Kevin Drum

Enthusiasm Gap Update

| Tue Sep. 28, 2010 11:42 PM EDT

A new NBC/Wall Street Journal poll reports that the enthusiasm gap is tightening as the election nears:

Among likely voters — identified by their past voting history and their high level of interest in the November midterms — 46 percent prefer a Republican-controlled Congress, versus 43 percent who want a Democratic-led one.

That’s a decline (though within the margin of error) from the 49-to-40 percent lead Republicans held in late August. The NBC/WSJ pollsters attribute the tightening to increased enthusiasm for the upcoming midterms by African Americans (who saw a six-point gain in high interest) and Hispanics (who saw an 11-point gain).

Perhaps the reality of a tea party-controlled Congress is finally sinking in.

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The Effect of Tax Cuts

| Tue Sep. 28, 2010 6:25 PM EDT

CBO director Doug Elmendorf testified today about the long-term effect of extending the Bush tax cuts, and his chart showing the difference between extending only the middle-class cuts vs. extending all the cuts has been making the rounds. Basically, CBO says that although temporary tax cuts would stimulate the economy right now, the effect of permanent tax cuts would be strongly negative in the long run because they'd blow up the deficit and crowd out private investment.

I was going to comment on this, but after reading through the full report it looks to me like the chart is wrong. As near as I can tell, it's drawn from data in Table 4 (page 31) but somebody in the graphics department drew the bars wrong. Take a look at the effect of a permanent extension. The original chart (in blue, below) suggests that under two different scenarios the long term negative effect of full extension is equal to or less than the negative effect of just a middle class extension. That doesn't really make sense. The revised chart (in red, at bottom) shows that full extension has a stronger negative effect than a middle class extension. This seems more intuitively correct.

I'm not actually sure of that, though. Mainly I just want to know what CBO's real opinion is. Is the chart correct or is the table correct? Or am I comparing the wrong things? I've got an email out to CBO to ask about this, and I'll let you know if I hear back.

UPDATE: My email provider decided to bounce my emails to CBO, so I never got a reply. However, I think I've figured out where the numbers in the chart came from. Unfortunately, that just prompted a followup question. Details here.

Obama and the Senate

| Tue Sep. 28, 2010 12:42 PM EDT

Ezra Klein says the Obama administration hasn't done enough to change Senate rules, and Jon Cohn agrees:

White House officials complain bitterly about the constraints the filibuster places on them, and rightly so. But they've expended relatively little energy speaking out about it and even less energy (as far as I know) actually trying to end it. That's not the only reason for their political struggles or even the main reason, obviously, but it certainly hasn't helped.

I dunno. Seriously, what could Obama have done on this score? He has no authority over Senate rules. Nor would using the bully pulpit do much good since the subject is too arcane for most of the public to care about, especially with everything else that was on the agenda over the past two years. (You think it's hard to get people excited about healthcare reform in the middle of a recession? Try getting them excited about procedural reform in the Senate. I can only imagine the derision Obama would be facing if he'd spent lots of time on this in 2009 when he should have been focused like a laser on jobs, as all the pundits keep reminding us.) What's more, even in theory the filibuster can only be eliminated at the beginning of session. So jabbering about it wouldn't have done any good anyway.

And comparing this to George Bush's constant call for "up or down votes" doesn't seem relevant either. Did that ever really do him any good? Aside from judicial appointments, I don't think the filibuster was really a big issue for Bush. For better or worse, he mostly chose to push bills that (a) could be passed by reconciliation — like the 2001 and 2003 tax cuts, (b) had plenty of Democratic support — like NCLB and the war resolution and the PATRIOT Act and Medicare prescriptions and the bankruptcy bill, or (c) that he didn't really like but caved in on — like Sarbanes-Oxley and McCain-Feingold. His biggest failure came on Social Security privatization, and that was so unpopular it probably didn't even have 50 votes. The filibuster just wasn't an issue.

I'd like to see the filibuster eliminated and I'd like to see unanimous consent eliminated. (For the latest abuse on that score, click here.) But the big issue here isn't Obama, I think. It's whether Harry Reid can round up even 50 votes for it when the 112th Congress meets in January. Maybe the president could help this along, but then again, he might just make things worse too. Senators haven't historically been too excited about presidents trying to push them around, after all.

Democrats haven't played this issue well, but that's where I'd put the blame. I'm not sure Obama had as much leverage here as people are suggesting.

