Kevin Drum

It's Not Just Blue-Collar Workers Who Voted For Trump Last Night

| Wed Apr. 20, 2016 11:47 AM EDT

I don't really know how much to make of this, but Donald Trump's victory in New York last night was remarkably thorough. Take a look at the exit poll results on the right for evidence.

Yes, Trump did well in his wheelhouse of high school grads. But college grads and postgrads also voted for him by huge margins. In New York, at least, having a PhD (or an MA or a law degree or a medical degree) didn't do much to help you see through his obvious flimflam.

Perhaps even more remarkably, Trump's strongest support didn't come from blue-collar workers with modest incomes. It came from middle and upper-middle-class voters. Whatever their motivations, it didn't have anything to do with China and Mexico taking away their jobs.

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Another Pension Fund Goes South After the Great Recession

| Wed Apr. 20, 2016 11:14 AM EDT

Here's the latest big pension fund in trouble:

More than a quarter of a million truckers, retirees and their families could soon see their pension benefits severely cut — even though their pension fund is still years away from running out of money.

....Like many other pension plans, the Central States Pension Fund suffered heavy investment losses during the financial crisis that cut into the pool of money available to pay out benefits. While the stock market has recovered since then, the improvements were not enough to make up for the shortfall....That imbalance left the fund paying out $3.46 in pension benefits for every $1 it received from employers. The shortfall has resulted in the fund paying out $2 billion more in benefits than it receives in employer contributions each year.

One of the big criticisms of 401(k) style retirement plans is that they can lose a bundle when the stock market tanks. And sure enough, that's exactly what happened during the Great Recession. The value of 401(k) plans fell dramatically, causing a lot of pain for people who were close to retirement.

But don't let that make you nostalgic for the good old days of defined-benefit pensions. Sure, they promise a steady retirement income, but promises are only as good as the money to back them up. This means that pension funds which lost a lot of money during the Great Recession are in no better shape than 401(k) plans that did the same. There's no magic here.

What's more, 401(k) plans have rebounded since the depths of the recession: taking into account both their losses and their subsequent gains during the recovery, the average 401(k) balance has grown more than 10 percent per year between 2007 and 2013. Apparently that's not the case for the Central States Pension Fund. Perhaps those much-maligned 401(k) plans are a better retirement vehicle than their critics give them credit for?

In the 21st Century, We All Want Smart, Gorgeous Mates

| Tue Apr. 19, 2016 7:59 PM EDT

Wonkblog points us today to a chart from Max Roser showing how men and women rated various aspects of potential mates in 1939 vs. 2009. (Since 1939 is the comparison year, it goes without saying that we're talking about straight, cis, and most likely white folks here.) You can see the entire set of data at either of the links above, but I was interested mainly in the traits that have moved up or down significantly over that period. Here they are, in a handily color-coded pink and blue chart:

What can we tell from this? For starters, keep in mind that this is what people say they value, not what they actually value. "Similar political background," for example, has allegedly moved up only one spot, from dead last to almost last, so it's not in my chart. But there's considerable evidence that a lot of people today would rather have their big toes cut off than associate with someone of the opposite party. So take all of this with a grain of salt.

Anyway, obviously chastity is out the door. No one cares anymore. Refinement is now decidedly old-fashioned, replaced by a desire for the more egalitarian virtue of sociability. And love has zoomed up to the top of the chart. (Allegedly, anyway.)

Beyond that, the two big movers are education and good looks. Apparently we all want mates who are both smart and gorgeous, which might go a long way toward explaining why marriage seems to be in decline. How many smart, gorgeous people are there in the world, after all? And if they have to be gregarious too—well, you're just being mighty picky. Good luck.

Notably, the boring traits haven't changed much: dependability and stability were near the top of the chart in 1939, and they're still there now. I guess meat and potatoes are always in fashion. Or so we tell the pollsters, anyway.

Here's a Sneak Preview of the Upcoming Republican Health Care Plan

| Tue Apr. 19, 2016 6:46 PM EDT

Seven years after they first promised an alternative health care proposal, Republicans now say they're close. "Give us a little time, another month or so," Rep. Fred Upton (R-Mich.) told reporters this week. Steve Benen is unimpressed:

The problem probably isn’t dishonesty. In all likelihood, Republicans would love to have a health care plan of their own — no one likes to appear ridiculous while breaking promises — but haven’t because they don’t know how to craft one.

