Kevin Drum

Friday Cat Blogging - 25 September 2015

| Fri Sep. 25, 2015 2:50 PM EDT

A few weeks ago Hopper got her picture taken in the bathroom sink, so naturally Hilbert immediately decided he wanted his picture taken in the bathroom sink. He doesn't fit quite as nicely, but he seemed pretty happy. He never went back, though. Once he'd evened things up with Hopper, he moved on to other attention-demanding exploits.

Advertise on

Jeb Bush: Deficits Are For Democrats to Worry About

| Fri Sep. 25, 2015 1:15 PM EDT

I analyze the news for you:

What Jeb Bush said this morning:

Everybody freaks out about the deficit....But if we grow our economy at a faster rate, the dynamic nature of tax policy will kick in....I'm more optimistic.

What he meant:

We should freak out about the deficit only when a Democrat is president. I'm a Republican. When Republicans are president we don't worry about the deficit. We just cut taxes on the rich.

You're welcome.

Boehner Resigns, Cruz Explodes, Shutdown Averted

| Fri Sep. 25, 2015 12:50 PM EDT

The always charming Ted Cruz reacts to the news that John Boehner will be resigning from Congress next month:

If it is correct that the speaker, before he resigns, has cut a deal with Nancy Pelosi to fund the Obama administration for the rest of its tenure, to fund Obamacare, to fund executive amnesty, to fund Planned Parenthood, to fund implementation of this Iran deal — and then, presumably, to land in a cushy K Street job after joining with the Democrats to implement all of President Obama's priorities, that is not the behavior one would expect of a Republican speaker of the House.

Unsurprisingly, this isn't true:

Following Boehner’s announcement, House Republicans said there was agreement to pass a clean spending bill to keep the government open. Several members of the Freedom Caucus, the conservative group which led the revolt against Boehner’s leadership, said they will now support the spending bill without demands that it include language to cut off funding for Planned Parenthood.

So no deal with the evil Nancy Pelosi was necessary. Imagine that. I guess we'll have to wait and see about the cushy K Street job, though.

71% of Americans Think Civil Asset Forfeiture Is Wrong

| Fri Sep. 25, 2015 12:36 PM EDT

Julian Sanchez draws my attention to a YouGov poll from last month about civil asset forfeiture, the practice of confiscating money that police merely believe to be connected to a crime. What do Americans think of this?

I suppose I should be happy: 71 percent of the respondents think that police should only be able to seize your money if you've been convicted of a crime. But what about the other 29 percent? It's sort of discouraging that nearly a third of the country doesn't think that conviction is necessary.

Then again, I've seen polls showing that a third of Americans don't really believe in free speech or fair trials or other bedrocks of democracy, so maybe this isn't bad. Now if we can just mobilize that 71 percent to care enough to make it an issue, maybe this poll will actually mean something.

Debating the Debates: Should Democrats Have More?

| Fri Sep. 25, 2015 12:06 PM EDT

Ryan Cooper wants more debates. Before we boo him off the stage, though, note that he's asking for more Democratic debates. And he thinks Hillary Clinton ought to be in favor. Here's why:

It would stop Republicans from dominating 2016 coverage....While a lot of the attention is negative due to half the candidates being strap-chewing lunatics, it's still building a sense of excitement.

....It would give the political press something to talk about besides the endless, pointless Clinton email story.

....Clinton could probably use the practice. I still remember the first presidential debate in 2012, when President Obama was roundly defeated by Mitt Romney. Obama looked like a very powerful man who was not used to being sharply challenged, and came off as simultaneously haughty and unsure of himself. Hillary Clinton is a smart, capable person, but sycophantic courtier syndrome is a real thing, and a square debate on equal footing is one of the few ways someone of Clinton's fame and standing can work against it.

Let's examine this. More debates would be fun. On the other hand, it would mean yet more long nights of liveblogging for me. On the third hand—wait a second. I'm curious about something. Do other countries have debates? According to Wikipedia, yes. The following countries have regular campaign debates:

  • Australia
  • Brazil
  • Canada
  • France
  • Germany
  • Ireland
  • Kenya
  • Malta
  • Mexico
  • Netherlands
  • New Zealand
  • United Kingdom
  • United States

That's not very many. Thirteen countries out of 200—and only seven that aren't part of the old British Empire. It's a little odd that the Anglo-Saxon bloc is so gung-ho on debates, considering that Mother Britain didn't have its first televised debate until 2010. Of course, they only held a grand total of three, but then again, their campaign season only lasts six weeks. At that rate, we'd have 30 or 40 debates in America.

