From Justice Anthony Kennedy, generally believed to be the key swing vote on the individual mandate, during oral arguments today:

Can you create commerce in order to regulate it?

I'm not sure what the context for this was, and on its own it doesn't make a lot of sense. What commerce is the government supposedly creating? But it's a bad sign, and CNN legal analyst Jeffrey Toobin had a dismal appraisal of this morning's session:

"This was a train wreck for the Obama administration," he said. "This law looks like it's going to be struck down. I'm telling you, all of the predictions including mine that the justices would not have a problem with this law were wrong... if I had to bet today I would bet that this court is going to strike down the individual mandate."

....Toobin also said he thought Justice Kennedy, the perennial swing vote, was a "lost cause" for supporters of the health care reform law.

Urk. Fasten your seat belts.

Has there been any public controversy in recent memory as disheartening as the Trayvon Martin case? I don't mean the killing of Martin itself, though. That's certainly disheartening, but it's hardly unique. I'm talking instead about the political reaction to it.

A week ago, the worst I could say about right-wing reaction to the Martin case was that conservatives were studiously ignoring it. But that was a week ago. Since then, conservatives have entered the arena with a vengeance.

But why? At first glance, there's no obvious conservative agenda here. They might, in the abstract, want to defend the "Stand Your Ground" laws that have suddenly drawn the public's attention since the Martin shooting. But the shooting itself? There's no special conservative principle at stake that says neighborhood watch captains should be able to shoot anyone who looks suspicious. There's no special conservative principle at stake that says local police forces should barely even pretend to investigate the circumstances of a shooting. There's no special conservative principle at stake that says young black men shouldn't wear hoodies.

But as Dave Weigel points out today, the conservative media is now defending the shooter, George Zimmerman, with an almost messianic zeal. There's a fake photo of Trayvon Martin making the rounds, and even after it was debunked it's still making the rounds:

Why is the fake photo so popular? It's part of a new cottage industry of "truth about Trayvon" content, calibrated to convince people that they really shouldn't worry about the implications of this killing. Why, the kid wasn't even a saint! He might have been shot after brawling with the man who creeply followed him around the gated community? The Drudge Report has become a one-stop shop for Trayvon contrarianism.

Unfortunately, it's not really a cottage industry at this point. More like a mammoth, smoke-belching factory. When I opened my LA Times this morning, for example, I found Jonah Goldberg staring back at me, explaining that we shouldn't really care about Trayvon Martin because:

Martin's tragic death is a statistical outlier. More whites are killed by blacks than blacks killed by whites (or "white Hispanics"). And far, far more blacks are killed by other blacks. Indeed, if we're going to use the prism of race to analyze murder rates, then the real epidemic is that of black murderers.

Quite so. And that, it turns out, is the conservative principle that's actually at stake here: convincing us all that traditional racism no longer really exists (just in "pockets," says Goldberg) and that it's whites who are the real racial victims in today's America. Heh indeedy.

Aaron Carroll writes today that although the individual mandate is getting all the attention, the Supreme Court's ruling on Obamacare's expansion of Medicaid is even more important:

The way the ACA is written, unless states comply with these expansions, they stand to lose all Medicaid funding....Florida, along with 26 other states, is bringing a case to court based on the Constitution’s Spending Clause. Basically, the federal government has the right to make states accept certain conditions for which they will be given federal funds. If they don’t accept the conditions, then they don’t get the money. This is how Medicaid began, as an optional program states could agree to join. All of them did, obviously.

But now the law has changed, and those against the ACA’s new policy argue that this is an unfair expansion of a program that in practical terms is no longer optional. Medicaid is so fundamental to states’ operations now, they assert, that it can’t be considered funding that states can refuse if they choose not to agree to the new regulations. Because they will lose not only the new funding but all Medicaid funding if they don’t expand the programs, they say the actions of the federal government are coercive.

Aaron is right that this part of the case is far more fundamental than the court's ruling on the mandate. If the mandate is overturned, it would place moderate new limits on Congress's regulatory power. It wouldn't even necessarily be disastrous to Obamacare: there are other ways to implement an effective mandate that are unquestionably constitutional, after all. The problem is that right now Democrats don't have the votes to pass one of those other ways. But that's a political problem, not a fundamental constitutional problem.

