Kevin Drum

Why He Did It

| Mon Jan. 10, 2011 12:21 PM EST

Why did Jared Lee Loughner target Gabrielle Giffords for assassination? Nick Bauman talked today to a friend of Loughner's, Bryce Tierney, who says that Loughner held a bizarre grudge against her:

He [] describes Loughner as being obsessed with "lucid dreaming"—that is, the idea that conscious dreams are an alternative reality that a person can inhabit and control—and says Loughner became "more interested in this world than our reality."

....Tierney, who's also 22, recalls Loughner complaining about a Giffords event he attended during that period...."He told me that she opened up the floor for questions and he asked a question. The question was, 'What is government if words have no meaning?'" Giffords' answer, whatever it was, didn't satisfy Loughner. "He said, 'Can you believe it, they wouldn't answer my question,' and I told him, 'Dude, no one's going to answer that,'" Tierney recalls. "Ever since that, he thought she was fake, he had something against her."

Read the whole thing for more.

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Who's Afraid of Glenn Beck?

| Mon Jan. 10, 2011 12:08 PM EST

I was busy this weekend writing the third draft of a piece for the next issue of the magazine, so thankfully I had a pretty good excuse for not joining the blogging/twittering/cable frenzy over the meaning of the assassination attempt on Gabrielle Giffords. For the record, though, I think the attacks on Sarah Palin have been completely ridiculous — and I can't tell you how much it pisses me off that I feel forced to say that. But come on, folks. "Targeting" political candidates for defeat is so common a metaphor that we could barely even hold elections anymore if we didn't use it. Give it a rest.

That aside, though, I'd say Andrew Sullivan had the sharpest observation of the day. Have we really gotten to the point where a "senior Republican senator" has to ask for anonymity in order to say this?

“There is a need for some reflection here — what is too far now?” said the senator. “What was too far when Oklahoma City happened is accepted now. There’s been a desensitizing. These town halls and cable TV and talk radio, everybody’s trying to outdo each other.”

Good God. Is he really that afraid of the wrath of Glenn Beck?1

1And having listened to Beck now and again, I'd say that if you're really looking for someone to censure on the rhetoric front, he's a way better target than Sarah Palin. A campaign poster like Palin's that uses a bunch of bullseyes to represent "targeted" candidates is pretty unlikely to send some mentally unbalanced nutcase over the edge, but frankly, I'm surprised Beck hasn't already inspired a couple of Jonestown-like mass homicide waves.

A Wee Question — Answered!

| Sat Jan. 8, 2011 1:32 PM EST

Yesterday I asked a question about money. Nobody in comments guessed why I asked it, but before I tell you the answer I'll repeat the question. Here it is: Suppose that you lead a comfortable middle-class life. Let's say that you're in your 30s, married, two children, and you make $100,000 per year. I offer you a fair coin flip with the following possible outcomes:

  • Heads: You will be stripped of most of your assets and will earn $30,000 per year for the rest of your life. That's all you get, and neither friends nor family can top it up for you.
  • Tails: You will earn $1 million per year for the rest of your life.

Would you take me up on my offer to flip the coin?

Before I explain further, a caveat: this isn't meant to be a scientific experiment. It doesn't prove anything. There are dozens of reasons why the results are meaningless. But there's no need to dwell too much on that. This is just a (possibly) provocative data point to mull over.

So here's why I asked: I'm writing a piece about income inequality and other things for the next issue of the magazine, and in an email conversation with my editor she suggested that one point worth making is that in America today, "someone making $100K has a lot more in common with someone making $30K than someone making $100 million." Now, there's an obvious sense in which that's true, but I suspect that there's a more important sense in which it's not. Yes, the zillionaire jets around the world and owns a bunch of mansions and has a staff of aides and servants to take care of things. That's really, really nice. But our $100K wage slave also has a comfortable house, gets to fly around the world now and again, probably employs a gardener and cleaning service, has a pretty stable life, etc. etc. Also nice. On the other hand, a household earning $30,000 — which is well above the poverty line — lives a pretty precarious life on a variety of measures.

So how to get at the difference? Well, I figured one possible way is this: if you really were a fairly ordinary upper middle class wage earner making $100K per year, and you had a 50-50 chance of either joining the ranks of the elite or falling down to the bottom of the working class, which seems further away to you? The answer from comments was loud and clear: the bottom of the working class. I didn't count, but I'd say only about 10% of commenters were willing to take the coin flip. The other 90% would stick with their $100K lifestyle.1

So what does this mean? Probably not much. But it's suggestive that in terms of lifestyle, if not political goals, a $100K wage earner actually feels somewhat closer to the zillionaires than to someone barely scraping by. We intuit, correctly I think, that life at the bottom of the working class is pretty damn tough, while life at the tippy top is more exciting, but perhaps not fundamentally different from life in the upper middle class.