Anyway, what were we talking about? Oh yes: should Hillary Clinton welcome more debates? I'm going to say no. A presidential campaign is obviously a zero-sum affair, and all her competitors want more debates. Unless they're idiots, that's because they think it will benefit them—which it would, by giving them priceless exposure. Obviously Hillary has no interest in that, so like most front runners she wants fewer debates.

All other arguments aside, then, the DNC is unlikely to change its mind on this. So tune in on October 13 for the first Democratic debate, held at the fabulous Trump Las Vegas. Just kidding. That would be a hoot, though, wouldn't it? It will actually be held at the fabulous Wynn Las Vegas, owned by a Democratic billionaire rather than a Republican one.

The EPA Is Coming After Your Defeat Devices

| Fri Sep. 25, 2015 11:04 AM EDT

If you're using a defeat device on your car, you'd better remove it ASAP. New testing protocols are coming in the wake of the VW scandal:

The EPA is sending a letter to auto manufacturers to explain that it may test or require testing of vehicles in an environment that would resemble normal driving conditions, the official said.

....“We have to be concerned about whether or not there are other defeat devices out there that we have not been able to detect,” EPA Administrator Gina McCarthy said at an event hosted by The Wall Street Journal this week. “This was particularly difficult for us to detect. We got there.”

Sounds like more big-government bullying by the EPA to me. I expect Republicans to do the right thing and denounce this immediately.

Advertise on

Chart of the Day: The Surprisingly Close Relationship Between Housing Sales and Housing Starts

| Thu Sep. 24, 2015 11:13 PM EDT

The Economist notes a "bizarre" relationship today:

For the last forty years the number of new houses built privately has been almost exactly one-tenth the total number of houses bought and sold in a given year. So, for example, if 1m houses are bought or sold in Britain next year (as seems likely) then you can expect about 100,000 houses to be built by private housebuilders.

This doesn't actually seem all that strange to me. I'd guess that when the economy is good, there are both more houses built and more houses sold. It's true, though, that the 10:1 relationship is surprisingly precise, which makes it intriguing. So that got me wondering: is the same thing true in the United States?

Sort of. If you're not a housing expert—and I'm not—it's a little tricky knowing exactly which data to use. I used Census Bureau data for houses sold and housing starts, and got the chart on the right. It shows a very close relationship except for the period 1997-2007, which corresponds to the great housing bubble. That makes sense: if there are a lot of transactions but just the usual amount of new construction, you'd expect prices to spike. And that's what happened.

The other interesting thing is that the relationship in the US is about 2.5:1. The Economist claims that economists don't know why this relationship exists, and then goes on to propose a fairly outré theory: Home builders in Britain tend to target the price of newly built houses at the upper 10 percent of local prices. Thus the 10:1 relationship.

I don't get this, and the Economist writer doesn't seem to get it either. If it's true, though, it would mean that American home builders target the price of newly built houses at the upper 40 percent of local prices. Why the difference?

It's a mystery. In fact, I'm not even sure why I wrote this post. Perhaps so that someone smarter than me (and the Economist) can explain what's going on.

Some Notes Toward a Comprehensive Plan for Screwing Martin Shkreli

| Thu Sep. 24, 2015 6:51 PM EDT

As we all know, Rosa Parks was not the first black woman in Montgomery to be arrested for refusing to move to the back of the bus. There were two before her, but local black leaders declined to make test cases out of them. They waited until they found someone who was sure to gain white sympathy, and Parks fit the bill.

Martin Shkreli is sort of the anti-Rosa Parks. Lots of companies have jacked up the price of drugs before, and they got only blips of attention. Then Shkreli came along and jacked up the price of Daraprim from $13 to $750—and instantly became the poster child for evil scum. That's because he was perfect for the role. He's a Wall Street hedge fund guy. He was fired by a firm he founded when the board accused him of using the company as a "personal piggy bank to pay back angry investors in his hedge fund." He looks like a callous young punk. And instead of hiding behind a PR flack, he happily gave interviews where he all but told the world to fuck off and pay his price if they wanted Daraprim.

That makes this whole story too good to check. Why interfere with the public lynching of a guy who seems to richly deserve it? And yet, you still wonder how he got away with this. Daraprim is just pyrimethamine, a drug invented decades ago and no longer under patent. Why doesn't someone else make it?

The usual answer is that it's not worth anyone's time. In the United States it's primarily used to treat toxoplasmosis and accounts for only about 10,000 prescriptions a year. If you've already done the chemistry and the marketing and the manufacturing setup, you might as well keep making the stuff. But starting up from scratch involves high fixed costs, and it's not worth it. So Shkreli is safe. He can charge sky-high prices in the certain knowledge that no one will enter the market to compete with him.

