Kevin Drum

Bailing Out Detroit

| Tue Dec. 9, 2008 10:55 PM PST

BAILING OUT DETROIT....David Leonhardt uses this graphic in the New York Times today to illustrate the labor costs of the Big Three auto makers vs. the Japanese companies who manufacture cars in nonunion plants. As he says, the $70+ per hour figure that gets tossed around so often is badly misleading: a big chunk of that figure comes from legacy retiree costs, and retiree costs are high not because retiree benefits are wildly stupendous, but simply because the Big Three are old companies and therefore have a lot of retirees. But even so:

[Defenders of the Big Three] are not right to suggest, as many have, that Detroit has solved its wage problem. General Motors, Ford and Chrysler workers make significantly more than their counterparts at Toyota, Honda and Nissan plants in this country. Last year's concessions by the United Automobile Workers, which mostly apply to new workers, will not change that anytime soon.

He's right. Even under the new contracts signed last year with the UAW, it will take years for Detroit's costs to come down to Japanese levels. But worker paychecks aren't Detroit's primary problem anyway:

Imagine that a Congressional bailout effectively pays for $10 an hour of the retiree benefits. That's roughly the gap between the Big Three's retiree costs and those of the Japanese-owned plants in this country. Imagine, also, that the U.A.W. agrees to reduce pay and benefits for current workers to $45 an hour — the same as at Honda and Toyota.

Do you know how much that would reduce the cost of producing a Big Three vehicle? Only about $800.

That's because labor costs, for all the attention they have been receiving, make up only about 10 percent of the cost of making a vehicle. An extra $800 per vehicle would certainly help Detroit, but the Big Three already often sell their cars for about $2,500 less than equivalent cars from Japanese companies, analysts at the International Motor Vehicle Program say. Even so, many Americans no longer want to own the cars being made by General Motors, Ford and Chrysler.

....It's a sad story, in many ways. But it can't really be undone at this point. If we had wanted to preserve the Big Three, we would have bought more of their cars.

Obviously I have mixed feelings about all this. No one wants to see hundreds of thousands of auto workers collecting unemployment, especially now, but at the same time it just doesn't make sense to keep GM and Chrysler alive as zombie companies for the next couple of years. And the idea of a "car czar" doesn't appeal much either. It's only systemic restructuring that's going to make a difference here, and the deal we've struck so far doesn't seem to really accomplish that. Like so many other things these days, there aren't any good solutions here. Just bad and slightly less bad.

Advertise on MotherJones.com

Blimps!

—By Kevin Drum

| Tue Dec. 9, 2008 10:24 PM PST

BLIMPS!....Julian Barnes of the LA Times reports that Bob Gates's decision to stay on as Secretary of Defense will mean some procurement changes at the Pentagon:

The decision to keep Gates could spell the end of the Army's $160-billion Future Combat Systems program, and dim Air Force hopes for large numbers of new high-tech F-22 fighter jets. At the same time, smaller projects — perhaps blimps or light planes useful for ongoing conflicts — are likely to find new support.

Blimps? Seriously?

Some Army officials are pushing development of a small blimp equipped with an automated high-powered sniper rifle that could provide a form of inexpensive but effective air support for platoons in Afghanistan.

Can laser-equipped sharks be far behind?

Multiple Choice

—By Kevin Drum

| Tue Dec. 9, 2008 7:13 PM PST

MULTIPLE CHOICE....Robert Waldmann, who is currently residing in Rome, says he's happy that U.S. students are performing well in the TIMSS test of math and science, but then adds this:

However, I do have to note that the TIMSS test is mostly a multiple choice. Students in the USA have practice with the format. I teach in Italy and I can assure you that Italian students just don't know how to deal with multiple choice questions. It is a specific skill and not really related to knowledge about or understanding of math and science.

It's the italicized part that I'm interested in, not the part about whether multiple choice tests are fundamentally any good. Do Italian students really never take multiple choice tests? How about their equivalent of the SAT? (Do they have such a thing?) Also: Are multiple choice tests rare in the rest of Europe as well? (Perhaps. Here is a professor in London saying that "there is a British antipathy to multiple choice.") Why? And why then did they become so popular in the U.S.? (Don't say NCLB. We've been using them for a lot longer than that.)

Anyway, this is a curious little factoid that I didn't know before, so I thought I'd pass it along.

Infrastructure

—By Kevin Drum

| Tue Dec. 9, 2008 5:26 PM PST

INFRASTRUCTURE....What kind of infrastructure program is Barack Obama likely to support once he gets into office? Well, Obama's choice to head up the OMB is Peter Orszag, so Alex Tabarrok suggests looking at Orszag's previous statements on infrastructure when he was head of the Congressional Budget Office.