So that's that. Politically, I think it's quite possible that our $100K earner has more in common with the $30K earner than the millionaire — though they often don't know it. But in terms of lifestyle, I'm not so sure. How many gold plated bathroom sinks do you need, after all?

1Quite a few people thought that I asked my question in order to make a Kahneman-esque point about loss aversion. Not really. It's true, as Kahneman and Tversky discovered several decades ago, that people generally value losses more strongly than gains. Outside of artificial environments like casinos, if you offer people a fair coin flip where they win or lose $100, they won't take the flip. The fear of losing $100 outweighs the possible pleasure of gaining $100.

But here's the thing: Kahneman and Tversky found that the effect of loss aversion is about 2:1. That is, if you offer people a fair coin flip where they lose $100 on heads but win $200 on tails, they'll take the flip. In my question, however, we're way, way past that: you lose $70,000 on heads but gain $900,000 on tails. That's a ratio of more than 10:1. Obviously it matters that the relative loss is large in my question (70% of your income), but on conventional risk aversion grounds the ratio still should have been high enough to get at least half of you to take the chance. The fact that you didn't suggests to me the marginal utility of money really does decline quite rapidly once you get into upper middle class territory. On a variety of levels, this has a big impact on questions of political economy.

Friday Cat Blogging - 7 January 2011

| Fri Jan. 7, 2011 4:05 PM EST

The first week of the new decade is finally over. Hooray! And that means the first Friday catblogging of the new decade is here. Hooray again! To start off the new year, Domino is back up on the fence and obviously keeping a keen eye out for an inattentive bird. Sadly for her, birds around here are plenty attentive, and she has no front claws to hunt them down with in any case. On the right, Inkblot, well aware that birds are out of his weight class, is protecting the house from malevolent laser pointers instead. All for the best, I think.

Creeping Tyranny

| Fri Jan. 7, 2011 3:49 PM EST

Go read this Glenn Greenwald post and this followup from Nick Baumann about Gulet Mohamed, an American citizen who was recently arrested in Kuwait, brutally tortured (I think it's OK to use the word since it's someone else's police we're talking about), and then put on a no-fly list so he can't return to America. This is not the first time this has happened, and if you're really worried about an increasingly tyrannical government, this is the kind of thing to worry about. If a crime has been committed, then let him come home and charge him. If not, then he's an American citizen, and no American government should be allowed to unilaterally strand its own citizens overseas. This whole affair is revolting.

Quote of the Day: Cutting Government

| Fri Jan. 7, 2011 3:39 PM EST

From Republican Speaker of the House John Boehner, asked by NBC's Brian Williams to name a federal program that could be cut:

I don't think I have one off the top of my head.

Roger that. After 20 years in Congress, and after waging a brutal midterm campaign focused almost solely on the need to slash government spending, Boehner can't come up with a single program cut off the top of his head. He's a real profile in courage, isn't he?

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Simple Taxes for Thee, But Not For Me

| Fri Jan. 7, 2011 3:22 PM EST

Via Megan McArdle, Howard Gleckman at TaxVox summarizes the #1 tax problem identified this year by Nina Olsen, the National Taxpayer Advocate at the Internal Revenue Service: complexity.

Olsen estimates that individuals and businesses spend 6.1 billion hours preparing their returns. That equal to a year’s labor by three million full-time workers. Individual taxpayers are so befuddled by the Code that she reports 89 percent either pay a preparer or buy commercial software to help with the paperwork. The total cost of compliance in 2008, Olsen estimates, was $163 billion, or more than 11 percent of total income tax collections. The average out-of-pocket cost per taxpayer: $258. Something is very wrong when we have to pay a vendor $258 just to perform the most basic of civic duties.

....More troublingly, all this complexity is driving people to cheat. More than 60 percent of self-employed workers (whose income tax is not withheld) either under-report income or over-report deductions. Olsen attributes at least some of this behavior to taxpayers’ belief that they are paying more than their fair share while others are avoiding tax. Nobody, she says, wants to be a “tax chump.”

