Kevin Drum

Foxes and Henhouses

| Mon Jan. 3, 2011 1:02 AM EST

Andrew Samwick writes about the well-known problem that employers — both private and public — have been underfunding their pension plans for years:

There is nothing inherently wrong with a defined benefit pension plan, but its implementation has been a challenge in both the public and private sectors. It is a promise to pay compensation in the future. To honor that promise responsibly, the plan sponsor needs to fund it adequately in the time interval between when the promise is made and when it is kept. Simply put, that hasn't been happening in large private sector plans and in most public sector plans. The problems are worse in the public sector because voters don't pay as much attention to the financial bottom line as shareholders do and because the accounting standards are sharper for private sector plans than public sector plans. For many years, elected officials have been making promises that future (now, near-future) taxpayers are not going to want to keep.

This seems like a problem that really could be solved via privatization: instead of allowing employers to self-fund their pensions, require them to use an outside fund (or funds). An outside fund would insist on contributions being adequate to fund projected payouts since they're the ones on the hook to make good. No gameplaying tolerated. And as long as there are enough funds out there, competition would keep them from going in the other direction and demanding contributions that are excessive.

What am I missing here? (Aside from the fact that employers wouldn't like the idea of not being allowed to play games, that is?) A whole swath of regulations would be required to make this work, but surely nothing more complicated than what we already have. Almost anything seems better than allowing employers to decide for themselves what's adequate and what isn't.

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Parking Regulations

| Sun Jan. 2, 2011 5:51 PM EST

Matt Yglesias on requirements that businesses provide parking for their customers:

For the millionth time this isn’t something that needs regulating. Land is a valuable commodity. And ability to park one’s car is also valuable. Property owners in any given area are perfectly capable of evaluating what portion of land should be dedicated to parking based on the market demand for parking relative to the demand for other uses of land.

Requirements in cities and suburbs vary, but here in the burbs the general idea behind parking regulations is to make businesses pay for their own externalities instead of fobbing them off on other people. If I provide parking for my customers, and someone opens up next door and decides not to bother, then his customers will take up all my spots. If neither one of us provides enough parking because there's a neighborhood nearby, then our customers will take up street parking that owners of existing houses have paid for and are accustomed to using. In both cases, there are people who would like to regulate parking in order to make life more convenient and prevent free riding.

Now, if your goal is simply to reduce the amount of parking so that it's a pain in the ass and people will drive less, that's fine. It's a pretty roundabout way of doing it, but whatever. But if your goal is to match parking spaces to cars, then it's simply not true that property owners are the best judges of how much parking is needed. Like profit maximizers anywhere, they'll do their best to provide as little parking as possible and instead try to free ride on the parking that other people have already created and paid for.

If there were an efficient way to allow customers to park only in spaces specifically paid for by each business, then property owners could be left alone to determine their own parking requirements. But that's rarely the case. Thus, regulations.

Friday Cat Blogging - 31 December 2010

| Fri Dec. 31, 2010 1:29 PM EST

I think it's probably daft to pretend that I'm going to find something worthwhile to blog about today if I just keep staring at the computer long enough, so let's get straight to Friday Catblogging and call it a year. Unfortunately, even though I've had two weeks to get my act together, I haven't taken any fresh pictures of the furballs lately. So last night at 8:59 I decided instead to treat you all to a bit of cinéma vérité: Inkblot and Domino at snack time. Unfortunately, they didn't really put on a very good show. Still, vérité is vérité, and this is truly a slice of real life, dramatic qualities be damned. Sometimes life just isn't very dramatic. But still cute.

And with that, happy New Year, everyone. See you on the other side.

Convex Mirrors Coming to America?

| Thu Dec. 30, 2010 8:45 PM EST

Here's an entry from the annals of "things I've always wondered about but never had the energy to bother checking on": Why don't cars in the United States have convex driver's side mirrors? They sure seem to make sense to me, but who knows? Maybe there's something unsafe about them that I haven't thought of.

As it turns out, I still don't know. The proximate answer, of course, is that they're illegal, but I don't know why they're illegal. The reason is probably buried in the mists of time. However, according to the New York Times, the Department of Transportation, after a grueling three-year process, is thinking about maybe, just possibly, allowing carmakers to use them. Mike O'Hare, who is a positive sink of information about the most obscure topics imaginable, comments:

Thinking about bureaucrats in DOT taking three years to make a decision worth maybe half a day, having spent a couple of decades to even engage the question, through all of which millions of drivers outside the US have been running an enormous demonstration program showing the superiority of convex driver’s-side mirrors, can make a libertarian’s day.

