Kevin Drum

America's Love Affair With Ronald Reagan

| Tue Feb. 1, 2011 6:42 PM EST

I agree with Brendan Nyhan and others that Ronald Reagan didn't actually change Americans' attitude toward government that much. What's more, to the extent that attitudes did change, it was mainly thanks to a backlash against 70s liberalism that would have happened with or without Reagan.

Still, when Paul Waldman suggests that Reagan's popularity is a myth too, I think he takes a step too far. Reagan is pretty popular! With the exception of our weird ongoing love affair with John F. Kennedy, Reagan and Bill Clinton are routinely chosen in polls as the most popular postwar presidents. Likewise, Reagan and Clinton were basically tied for the highest approval rating when they left office.

This isn't too hard to understand, either. People mostly associate Reagan with recovery from a lousy economy, they associate him with the fall of the Iron Curtain, and they associate him with rebuilding America's prestige in the world. Maybe this is right, maybe it's not, but it's pretty understandable.

Generally speaking, even decades later presidents are mostly judged by how they did and how things were going during their last year in office. Things were going great for Kennedy, Reagan, and Clinton, so they're remembered very favorably. Things were going decently for Eisenhower, Ford, and Bush Sr., and they're remembered decently. Things were going badly for LBJ, Nixon, Carter, and Bush Jr., and they're remembered badly. The main exception seems to be Truman, who ended his presidency on a sour note but has since recovered pretty well.

In any case, maybe Reagan deserves his popularity, maybe he doesn't. Still, he's a pretty popular guy.

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Huntsman for President! (In 2016)

| Tue Feb. 1, 2011 3:09 PM EST

Over at Democracy in America, Jon Fasman is trying to figure out why Jon Huntsman might be considering a run for the Republican presidential nomination this year:

Jon Huntsman was a successful governor, is a successful ambassador, is personable, handsome, accomplished, fluent in Mandarin and has all the makings of a major-party presidential candidate sometime in the future. Apparently, Mr Huntsman seems to have decided that the future is now: he will resign as ambassador to China in May and appears poised to run for president next year. This is a baffling decision....First, Republicans really don't like Barack Obama. Mr Huntsman has just spent two years as an Obama appointee....Second, why would he waste his candidacy this year? He brings moderation and an actual record of bipartisanship to a party and a primary electorate that seems interested in neither.

....The obvious answer, of course, is that he's leaping in because he thinks he can win.

Actually, I'd say the obvious answer is exactly the opposite. Huntsman's chances do indeed seem pretty slim in this election cycle — both in the primaries and in the general election. However, his name recognition is minuscule, and if he wants to run seriously in 2016 he needs to become better known. The best way to do that is to run in 2012. If he runs a decent, serious race, but loses to a more wingnutty candidate who then gets blown out by Obama, he'll have pretty good credentials for a 2016 run.

Now, I don't know if actual big-time politicians ever think this way. They seem to have an almost bottomless ability to believe against all evidence that they can win the presidency. (Fred Thompson? Seriously?) But Huntsman seems like a pretty smart, self-aware guy, and I wouldn't be surprised if he knows perfectly well that the odds are stacked against him. Most likely, what he's really doing is auditioning for 2016.

Why Judge Vinson's Decision Matters

| Tue Feb. 1, 2011 2:06 PM EST

A couple of times yesterday I started up a post on the federal district court judge who ruled that the healthcare reform law was unconstitutional. And both times I killed it because I didn't really care. This case is going to the Supreme Court, and they don't give a rat's ass about the legal arguments of the various district court judges who have ruled for and against PPACA. So Judge Vinson's decision doesn't really matter.

But a lawyer friend of mine writes in to say it does matter:

Kevin, this is a classic example of what happens when judges become overtly political, so I have to disagree with one of your posts from a few days ago where you advocated for a more political judiciary.1  We're all political, and for judges that often serves to slant their opinions, but in our system of precedent there are generally a series of margins they can't push — such as willfully ignoring Appellate Court or Supreme Court precedent. Like Vinson does when he converts his opinion to a political policy statement. Orin Kerr takes him apart at Volokh Conspiracy. And what's frightening is that Orin is very clearly right but somehow none of that may matter if this just becomes another exercise in supporting Team Red no matter what the costs.

It's a heavy subject and I can't really write about it without sounding like a naif, but for me the struggle to maintain the independence of the judiciary is one of the most important for the country. And political and cavalier (and clearly intentionally unserious conduct) from Article III judges — or worse, appellate and S.Ct. judges — can have devastating effects. (o.k. so much for not sounding like a naif).

