Cui Bono?

AT&T's proposed acquisition of T-Mobile would make AT&T about a third bigger than it is now. Here's my prediction about how this will play out if the deal goes through: within five years, the compensation of AT&T's CEO will grow to be about a third bigger than it is now.

There's no especially compelling reason this should happen, but it will regardless. Keep that in mind in the midst of the coming blizzard of explanations for why this particular consolidation is good for the industry, good for the consumer, good for shareholders, and, well, just plain good for America, dammit. Industry consolidation over the past 30 years has produced a smaller but much higher paid class of corporate executives, and this one will too.

Chart of the Day: Why the Stimulus Didn't Work

Why did the 2009 stimulus package produce such meager results? Partly because the recession turned out to be worse than Obama's team thought, and partly because they didn't press for a big enough package even for the recession they thought we had. But another reason is that at the same time the feds were spending more money, state governments were cutting back. The chart below from CBPP tells the story. They have data for all but six states, and on average for 2012, "those 44 states plan to spend 9.4 percent less than their states spent before the recession, adjusted for inflation." That's not just less than last year, it's less than 2008. That wiped out nearly the entire effect of the federal stimulus package.

Griping About Libya

I'm not likely to blog very much about Libya, but I have to say there's an air of unreality surrounding a lot of the commentary that's starting to get on my nerves. Criticizing Obama for not consulting Congress is one thing. It's not as if this is some kind of unprecedented break with past practice or anything, but still. I get it.

But the "dithering" complaint? Give me a break. When did it suddenly become a personality defect to decline to intervene in a foreign rebellion the instant it broke out? Isn't there anyone left who appreciates the fact that Obama still retains a few shreds of anti-interventionist instinct and moves in a deliberate fashion?

Then there's the "why did he change his mind?" nonsense. Answer: because when events on the ground are moving fast, presidents change their minds. How? Usually by first holding a meeting and getting lots of input. Obama changed his mind last Tuesday in exactly the same way that every president since George Washington has changed his mind.

And then the "following, not leading" complaint. Look: if the only thing you actually care about is showing just how manly the United States can be, this makes sense. But that's a pretty stupid justification. There's just no reason why America should be required to take the leadership role in every military action around the globe.

Finally, there's all the handwringing over why we're intervening in Libya but not Bahrain or the Congo or Yemen. Please. Muammar Qaddafi is a terrorist and thug who's been on practically everyone's shit list around the world for decades. He has no allies, no friends, and not much firepower. Getting rid of him looks like a doable mission, and there's no one really opposed. Other places either don't look very doable or else their autocrats happen to be U.S. allies. Maybe that's not the most honorable reason in the world for leaving them alone, but it's a reason followed by pretty much every national leader since the first nomad planted a wheat field in Ur and settled down. We shouldn't act quite so wide-eyed and shocked that the United States does too.

Look: I'm not really happy about the intervention in Libya. Like a lot of people, I'd like to know what our actual goals are. What's more, I'm not sure it'll be the cakewalk that Hillary Clinton and Nicolas Sarkozy seem to think, and I believe that for a variety of reasons the United States is best served by not giving anyone an excuse for thinking that the current round of rebellions in the Middle East are backed by American power and interests. It's better for us to keep a pretty low profile right now.

But an awful lot of the criticism is just so unremittingly juvenile that I can hardly stand listening to it anymore. Time to grow up, people.

Who You Calling Progressive?

Greg Mankiw has a post up today linking to data from the Tax Foundation showing that the United States has a pretty progressive tax structure compared to other rich countries. Karl Smith has turned it into a chart and comments that "the US is more or less right on target." Rich people here are richer than in most other countries, but they also pay a bigger share of taxes than they do in most other countries. I have a few comments about this:

  • Using the "richest 10%" as your benchmark is misleading. America features not just lots of ordinary income inequality, it features lots of income inequality at the very tippy top of the income distribution. The real scandal of our tax system is that the top 1% and the top 0.1% make wildly more money than the top 10%, but they pay effective taxes at about the same rate. This chart doesn't capture that.
  • The chart includes only income and payroll taxes. But state and local taxes tend to be pretty regressive in the U.S. If you calculate the entire tax burden, you'll find that the American tax system is less progressive than this chart suggests. (See Figure 3 from the Tax Foundation here.)
  • That said, it's absolutely true that lots of other countries have only moderately progressive tax systems too. Most European countries raise far more in taxes than we do and fund a much greater range of social services, but they mostly do it with a combination of progressive income taxes, moderate taxes on capital, and fairly hefty VATs that are either regressive or flattish. Add it all up and the shape of their tax systems turns out to be fairly moderate.