....There’s more to the convex mirror than the Times story records. Not only is the field of view wide enough to cover the left-hand blind spot, but a convex mirror doesn’t have to be dimmed to prevent cars behind you from blinding you at night. Now, if we could get them in the right place, which is on the fender, visible through the dashboard so you don’t have to take your eyes off the road to be aware of what’s going on behind you, we’ll be making some real progress. For this location, they have to be convex, because at that distance, the field of view of a flat mirror is much too narrow. I’ve had convex fender mirrors (very hard to find, and it’s a nuisance to make a flat panel to replace the stock abortions on the doors) for twenty years and would never go back. I suppose I’m courting a ticket, but so far, no problems.

I still don't know why flat driver's side mirrors have been mandated in the U.S. for so long, so be sure and enlighten us in comments if you happen to know the answer. In any case, it looks like our long national nightmare may soon be over. Just please don't tell any conservatives that DOT is considering this change so that U.S. rules will be "harmonized with European requirements." You know how they feel about euro-weenies.

Snowy LA?

| Thu Dec. 30, 2010 7:46 PM EST

This was posted a few minutes ago on Andrew Sullivan's blog:

WTF? Is this a window facing a backlot at Universal Studios? We've had monsoon-like rain around here lately, but I haven't seen any snow yet. Or perhaps this is somewhere on the Tejon Pass, just barely within LA County and therefore technically "Los Angeles" even though it's 40 miles from the actual city?

Beats me. It's a pretty picture, though.

UPDATE: Turns out the picture is from Virginia Beach, not Los Angeles. Good to know that I'm not going crazy.

Krugman's Waterloo

| Thu Dec. 30, 2010 7:01 PM EST

Paul Krugman on NYC Mayor Michael Bloomberg's hapless response to the city's recent blizzard:

He just faced a major test of crisis management — and it’s been a Brownie-you’re-doing-a-heck-of-a-job moment.

Krugman, again, a few minutes later:

Update: Commenters are right: I shouldn’t have been so casual about the comparison to New Orleans, where so many people actually died. I was thinking too narrowly of the political aspect, of the collapse of an undeserved reputation for competence; but the dead deserve more respect.

Can I vent? Krugman's crack wasn't in any way disrespectful to New Orleans, it was just a comparison that used a cultural touchstone that everyone would instantly recognize. Likewise, if you tweet that the world would be better off if someone were dead, it's not "eliminationist" rhetoric, it's just water cooler conversation from someone whose temper is frayed. No one thinks you really want to take out a contract on someone. And analogies to World War II aren't meant to trivialize Nazis, they're just handy comparisons that most people will understand because World War II is really famous.

This kind of "How dare you!" reaction is way too common in response to casual comments. Sure, we should all be careful with our smart remarks, but the outrage brigade needs to ease up. Either that or they need to start getting equally upset over "_____'s Waterloo" formulations. A lot of people died there too.

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Five Books

| Thu Dec. 30, 2010 4:18 PM EST

This was kind of an odd year in books for me. I actually read a fair number of books that I liked, but not very many that I really liked. For example, at the beginning of the year I inhaled a whole slew of books on the financial crisis: Too Big To Fail, This Time Is Different, Fool's Gold, 13 Bankers, Econned, The Big Short, and Ship of Fools. They were all pretty good, and they all focused on different aspects of the crisis. But I don't know that I'd really recommend any one of them as the book to read on what happened. For me, the whole year was a bit like that.

Still, with that said, here are my picks for the best five nonfiction books I read this year (though not necessarily published this year):

  1. Winner-Take-All Politics, by Jacob Hacker and Paul Pierson. In this book, Hacker and Pierson explain the political foundations of growing American income inequality by focusing on the rise and fall of institutional pressure groups. I wish they'd spent more time on the mechanics of how legislation and regulatory changes have affected income distribution, but overall it's a masterful explanation. More here.
  2. Stayin' Alive, by Jefferson Cowie. This is primarily a book about the decline of organized labor in the 70s. Cowie intersperses this with chapters about music in the 70s (thus the title), and I don't think this conceit actually works very well: the music stuff is often interesting in its own right, but I don't think it illuminates the rest of the story the way he thinks it does. But that's a nit. The bulk of the book is a detailed and engrossing political history of a decade that too many people either ignore or misunderstand, and it's an excellent, highly readable primer for anyone whose knowledge of politics basically starts with Reagan. Highly recommended.
  3. The Promise, by Jonathan Alter. There were several books published this year about Obama's first year in office, and this was the only one I read (because the publisher sent me a free copy). So I can't say for sure that it's the best of the lot. But it's pretty good: a nicely written, deeply reported look at the world as Obama sees it. For political junkies a lot of it is inevitably a recap, but there's new stuff as well, and it provides a pretty good sense of why things happened the way they did during 2009.
  4. How Soccer Explains the World, by Franklin Foer. This is several years old, but I only got around to reading it this year, just before the World Cup started. As it turns out, it doesn't really explain the world, but it does explain a lot about soccer, including my perennial favorite: why the hell are soccer fans so crazy? I'm still not sure I know, but at least I'm closer to knowing.
  5. How Wars End, by Gideon Rose. This is just what its title says: a book about how American wars have ended over the past century and why they've ended (or continued to sputter on) the way they did. Rose's basic thesis is that (a) politicians routinely screw up by not thinking hard enough about what to do after wars end, and (b) they're too obsessed with not repeating the mistakes of the previous war, which blinds them to ways in which the current war is different, not just a rerun of some previous fight. In some ways I think his take on (a) is a little unfair, simply because the complexity of planning well for a postwar environment is really, really hard, but his illumination of (b) is pretty compelling. I've noticed the same dynamic myself over and over, but this is the first book I've read that really laid out the problem methodically.

