Matt Yglesias takes a look at a recent Gallup poll about perceptions of government waste and says, "I infer from the fact that state/local government is seen as less wasteful than the federal government and that older people have a much higher waste-perception than younger people that this is driven by the fact that people don’t understand Social Security and Medicare." I thought I might write a post about why older people perceive so much waste, but I changed my mind when I clicked through and found this summary table of responses.

First, on the young-old thing: there's actually surprisingly little difference. 30-somethings think 52 cents of every dollar is wasted while seniors think 56 cents of every dollar is wasted. Meh.

In fact, it's pretty surprising how similar everyone's views are. Democrats say 47 cents, Republicans say 52 cents. High school grads say 52 cents, PhDs say 45 cents. Etc.

What I'd really like to know about this is what people are thinking when they hear the word "waste." Are they thinking about conventional waste, money that's just flatly going down a rathole and not doing what it's supposed to be doing? Or are they applying the term to spending they just don't like? Is this a matter of pacifists calling the entire Pentagon budget waste and libertarians calling the entire Medicare budget waste?

There's no telling, but either way this number is astonishingly large, and it's another demonstration of the overwhelming success conservative messaging has had over the past three decades. Perception of waste has gone up slowly but steadily since 1980 (which means the latest numbers aren't due to stimulus spending or anything like that), but the truth is that nothing much has actually changed on the waste front since then: the federal budget looks about the same now as it did in 1980, it's roughly the same size, and the amount of bad management is probably pretty similar. There are really only two big things that have changed: (1) a huge slowdown in income growth, which probably makes people begrudge their taxes more, and (2) three decades of scorched-earth conservative warfare against the very idea of government.

And it's worked. Hell, if I thought 50 cents of every dollar was wasted, I wouldn't support another dime in taxes either. It's insane that people think this, though, and it's a sign of the massive failure of liberal imagination that we've allowed it to happen.

A reader writes:

I'm writing regarding an often repeated refrain that the top 10% of income earners pay 70% of all income tax. This looks big when compared to their 50% share of total income, but I know this ignores payroll taxes. I have not been able to find a good online breakdown of how payroll taxes paid by individuals changes this. Could you refer me to some sources if you know?

Well, why not? The Congressional Budget Office has a nice page here that provides lots of useful tax and income share data. The table below is combined from their income share document and their tax share document, and it shows the share of all federal taxes paid by different income groups (their latest data is for 2006). Their definition of "income" is quite broad, including healthcare benefits and federal welfare benefits. As you can see, the top 10% receive 41% of total income and pay 55% of total taxes. In other words, the federal tax system as a whole is progressive, but it's not very progressive.

Add in state and local taxes and things get even less progressive. But for federal taxes only, this is the basic story.

UPDATE: Via Citizens for Tax Justice, here's a similar chart that accounts for all taxes — federal, state, and local. The income groups at the high end are arranged a bit differently than CBO's, but the basic comparisons are the same. As you can see, the total tax system in America is only very slightly progressive.

A single month of data is never cause for panic, but this particular piece of data sure isn't good news. The advance release of the composite PMI index for Europe fell below 50 in September, which suggests the European economy is now contracting. Outside of France and Germany the news is even worse, and in the service sector both current activity and expectations of future activity are down. There's just no silver lining here.

Can ordinary Americans like you and me sue the government for illegally spying on them? When it comes to the NSA surveillance program, the government itself says the answer is no. After all, since it's a secret program you don't really know if you're being spied on. And if you don't know you're being spied on, you have no standing to sue.

If that logic makes your head spin, it should. But today Glenn Greenwald reports some modest good news. A few months ago a panel of judges on the 2nd Circuit Court decided that such a suit could indeed go forward. So the government appealed to the full court:

Yesterday, the full Second Circuit panel issued its ruling on the Obama DOJ's request. Six of the judges voted against a full review of the decision by the three-judge panel, while six voted in favor of reviewing it. Because a majority is needed for a full-circuit review, the 6-6 tie means that there will no further review, and the March decision of the three-judge panel — allowing the lawsuit challenging the FAA's constitutionality to proceed — will stand. This significant victory for the rule of law may well be temporary, as the unusual 6-6 vote (and the numerous contentious opinions accompanying the vote) makes it likely (though by no means guaranteed) that the Supreme Court will accept this standing dispute for resolution. But at least for now, this is a good and important development.

Actually, "modest" might be overstating just how good this news is. As a layman, I find it pretty shocking that any judge could rule that, effectively, no one ever has any standing to sue in a case like this, let alone six judges. And it gets worse. You really have to read the opinion of Dennis Jacobs, the Chief Judge of the Second Circuit, to believe it. Jacobs apparently can't even conceive that there might be a legitimate reason for anyone to object to the NSA program:

At the risk of being obvious, the purpose of this lawsuit is litigation for its own sake — for these lawyers to claim a role in policy-making for which they were not appointed or elected, for which they are not fitted by experience, and for which they are not accountable. As best I can see, the only purpose of this litigation is for counsel and plaintiffs to act out their fantasy of persecution, to validate their pretensions to policy expertise, to make themselves consequential rather than marginal, and to raise funds for self-sustaining litigation.