The Orin Kerr post he links to makes this point explicitly: district court judges aren't supposed to decide cases on first principles, as Judge Vinson appears to have done. They're required to obey precedent from higher courts. And unless the Supreme Court changes its mind, precedent is pretty clearly on the side of PPACA's individual mandate being constitutional, whether you like it or not:

The words of the relevant Supreme Court cases [Wickard v. Filburn and Gonzales v. Raich] point to an extremely broad power, and Judge Vinson is supposed to be bound by those words. But Judge Vinson concludes that these words can’t be taken at face value because “to uphold [the mandate] via application of the Necessary and Proper Clause would [be to] . . . effectively remove all limits on federal power.”....Judge Vinson is reasoning that existing law must be a particular way because he thinks it should be that way as a matter of first principles, not because the relevant Supreme Court doctrine actually points that way. Remember that in Raich, the fact that the majority opinion gave the federal government the power to “regulate virtually anything” was a reason for Justice Thomas to dissent. In Judge Vinson’s opinion, however, the fact that the government’s theory gave the federal government the power to “regulate virtually anything” was a reason it had to be inconsistent with precedent.

In a narrowly operational sense, I still don't think these decisions mean anything. The Supreme Court will decide the fate of PPACA, and they are allowed to overturn precedent if they want to. Still, both Orin Kerr and my legal buddy have a point: both of the decisions ruling PPACA unconstitutional were embarrassing and dangerous. Judge Hudson relied on elementary logical mistakes of the kind that a first-year law student would get marked down for, and Judge Vinson simply decided to make up his own law and ignore precedent entirely. Conservatives really shouldn't be celebrating these decisions even if they happen to like the results. Rather, they should accept that lower courts need to reason properly based on existing precedent, but then argue that the Supreme Court needs to change the precedent. It's the only intellectually honest approach, and the only one that isn't likely to come back to bite them in the ass sometime down the road.

1In my defense, I was only arguing that Supreme Court justices should drop the pretense that they're purely apolitical creatures, since obviously they aren't. Plus I was drunk that day.

The $700 Million Neon Sign

| Tue Feb. 1, 2011 1:16 PM EST

In its never-ending quest for a pro football team, one of the groups with plans to build a new stadium in Los Angeles is teeing up an announcement:

Backers of a plan to build a football stadium in downtown Los Angeles are set to announce Tuesday that they have reached a naming-rights deal worth $700 million, which would be the most valuable such agreement ever and a significant step toward bringing an NFL team to Los Angeles.

....The deal [with Farmers Insurance] would provide AEG's proposed project a crucial chunk of contractually obligated income, starting at $20 million for the first year and escalating incrementally every year after, according to individuals familiar with the negotiations but not involved in them. The stadium would be named Farmers Field.

I'm wildly ignorant about this stuff, and obviously naming rights have been big business for sports venues for a long time now. But I'm still a little perplexed by it. Is this stuff really worth it? Does Farmers Insurance truly get $20 million per year of promotional value just for having its name on a stadium? Or is this largely a charity operation, with a local company demonstrating its support for the community? Or what? Can anyone point me to the definitive piece to read on naming deals?

Subsidizing Food

| Tue Feb. 1, 2011 12:27 PM EST

The latest from the Middle East:

Jordan's King Abdullah II on Tuesday dismissed Prime Minister Samir Rifai and his cabinet after widespread protests by crowds of people inspired by demonstrations in Egypt, Tunisia and elsewhere.

The weekly demonstrations, which have drawn momentum from the unrest in the region and were joined Friday by thousands across Jordan, reflect growing discontent stoked by the most serious domestic economic crisis in years and accusations of rampant government. Demonstrators protested rising prices and demanded the dismissal of Rifai and his government.

One of the staples of op-ed page commentary is complaints about third-world governments that subsidize food and fuel to keep prices down. It's inefficient! The market should set prices! And so it should. But events of the past couple of weeks certainly make the decision to subsidize a lot more understandable, don't they? If it's a choice between market efficiency and keeping your head off a pike, market efficiency is going to lose every time.

Glenn Beck's World

| Mon Jan. 31, 2011 10:55 PM EST

Me, a few minutes after 3 pm today: "Beck is really bringing it today. Finally his theory of the world is complete." And just what is that theory of the world? Behold:

Here's Egypt, Libya, Tunisia. What's next to Tunisia? Algeria, also on fire now, the riots are starting here. Morocco is on fire. What's across from Morocco? Spain. Connected to France, and Germany, and Italy, also on fire. And Greece, also on fire. Which brings you right back here to Turkey. The entire Mediterranean is on fire.

