Kevin Drum

How to Spend Less So You Can Afford to Save More

| Fri Jan. 8, 2016 12:48 PM EST

Thanks to Harold Pollack, personal finance index cards are all the rage. Today, the New York Times even has an index of popular index cards. Many of them share the same suggestions: pay off your credit cards, max out your 401(k), invest in low-load index funds, etc.

This is excellent advice. But how do you do it? Where do you get the money for this? For that, you need Kevin's pre-index card. Not everything here works for everyone, but most of them will comfortably reduce daily expenses for most people without too much angst. And you can add your own ideas in comments. Enjoy!

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Charles Koch Is Disappointed That He Can't Buy More Influence

| Fri Jan. 8, 2016 11:51 AM EST

Stephen Foley talks to Charles Koch about the vast amounts of money he has raised to support conservative politicians:

He says he is “disappointed” by the current crop of Republican presidential candidates, and resigned to having to support one with whom he agrees on only some issues. “It is hard for me to get a high level of enthusiasm because the things I’m passionate about and I think this country urgently needs aren’t being addressed.”

The Kochs’ political machine has presented all the candidates with a list of issues it wants on the agenda but, says Koch, “it doesn’t seem to faze them much. You’d think we could have more influence.”

So does the man that the left believes has too much influence in politics believe he in fact has too little? “I’m pleased that I can still speak and I’m pleased that it isn’t worse,” he says. “They haven’t nationalised all the industries like happened in the UK when the Fabians took over.”

I ask him to put his businessman’s hat on and to tell me whether he thinks his political spending is generating a positive return on investment. “I’m not confident,” he says. “I’d say there are some benefits. Ask me in 10 years.”

There are two interesting things going on here. First is Koch's disappointment that his money doesn't buy him more influence. It's easy to laugh at that, but he's probably right. He's raised a lot of money. But it's hard to see that Republican views have changed in his direction much. The entire party denies climate change and wants to lower taxes already, so there was no work to be done there. But a less aggressive foreign policy? An end to corporate welfare? Turning down the volume on social issues? Koch is right: all his money has had no effect on that. It's only had a significant effect when he's pushing in the same direction that the GOP wind is already blowing.

Second is Koch's fascinating observation about the Fabians. The way he mentions them, he sounds as if he's genuinely surprised that he's still allowed to say what he pleases. He's genuinely surprised that Koch Industries hasn't been nationalized. Here's a man who has been fighting political battles for decades and is worth something north of $40 billion thanks to the growth of his business. If that doesn't demonstrate America's fundamental commitment to both free speech and capitalism, I don't know what does. And yet, he still seems fearful that Marxism is just around the corner.

It's weird. What is it that makes a smart guy like him so paranoid?

How Much Do People Hate Ted Cruz? A Lot.

| Fri Jan. 8, 2016 11:22 AM EST

I think that everyone—literally everyone—knows that Ted Cruz is a natural born citizen and thus eligible to become president. The whole issue is a complete crock. And yet, ever since Donald Trump brought it up, you can hardly swing a dead cat without running into someone jabbering about it. Even John McCain and Nancy Pelosi have gotten into the act. What's going on? Here are some possibilities:

  • We are all bored. We are so bored that we'll literally talk about anything. This is the true genius of Donald Trump: he recognizes how bored we all are and is willing to find stimulating topics for us to chatter about.
  • Everyone loathes Ted Cruz. They loathe him so much that they're willing to discuss this ridiculous meme as a way of hurting him, even though they know perfectly well it's ridiculous.
  • We can't help ourselves. It's the "someone is wrong on the internet" syndrome: when Trump suggests Cruz doesn't qualify for president, we have to explicate it. We have to research it. We have to find constitutional experts who like being on TV to cite endless case law. In the end, we have to explain why it's wrong. It's what we do. This has lately earned the moniker "Voxsplaining," which is a little unfair—it's not as if Vox invented this phenomenon—but only a little.
  • We remain under the misguided notion that anything Donald Trump says is automatically newsworthy because he's the Republican front-runner.

That's all I could come up with. Are there other possible explanations?

Chart of the Day: Net New Jobs in December

| Fri Jan. 8, 2016 10:36 AM EST

The American economy added 292,000 new jobs last month, 90,000 of which were needed to keep up with population growth. This means that net job growth clocked in at a brisk 202,000 jobs—nearly all of it in the private sector. The headline unemployment rate stayed steady at 5.0 percent. This is a pretty strong showing, and it was all good news. Nearly 300,000 people re-entered the labor force and the participation rate ticked up a bit. This strong jobs report was due entirely to people finding jobs, not to people dropping out of the labor force.

Disappointingly, this didn't produce much wage growth. Hourly earnings of production and nonsupervisory employees went up at an annual rate of about 1 percent. For the year, earnings were up 2.4 percent—OK but not great. Job growth at the level of the last few months isn't spectacular, but it's pretty strong, and it should start translating into wage gains soon if it keeps up.