I don't disagree with this. I would love to create a simpler tax code, and on the business side I'd be willing to do away with the corporate income tax entirely. As a confirmed bleeding heart liberal, of course, I'd like to do this in return for a code that's more progressive and raises more revenue. But also as a confirmed bleeding heart liberal, I'd like to point out a few things about tax code complexity that our conservative aristocracy doesn't often acknowledge:

  • That $258 number is an average, and most likely includes a whole lot of people paying $29.95 for a copy of TurboTax and a rather smaller number of people paying their Park Avenue accountants $100,000 per year. The average schmo doesn't spend anything like $258 on tax preparation. And keep in mind that a fair number of low-income filers use tax preparers like H&R Block not because they need help, but because they offer "refund anticipation loans" that allow people to get their refund checks faster. (At the cost of a fat fee, of course.)
  • But aside from these kinds of loans, why do low and middle-income filers use any tax preparation at all? Most of them have only wage income and very simple filing requirements. The reason varies, of course, but a lot of it is due to the complexity and auditing requirements associated with the Earned Income Tax Credit. And why is the EITC audited so vigorously? Because Republicans insist on it. We don't want poor people gaming the system for a few hundred extra dollars, after all. This might not be so bad (there really is a certain amount of fraud associated with EITC claims) except that.....
  • The vast bulk of tax avoidance is done by the rich, not the poor. David Cay Johnston reported on some of the most baroque tax avoidance schemes for us last year, and he estimates that in total this costs us something like $300 billion per year. And to make things even worse, Republicans have waged a decade-long war to reduce audits of the rich by the "jackbooted thugs" of the IRS. Just to take the most recent example, Johnston reported in 2006, "The federal government is moving to eliminate the jobs of nearly half of the lawyers at the Internal Revenue Service who audit tax returns of some of the wealthiest Americans, specifically those who are subject to gift and estate taxes when they transfer parts of their fortunes to their children and others."

This post isn't a disagreement that we ought to have a simpler tax code. It's just a reminder that a big part of the reason for that complexity is that rich people want it that way. A simple tax code is hard to game, after all. If we really, truly tried to create a simpler tax code that removed all the common ways that high-income taxpayers fleeced the system, the loudest cries of anguish would come from conservatives, not liberals.

Huzzah for Healthcare Reform!

| Fri Jan. 7, 2011 1:41 PM EST

It's no surprise that President Obama has threatened to veto any repeal of healthcare reform that reaches his desk. (It won't reach his desk, of course, since it'll never get past the Senate. But put that aside for now.) Still, surprise or not, Jon Cohn thinks it's a sign of a welcome new aggressiveness in the Democratic caucus:

For most of last year, Democrats were playing defense on health care, responding to Republican criticisms or, in many cases, trying desperately to change the subject of debate. Now something has changed. Congressional Democrats are challenging Republicans, daring them to come out against the bill's more popular provisions.

....Of course, they may not have a choice. Republicans have made repeal a top priority, so the fight is going to take place whether or not Democrats want it. But I think it also reflects a changing dynamic, as well. According to Greg Sargent, who was among the first to spot the shift, House Democrats in particular are aware of the opportunity they missed last year, while the party and most of its leaders were trying so hard to save endangered incumbents. They think they're in a stronger position now, since people are starting to see the law's benefits and repeal will mean changing an increasingly favorable status quo.

Granted, it's always easier to be aggressive in the minority than the majority. And it's easier still to be aggressive when there's no election looming. But isn't there something else at work here as well? An awful lot of the centrist Dems who considered healthcare reform politically toxic are gone. There's a small rump of Blue Dogs left in the House (mainly the dozen or so dead-enders who voted for Heath Shuler to replace Nancy Pelosi for majority leader), but it's in dire shape. Most of the Democrats left in the House are eager to back healthcare reform and represent districts where it's safe to do so.

The Senate is a somewhat different story, but it matters less there since any attempt to repeal ACA will simply be filibustered and die. Still, whatever the reason, it's sort of refreshing to see Dems fighting for healthcare reform a little more openly these days. It's certainly good practice, anyway.

Playing Games With the CBO

| Fri Jan. 7, 2011 1:17 PM EST

Bruce Bartlett on what motivates the longtime Republican hatred of the Congressional Budget Office:

CBO’s great sin, in Republican eyes, is that it’s always telling them that their pet ideas are wrong: tax cuts don’t automatically pay for themselves through the Laffer Curve, the Affordable Care Act didn’t raise the deficit, the budget can’t be balanced only by cutting domestic discretionary spending, and other heresies to Republican dogma.

The latest incarnation of this assault on reality is typically childish: the GOP leadership is declining to officially reappoint Doug Elmendorf to head the CBO even though both the chairmen of the House and Senate Budget committees (one Republican and one Democrat) have recommended it. It sure is good to see that the grownups are back in charge, isn't it?

A Wee Question

| Fri Jan. 7, 2011 10:21 AM EST

Here is a question for you. Suppose that you lead a comfortable middle-class life. Let's say that you're in your 30s, married, two children, and you make $100,000 per year. I offer you a fair coin flip with the following possible outcomes:

  • Heads: You will be stripped of most of your assets and will earn $30,000 per year for the rest of your life. That's all you get, and neither friends nor family can top it up for you.
  • Tails: You will earn $1 million per year for the rest of your life.

Treat this as a serious question. Would you take me up on my offer to flip the coin?