Taxing the Other Guy

| Tue Sep. 28, 2010 11:38 AM EDT

Matt Yglesias notes that commuters in DC are split pretty evenly between drivers and transit users:

This means that something like higher taxes on downtown parking garages would generate lots of revenue from non-residents without disadvantaging the majority of DC residents. The revenue could then be used to reduce the district’s sales tax or increase the personal exemption of the DC income tax. Not only would that be good tax policy, it would shift the balance of power in the future further in the direction of rolling back car-subsidization policies.

Italics mine. I don't really have an opinion on higher parking taxes. It's probably a good idea, just the same as taxes on gasoline or carbon emissions would be a good idea. Almost anything that cuts down on driving is a good idea.

But I'm curious: is it my imagination, or have we seen a recent wavelet of cities and states trying to figure out ingenious ways to tax nonresidents more stiffly? Commuter taxes are one way, higher hotel taxes are another, fees on sporting event tickets and jacked up highway tolls are yet others. So two questions. First, is this sort of thing really becoming more popular, or have I just happened to notice it more over the past couple of years? Second, is it a good idea? Are nonresidents really free riders on urban awesomeness who aren't paying their fair share, or does this kind of thing run the risk of spiraling into a morass of competitive taxes that will end up hurting everyone? Just wondering.

Wage Equality State By State

| Tue Sep. 28, 2010 11:20 AM EDT

According to the Census Bureau, median household income fell by $1,500 last year, a drop of 2.9%. However, if you're lucky enough to still be working full time, your earnings went up slightly, and women's earnings went up more than men's:

For full-time, year-round workers, the 2009 ACS median earnings for women were 78.2 percent of men’s earnings [...] and the ratio of women’s earnings to men’s earnings was up from 77.7 percent....At 88.2 percent, the District of Columbia was among the highest ratios of women’s to men’s earnings. Wyoming, at 65.5 percent, was among the lowest.

The map below shows how each state fares when it comes to gender equality in wages.

Obama's Defense

| Tue Sep. 28, 2010 10:11 AM EDT

Jann Wenner reports in Rolling Stone today that after his recent interview with President Obama was over, Obama returned briefly to the Oval Office and tacked on a coda, speaking "with intensity and passion, repeatedly stabbing the air with his finger":

It is inexcusable for any Democrat or progressive right now to stand on the sidelines in this midterm election. There may be complaints about us not having gotten certain things done, not fast enough, making certain legislative compromises. But right now, we've got a choice between a Republican Party that has moved to the right of George Bush and is looking to lock in the same policies that got us into these disasters in the first place, versus an administration that, with some admitted warts, has been the most successful administration in a generation in moving progressive agendas forward.

....If we want the kind of country that respects civil rights and civil liberties, we'd better fight in this election. And right now, we are getting outspent eight to one by these 527s that the Roberts court says can spend with impunity without disclosing where their money's coming from. In every single one of these congressional districts, you are seeing these independent organizations outspend political parties and the candidates by, as I said, factors of four to one, five to one, eight to one, 10 to one.

We have to get folks off the sidelines. People need to shake off this lethargy, people need to buck up. Bringing about change is hard — that's what I said during the campaign. It has been hard, and we've got some lumps to show for it. But if people now want to take their ball and go home, that tells me folks weren't serious in the first place.

If you're serious, now's exactly the time that people have to step up.

Well, that's not going to be popular with Obama's lefty critics, though obviously you'd expect a mushy sellout like me to agree with him. And I do! But I'd also make a distinction. If you're, say, Glenn Greenwald, I wouldn't expect you to buy Obama's defense at all. All of us have multiple interests, but if your primary concern is with civil liberties and the national security state, then the problem isn't that Obama hasn't done enough, it's that his policies have been actively damaging. There's just no reason why you should be especially excited about either his administration or the continuation of the Democratic Party in power.

On the other hand, if your critique is the broader and more common one — that Obama has moved in the right direction but has been too quick to compromise and hasn't accomplished enough — then I think you should take his defense of his record way, way more seriously. It's all too easy, like Velma Hart, to convince yourself that he could have waved a magic wand and gotten a bigger stimulus and a better healthcare bill and stronger financial regulation and a historic climate bill. But honestly, you have to buy into some pretty implausible political realities to believe that (Olympia Snowe would have voted for a trillion-dollar stimulus, there were Republican votes for a climate bill if only it had been a bigger priority, healthcare reform could have been passed via reconciliation, Harry Reid could have unilaterally ended the filibuster, etc.). The votes just weren't there and the president's leverage over centrist Dems and recalcitrant Republicans just wasn't very strong. Maybe he could have done better, but the evidence says that, at best, he could have done only a smidge better.