The Medicaid changes are quite different, though. For decades, Congress has implemented national programs not by explicitly forcing the states to go along, but by making funding available only to those states that agree to follow federal rules. Critics have long argued that this is a subterfuge: Congress does this in cases where they don't have the constitutional power to make a program mandatory on a national basis, so instead they extort cooperation by sucking out tax dollars from the states and then agreeing to give them back only if the states go along. But subterfuge or not, courts have always ruled that this is constitutional.

So if the Supreme Court overturned the Medicaid changes, it would be a genuine earthquake. At worst, it would make hundreds of programs instantly unconstitutional and expel the federal government from playing a role in dozens of policy areas. At best, the federal government could still start programs this way, but could never change them once they'd become entrenched and were no longer "optional." This would freeze policy in place in a way that would be disastrous.

This, of course, is why most observers haven't paid a lot of attention to this part of the case: it's nearly inconceivable that the court is willing to produce this kind of bedlam. It would overturn decades of very clear precedent and produce chaos at both the state and federal levels. And unlike overturning the mandate, overturning Congress's ability to fund national programs this way would quite likely provoke a genuine constitutional crisis. I don't think anybody believes the court is really in a mood to do this. So even if they do overturn the Medicaid provisions (unlikely), they're almost certain to do so on very narrow terms that don't have a broad impact on Congress's general ability to make federal grants conditional on Congress's rules.

But I guess we'll see. If this part of the law gets upheld, but by only a 5-4 vote, it would mean that Medicaid is safe but that the court is really and truly feeling its oats. This part of the program will be argued tomorrow, and it's worth a watch.

The Wall Street Journal reports that, at least for the moment, companies with performance goals for their CEOs are actually paying their CEOs based on whether they meet those goals:

Preliminary results highlight how corporate directors, under new scrutiny from shareholders, are tying more CEO pay to corporate performance. When companies miss targets, directors are holding the line.

"The pressure from shareholders clearly has had an effect here," discouraging boards from using their discretion to boost pay, says Robin Ferracone, executive chair of Farient Advisors LLC, a Pasadena, Calif., compensation consultant.

....That is a shift from a few years ago, compensation consultants say, when directors would often overlook missed targets and award big bonuses anyway. That dynamic has changed under pressure from investors and the Securities and Exchange Commission.

One of the worst aspects of "pay for performance" CEO compensation is that quite often it's rigged outrageously in favor of the CEO. There's almost no way to lose. And then, on the off chance that you do poorly anyway, the board decides that it was just bad luck and you shouldn't be deprived of the bonus you've been counting on all year. So they make it up to you. After all, we're all one big happy family on mahogany row, right?

But if the Journal is to be believed, company boards are actually holding their rock-jawed titans of capitalism to their promises these days. Good to hear. I wonder how long it will last?

The Economist writes about some promising applications of behavioral economics, especially those popularized by the book Nudge:

The book, first published in 2008, is about the potential for behavioural economics to improve the effectiveness of government. Behavioural economists have found that all sorts of psychological or neurological biases cause people to make choices that seem contrary to their best interests....That theory is now being put to the test [...] in several countries including Denmark, France and, above all, Britain, where David Cameron has established a Behavioural Insights Team, nicknamed the Nudge Unit.

The Nudge Unit has been running dozens of experiments and the early results have been promising. In one trial, a letter sent to non-payers of vehicle taxes was changed to use plainer English, along the line of “pay your tax or lose your car”. In some cases the letter was further personalised by including a photo of the car in question. The rewritten letter alone doubled the number of people paying the tax; the rewrite with the photo tripled it.

Changes to language have had marked effects elsewhere, too. A study into the teaching of technical drawing in French schools found that if the subject was called “geometry” boys did better, but if it was called “drawing” girls did equally well or better. Teachers are now being trained to use the appropriate term.

At the risk of sounding peevish, I have to ask: in what way is any of this stuff behavioral economics? Trying to figure out better ways of persuading people to do things used to go under the rubric of rhetoric, politics, or salesmanship. When did we suddenly decide that the kind of thing that marketing people have been doing for the past century is now a wholly-owned subsidiary of economics?