With that in mind, then, here's a chart from testimony he gave to Congress last May. For a range of activity, it shows that the infrastructure budget ought to be increased $20 billion to maintain current service levels, but that nearly $80 billion more could be economically justified. However, here's what he says about the highway portion:

[A]ccording to a detailed analysis that the FHWA provided to CBO, over the next five years, investments required to maintain current levels of highway service would represent 58 percent of the total spending for all economically justifiable investments for highways, but they would provide 83 percent of the net benefits.

More than likely, then, Orszag won't be pushing for lots of additional spending on roads and bridges, since he believes the net benefit is pretty small once you get past the initial boost needed just to maintain the current system.

Alex suggests that Obama should instead focus on congestion pricing and electricity infrastructure (the famous "smart grid" that everyone talks about but no one ever seems to make any progress on). Here at Mother Jones, in a piece that just went online today, James K. Galbraith proposes a long-term investment program (not just a "stimulus") that includes aid to states, increased Social Security benefits, a payroll tax holiday, and this:

Finally, we must change how we produce energy, how we consume it, and above all how much greenhouse gas we emit. That's a long-term proposition that will require research and reconstruction on a grand scale: support for universities, for national labs, for federal and state planning agencies, a new Department of Energy and Climate. It's the project around which the economy of the next generation must be designed. It's the key to future employment and future growth — and to our physical survival.

Obama's radio speech this weekend outlining his stimulus-related spending plans had some decent points but wasn't exactly a barnburner. After he rolls out his environment team later this week, hopefully green energy development and smart grids will get a little more attention.

Chart of the Day - 12.09.2008

—By Kevin Drum

| Tue Dec. 9, 2008 4:33 PM PST

CHART OF THE DAY....Adapted from Secular Right, here's a graph showing frequency of prayer plotted against strength of partisanship. The data is from the General Social Survey. Apparently, strong political partisans also tend to pray a lot. Weak partisans and independents, not so much. The effect is roughly the same if you confine the analysis to whites only.

Why? Is it just a reflection that some people are strong believers and others aren't, and this temperamental cast applies to everything they believe in? Or is it something else? Speculate away!

Blago Update

—By Kevin Drum

| Tue Dec. 9, 2008 12:04 PM PST

BLAGO UPDATE....Thanks partly to this being a slow news day and partly to the sheer juiciness of the whole thing, the blogosphere is ablaze with chatter about the arrest of Illinois governor Rod Blagojevich on corruption charges. Main theme: the guy has been under investigation for three years by the same prosecutor who convicted both Scooter Libby and the previous governor of Illinois, but he was merrily blathering away to friends anyway about selling off Barack Obama's senate seat to the highest bidder? What kind of fucking moron is this guy?

Other, slightly more substantive comments from around the 'sphere:

Who are the six possible candidates for Obama's senate seat mentioned in the idictment? Adam Serwer tries to track them down.
It wasn't just senate seats in play! Blago also told the Tribune Company that he wouldn't approve any state financial assistance for their effort to sell the Chicago Cubs unless they fired some editorial board members who had been critical of him. Apparently Blagojevich told the Tribune Company's representative, "our recommendation is fire all those [expletive] people, get 'em the [expletive] out of there and get us some editorial support."
Is Barack Obama implicated in any of this? At a press conference today, prosecutor Patrick Fitzgerald said no: "I should be clear that the complaint makes no allegations whatsoever about the president-elect or his conduct." What's more, the indictment quotes Blagojevich telling a friend that he wasn't willing to appoint Obama's favored candidate to the Senate because "they're not willing to give me anything except appreciation. [Expletive] them."

Still, Time's Michael Scherer thinks this is going to be a problem for Obama anyway: "The President of the United States has a higher burden than just about any elected official anywhere. His staff will be called on by the press to account for all their conversations with Blagojevich and his aides. Obama will have to explain what he knew about these discussions." Etc. My guess is different: I think Obama will be so open about this, and so obviously uninvolved, that it won't cause him any pain whatsoever. It's an Illinois story, not an Obama story.
My colleage Jonathan Stein runs down the corruption record of Illinois governors since 1973. It's not pretty.
Bizarrely enough, despite his 4% approval rating and ongoing corruption investigation, Blago seriously considered appointing himself to Obama's open senate seat because he thought it would a good launching pad for a 2016 presidential run. The mind reels.
Anyway, that's your Blago roundup for the morning. More, much much more, to come later, I'm sure.