And the alternative? Well, if the prospect of ripping apart healthcare reform, shutting down the government, deep sixing START, slashing social spending, and reliving the glory days of investigations over Christmas card lists isn't enough to get you motivated, I guess I'm not sure what is. I wish I got more warm and fuzzies from Obama too, and I wish, like Mike Tomasky, that his "fetish of not kowtowing to public opinion" were a little less ostentatious. But letting Darrell Issa take over the House Committee on Oversight and Government Reform doesn't seem like a very good way of getting that message across.

OK then. I think I'll go donate a hundred bucks to someone. Who do you think it should be?

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Everything Old is New Again

| Tue Sep. 28, 2010 8:00 AM EDT

So, how about that whole tea party movement, eh? Quite the contemporary phenomenon, isn't it? After all, they mostly seem to be mad about newly skyrocketing deficits, a recently passed healthcare bill, an unprecedented bank bailout, and a huge new stimulus bill enacted last year. But no. That's really not it at all:

Too many observers mistakenly react to the tea party as if it's brand new, an organic and spontaneous response to something unique in the current political climate. But it's not. It's not a response to the recession or to health care reform or to some kind of spectacular new liberal overreach. It's what happens whenever a Democrat takes over the White House. When FDR was in office in the 1930s, conservative zealotry coalesced in the Liberty League. When JFK won the presidency in the '60s, the John Birch Society flourished. When Bill Clinton ended the Reagan Revolution in the '90s, talk radio erupted with the conspiracy theories of the Arkansas Project. And today, with Barack Obama in the Oval Office, it's the tea party's turn.

....The growth of the tea party movement isn't really due to the recession (in fact, polling evidence shows that tea partiers are generally better off and less affected by the recession than the population at large). It's not because Obama is black (white Democratic presidents got largely the same treatment). And it's not because Obama bailed out General Motors (so did George W. Bush). It's simpler. Ever since the 1930s, something very much like the tea party movement has fluoresced every time a Democrat wins the presidency, and the nature of the fluorescence always follows many of the same broad contours: a reverence for the Constitution, a supposedly spontaneous uprising of formerly nonpolitical middle-class activists, a preoccupation with socialism and the expanding tyranny of big government, a bitterness toward an underclass viewed as unwilling to work, and a weakness for outlandish conspiracy theories.

That's me in the latest issue of the magazine. But don't despair: it turns out there is one thing new about the tea parties after all. But you'll have to click the link and read to the end of the story to find out what it is. Enjoy.

The Power of Fox

| Mon Sep. 27, 2010 11:30 PM EDT

Paul Waldman argues today that although the left has made some progress catching up to the right's media infrastructure, it hasn't closed the gap yet. That's especially true in one key area:

Todd Gitlin, professor of journalism at Columbia University, says the key is Fox News....On the right, he says, "it's Fox that makes the difference." While MSNBC's evening schedule features three liberal hosts (Olbermann, Maddow, and Ed Schultz), it doesn't have the same around-the-clock consistency of both ideology and story selection that Fox does.

Fox does more than amplify the conservative message; it builds momentum for a story by hammering it over and over for days or weeks until the mainstream media finally feels compelled to discuss it. While Maddow may take an interest in a particular story other media are ignoring, she won't be backed up by six separate MSNBC shows doing a dozen segments a day on her new pet topic. But Fox routinely takes that all-hands-on-deck approach. Recently Media Matters counted 95 separate segments on the New Black Panther Party voter-intimidation case — a contrived story conservatives did their best to trump up — in a period of two weeks on Fox. This kind of relentlessness doesn't work every time, but it works often enough. Eventually, many other news outlets covered the voter-intimidation story.

Yep. In most areas the left is at least close. The right has Drudge, we have the Huffington Post and TPM. The right has Rush, we have NPR. The right has the Wall Street Journal, we have the New York Times. The right has the Heritage Foundation, we have CAP. All of these comparisons are imprecise in one way or another (NPR isn't an anti-Rush, Heritage is bigger than CAP but the left boasts lots of center-left think tanks, the WSJ's editorial page is far more aggressive than the NYT's, the right has nothing to compete with Daily Kos or Jon Stewart, etc.) but they're at least in the same ballpark.

But nothing we have comes even close to the power of Fox. It is unique. MSNBC is so far behind in the agenda-setting arena that it's hardly even playing the same game. So far, the mainstream media simply hasn't figured out how to deal with Fox, and there's no hint that they're getting any closer.

Why Income Matters

| Mon Sep. 27, 2010 8:10 PM EDT

I'm a little bored at the moment. How about another post on income inequality to liven things up? That should bring the page views pouring in, shouldn't it?