That's just staggering. Hell, it would seem over the top coming from Rush Limbaugh, let alone an appellate judge. What rock did this guy crawl out from?

Your mission tonight: watch Rick Perry's debate performance and decide if it's really Reaganesque. Pollster Matt Towery, a former national debate champion, says he's sure trying to make it look that way:

"Every time someone says something, he cocks his head with a little smile on his face," Towery said. "Reagan would always move his head to one side and act as if he couldn't quite believe what the other person was saying. I guarantee that's what he's trying to do."

OK. I'll keep my eyes open for that. And as long as we're talking about debates, let's also explode a myth. Here's the conclusion of the article:

By now it's a faded memory, but the first televised presidential debate in 1960, between John F. Kennedy and Richard Nixon, signaled the dawn of a new age of judgment on the part of debate watchers, one that launched a thousand image-consultant careers.

Nixon, sweating under the hot TV lights, his five o'clock shadow visible, seemed nervous and shifty compared with Kennedy, who bore an easy smile and suave demeanor. People remember that Kennedy won the debate. That was true for TV viewers. Radio listeners, immune to Kennedy's visual appeal, gave the win to the sweaty guy.

This myth was seriously called into question a long time ago. The polling evidence is extremely thin to begin with — basically a single small survey that showed radio audiences with a better opinion of Nixon — and it's unclear whether even that survey can be trusted. By 1960, TV was so widespread that its audience was fundamentally different from the radio audience, which by then was mostly rural, conservative, Protestant, and — quite likely — predisposed to like Nixon in the first place. Nixon's sweaty brow and pale demeanor might have hurt him with the TV audience, but the evidence on this score is close to nonexistent.

From Ezra Klein:

Eric Jackson, a former employee of PayPal and now the CEO of the online-investing platform CapLinked, worries that implementing the “Buffett rule” would hurt the pool of investment money available to tech start-ups. His logic on this point is unimpeachable: If the Buffett rule means taxing capital gains more like normal income, then it will, on the margin, hurt investment of all kinds, including investment in tech start-ups.

Hmmm. "On the margin" is doing a lot of heavy lifting here. I've never seen any compelling evidence that higher capital gains rates have more than a minuscule effect on investment. Changes in rates can have short-term effects as investors rush to sell assets before new rates takes effect, and high rates can also produce a modest "lock-in" effect, in which investors hold on to assets in order to avoid taxation.

But the long-term effects appear to be very small, and low rates have a serious drawback: they spur a huge amount of unproductive tax sheltering as wealthy taxpayers spend time trying to figure out how to redefine ordinary income as capital gains. This is not just useless, it's positively damaging. What's more, capital gains already get favorable tax treatment just by virtue of the fact that gains can accumulate year after year tax free. You only have to pay taxes when you sell, and the net effect of this is a low effective tax rate compared to income that you have to pay taxes on as it's earned.

My own take is that capital gains rates should, perhaps, be a bit lower than ordinary income rates, but only a bit. Maybe 30% or so, compared to 35% or 40% for ordinary income. I'd sure like to hear the case that a lower rate really has any significant long-term negative effects on investment or capital formation.

I haven't seen this anywhere else, but the Guardian is reporting that a UN vote on Palestinian statehood might get delayed after all:

The Palestinian leader, Mahmoud Abbas, is said to have told Barack Obama at a meeting on Wednesday evening that he would agree to delaying a security council vote by several weeks, although the Palestinians are maintaining the line in public that any delays will be "procedural not political".

....The Palestinians appeared to be pulling back from an immediate confrontation, having come under intense pressure from the Europeans as well as the Americans. Although [Nicolas] Sarkozy staked out a position sympathetic to the Palestinian cause in his UN speech, he has advised Abbas to hold off from the security council move.

Sarkozy wants to use the threat of a UN vote as a way of jumpstarting the peace process "without preconditions." But of course, there are always preconditions. After all, if there weren't there's a chance that negotiations might actually make some progress. And we can't have that, can we?

When Ron Suskind interviewed former White House communications director Anita Dunn for his book, Confidence Men, she told him that "if it weren't for the president," the Obama White House would have been in court for being a hostile workplace. But when the book appeared, those six words weren't part of the quote. I slammed Suskind for this yesterday, but today he explained what happened to the Washington Post's Erik Wemple:

Dunn, according to Suskind, was simply saying that her loyalty — and that of others — to the president prevented anyone from ever going legal with their issues....The quote was originally uttered in a long telephone conversation in April. Once he had a manuscript in hand, in the summer, Suskind called Dunn back and explained what he was prepared to publish. Dunn was the one who took issue with the preamble [this refers to the six words, I assume] — as it turns out, her husband was serving as White House counsel while she was communications director, and so she didn’t want to be making a comment about actionable conditions at the workplace given her husband’s role. So she petitioned Suskind to replace the preamble with the “looking back” treatment that’s now in print.