But Alex Tabarrok says that's not quite the case. Lots of companies make pyrimethamine overseas, and for them startup costs aren't an issue. The problem is that none of them have gotten FDA approval to sell in America, and that's expensive and time consuming. Basically, Shkreli is engaging in regulatory arbitrage, with the high fixed cost of FDA approval keeping him just as safe from new competitors entering the market as the fixed cost of starting up a manufacturing line.

This got me curious. Tabarrok concedes that Indian or Chinese generic drug makers are a little dodgy, and the FDA might be right to insist on keeping their products out of the country without rigorous testing. But what about European drug makers? Why not give them reciprocity? If a generic drug is approved in Europe, go ahead and provide streamlined approval in the US. Why not trust European drug regulators?

Actually, it turns out to be even weirder than that. Take the case of Fansidar. It's a combination of pyrimethamine and sulphadoxine made by Roche. It was approved by the FDA in 1981 and went on the market in 1982, primarily as an anti-malarial drug.1 Roche has sold bazillions of tablets since then, and the cost seems to vary from a dollar or two in small quantities to a few cents in large quantities. It has even been tested for toxoplasmosis and found to be pretty effective.

So, Roche already manufactures pyrimethamine. They already have FDA approval for a drug that contains it. They already have a well-respected manufacturing capability. And they already have distribution in the United States. All they'd have to do is make the same tablet but without the sulphadoxine and put it on the market. If the FDA were willing to streamline the approval, the startup costs would be very low.

Now, for a company the size of Roche, it might still not be worth it. But there are plenty of other companies that make pyrimethamine/sulphadoxine combinations. If the FDA offered quick approval for a pyrimethamine-only tablet, I wonder if someone would take them up on it? Legally, the FDA is not supposed to consider cost in its approval process, but surely it would be worth making an exception just to see Shkreli take a bath on his cute little scheme.

1I gather that it's no longer a state-of-the-art treatment for malaria, but that doesn't matter for our story.

Let's Experiment With Universal Preschool

| Thu Sep. 24, 2015 2:43 PM EDT

I'm a considerable fan of early childhood education. Megan McArdle says she's tentatively in favor too, but "I am opposed to blind boosterism of such programs, the kind that confidently predicts marvelous results from thin empirical evidence, and briskly proceeds to demand huge sums be spent accordingly." I'm tempted to say this is a straw-man argument, but maybe not. There are a lot of cheerleaders out there. In any case, she offers a useful corrective for anyone who thinks the evidence in favor of universal preschool is open and shut. So what should we do?

I would like to see us experiment more with these programs. But the key word here is “experiment.” Which is to say we should: Try more programs....Take the programs that seem to work and scale them up to a larger group....Rinse and repeat [until we figure out what, if anything, works.] That would be the sane, sensible way to go about constructing policy in an important area.

But politically, how insane! Voters don’t want to hear about a decade or two of carefully planned research to help shape solid policy choices; they want to hear promises of immediate solutions to an immediate problem. That’s not a great way to make policy. But it’s a pretty good way to get elected.

I don't think these are mutually exclusive options. The 1988 Family Support Act might be a useful model here. Following a series of welfare reform experiments in the early 80s, it authorized additional research on a larger scale. Why not do the same thing with preschool? Offer substantial funding to states willing to participate in rigorous testing of preschool programs, with the goal of producing useful results in six or seven years.

This could be a substantial program, not just a few small-scale tests, which would certainly count toward any campaign promises made about universal pre-K. And the money would go to the states most eager to participate, which would be politically savvy. At the same time, it wouldn't cost as much as a nationwide program, which would make it easier to get through Congress. And finally, the promise of larger-scale testing would satisfy the demands of social scientists, who rightly point out that small-scale experiments don't always scale successfully into bigger programs.

I'm tempted to say that if Democrats and Republicans could agree on this approach for testing welfare reform in 1988, they should be able to agree on doing the same thing for preschool in 2017. That's not necessarily true, of course. Still, it seems like this kind of program would, at a minimum, be more likely to pass a divided Congress than full-blown universal pre-K legislation. Why not give it a try?

Why Is No One Talking About the Menace of the Pacific Ocean?

| Thu Sep. 24, 2015 1:36 PM EDT

Look, if we're going to have a wall on the Southern border and the Northern border, then I want a wall along the Western border too. I won't feel safe until we build one.

Shame about the view, but national security comes first.