I'm going to start by reporting on Will Wilkinson's emotional state: he's sad. He's been trying to explain the idea that there can be different inflation rates for different groups of people, but it's a complicated concept and hard to get across. However, he thinks it's an important part of the inequality argument, and that's the part I want to address.

So here's the simple version. Suppose that rich people tend to consume lots of Porsches and tins of Beluga caviar, while poor people tend to consume lots of Chevrolets and hot dogs. Now suppose that over the past decade the price of Porsches and caviar has gone up 20% while the price of Chevrolets and hot dogs has stayed the same.

Got that? Now suppose you read that the incomes of the poor had been flat during the aughts while the incomes of the rich had gone up 20%. You would be outraged. The rich are getting richer while the poor are stagnating! Inequality is rising! When will it ever stop?

And people are consuming the exact same number of BMWs and tins of caviar as they did ten years ago and poor people are consuming the exact same number of Chevrolets and hot dogs. Looking at income is misleading. Both groups are doing about the same.

Now, measuring inflation is hard enough already, and the measurement problems associated with trying to figure out separate inflation rates for rich and poor are convoluted enough to make grown econometricians cry. What's more, you can't just assume that everyone is buying the same stuff today that they bought in the past. Maybe purchasing patterns have changed over time in response to different growth rates in wages. It's a tough nut to crack.

In theory, though, it's a legitimate topic of research if you're interested in understanding the lived experience of different groups. You also need to consider government transfers, tax rates, household compositions, number of hours worked, and lots of other things. It's a fertile field of study.

As it happens, though, it's not the topic I'm usually interested in. The topic that's my normal preoccupation is understanding how the private economy works. That is, how does the private economy reward various groups of people? How has this changed over time? Why has it changed over time? Is it healthy? Can it last?

This second question is purely one of income and wealth distribution. I just want to know how money flows to different classes of people. Because while it's reasonable to say that a particular industry can be a growth driver during some particular period — electricity in the early 20th century, cars during the middle, and computers later on, for example — it's not really reasonable to say that a particular income class is a growth driver. Does anyone really think that 30 years ago rich people suddenly became more responsible for economic growth than the poor or the middle class?

I don't, and the comparative international evidence doesn't suggest it either. Rather, I think the rich in America have simply managed to reengineer our political and economic institutions to suppress middle class income, thus producing a vast pool of money that flows in their direction. As a result, their share of national income becomes ever more swollen. And this is horribly corrosive. I believe pretty strongly that a modern mixed economy can remain healthy only if prosperity is broadly shared, economic values are widely regarded as fair, and the middle class is becoming steadily wealthier. If that stops happening over an extended period of time it spells trouble on a whole bunch of fronts. The middle class becomes alienated and discouraged. The rich wall themselves off from the rest of us. The political process becomes increasingly co-opted. Boom and bust cycles become ever more pronounced.

You can mask this, of course. Technological improvements can make life better even with a stagnant income. Globalization can make low-end consumer goods seemingly cheaper. The rich can loan money to the middle class — for a while. Government programs can redistribute wealth a bit.

But those are just band-aids. The real long-term problem is that the fruits of economic growth are being increasingly funneled to a small group of the super rich in the first place. This just isn't sustainable without becoming a banana republic. Eventually, if we want a prosperous society, the private economy needs to distribute economic growth reasonably equitably in the first place.

Plus there's this: money is money. Even if stagnant incomes can produce growing consumption for a while, it comes at the cost of other things money can buy: leisure, retirement, savings cushions, etc. Rising incomes for the middle class would allow them more of everything that money can buy, not just more consumer goods.

Bottom line (so to speak): how people live their lives is an important topic. But it's not the only topic. How the private economy distributes wealth and income is important too. And on that score, all the signs point to an ever-widening gulf between rich and poor — an unhealthy, unsustainable gulf. We can't just shrug our shoulders and accept it.

Tax Cut Update

| Mon Sep. 27, 2010 2:05 PM EDT

Bloomberg reports the latest on the middle class tax cuts:

Congressional Democrats and a top White House official said Congress will extend soon-to-expire tax cuts for low- and middle-income Americans after the Nov. 2 election. Republicans said the delay and the threat of higher taxes for top earners will hurt the economy.

Illinois Senator Richard Durbin said Democrats will come together to extend Bush-era tax cuts for the first $250,000 of a married couple’s income, including lawmakers who also want to keep the lower rates for high-earning Americans.

We'll see. I still don't see how this would be anything other than an election-year plus if they did it now, but I guess I'm not as smart as the Blue Dogs.