If you put all this together and then reconstructed the chart, I think you'd find that most European countries do, in fact, have a somewhat more progressive tax structure than the U.S. But not by a lot. Roughly speaking, the social contract in Europe requires everyone who's non-poor to pay fairly heavy taxes, and then uses that money to fund broad social programs that are, themselves, quite progressive (a bus driver gets the same value from the French national healthcare system as a millionaire does). There is, it turns out, more than one way to skin the progressive cat, and you can do it on the spending side just as well as on the taxing side.

The American Academy of Pediatrics says children should stay in rear-facing car seats longer than we used to think:

Toddlers are usually switched from rear-facing to forward-facing car seats right after their first birthday — an event many parents may celebrate as a kind of milestone. But in a new policy statement, the nation’s leading pediatricians’ group says that is a year too soon.

....The academy’s previous policy, from 2002, said it was safest for infants and toddlers to ride facing the rear, and cited 12 months and 20 pounds as the minimum requirements for turning the car seat forward. But Ms. Baer, a certified child passenger safety technician, said parents tended to take that as a hard and fast rule.

“A lot of parents consider turning the car seat around as another developmental milestone that shows how brilliant and advanced their child is,” she said, “and they don’t realize that it’s making their child less safe.”

I don't have kids and my personality is kind of weird anyway, but I still have to ask: Really? Do parents really turn their kids around at age one because they think it shows how brilliant and advanced their child is?

Or do they do it because up until a few hours ago the American Academy of Pediatrics said it was OK to turn them around at age one? That actually seems more likely, doesn't it?

Chart of the Day: The Collapse of Wind Power

Stuart Staniford points out today that the pace of new wind power installations has cratered in the United States:

We need much more wind power. When wind power goes wrong, it kills the odd bird or maybe the occasional worker. Some people don't like the look of the towers. But we need power, and wind power doesn't destabilize the climate, and it doesn't irradiate hundreds of square miles of farmland. So this collapse in investment is terrible news.

I understand why the US congress and the Obama administration was not able to pass climate change legislation, but it's a terrible commentary on their energy/environmental policy that they weren't even able to maintain the pace of growth in wind installation.

What caused this? Wind projects have big capital requirements and long lead times, of course, so this could just be a delayed reaction from the 2008 financial crisis. If anybody out there can offer up a better explanation, I'm all ears.

The (Lack of) Power of Congress

I'm a longtime advocate of the position that, cases of clear self-defense aside, Congress should issue a declaration of war before the president commits combat troops overseas. At the same time, I recognize that this virtually never happens anymore. At best we get vaguely worded "authorizations of force," at worst we get nothing at all. Every president since Roosevelt, and most of them before him, have operated this way. So I'm not especially put out that President Obama failed to get congressional approval before committing the United States to support the no-fly zone over Libya. He's just acting the way every president in recent memory has acted. Matt Yglesias offers up this explanation for our current state of affairs:

The main reason congress tends, in practice, not to use this authority is that congress rarely wants to. Congressional Democrats didn’t block the “surge” in Iraq, congressional Republicans didn’t block the air war in Kosovo, etc. And for congress, it’s quite convenient to be able to duck these issues. Handling Libya this way means that those members of congress who want to go on cable and complain about the president’s conduct are free to do so, but those who don’t want to talk about Libya can say nothing or stay vague. Nobody’s forced to take a vote that may look bad in retrospect, and nobody in congress needs to take responsibility for the success or failure of the mission. If things work out well in Libya, John McCain will say he presciently urged the White House to act. If things work out poorly in Libya, McCain will say he consistently criticized the White House’s fecklessness. Nobody needs to face a binary “I endorse what Obama’s doing / I oppose what Obama’s doing” choice.

I think there's something to this, but it also strikes me as incomplete. After all, on domestic policy, the same dynamic applies: why not just let the president do what he wants so that you remain free to criticize him without ever taking a firm stand? But that's not what Congress does.

Rather, there are certain specific areas where Congress has deliberately given up its authority. Warmaking is one. Monetary policy is another. Detailed federal rulemaking is a third. Each has a different justification. In the case of war, the theory is that an active executive needs to act quickly, free of congressional dithering and endless committee hearings. In the case of monetary policy, the theory is that politics will inevitably get in the way of decent policy, so Congress should voluntarily restrain itself. In the case of rulemaking, the theory is that there are simply too many rules and it's impossible in practice for Congress to consider them all.

Each of these theories has problems. With very rare exceptions, there's enough time for Congress to consider a declaration of war. They've shown they can act within a day or two if a situation is especially urgent. In the case of monetary policy, Congress could easily provide more specific direction to the Fed even if they don't intervene in day-to-day open market operations. And Congress, if it wished, could insist that federal rules be bundled into packages and passed only after an up-or-down vote in the House and Senate, no amendments allowed.1

Proposals to reform this stuff come up now and again, but it never happens. The War Powers Act was the last time Congress tried to assert some authority in the area of warmaking, and its practical effect was negligible. There's occasionally talk of making the Fed more accountable, but it never goes anywhere. And there's frequently talk of changing the rulemaking process, but it also goes nowhere.

