Kevin Drum

The Immigration Show

| Thu Jan. 27, 2011 2:37 AM EST

Even though deportations of illegal immigrants are up under the Obama administration, the LA Times reports that Republicans want to return to the high-profile workplace raids of the Bush era. But why return to a less efficient program? Let's take a look:

Targeting employers is part of an effort by the administration to thwart illegal immigration by reducing the demand for illegal jobs, which draws hundreds of thousands across the border each year to look for work. "There is a laser-like focus on holding employers accountable. In the final analysis, they are the ones supplying the jobs. It is the greatest use of the resources," [Kumar] Kibble said.

Under Obama, cases against employers are up sharply: Immigration and Customs Enforcement quadrupled the number of employer audits after Obama took office, increasing the number of inspections and arrests against those who knowingly hire illegal immigrants. Businesses were fined $6.9 million in fiscal 2010, up from $675,000 in 2008.

That explains it. The Obama approach might be more effective, but it actually targets the business community, and we can't have that, can we? Better to do something showy but ineffective instead.

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Is Tunisia the First Domino?

| Wed Jan. 26, 2011 11:00 PM EST

Joshua Tucker makes an argument today that Tunisia might be the leading edge of a broader revolt in the Middle East, just as Poland was the leading edge of the fall of communism in Eastern Europe in 1989. But then I think he undermines his own case:

One fundamental difference that I can not help noting between 1989 and 2011, however, is the lack of a powerful external actor enforcing the non-democratic regimes in the Middle East. East-Central European communist propaganda notwithstanding, few probably doubted by the 1980s the most of the region would throw off communism if Moscow ever gave them the opportunity to do so. Thus perhaps the most crucial information transmitted by the success of the Polish and Hungarian revolutions was precisely the fact that the Russians were not planning on intervening. I'm not sure there is anything analogous in place in the Middle East.

I'm no expert on 1989, but I think it's hard to overstate the importance of Mikhail Gorbachev in all this. For a variety of reasons, he chose not to intervene to prop up the communist regimes in Eastern Europe, as his predecessors had done in 1956 and 1968, and that made all the difference. If Soviet tanks had rolled into Warsaw or Prague, there's no telling how much longer the Iron Curtain would have remained standing.

It's pretty unlikely that anything similar will happen in the Middle East. After all, its leaders know the lesson of 1989 just as well as we do. As Marc Lynch puts it, "Dictators learn from each other, not just from the past." Still, after ticking off all the reasons that the Tunisian revolt probably won't spread successfully, he says that skepticism sounds a bit hollow this time:

There are plenty of reasons to see Tunisia as a one-off. And yet... it doesn't feel that way. The scenes in Cairo yesterday stand as a sharp rebuke to any analytical certainty. The Egyptian regime was fully prepared, its security forces on alert and deployed, the internet disrupted and al-Jazeera largely off the table... and yet tens of thousands of people still poured into the streets and put together one of the largest demonstrations in contemporary Egyptian history.

Tunisia has manifestly inspired people across the region and galvanized their willingness to take risks to push for change, even without any clear leadership from political parties, Islamist movements, or even civil society. The Tunisian example has offered the possibility of success, and models for sustained action by a decentralized network, after a long and dispiriting period of authoritarian retrenchment. Al-Jazeera and the new media have played their role in reshaping political opportunities and narratives, but it is people who have seized those opportunities. And the core weaknesses of these Arab states — fierce but feeble, as Nazih Ayubi might have said — have been exposed. They have massively failed to meet the needs of their people, with awesome problems of unemployment, inflation, youth frustration and inequality combined with the near-complete absence of viable formal political institutions.

Stay tuned.

