Kevin Drum

How Uncertainty is Crippling Recovery

| Tue Aug. 17, 2010 1:08 PM EDT

Hooray! I finally found some evidence for the idea that regulatory uncertainty is hindering investment and economic recovery in the U.S. So I stand totally corrected on this:

Alternative energy investment prospects have shriveled in the United States after the U.S. Senate was unable to break a deadlock over tackling global warming, a Deutsche Bank official said. "You just throw your hands up and say ... we're going to take our money elsewhere," said Kevin Parker in an interview with Reuters.

....Parker, who is global head of the Frankfurt-based bank's Deutsche Asset Management Division, oversees nearly $700 billion in funds that devote $6 billion to $7 billion to climate change products. Amid so much political uncertainty in the United States, Parker said Deutsche Bank will focus its "green" investment dollars more and more on opportunities in China and Western Europe, where it sees governments providing a more positive environment.

Oh wait. This is regulatory uncertainty caused by Republicans. And it's investment by foreigners. So it probably doesn't count. Forget I said anything.

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Polling the GZM

| Tue Aug. 17, 2010 12:34 PM EDT

Has anybody done a split poll where half of the respondents are asked these two questions?

  • Do you oppose construction of the Ground Zero mosque?
  • Do you oppose construction of a Muslim community center and mosque in lower Manhattan a couple of blocks away from the World Trade Center site?

(I use "oppose," rather than "support or oppose" advisedly. I don't really care whether people actively support the Park51 project, only whether they actively oppose it.)

Anyway, this is a genuine question. Has anyone done a poll like this? The very first time I heard about the "Ground Zero mosque" I thought it was literally a plan to build a mosque as part of the memorial at the rebuilt WTC site. I wonder how many people still think that?

A Walk Down Memory Lane

| Tue Aug. 17, 2010 11:43 AM EDT

Dave Weigel provides a blast from the past this morning: the Dubai Ports World controversy. Remember that? DPW, owned by the government of Dubai, wanted to buy the port operations of P&O, which would have given them control over portions of several U.S. ports. George Bush was in favor of the deal, Chuck Schumer went ballistic at the thought of a bunch of Arabs controlling the docks at some U.S. ports (including New York's), and the general liberal reaction seemed to be that it was about time Bush got a taste of his own medicine. And maybe it was. But I didn't buy it:

Encouraging the xenophobic jingoism that's driving this controversy is a little too much for me. Unless there are serious substantive reasons to oppose this deal, I'm not willing to jump on the bandwagon solely because it's an opportunity for some righteous Bush bashing....I'd prefer to walk the liberal internationalism walk instead of jumping ship for short term political gain. I've said before that engaging seriously with the Arab world is the best way of fighting terrorism, and I meant it. This is a chance to do exactly that.

....UPDATE 2: The whole thing feeds on a mindless anti-Arab jingoism that's genuinely dangerous, and that's why I'm not joining the fun unless I hear some really good reasons for doing so. As liberals, we're either serious about engaging with the Muslim world in a sensible, non-hysterical way or we're not. Which is it?

The parallels with the mosque controversy are eerie.  Both involved proximity to Ground Zero (the World Trade Center was owned by the Port Authority of New York and New Jersey and the DPW deal included some port operations in New York harbor). Both elicited no controversy at first and the DPW deal was initially welcomed by the port authorities in the affected cities. Both involved the Muslim community. Both were vaulted into public consciousness by politicians seeking partisan advantage during an election year. And both, needless to say, appealed mostly to mindless xenophopia and "war of civilizations" nonsense.

The DPW brawl was a mistake for liberals. The Ground Zero mosque brawl is a mistake for conservatives. It's time for everyone to grow up.

POSTSCRIPT: By the way, do you wonder what ever happened to the DPW deal? Well, P&O's deal with DPW went through, but the blowback in the U.S. forced DPW to dispose of its American subsidiary. (No other country had a problem with them.) And who did they dispose of it to? Well, after a bit of shopping around they finally sold their U.S. port operations to — wait for it — AIG. So now those port operations are essentially owned by the United States government — i.e., you. It actually might be a nice asset to sell in order to raise money to pay back taxpayers for AIG's 2008 bailout, but who'd want to buy it now? The fuss in 2006 probably scared everyone off.