So why these three areas, plus a few others, but nothing else? Is it just inertia and tradition? Or is there something special about them? My vote is mostly for inertia and tradition. There's no really persuasive reason why Congress should have decided to abdicate its authority in these areas but not others, but they have. And once power is abdicated, it's rarely regained.

1There are legal obstacles to all of these things. However, as near as I can tell, they could mostly be overcome if Congress truly asserted itself.

The Last Chapter Problem

In the New York Times this weekend, David Greenberg takes on the dreaded Last Chapter problem, which curses nearly every book that analyzes a social or political problem:

Practically every example of that genre, no matter how shrewd or rich its survey of the question at hand, finishes with an obligatory prescription that is utopian, banal, unhelpful or out of tune with the rest of the book. When it comes to social criticism, no one, it seems, has an exit strategy.

Consider a few cases of hard-headed criticism yielding suddenly to unwarranted optimism.....[Examples duly given.]

Greenberg's analysis of why last chapters nearly alway disappoint is the obvious one: any social or political problem that's hard enough to be interesting is also hard enough to have no obvious solutions. In fact, most of them are hard enough not to have any short-term solutions at all, obvious or not.

So how do things work out if you abandon the last chapter and don't offer up any solutions to the problem you described? Judge for yourself. When my editors initially asked me to write my recent article about the decline of unions and how that affected the liberal project, I told them I was reluctant because I didn't have any solutions to offer up. No problem, they said. So I went ahead. Here's the original ending:

And yet: The heart and soul of liberalism is economic egalitarianism. Without it, Wall Street will continue to extract ever vaster sums from the American economy, the middle class will continue to stagnate, and the left will continue to lack the powerful political and cultural energy necessary for a sustained period of liberal reform. For this to change, America needs a countervailing power as big, crude, and uncompromising as organized labor used to be.

But what?

Now that, I figured, made it crystal clear that I wasn't offering up any solutions. I liked it. But it was just a wee bit too blunt, so eventually I agreed to add one more paragraph:

Over the past 40 years, the American left has built an enormous institutional infrastructure dedicated to mobilizing money, votes, and public opinion on social issues, and this has paid off with huge strides in civil rights, feminism, gay rights, environmental policy, and more. But the past two years have demonstrated that that isn't enough. If the left ever wants to regain the vigor that powered earlier eras of liberal reform, it needs to rebuild the infrastructure of economic populism that we've ignored for too long. Figuring out how to do that is the central task of the new decade.

This doesn't offer up any solutions either, but it's slightly less bleak. At least it lays out an action program for the next decade: figure out how to replace the working class institutional muscle that unions used to offer the progressive movement.

So here's the question: what do you think? Those of you who read the piece: did it strike you as disappointing that after wading through 4,000 words you didn't really get any words of hope and encouragement? Even if it had been a little weak, do you think the whole thing would have gone down better if I'd tacked on a few paragraphs of possible solutions? Or was it better left this way?

Touchpad Bleg

I'm thinking about replacing the mouse on my desktop Windows PC with a touchpad. It doesn't have to have a ton of features, but I'd like to get one that's reliable and well made. Wireless would be nice, but USB is fine too. Anyone have any experience with an add-on touchpad that they really like? 

The Arab League and the No-Fly Zone

After a mere 24 hours, the Arab League is already reconsidering its support for a no-fly zone over Libya:

The Arab League secretary general, Amr Moussa, deplored the broad scope of the U.S.-European bombing campaign in Libya and said Sunday that he would call a league meeting to reconsider Arab approval of the Western military intervention.

Moussa said the Arab League’s approval of a no-fly zone on March 12 was based on a desire to prevent Moammar Gaddafi’s air force from attacking civilians and was not designed to endorse the intense bombing and missile attacks — including on Tripoli, the capital, and on Libyan ground forces — whose images have filled Arab television screens for two days.

Most of the commentary I've seen about this has basically consisted of derision: either of the Arab League itself, for doing a U-turn so fast, or of the Obama adminstration, for believing that the Arab League was ever likely to maintain its support in the face of a genuine military effort.

But I'd rein in the mockery a bit. Moussa is right, after all: aside from taking out Libya's anti-aircraft capability, Operation Odyssey Dawn has turned out to be a major assault anchored by dozens of ships, B-2 stealth bombers, Marine Harrier jets, Tomahawk cruise-missile strikes, and attacks by French and British fighters. This may or may not be necessary to accomplish whatever it is that the coalition is trying to accomplish (that's less than clear at the moment), but it really does go pretty far beyond what the Arab League thought it was signing up for.

For more on all things Libya, see our continually updated Libya explainer here.