Should Real Life Be More Like Videogames?

| Wed Jan. 26, 2011 7:04 PM EST

Game researcher Jane McGonigal writes in the Wall Street Journal today that real life isn't good enough anymore:

Gamers want to know: Where in the real world is the gamer's sense of being fully alive, focused and engaged in every moment? The real world just doesn't offer up the same sort of carefully designed pleasures, thrilling challenges and powerful social bonding that the gamer finds in virtual environments. Reality doesn't motivate us as effectively. Reality isn't engineered to maximize our potential or to make us happy.

....In a good game, we feel blissfully productive. We have clear goals and a sense of heroic purpose. More important, we're constantly able to see and feel the impact of our efforts on the virtual world around us....When we play, we also have a sense of urgent optimism. We believe whole-heartedly that we are up to any challenge, and we become remarkably resilient in the face of failure.

Well, sure. After all, games are deliberately engineered to be addictive, and they do it largely by producing an artificial world in which failure has no serious consequences and success is all but guaranteed to anyone willing to put in a moderate amount of effort. That's why we call it "entertainment." But this is nothing surprising. Lots of other leisure activities make you artificially "alive, focused and engaged in every moment" too: gambling, skydiving, and snorting cocaine, just to name a few. The difference, McGonigal thinks, is that the artificial thrills of gaming can be put to real-life use:

In 2010, more than 57,000 gamers were listed as co-authors for a research paper in the prestigious scientific journal Nature. The gamers—with no previous background in biochemistry—had worked in a 3D game environment called Foldit, folding virtual proteins in new ways that could help cure cancer or prevent Alzheimer's. The game was developed by scientists at the University of Washington who believed that gamers could outperform supercomputers at this creative task—and the players proved them right, beating the supercomputers at more than half of the game's challenges.

More recently, more than 19,000 players of EVOKE, an online game that I created for the World Bank Institute, undertook real-world missions to improve food security, increase access to clean energy and end poverty in more than 130 countries. The game focused on building up players' abilities to design and launch their own social enterprises.

After 10 weeks, they had founded more than 50 new companies—real businesses working today from South Africa and India to Buffalo, N.Y. My favorite is Libraries Across Africa, a new franchise system that empowers local entrepreneurs to set up free community libraries. It also creates complementary business opportunities for selling patrons refreshments, WiFi access and cellphone time. The first is currently being tested in Gabon.

I'd be lying if I said I wasn't pretty skeptical of this. With rare exceptions, real life is just never going to be much like a videogame. But it's certainly an interesting idea, and I'd love to be proven wrong.

UPDATE: Here's an article about McGonigal and gaming that we published on Monday.

The CBO's Crystal Ball

| Wed Jan. 26, 2011 4:04 PM EST

Over at The Corner, Avik Roy is outraged at today's estimate from the CBO that the 2011 deficit will be $1.5 trillion. Beyond the outrage, though, he also implies that perhaps this reflects badly on the CBO's forecasting ability, since they predicted a lower deficit last year. "What’s a $500 billion, 50 percent error among friends?" he sneers. ZOMG!

To his credit, though, Roy reproduces a table showing exactly where the $500 billion "error" comes from. Here it is:

Hmmm. Estimated 2011 revenues are down $442 billion, accounting for virtually all of the difference. And where does that come from? Table A-1 in the CBO report provides the answer: nearly all of it is due to the package of tax cuts that were signed into law during the lame duck session last year. Almost none of it is due to technical changes.

So there's no "error" here. The CBO did fine. What happened was that Congress passed a whole bunch of tax cuts — cuts that I'm sure Roy supported — and those cuts increased the deficit. Only a conservative could possibly be surprised by this. Or someone trying his best to undermine the credibility of the CBO for unrelated reasons. Like, say, someone who doesn't like the CBO's contention that healthcare reform will reduce the deficit.

By the way, did I mention that Roy mostly writes about healthcare reform?

UPDATE: Roy responds here. He's right that not all of the lost revenue comes from extension of the Bush tax cuts. The tax package passed during the lame duck session includes both extension of the Bush tax cuts and various other tax cuts implemented at the same time (the AMT patch, payroll tax holiday, etc.). I've corrected the text.