Travel to Cuba

| Tue Aug. 17, 2010 10:49 AM EDT

This isn't much, but it's progress:

The Obama administration is planning to expand opportunities for Americans to travel to Cuba, the latest step aimed at encouraging more contact between people in both countries, while leaving intact the decades-old embargo against the island’s Communist government, according to Congressional and administration officials. [They] said it was meant to loosen restrictions on academic, religious and cultural groups that were adopted under President George W. Bush, and return to the “people to people” policies followed under President Bill Clinton.

Policy analysts said the intended changes would mark a significant shift in Cuba policy. In early 2009, President Obama lifted restrictions on travel and remittances only for Americans with relatives on the island. Congressional aides cautioned that some administration officials still saw the proposals as too politically volatile to announce until after the coming midterm elections, and they said revisions could still be made.

I'm opposed to the Cuba embargo because I think it's foolish policy. But I'm really, really opposed to travel restrictions to Cuba. If the Cuban government wants to keep us out of Cuba, that's one thing. Cuba is a dictatorship, after all. But the United States isn't, and my government has no right to restrict where I go. Period. The travel embargo is a policy that fits the old Soviet Union better than it does the United States. America is a free country and American citizens should be allowed to travel anywhere they want.

How Dangerous is a Haircut?

| Tue Aug. 17, 2010 10:29 AM EDT

Matt Yglesias doesn't think barbers need to be licensed:

Regulation of this sort seems totally unnecessary. People don’t die of bad haircuts, and since hairstyle is a quintessential matter of taste there’s absolutely no reason to think consumers can’t figure out for themselves who has a decent reputation as a cutter of hair. You can cut your own hair perfectly safely in your own house, and if you screw it up all that happens is you need to find a real professional to fix it. But what’s more, even if regulation were somehow a good idea, the composition of the board couldn’t possibly serve a legitimate consumer protection function. It’s overwhelmingly composed of people from the industry whose incentive is to limit competition and raise prices.

You'll be unsurprised to know that I don't have a lot to add on this subject. But I did get into a conversation about this with my haircutter once, and she pointed out that there's more to this business than you might think. It's true that clipping hair — which is the only side of the business that Matt and I ever see — isn't especially dangerous. But for more complicated jobs, hair professionals handle a lot of dangerous chemicals and they need to know how to use these properly to insure that they don't do some serious damage to their customers. That, apparently, is part of what they teach you at cosmetology school.

That's what she said, anyway. Alternatively, maybe it's all just a big scam. After all, plenty of women give themselves home perms and seem to survive the experience. Hair professionals should feel free to school us in comments.

UPDATE: Alex Massie adds some genuine data to this burning controversy: hairdressers in Britain, it turns out, don't require any kind of licensing at all. "Somehow," he says, "the country has survived an unregulated hairdressing and barber-shop industry all these years and may yet, with god's providence, do so in the future."

Well fine. Be that way. But just remember the story of the telephone sanitizers.

Confused About Taxes

| Tue Aug. 17, 2010 12:46 AM EDT

The Wall Street Journal has a piece tonight on the federal deficit, and it comes to the unsurprising conclusion that although most people say they're strongly in favor of reducing the deficit, when it comes to nuts and bolts they're only in favor of raising taxes on other people and cutting programs they themselves don't use.  What's more, you also get responses like these:

So 32% of respondents favor a VAT that would raise taxes on all Americans, but only 20% favor increasing taxes on all Americans. It looks like 12% of the country is mighty confused.