Good News: Labor Compensation Is Finally Starting to Rise

| Fri Jan. 8, 2016 12:01 AM EST

When I was making a case this morning that America is actually in pretty good shape, probably the biggest pushback I got was about wages. And I agree that on the economic front, that's still our biggest problem. Unemployment is relatively low, but thanks to modest GDP growth and the long-term unemployed continuing to re-enter the workforce, the labor market hasn't been tight enough to push wages up.

Still, the news isn't entirely bad on this front. Cash wages remain pretty sluggish, but total compensation has risen nicely over the past five quarters. If this keeps up—and if health care costs continue to rise slowly—this will start to spill over into hourly wages. There are still plenty of things that could go wrong, and the weak growth of middle class wages remains our biggest long-term challenge, but there's at least a glimmer of hope on this front. We may finally be truly starting to recover from the Great Recession.

Sunset in Irvine

| Thu Jan. 7, 2016 8:26 PM EST

Here in California, we have great reproductive rights and great sunsets!

In reality, tonight's sunset was only nice, not especially striking. But I was playing around in Photoshop and applied the haze filter even though there was no haze in the picture. This gave it a lovely sort of JMW Turner drama—assuming Turner had painted in a well-manicured American suburb, that is. Alternatively, you can apply a brush stroke filter for even more of a fake Turner look. Well done, Photoshop!

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Lead and Crime: Another Look

| Thu Jan. 7, 2016 6:44 PM EST

A trio of researchers from the University of Missouri and the University of Iowa have a new paper out that calls into question the correlation between lead emissions and violent crime rates. I want to comment on it, but with two caveats:

  • I'm not knowledgeable enough to judge the analysis in detail. I can explain what the authors have done, and I can point out some questions, but that's about it. Serious critiques will have to come from qualified researchers.
  • This post isn't hard to follow, but it's pretty long and the payback is slim. For that reason, I'm putting it under the fold. Click if you want to wade through the whole thing.

Is Being a Modern Teen Really a Relentless Slog of Existential Angst?

| Thu Jan. 7, 2016 4:42 PM EST

I was just at the bookstore, and on a whim I browsed through a bunch of "Teen Fiction" titles. Good God. I've never seen such a pile of depressing writing in my life. Everyone is sick, abandoned, kidnapped, bullied, overweight, comes from a broken family, survived a school shooting, or caught in the middle of a gothic horror. The horror books actually seemed the most uplifting.

I dunno. Maybe they all have happy endings? In any case, if these books are typical of what teens read these days, I'm halfway surprised that any of them make it out of adolescence with their psyches intact.

On the bright side, I learned a new word: Unputdownable. So it wasn't a total loss.

It's Time to Return to Market-Based Antitrust Law

| Thu Jan. 7, 2016 3:02 PM EST

Tim Lee makes an interesting argument today. He notes that cell phone plans have gotten a lot better lately:

Next time you go shopping for a new cellphone plan, you're likely to find that the options are a lot better than they were a couple of years ago. Prices are lower. You don't have to sign up for one of those annoying two-year contracts. You'll probably get unlimited phone calls and text messages as a standard feature — and a lot more data than before.

Why has this happened? Because for the past couple of years T-Mobile has been competing ferociously with cheaper, more consumer-friendly plans, and the rest of the industry has had to keep up. But what prompted T-Mobile to become the UnCarrier in the first place?

Back in 2011, AT&T was on the verge of gobbling up T-Mobile, which would have turned the industry's Big Four into the Big Three and eliminated the industry's most unpredictable company....But then the Obama administration intervened to block the merger. With a merger off the table, T-Mobile decided to become a thorn in the side of its larger rivals, cutting prices and offering more attractive service plans. The result, says Mark Cooper, a researcher at the Consumer Federation of America, has been an "outbreak of competition" that's resulted in tens of billions of dollars in consumer savings.

After the AT&T deal fell through, T-Mobile needed a new strategy....So T-Mobile and its new CEO, John Legere, started changing a lot of things. In 2013, the company dropped the much-hated two-year contracts that had become an industry standard. It introduced a new price structure that offered unlimited phone calls and text messages as a standard feature....In 2014, T-Mobile added more goodies, including more generous data caps and unlimited international texting. It boosted its data caps once again in 2015.

Antitrust law in America has been off track for decades, and it's time to get back on. The government shouldn't worry about trying to gauge price levels or consumer welfare or benefits to consumers. That's like trying to centrally control the economy: we don't know enough to do it well even if we want to. Instead, the feds should concentrate on one simple thing: making sure there's real competition in every industry. Then let the market figure things out. There are exceptions here and there to this rule, but not many.

Competition is good. Corporations may not like it, and they'll fight tooth and nail for their rents. But it's good for everyone else.

Map of the Day: Reproductive Rights In Your State

| Thu Jan. 7, 2016 2:09 PM EST

Courtesy of the Population Institute, here's a map and accompanying chart that tells you how your state is doing on reproductive rights. More here.