Putting a Lid on the Bloviators

| Wed Jan. 26, 2011 3:35 PM EST

I'll probably never say this again, but I think I'm actually on Darrell Issa's side here. He decided to do things a little differently at today's TARP hearing:

At the start of the hearing, chairman Rep. Darrell Issa announced the committee members would waive their opening statements and instead would have seven days to place them into the record. Rep. Elijah Cummings, the committee’s ranking Democrat, immediately fought back questioning this deviation in traditional procedure, but Issa held his ground. “I recognize that tradition is we hold the members, the witnesses here for sometimes an hour through opening statements. That is a tradition that I intend to break,” Issa said. “That doesn’t mean there won’t be opening statements in the future.”

....Rep. Dennis Kucinich later interrupted and stated, “I’ve been in the Congress for 14 years, and I’ve never — it’s just unprecedented that the ranking member not be permitted to give an opening statement.”

I don't know all the details here. I assume that Issa himself didn't give an opening statement either, and I assume that in the future the rules for statements will be fair to both sides. If not, then Issa's being a dick. But let's face it: long rounds of opening statements are a scourge. They virtually never produce anything of note, and forcing witnesses and everyone else to sit through them is a waste of time. Overall, I expect Issa to run the oversight committee like the partisan attack dog he is, but on this particular issue I salute him.

On the Impossibility of Finessing Third Rails

| Wed Jan. 26, 2011 3:15 PM EST

Felix Salmon would like President Obama to go after the mortgage interest tax deduction. Matt Yglesias comments:

The implication here is that what the country needs from the president is some bold straight talk on taxes, and I think that’s just wrong. Look at what happened when the Bush administration kinda sorta went after the mortgage interest tax deduction—wonky bloggers praised him, Democrats slammed him, Republicans ran for the hills, he abandoned the idea, and everyone forgot the whole thing ever happened. If Obama had proposed a revenue-neutral phase out of the tax deduction, you’d just get the same thing in reverse.

The right way for the White House to engage with this issue is (a) vaguely, and then (b) in private.

Actually, I'd say the right way for the White House to engage with this issue is (c) not at all. I mean, I'm all in favor of phasing out the home mortgage deduction, but it's political suicide and everyone knows it. Whether privately or not, no Republican will ever agree to it, and I don't imagine many Democrats would either. It's the fastest way I can think of to derail tax reform completely.

This is too bad, but the world is what the world is. It might be possible to propose replacing the mortgage tax deduction with a tax credit, which would be a bit more progressive, but it's a little hard trying to figure out what the political coalition for that is either. Working quietly on tax reform instead of making it into a huge public issue is a good idea (though possibly no longer feasible in the era of Fox News), but I think wonks should just give up on the idea of ditching the home mortgage deduction and focus instead on stuff that might actually happen.

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Yet More Healthcare Polling

| Wed Jan. 26, 2011 1:41 PM EST

Here's yet another poll showing what people think of healthcare reform. It's from Kaiser:

This is a little different from the last poll we saw, but not a lot. Overall, 47% want to keep or expand the law and 43% want to repeal or narrow the law. Additionally, most people disapprove of defunding the law and most of the individual provisions of the law remain popular except for the individual mandate. No surprises there. But take a look at this:

Items 1, 3, and 4 are all beneficial to seniors, yet seniors are less favorable toward them than younger people. Item 2 is harmful to seniors, but seniors are more favorable toward it than younger people. Only item 5 polls about the way you'd expect it to. The differences aren't huge, and it's questionable whether everyone really understood exactly what all these provisions mean, but it's still a bit of an odd result, isn't it?