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Arguing About the Mosque

| Mon Aug. 16, 2010 6:16 PM EDT

Dan Drezner fully supports the construction of Cordoba House (i.e., the "Ground Zero" mosque) but says there's one argument against the mosque's opponents that he's tired of:

I'm getting really sick of "the terrorists will win" line of criticism being levied against those wishing to prevent construction of the mosque. Over the past few days, I've seen bipartisan criticism of the mosque criticism along the lines of, "this line of argumentation is the best way to help Al Qaeda."....You know, I remember oh so many years ago the constant use of "if you say X, or criticize policy Y, or challenge official Z, then the terrorists win" kind of discourse. It was horses**t then, and it's horses**t now. I'll be damned if I'm going to see debate in the United States circumscribed because of fears of how Al Qaeda will react.

....Should Sarah Palin, Newt Gingrich, Abe Foxman et al be criticized for making ill-informed, incoherent, and idiotic arguments? Sure, and as loudly as possible, please. But quit bringing Al Qaeda into it. Silencing debate on national security grounds is so very 2002.

I think this is right, but too narrow. I agree that the Cordoba House controversy is unlikely to have more than a minuscule direct effect on al-Qaeda and its sympathizers. But there are still a couple of related effects that are important. The first is the impact that it has on Muslim public opinion in general. This probably isn't huge either, but it's one more straw on the camel's back, and as such it's certainly not helpful to U.S. security. Second, this controversy promotes the idea that we're engaged in a war of civilizations, not just a fight against the al-Qaeda franchise, and this does national security no favors either.

And while we're at it, there's a third effect: one of the reasons that there's been virtually no homegrown Muslim terrorism in America is because, even imperfectly, we've always done a pretty good job of allowing Muslim immigrants to assimilate, to worship freely, and to work without discrimination. Because of this, there's very little of the resentment and bitterness that's helped to fuel terrorist cells in Europe. Call me naive, but I'd say this is a national security plus. Why would anyone want to endanger it?

In related news, I think Doug Mataconis has lost his marbles if he's impressed by this statement from New Jersey governor Chris Christie:

"We have to bring people together. And what offends me the most about all this, is that it’s being used as a political football by both parties. And what disturbs me about the president’s remarks is that he is now using it as a political football as well....My principles on this are two-fold. One, that we have to acknowledge, respect and give some measure of deference to the feelings of the family members who lost their loved ones there that day. But it would be wrong to so overreact to that, that we paint Islam with a brush of radical Muslim extremists that just want to kill Americans because we are Americans. But beyond that....I am not going to get into it, because I would be guilty of candidly what I think some Republicans are guilty of, and the president is now, the president is guilty of, of playing politics with this issue, and I simply am not going to do it."

Asked if he’d call upon both parties to stop, he said, "Well, that again will be playing politics with the issue. I said what I feel about it, and I don’t believe it is up to me to pontificate on other people about what they should do. I just observe what I observe."

A political football from both parties? Spare me. Republicans, and the right more generally, have spent weeks demonizing the proposed mosque. They've painted it as treacherous, insensitive, and a menace to American values. Fox News has been been running the outrage machine 24/7. A-list pundits and top elected officials have joined in. But when, finally, Barack Obama steps in with a modest statement of support for religious freedom, both parties are now equally inclined to demagoguery? Give me a break.

As for Christie himself, will he take even a modest stand for tolerance? Goodness no. Then he'd be playing politics. He's merely an observer, you see.

Uh huh. Anyone here actually buy this? Let's see a show of hands.

Traffic Fatalities in New York City

| Mon Aug. 16, 2010 5:18 PM EDT

According to a newly released report about pedestrian safety, "2009 was the safest year on record in New York City history." In fact, says the NYC Department of Transportation, New York is safer than Copenhagen, Seattle, and San Francisco.

Good to hear! I don't know for sure if fatalities per 100,000 population is the right measure to use (fatalities per 100,000 vehicle miles driven is one alternative), and I also don't know if the decline in fatalities is due to better driving, aggressive DOT safety programs, or better emergency room care. But it's good news any way you look at it.