In general, I don't think there's any excuse for truncating a quote, regardless of whether you think it changes the meaning or not. But this is different: if it was Dunn herself who asked Suskind to truncate the quote, then he's blameless. Dunn herself apparently refuses to talk about this further, so we don't have her side of the story. But for now, it looks to me like Suskind is in the clear. He was actually helping out Dunn, who then had buyer's remorse when the quote appeared.

Just to complete the record, Wemple reports that when Suskind was researching the book he had already heard the "boys club" complaints about the White House (they've been widely reported before) and talked to another administration official about it:

Sympathetic to the women’s point of view, the official directed Suskind to speak with Dunn, who had left the White House for a consulting gig in town.

That’s the context that helps explain why Dunn was so forthcoming to Suskind: She would lend an authoritative and on-the-record voice to a lot of stuff he’d picked up. The author hastens to note that neither Dunn nor the anonymous White House official who made the referral was committing an act of insubordination. These officials were pleased that the president had taken steps to right the gender imbalance. “They felt that the president did step in here, and it was a management-teaching moment for him,” says Suskind.

So Dunn and others did feel the White House was a pretty hostile workplace for women, but they were also pleased that Obama addressed the problem once they brought it up with him. Unless Dunn decides to comment further, that's where things stand.

I've been reading all day about the $16 muffins the Department of Justice served at one of its conferences, and I finally got curious about this. Is it really true? So I went to the DOJ Inspector General's website, got the report, and searched for "muffin." The following paragraph looks fairly impenetrable, but go ahead and plow through it anyway:

Considering the EOIR reported that at least 534 people received refreshments at its 2009 Legal Training Conference in Washington, D.C., it spent an average of $14.74 per attendee per day on food and beverages—just above the $14.72 JMD limit for refreshments. We credit the EOIR for implementing the following controls to reduce food and beverage costs: (1) it provided just refreshments and not full meals, (2) it ordered fewer refreshments than the total number of reported attendees, and (3) it received 15 gallons of coffee, 30 gallons of iced tea, and 200 pieces of fruit for free. However, many individual food and beverage items listed on conference invoices and paid by the EOIR were very costly. The EOIR spent $4,200 on 250 muffins and $2,880 on 300 cookies and brownies. By itemizing these costs, we determined that, with service and gratuity, muffins cost over $16 each and cookies and brownies cost almost $10 each.

So did DOJ really pay $16 for muffins? Of course not. In fact, it's obvious that someone quite carefully calculated the amount they were allowed to spend and then gave the hotel a budget. The hotel agreed, but for some reason decided to divide up the charges into just a few categories instead of writing a detailed invoice for every single piece of food they provided. 

This is unremarkable. In fact, I'm here to tell you that this happens All. The. Time. I've been involved in what feels like a thousand conferences of this kind, and I'd be shocked if it happened any other way. Hell, I'm surprised DOJ even got that much of a breakdown. Far more commonly, your event person negotiates what kind of refreshments you'll get, and the invoice ends up looking something like this:

Refreshment table (bev/morn/aft) — 5 days....................$39,500

None of this is to say that DOJ didn't overspend on its conferences. In fact, it sounds like they did—though in some cases this was just an artifact of applying overhead costs to the food instead of accounting for it separately. But the $16 muffin? That's a myth. It'll never die now that it's been delivered to posterity thanks to some enthusiast in the OIG who broke out a calculator and mistakenly assumed they could calculate actual costs this way, but it's still a myth.

Threatening the Fed

Did the Republican leadership do anything wrong by sending Ben Bernanke an ominous letter warning him not to intervene in the economy? Atrios thinks not:

I don't agree with the substance, but I don't think there's anything wrong with Republicans sending the Fed a sternly worded letter. If you believe that central bank independence is important, then you don't want the president being able to boss the Fed chairman around and similarly you wouldn't want Congress trying to goad the Fed into one action or another through legislation. But there's nothing wrong with policymakers expressing their opinions about what the Fed is doing.

But there are opinions and then there are opinions. The Economist thinks this week's GOP assault is different in several ways from ones in the past:

One is that politicians, especially those from Texas, have historically wanted easier policy from the Fed....The second difference is that past critics had a point: Mr Volcker’s tight monetary policy did tank the economy. This time, the hysteria over inflation has no obvious factual basis....Third, and most important, historically the Fed’s antagonists came from the fringes of their (usually Democratic) party. Now Republican leaders and presidential candidates are flouting the idea of central-bank independence. That has troubling implications.

On reflection, I think I probably overreacted last night. I'm not as sanguine about the concerted Republican attack on the Fed as Atrios is, partly because it now has the flavor of official threats from the Republican leadership and partly because it's so obviously aimed at trying to prevent any kind of effort to improve the economy. That's pretty unprecedented and pretty indefensible.

But even granting that, Atrios is right: if politicians have opinions about monetary policy, there's no reason they shouldn't spout them. It's when things go beyond mere spouting that they can get dangerous. On that score, the Republican letter may be defensible, but it's still not something to be shrugged off as just politics as usual. Boehner & Co. show every sign of wanting to push the envelope much harder than before on this.