Also Russia, Britain, and Ireland. And who's responsible for all this? Muslims, radicals, progressives, Marxists, socialists, and communists. (Seriously.) "This is not just happenstance, this is not just poor people mad at rich people. This. Is. Coordinated." And nobody but Glenn Beck is willing to tell you the truth about it. Plus there was talk of the coming Muslim caliphate, which brought back fond memories of Steven Den Beste-era warblogging. Great stuff, truly the Full Beale today.

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What If Healthcare Reform is Struck Down?

| Mon Jan. 31, 2011 9:00 PM EST

A federal district court judge declared the individual mandate provision of the healthcare reform law unconstitutional today. He also ruled that because Democrats forgot to include a severability clause,1 the entire law is invalid. Ezra Klein thinks that conservatives might come to regret it if the Supreme Court decides he's right:

I think it's vanishingly unlikely that the Supreme Court will side with Judge Vinson and strike down the whole of the law. But in the event that it did somehow undermine the whole of the law and restore the status quo ex ante, Democrats would start organizing around a solution based off of Medicare, Medicaid, and the budget reconciliation process — as that would sidestep both legal attacks and the supermajority requirement.

The resulting policy isn't too hard to imagine. Think something like opening Medicare to all Americans over age 45, raising Medicaid up to 300 percent of the poverty line, opening S-CHIP to all children, and paying for the necessary subsidies and spending with a surtax on the wealthy.

In the long run, I'm sure Ezra is right. But we all remember what Keynes said about the long run, right? And the short run, unfortunately, doesn't look very promising. Democrats aren't likely to control the House anytime soon, and even if they do, they won't have effective liberal control. Ditto for the Senate, where Democrats are defending a lot of swing seats in 2012. And in 2016, it's pretty likely that a Republican will win the presidency. In other words, if PPACA is struck down, the soonest that some kind of single-payerish semi-universal healthcare scheme could pass is probably around 2024.

That's just a guess. Who knows what will happen between now and 2024? But Republicans and conservative Democrats don't seem likely to support anything further to the left of PPACA anytime soon, and they're probably going to control things for the next 14 years at least. So be careful what you wish for.

1Do Democrats need to take a remedial legislation class? They also screwed up the food safety act last year by forgetting to append it to a House bill, as required by the Constitution. What's going on?

Mubarak Watch

| Mon Jan. 31, 2011 8:29 PM EST

Here is my Egypt post for the day:

Q: Is Hosni Mubarak toast?

A: Nobody knows, and anyone who pretends otherwise is just guessing.

There. I've just saved you from hours and hours of cable blather. You can thank me later.

Underwater Mortgages and You

| Mon Jan. 31, 2011 5:41 PM EST

Homeowners who are underwater on their mortgages are a drain on the economy because high mortgage payments reduce their demand for other goods and services. So how do we fix this? Mike Konczal reviews a couple of proposals to help out distressed homeowners and doesn't like them:

These two plans sound like really complicated programs, large-enough in scale to be inefficient. Which is a waste, since we already have this great system for writing down and managing burdensome debt, and it’s this marvelous thing called our bankruptcy laws. Sadly there’s a defect in it that prevents bankruptcy courts from writing down single-family principle residence mortgage....[But] we could easily pass a streamlined, modified version of bankruptcy just for this crisis.

I think bankruptcy "cramdown" is a good idea, but there's a problem with it: lots of homeowners who are stuck with mortgages they can't afford — mortgages that, in aggregate, are a massive drag on the economy — nonetheless aren't in such desperate straits that they can declare bankruptcy. In addition, there are others who could, but don't want to. Bankruptcy is a big deal, after all.

So I'm a little more sympathetic toward those broader plans than Mike is, because they might help a broader swath of homeowners and get the economy moving more quickly. Unfortunately, as much as people hate bailing out banks, they hate bailing out their profligate neighbors even more. I think we can safely expect nothing to happen on this front, and that means the economy will continue to underperform and unemployment will stay high. Thanks, tea partiers!

The Great Stagnation

| Mon Jan. 31, 2011 3:34 PM EST

So far my only comment about Tyler Cowen's e-booklet "The Great Stagnation" has been a whine about the Kindle format it's offered in. I promised a more substantive review for Monday, but now that Monday is here I'm almost reluctant to weigh in because TGS has gotten so much attention already. At this point, I'm not sure I have anything original to say about it.