SOTU Wrapup

| Wed Jan. 26, 2011 12:20 AM EST

I decided not to liveblog the SOTU this year because I was pretty sure it would be an unusually uneventful speech. And I think that's how it turned out. (Transcript here.) In the end, the only thing that surprised me was how uneventful it was. With only a very few exceptions that were passed over pretty quickly (healthcare reform is great, student loan reform is great), there was almost literally nothing in there that couldn't have been in a George W. Bush speech. It was intensely technocratic and bipartisan: we need better education, we need to invest in infrastructure, we need to concentrate on innovation, we need tax reform, we need to get the deficit down, we're going to crush the Taliban, etc. etc. And even if you grant that "invest" is just another word for "spend," he was mostly talking about the kind of spending the Republicans could, in theory, go along with.

As for the responses, what can you say? Paul Ryan probably did about as well as anyone could do with one of those things, but his speech was mushy and vague to the point of parody. Michele Bachmann had a bit more pep to her step, but her attempt to pretend that the economy was great under George Bush was pretty laughable.

All in all, not a memorable night. Which is too bad, in a way, since I think Obama's education/technology/infrastructure message is actually pretty important. It's too bad nobody is really in a mood to hear it right now.

POSTSCRIPT: And a note to John Boehner: dude, we know you're a Republican. Obama is the opposition. We get it. But your preposterously ostentatious boredom during the entire speech really needs to go. You should at least pretend you're not in junior high school anymore.

The Big Freeze

| Tue Jan. 25, 2011 9:46 PM EST

Barack Obama plans to propose a five-year discretionary spending freeze in tonight's State of the Union address. Is this a good idea? A preemptive capitulation to Republican deficit hawks? Or what?

I vote for "or what." Let's all keep in mind that budgets are set one year at a time, and they're mostly set by Congress. The president has a certain amount of agenda-setting power, but that's about it. Members of Congress will do whatever they want, and next year they'll once again do whatever they want. If that means spending more money, they'll spend more money. Obama could announce a hundred-year discretionary spending freeze and it would mean about as much as a five-year freeze. This is more a PR exercise than anything else and should be evaluated on those terms.

The Myth of Slow Growth Revisited

| Tue Jan. 25, 2011 8:26 PM EST

Was economic growth in the period 1950-80 really significantly higher than it has been in the period since then? Yesterday I said that growth rates in those two periods were actually about the same, and today Stuart Staniford and Ryan Avent say I'm wrong. They both have a point, so let's revisit this.

Stuart points out that a 100-year logarithmic chart hides small differences. Ryan points to decadal averages for real GDP. So here's a new chart that addresses both of these concerns (GDP and population data from FRED.):

First off, I'm using GDP per capita, not raw GDP, since that's a better measure of actual economic growth. Stuart suggests that GDP per working-age person might be a better measure, and I'm open to that depending on what it is we want to measure. Still, GDP per capita is the usual measure, so that's what I used.

The most obvious conclusion that pops out from the data is that growth has been fairly steady for the past sixty years with the exception of a nice growth spurt in the mid-60s. You can see that in the average growth rates per decade:

  • 1950s: 1.67%
  • 1960s: 3.42%
  • 1970s: 2.49%
  • 1980s: 2.43%
  • 1990s: 2.02%
  • 2000s: 1.27% (through 2007)

For the 30-year period 1950-79, growth averaged 3.18%. For the 28-year period 1980-2007, growth averaged 2.53%.

There are a couple of conclusions here. (1) The 60s were great, the 2000s were lousy. (2) Overall growth in the most recent three decades was indeed lower than in the three decades of the postwar era. (3) But not by a lot.

So I overstated things yesterday, but I'd still say it's the economy of the aughts that's a problem, not the entire post-70s era. The fact is that the post-70s economy as a whole simply wasn't a lot worse than the post-40s economy. The problem during this era wasn't primarily that growth was lackluster, it's that middle class wages consistently lagged growth by upwards of a percentage point per year.

So to revisit yesterday's point: yes, growth is important. You can't have 2% wage growth if the economy is growing 1.27% per year. But it's not enough. We had good growth for three decades after the end of the 60s and it didn't produce steady middle-class income gains. Distribution is important too.