In any case, I went browsing through the report to see if I could find any interesting notes, and in the interest of stereotype bashing here's a couple of charts showing who's responsible for whatever mayhem remains on New York streets. Answer: men. The chart on the left shows who's behind the wheel when pedestrians are killed or seriously injured (KSI), and it's overwhelmingly men. Mostly young and middle aged men. There's a slight bit of karmic justice here, though, because the chart on the right shows who the victims are. Again, mostly men. So men drive like aggressive idiots, killing and injuring hundreds every year, and they also walk like aggressive idiots, thus getting killed by the hundreds every year.

The full report is here. It's got plenty of other little tidbits if you're interested in who, what, when, where, and why pedestrians are likely to get killed or injured in New York City. Have fun with it, and be careful out there.

Will Insurance Companies Game the ACA?

| Mon Aug. 16, 2010 11:39 AM EDT

Starting in 2014 insurance companies will no longer be allowed to discriminate against people with preexisting conditions. They'll have to take all comers for (almost) the same price, regardless of how healthy they are.

The incentive here is obvious: within the confines of the law, insurance companies will do their best to lure the healthiest patients into their programs and convince the sickest ones to switch. But how much leverage do they have to do this? Looking for clues, Aaron Carroll takes us back to a study done in 1997, when Medicare patients were allowed to switch back and forth between HMOs and traditional fee-for-service plans:

What did the researchers find? People who wound up joining the (private) HMOs used 66% less care before joining than those who stayed in the (public) Medicare group. Somehow the private insurance HMOs figured out a way to get the healthy people to jump ship out of the another plan into theirs!

Not only that, but people who left the (private) HMOs and went back to the (public) Medicare used 180% more care after leaving than the people who stayed. Somehow the private insurance HMOs figured out a way to convince the sicker people to jump ship back to the public plans.

Fascinating! But I'm not sure this tells us as much as it seems to. It does appear to tell us that private insurers are pretty good at marketing themselves to healthy people and then signing them up as customers. But the dice are loaded here: they were competing against a publicly funded fee-for-service program that didn't care if the sickest patients got dumped on them. In fact, it's worse than that: the fee-for-service folks probably wanted the sickest patients since it meant more money for them. So the private insurers may have done a good job of maximizing their profit, but only because their competition didn't fight back. Under ACA, it's mostly going to be private insurers vs. private insurers, and that's a whole different ball game.

But what about the second half of this study, which shows that private insurers were good at dumping sick people? That's more worrisome. It's still the case that they could only succeed as well as they did because the public system wasn't fighting back. But that only speaks to why they succeeded so brilliantly. When it's private insurers vs. private insurers, dumping tactics probably won't work as well, but they'll still have to be used by any insurer who wants to stay in business. After all, if even one private insurer is aggressively trying to dump its sick patients, every other private insurer has to do the same thing if they want to stay profitable. In the end, the sick patients might all stay in the system (though there will probably be some leakage to Medicaid), but they're going to be treated badly the entire time as insurers do their best to get them exasperated enough to try switching to someone else.

Aaron's conclusion: "Insurance companies are very, very good at what they do. I don’t doubt that they will find ways to remain profitable. That’s not a moral judgment. I don’t hate them for it; it is their nature." In other words, the fight isn't over yet. The quality and detailed nature of the regulations HHS puts in place are going to make a big difference to the success of ACA. Insurance companies are going to be keeping a very sharp eye on this, and hopefully the rest of us will too.

New Comment System Up and Running

| Mon Aug. 16, 2010 10:47 AM EDT

I was gone while all the new comment system plumbing was installed, so I almost forgot to ask: how do you like it? Anything not working for you? Any random gripes or complaints? The main reason for installing it was to cut down on spam, but just so you know, it sports a few other new features too:

  • You don't have to create a new Mother Jones login. But now you can also sign in with your Twitter, Facebook, Yahoo, or OpenID login.
  • Flag inappropriate comments: See spam? Trolls? Hate speech? Flag it for our moderators.
  • Sort comment view: You can now change the way you view comment threads for a given article if you like. Want to see only the comments other readers liked? Or only the most recent ones? No problem.

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