Not true! They know exactly how to craft one. In fact, I've seen a leak of their upcoming plan. Here it is:

  • Block granting of Medicaid
  • Tort reform
  • Interstate purchase of health plans
  • High-risk pools
  • Tax breaks for buying individual coverage
  • Health savings accounts

None of this would have much effect on the health care market, and it would probably fall about 19 million short of covering the 20 million people currently covered by Obamacare. That's why they don't want to unveil it. They know what they want, and they know how to craft it, but they still don't know how to make up a plausible set of lies about how it will do anybody any good. As soon as they figure that part out, they'll go public the next day.

Supreme Court Urges Nevada to Stop Hating on California

| Tue Apr. 19, 2016 2:58 PM EDT

Excellent news. In a case pitting a Nevada resident against the bureaucrats of the state of California, the Supreme Court has confirmed that Nevada does indeed hate California and needs to knock it off:

Nevada has not applied the principles of Nevada law ordinarily applicable to suits against Nevada’s own agencies. Rather, it has applied a special rule of law applicable only in lawsuits against its sister States, such as California.

....The Nevada Supreme Court explained its departure from those general principles by describing California’s system of controlling its own agencies as failing to provide “adequate” recourse to Nevada’s citizens....Such an explanation, which amounts to little more than a conclusory statement disparaging California’s own legislative, judicial, and administrative controls, cannot justify the application of a special and discriminatory rule. Rather, viewed through a full faith and credit lens, a State that disregards its own ordinary legal principles on this ground is hostile to another State.

....We can safely conclude that, in devising a special—and hostile—rule for California, Nevada has not “sensitively applied principles of comity with a healthy regard for California’s sovereign status.”

The case itself doesn't matter much. An inventor moved to Nevada and then sued California when it harassed him for back taxes. Nevada normally limits these judgments to $50,000 even if you win, but as long as you're suing California, it turns out the sky's the limit. The Supreme Court was not amused. Nevada can't do that just because they think poorly of California's laws.

But all is forgiven now. Come to the beach and relax, Nevadans! Don't let the dark side consume you.

Chart of the Day: Americans Think Hard Work Is the Key to Success. Europeans, Not So Much.

| Tue Apr. 19, 2016 2:25 PM EDT

Here's a fascinating result from the plucky pollsters at Pew Research:

I'm not surprised that the US ranks highest. But I am surprised at how much higher. Only a quarter of the French think that hard work is important for getting ahead in life? How about that. Even the famously diligent Germans clock in at only 49 percent.

Granted, in order to make the grade, you have to score this as 10 (or "10," as Pew puts it) on a 0-10 scale. Maybe Europeans tend to score it as a 9—still pretty important, but not quite totally life-engulfing. Either way, though, apparently we Americans continue to believe in the importance of hard work a lot more than our Europeans peers. No 6-week vacations for us!

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The Gig Economy Is Mostly a Myth

| Tue Apr. 19, 2016 1:05 PM EDT

The gig economy. Uber for X. The on-demand revolution. Crappy part-time work with no benefits or job security.

Call it what you will, but it's big. Very, very big. It's the future.

Or is it? It's important to define things correctly here. The "gig economy"—and I really want to know who came up with this idiotic name—has nothing to do with using software as some kind of consumer front end. Practically every company in the world does that in one way or another. Nor is Amazon "Uber for diapers." They're just a gigantic retailer that delivers stuff fast.

What we're really talking about here is being able to hire the services of random strangers (a) quickly and (b) for unpredictable amounts of time. The truth is that Uber could be run entirely via old-school phones and a call center. It would be less convenient, but still workable. So why is it that Uber has been phenomenally successful but few other on-demand services have come anywhere close? Matt Yglesias suggests that everyone misunderstood what Uber was really doing:

What optimistic investors missed about Uber clones is that hailing rides is a bit of a unique case. In that particular market, digital ordering isn't just a little better than the old analog alternative, it's dramatically better. But that's because of the ways rides for hire were regulated, not something that applied to food or laundry delivery.

The traditional taxi market before the rise of ride-hailing apps was regulated in a peculiar way....In the vast majority of cases, the agencies in question were essentially "captured" by industry lobbyists who set the rules so as to protect the incumbent holders of taxi licenses from competition.

....App-based ride hailing was a game changer in this context, not just because it offered a somewhat better way to get a ride, but because in Uber's earliest cities it exploited loopholes in the way taxi regulations were written to put vehicles for hire on the road that would not have been allowed to operate as cabs.