They're all good books, but the top two are the best books I read all year. So if you're only going to read one, read one of those.

Big Cars

| Thu Dec. 30, 2010 2:13 PM EST

Atrios:

From talking to a few parents, the SUV craze is at least in part due to the perceived additional safety given that everyone else on the highway is driving a giant car. Probably stuck there. In fairness, my most frequent form of transport is a rather large bus.

This goes back a long way. Even when I was a kid, I routinely heard other parents say they felt better with "a lot of steel" around them, not tooling around in some little tin can. In that sense, SUVs are just replacements for the full-size land yachts that everyone loved in the 50s and 60s. As it happens, I've always suspected that the safety/comfort argument is largely a pretense for people who just like to drive big cars, but it's a hard one to kill since there is, after all, a kernel of truth to it. Other things equal, a big, heavy car really is a bit safer than a small one if they hit each other.

Losing Well

| Thu Dec. 30, 2010 1:48 PM EST

Mike Konczal says two of his biggest disappointments of 2009-10 have been Congress's failure to enact a carbon policy and Obama's continuation (and in some cases, expansion) of Bush-era civil liberties policies. No argument there. But his other big disappointment is that he thinks Obama never learned to lose well:

By losing well, I mean losing in a way that builds a coalition, demonstrates to your allies that you are serious, takes a pound of flesh from your opponents and leaves them with the blame, and convinces those on the fence that it is an important issue for which you have the answers. Lose for the long run; lose in a way that leaves liberal institutions and infrastructure stronger, able to be deployed again at a later date.

[Example: ramping up deportation of illegal immigrants and then failing to get Republican support for the DREAM Act anyway.]

This is losing poorly. It makes major concessions without getting anything in return, conceding both pieces of flesh and the larger narrative to the other side....This is true of many issues, ranging from unions fighting for the ability to unionize easier to the technology groups fighting for Net Neutrality. Why should these groups be happier with the past two years, even if they thought on day one that they wouldn’t win anything? How are either stronger for the next battle?

This has indeed been a mystery. It's never been clear whether Obama makes these pre-emptive concessions because he genuinely believes they're good policy or because he genuinely thinks it will draw out Republican support down the road. Neither really seems to make sense. Even if he thinks they're good policy, it's still smarter to hold them back as bargaining chips for broader policy victories. And quite plainly they did nothing to endear him to Republicans, who are almost unanimously convinced that he spent the last two years ramming an ultra-liberal policy agenda down their throats using a combination of bald lies and Chicago-style thuggery. It's hard to believe that Obama ever thought they'd react differently.

In any case, I find this aspect of Obama's presidency perplexing too. Compromise is one thing: it's baked into the cake of mainstream American politics. But I expected that even as he inevitably compromised, Obama, with his famously long view of things, would steadily try to push the public in a more liberal direction. As Mike says, this may mean eventually compromising on a policy that appeals to the broad middle of the country, but doing it in a way that hurts your opponents and energizes your friends for battles to come. Obama seems to have done exactly the opposite. It's hard to understand.

Regulations for All!

| Thu Dec. 30, 2010 1:10 PM EST

Despite all the attention it received in the blogosphere during this slow holiday week, I've read about libertarians thoroughly enough already that I couldn't sustain the interest to read Chris Beam's recent take in New York magazine all the way through. Some libertarians are weirdo Randites, some are capital-L types with the usual pathologies of most small capital letter political sects, and some are just ordinary folks with a non-insane tendency in the direction of strong individual rights and minimal economic regulation. Meh. But speaking of that, here's a tiny excerpt from a Dave Weigel post about how libertarian thought is doing these days:

Voters like low taxes, and they hate regulation and policies that take away choices. Libertarians are winning on all of that.

This is a common misconception. Actually, regulations are like lawyers: everybody hates them until they need one. Then your lawyer is suddenly a shining beacon of truth and justice fighting against a slavering horde of corrupt and greedy corporate snakes. Likewise, everyone hates regulations that restrict them from doing something that might harm other people, but they generally love regulations that prevent other people from doing stuff that might harm them. It all depends on whose ox is being gored and how different people define "harm."

But then, definining "harm" is the central problem of much of libertarian thought, so this is no surprise. In any case, the bottom line is that although you can whip up a fair amount of resentment against "gummint regulation" in the abstract, specific regulations are actually a lot more popular than most libertarians and conservatives would like to believe.