I remember having the same problem with Freakonomics when it first came out. It was all interesting and breezily written, but most of it was nothing more than the application of clever statistical techniques to figure out how different incentives affect people's actions. But unless we've all agreed that anything involving the study of human incentives is, by definition, economics, the title of the book is seriously misleading. Only a few of the chapters dealt with subjects traditionally viewed as economics.

I've got nothing against the study of nudging. We should do more of it! But the steady colonization of economics into every area of human behavior should be put to a hard stop. I suppose that hardnosed politicians are more likely to listen to a "behavioral economics" pitch than a "marketing" pitch, but that's not much of an excuse. Just because it uses math and deals with human behavior doesn't make it economics.

UPDATE: Richard Thaler, one of the co-authors of Nudge, tweets: "Not true of the book. The article is just a thin slice." I didn't really mean to implicate the book itself, which I haven't read, with the Freakonomics problem, so apologies for that.

Over the past few years it's become fashionable in sophisticated political circles to argue that presidential campaigns themselves barely matter. What matters is the economic fundamentals. When the economy is strong, the incumbent party wins. When the economy is lousy, the incumbent party loses. All the rest is just a bunch of sound and fury, signifying nothing.

I've long had some problems with this attitude. I don't think there's any question that the state of the economy matters, and I agree that political journalists probably ought to pay more attention to this than they usually do. At the same time, it's easy to go overboard. For one thing, political scientists have come up with a lot of different models, and they don't all rely on the same economic measures. Nor do they make the same predictions. Nor do they even claim (in most cases, anyway) to explain more than about 60-70% of the variance in how well the parties do. So even if the models are accurate, there's plenty of scope for other factors to influence presidential elections too.

But are they accurate? It's easy to be impressed by a model that accounts for past election results with high accuracy. That's a nice looking regression line, pal! But it's quite another thing for your model to predict elections in advance, and that's the acid test for any election model. Until now I've never seen anyone do a systematic review of actual predictions by the various models, but today Nate Silver filled that void, taking a look at model predictions since 1992. The results aren't pretty:

In total, 18 of the 58 models — more than 30 percent — missed by a margin outside their 95 percent confidence interval, something that is supposed to happen only one time in 20 (or about three times out of 58).

Across all 58 models, the standard error was 8 points of vote margin or 4.6 points of incumbent vote share. That was much larger than the error that the models claimed they would have — about twice as large, in fact....The “fundamentals” models, in fact, have had almost no predictive power at all. Over this 16-year period, there has been no relationship between the vote they forecast for the incumbent candidate and how well he actually did.

Nate argues that the state of the economy does have some predictive power. He figures it at about 40%, but says that most current models don't even do that well because they're poorly designed. That doesn't surprise me: this is a really hard subject with lots of hard-to-answer questions. What matters most, the absolute state of the economy or whether it's on an upswing/downswing? Should we look at GDP growth or unemployment? Or something else, like disposable income? Do voters respond to some variables, like inflation, only when they get above a certain level? Etc. This is hard stuff, and we don't have a whole lot of data points to work with.

What's more, common sense suggests that other things matter too. For example, I just can't accept as coincidence that since 1950 incumbent parties have nearly always won after one term in office and nearly always lost after two terms. If I used that as my only rule, I'd have an accuracy rate of 87%. (Though only 80% if you count Al Gore as the popular-vote winner in 2000.)

All of this is one reason why I'm reasonably optimistic about Obama's chances in November. Yes, the economy is still in weak shape. But it's improving, which I suspect is at least as important as its absolute level. What's more, his party has been in power for only one term and he's a strong candidate running against a weak Republican field. Put all that stuff together, and I think his odds look pretty good.

Bottom line: the economy matters, but it's probably wise not to get too deterministic about these things. Monocausal explanations are often appealing, but just as often wrong. The world is a complicated place.

From Paul Waldman, on Rick Santorum's latest video apocalypse:

Holy crap! Was that a shot of Barack Obama forcing a little girl to bite the head off her beloved guinea pig? Maybe not, but almost. Apparently, it will take Obama only two years to turn America into some combination of "The Day After" and "Saw."