But perhaps I do. The primary argument of TGS is that the United States has been growing strongly for the past two centuries by relying on lots of low-hanging fruit, but now the days of easy growth are over. In particular, Tyler identifies three sources of easy growth that are no longer open to us:

  • Land. The United States used to have lots of open land and now we don't anymore. I find this argument unpersuasive. Europe ran out of land a long time ago and its economic growth over the past two centuries has been great. Conversely, Brazil has lots of open land, but until recently its growth was poor. So I'm just not convinced that land is a big issue here.
  • Education. Starting a century ago we dramatically increased the number of kids who went to high school. More importantly — much more importantly, I'd say — after World War II we dramatically increased the number of kids who graduated from college. But you can only do that once. We can still make incremental improvements on this score, but we can't double or triple the number of college grads anymore. That avenue of growth is closed to us.
  • Technology. Tyler argues that technological growth was high between 1900-1950, but it's slowed since then. We spent several decades exploiting all the new inventions of the early 20th century, but a few decades ago we ran out of steam and we haven't invented enough truly fundamental new stuff since then to keep growth going. Longtime readers know that I basically agree with this, so I don't need much convincing on this score.

But there's a tension here that Tyler doesn't address. Technology grew like gangbusters in the first half of the 20th century, but it wasn't until the second half that education took off. So apparently it's not higher education that's really responsible for dramatic technological growth. But if that's the case, who cares about education?

The answer, I think, is that having lots of college grads doesn't really help push technological boundaries forward. What it does is produce a population that can effectively manage and direct large organizations that depend on advanced technology. And that helps produce economic growth nearly as much as fundamental new inventions do.

So here's what I think Tyler missed: it's true that we've already made our big improvements in access to education, and we can't do that again. But even if the number of college grads stays about the same as it is now, and even if the quality of their education stays about the same as it is now, the effectiveness of their management skills is multiplied tremendously by the computerization of the workplace. The human beings who are managing our country might be about the same as the ones who managed it 30 years ago, but they're managing it with steadily improving software and networking. They'll keep doing that for a long time, and that will keep GDP growing in the same way that better and better exploitation of electricity did during most of the 20th century.

In other words, computerization isn't just about the internet, and it's not just about whether Facebook generates a lot of utility without generating a lot of traditional GDP. That's the sexy stuff, but for the next 30 years it's continuous improvements in the computerization of industry and the computerization of management that will be the big GDP driver. Providing well-educated humans with better computers is every bit as important as simply churning out more well-educated humans.

(And after that? I'm a true believer in artificial intelligence, and I figure that 30 or 40 years from now computers are literally going to put humans out of business. They'll dig ditches better than us, they'll blog better than us, and they'll make better CEOs than us. This is going to cause massive dislocations and huge social problems while it's happening, but eventually it will produce a world in which today's GDP looks like a tinker toy.)

Tyler makes a bunch of other arguments in "The Great Stagnation" too, some more persuasive than others. Like some other critics, I'm not sure why he uses median wage growth as a proxy for economic growth. It's important, but it's just not the same thing. Besides, median wage growth in the United States slowed very suddenly in 1973, and it's really not plausible that our supply of low hanging fruit just suddenly dropped by half over the space of a few years. I also had a lot of problems with his arguments about whether GDP generated by government, education, and healthcare is as "real" as other GDP. For example, he suggests that as government grows, its consumption is less efficient, but that's as true of the private sector as it is of the public sector. A dollar of GDP spent on an apple is surely more "real" than a dollar spent on a pet rock, but there's simply no way to judge that. So we just call a dollar a dollar, and figure that people are able to decide for themselves whether they're getting the same utility from one dollar as they do from the next.

The healthcare front is harder to judge. I agree with Tyler that we waste a lot of money on healthcare, but at the same time, I think a lot of people seriously underrate the value of modern improvements in healthcare. It's not just vaccines, antibiotics, sterilization and anesthesia. Hip replacements really, truly improve your life quality, far more than a better car does. Ditto for antidepressants, blood pressure meds, cancer treatments, arthritis medication, and much more. The fact that we waste lots of money on useless end-of-life treatments doesn't make this other stuff any less real.

To summarize, then: I agree that the pace of fundamental technological improvements has slowed, and I agree with Tyler's basic point that this is likely to usher in an era of slower economic growth in advanced countries. At the same time, improvements in managerial and organizational efficiency thanks to computerization shouldn't be underestimated. Neither should the fact that other countries still have quantum leaps in education to make, and that's going to help us, not just the countries trying to catch up to us. After all, an invention is an invention, no matter where it comes from. And finally, try to keep an even keel about healthcare. It's easy to point out its inefficiencies, but it's also easy to miss its advances if they happen to be in areas that don't affect you personally.