In other words, Uber wasn't primarily a technology hack, as everyone assumes. It was a regulatory hack. Try to do Uber for groceries or Uber forbabysitting and you have to compete with everyone who's already out there—most of whom have been operating in a competitive market forever and know a lot about how to do it. It just won't work as well as it does when you're taking on a long-coddled industry.

If this is true—and it certainly sounds plausible—it's important to take away the right lesson from this. It's not that new startups should all start beavering away to find regulatory hacks. It's that you have to have some kind of hack. In its early days, Netflix hacked the postal service. Amazon hacked the clubby publishing clique. Uber hacked the taxi medallion system.

"On demand" is nothing new. Ask any freelancer or consultant or day laborer. App-based dispatching adds some convenience to on-demand services, but in most cases it's nothing to shout about. That's because the market economy is already an on-demand machine. That's the whole point of a market economy. If you make that machine a little better, you'll make a little bit of money. But if you find some kind of niche that you can make a lot better, you'll make a lot of money. You just have to find the niche.

It Was Night Goggles, Not the Taliban

| Tue Apr. 19, 2016 12:15 PM EDT

Here's the result of an Air Force investigation:

A solid plastic case designed to hold a set of night-vision goggles was ultimately responsible for causing the crash of an Air Force transport plane that killed 14 people in October, the Air Force announced in a statement last week.

This is obviously a tragedy, all the more so for having such a trivial cause. But what's interesting is what came next:

Twenty-eight seconds after takeoff, 14 people, including the four crew members, two Air Force security personnel and five civilian contractors aboard, were dead. The Taliban quickly claimed responsibility for the crash, saying it shot down the aircraft.

I often wonder how many claims of this nature are actually true. Many of them are, obviously. But it's pretty easy to claim responsibility for just about anything, and it's good PR to take credit for killing a bunch of Americans. Maybe too easy.

No, Bernie's Taxes Don't Show That He's a Hypocrite

| Tue Apr. 19, 2016 11:27 AM EDT

This argument was tiresome a decade ago, and it's still tiresome:

Bernie Sanders released his 2014 tax return this weekend, revealing that he and his wife took $60,208 in deductions from their taxable income. These deductions are all perfectly legal and permitted under the U.S. tax code, but they present a morally inconvenient, if delicious, irony: The Democratic socialist from Vermont, a man who rages against high earners paying a lower effective tax rate than blue-collar workers, saved himself thousands using many of the tricks that would be banned under his own tax plan.

....The deductions left Sanders and his wife paying...an effective federal tax rate of 13.5 percent. If that seems low to you, your instincts are right: According to the Tax Foundation, the average federal income-tax rate for a couple making $200,000 to $500,000 in 2014 was 15.2 percent.

....What Sanders did, using every option and advantage available under a Byzantine tax code to minimize his tax payment, is a normal practice for many Americans. But it’s also exactly what the targets of his anger do. You can argue about whether or not that’s greed, but it’s impossible to argue that it isn’t hypocrisy. The paragon of liberal purity is not as pure as he’d like the world to believe.

This isn't even close to hypocrisy. If you don't like the designated hitter rule in baseball, does that mean you should send your pitcher to the plate just to prove how sincere you are? Of course not. You play by the rules, whatever those rules are.

I favor universal, government-funded health care. Does that mean I should virtuously refuse MoJo's employer health care? Does anyone on the planet think that makes any sense at all?

Tax laws are tax laws, and there's nothing hypocritical about following them even if you disagree with them. Just the opposite, in fact. It speaks well of Sanders that he supports changes that would hurt him personally. It's a helluva lot more than Republicans ever do.

Trump, Clinton Remain Way Ahead in New York Primary

| Mon Apr. 18, 2016 9:36 PM EDT

I'm not sure how reliable primary polling has been this year, but the Pollster aggregates are pretty clear for Tuesday's primary in New York. Donald Trump retains a commanding lead on the Republican side, even though New Yorkers should know better, and Hillary Clinton is ahead of Bernie Sanders by 15 points in the Democratic primary. Both Trump and Clinton have increased their leads slightly since the beginning of the month.

Sam Wang forecasts that a big win in New York puts Donald Trump on track to win the Republican nomination outright with 1265 delegates by the end of primary season. His probability of getting 1237 or above is 64 percent. Hillary Clinton, of course, has basically already won the Democratic nomination thanks to her current lead in pledged delegates and her overwhelming lead in superdelegates. The Democratic primary has been little more than shadow boxing for at least the past month.