Paul isn't exaggerating. Santorum's ad really does open with a Saw-like shot of a flock of crows shrieking as they fly away from an abandoned, windswept little town. The Santorum campaign is really getting desperate.

Via Joe Weisenthal, this chart from BarCap shows the growth of the tech sector with and without Apple. Take Apple's stock out of the equation, and instead of growing 8% over the past year, the tech sector has shrunk about 3%. It's true that you can see an effect like this on any kind of aggregate index if you remove the top performer, but given the size of the tech sector this is a pretty stunning example of the effect.

Paul Krugman comments on the Obamacare court case being argued today:

We know, or I think we know, that a single-payer system — in which the government collects taxes, and uses the revenue to provide health insurance — would be constitutional. I mean, I don’t think the court is about to strike down Medicare.

Well, ObamaRomneycare is basically a somewhat klutzy way of simulating single-payer. Instead of collecting enough revenue to pay for universal health insurance, it requires that those who can afford it buy the insurance directly, then provides aid — financed with taxes — to those who can’t. The end result is much the same as if the government collected taxes from those under the mandate and bought insurance for them....It is in no sense more interventionist, more tyrannical, than Medicare; it’s just a different way of achieving the same thing.

Agreed. This whole case has a serious air of angels-dancing-on-the-head-of-a-pin. The individual mandate is enforced by a tax penalty, and if it were called a tax penalty it would be OK. But since it's called a fine it's unconstitutional! Congress can tax everyone and then provide them with health insurance — outsourced to a private company if it wants to. But it can't require everyone to simply buy the exact same health insurance directly for the exact same price! Raich may seem like a precedent that binds conservatives to uphold Obamacare, but Raich was an as-applied challenge. The current case is a facial challenge!

And on and on. Maybe these distinctions really matter. But to an awful lot of people, they sure sound an awful lot like mere excuses to reach a conclusion they want to reach. That's because, broadly speaking, it's nearly impossible to argue that Obamacare is even close to pushing the envelope on Congress's power to regulate interstate commerce. It's aimed at a particular sector (healthcare) and uses a particular method (the mandate) to accomplish its goals, but lots of acts of Congress use slightly new and different ways of accomplishing legitimate goals. The methods of 1787 just don't map precisely onto 2012.

We'll see. If the conservative justices are simply bound and determined to make their mark and overturn Obamacare, they will. But if they do, they're going to have to torture the law pretty hard to get there.

More here from Adam Serwer on possible outcomes.

Yesterday I asked for podcast recommendations. I got loads of 'em! So now, as a public service, I figure I should provide you with a rough Top Ten list culled from comments and emails. The full comment section has a lot more than just the podcasts below, and you should take a look if you're in the market for something a little different, but here were the favorites:

  1. Radiolab won by a mile. The entire stable of NPR shows also got a lot of votes, including Planet Money, Car Talk, This American Life, Foreign Dispatch, and others.
  2. In Our Time was the only show that came close to Radiolab. The rest of the BBC radio lineup got lots of recommendations too.
  3. The Bugle, a news sendup from John Oliver and Andy Zaltzman.
  4. Philosophy Bites, "podcasts of top philosophers interviewed on bite-sized topics..."
  5. "The Civil War and Reconstruction Era, 1845-1877," a Yale University course by David Blight. The Open Yale series in general got a lot of strong recommendations.
  6. History of Rome, a massive, ongoing series of podcasts "tracing the history of the Roman Empire, beginning with Aeneas's arrival in Italy and ending (someday) with the exile of Romulus Augustulus, last Emperor of the Western Roman Empire." So far it's up to episode #172, which covers Attila the Hun's invasion in 451 AD, so it must be getting close to wrapping up.
  7. WTF, comedy with an attitude from Marc Maron.
  8. The B.S. Report, sports talk from ESPN's Bill Simmons.
  9. The New Yorker's stable of podcasts, incuding Comment, Political Scene, Fiction, and Out Loud. 
  10. Slate's stable of podcasts, including Gabfest, Culture Gabfest, and Double X Gabfest.

On the technology side, there were also several recommendations for Downcast as an alternative to iTunes. And, of course, lots of other recommendations that were a little farther off the beaten path than the ones above. Click the link for more. Enjoy.