Advertise on MotherJones.com

The Kids These Days....Part 476

—By Kevin Drum

| Tue Dec. 9, 2008 11:38 AM PST

THE KIDS THESE DAYS....PART 476....Here's the latest international report card on how American kids are doing in science and math. Short answer: not badly, really. According to the latest TIMSS report, eighth grade Asian kids outscore everyone, and American kids outscore nearly everyone who's not Asian (only Hungary, England, and Russia do slightly better). The story in science is about the same. TIMSS doesn't conduct their tests in every country, but among the countries that do worse than the U.S. are Australia, Sweden, Italy, Norway, and Israel.

Full results here. They're pretty much the same as in years past, by the way. It would obviously be nice if American kids were doing even better, but the evidence hardly suggests that the United States is some kind of educational hellhole. In science and math, anyway, we're better than most and roughly average among our first world peers.

UPDATE: Sorry, I guess the charts are a little hard to decipher. Basically, they show what percentage of kids scored at or above various levels on the TIMSS test. For example, 92% of American eighth graders scored above the cutoff point for low performance on the math test and 67% scored above the intermediate level, compared to an international average of only 75% and 46% respectively. Basically, at every single level, more American kids scored above the cutoff point than the international average.

However, keep in mind that these international averages include lots and lots of very poor countries. If you look only at other rich countries, the United States is right around average.

Social Happiness

—By Kevin Drum

| Tue Dec. 9, 2008 10:50 AM PST

SOCIAL HAPPINESS....Remember all those news reports from last week hawking a study about how happiness is spread via social networks? Via Justin Wolfers, a couple of spoilsports have done a competing study that looked at a few other characteristics. From their writeup:

As we intended to investigate potential biases in previous methods, we looked at three health outcomes that could not credibly be subject to social network effects and were available in all three waves of the data: self reports of skin problems, self reports of headaches, and height over time.

Long story short, they found network effects for all three of these things even though network effects almost certainly don't exist. The problem, they say, is that shared environments (same school, similar eating habits, etc.) can explain much of the supposed "contagion," but the datasets used for social network studies often don't include enough information on individual environments to allow it to be factored out.

In other words, be careful accepting breathless claims about the spread of this or that via social networks. Maybe it's true, maybe it isn't. On the other hand, it can't hurt to have happy friends, can it?

BCS Uber Alles

—By Kevin Drum

| Tue Dec. 9, 2008 10:19 AM PST

BCS UBER ALLES....Via Lee Sigelman, apparently this has been circulating virally:

After determining the Big-12 championship game participants the BCS computers were put to work on other major contests and today the BCS declared Germany to be the winner of World War II.

"Germany put together an incredible number of victories beginning with the annexation of Austria and the Sudetenland and continuing on into conference play with defeats of Poland, France, Norway, Sweden, Denmark, Belgium and the Netherlands. Their only losses came against the US and Russia; however considering their entire body of work — including an incredibly tough Strength of Schedule — our computers deemed them worthy of the #1 ranking."

Questioned about the #4 ranking of the United States the BCS commissioner stated "The US only had two major victories — Japan and Germany. The computer models, unlike humans, aren't influenced by head-to-head contests — they consider each contest to be only a single, equally-weighted event."

German Chancellor Adolph Hiter said "Yes, we lost to the US; but we defeated #2 ranked France in only 6 weeks." Herr Hitler has been criticized for seeking dramatic victories to earn 'style points' to enhance Germany's rankings. Hitler protested "Our contest with Poland was in doubt until the final day and the conditions in Norway were incredibly challenging and demanded the application of additional forces."

The French ranking has also come under scrutiny. The BCS commented "France had a single loss against Germany and following a preseason #1 ranking they only fell to #2."

Japan was ranked #3 with victories including Manchuria, Borneo and the Philippines.

Time for Obama to get cracking on that college football playoff he says he favors. That would be change we can believe in.

Malaria Vaccine

—By Kevin Drum

| Tue Dec. 9, 2008 9:26 AM PST

MALARIA VACCINE....My morning paper reports some spectacularly good news for Africa:

A vaccine against the parasitic disease malaria cut illnesses by more than half in field trials and could be safely given with other childhood inoculations, two studies have reported.

....Malaria kills nearly 1 million people each year and sickens about 2 million others, according to estimates from the World Health Organization. Most of the deaths are among children younger than 5 in sub-Saharan Africa, the population that the vaccine targets.

More here.