Our Economic Kabuki Show Continues

Well, it looks like Macroeconomic Advisors was right:

The American economy slowed to a crawl in the first quarter, but economists are hopeful that the setback will be temporary. Total output grew at an annual pace of 1.8 percent from January through March, the Commerce Department said Thursday, after having expanded at an annual rate of 3.1 percent in the fourth quarter of 2010.

It's a little hard to know what to say about this aside from the usual: our big problem right now is sluggish growth and high unemployment, but no one seems to care about that anymore. It's all inflation and deficits and the weak dollar. Paul Krugman will undoubtedly write a few blistering columns about this, everyone will shrug because it's just Krugman being Krugman, and then we'll go back to our usual right-wing kabuki show over inflation and deficits and the weak dollar.

And growth will remain lousy and unemployment will stay high and we'll all pretend there was nothing we could have done about it.

Our National Security Farm Team Problem

Yesterday President Obama announced a reshuffling of his national security portfolio, moving Leon Panetta from CIA to Defense, Gen. David Petraeus from Afghanistan to the CIA, Gen. John Allen from Centcom to Afghanistan, and Ryan Crocker from retirement to active duty as ambassador to Kabul. Fred Kaplan says "it's hard to imagine a shrewder set of moves, both politically and substantively." And maybe so. But then there's this:

What's glaringly obvious about this list is that [...] it's a game of musical chairs. No fresh talent has been brought into the circle. And one reason for this is that the bench of fresh major-league talent is remarkably thin.

There are plenty of smart, capable analysts and bureaucrats in the Pentagon's second tier or in the think-tank community—but very few, arguably none, who possess the worldliness, gravitas, intramural hard-headedness, and credibility on Capitol Hill that a president, especially a Democratic president, would like to have in a defense secretary during a time of two wars and ferocious budget fights....In the past few weeks, I've asked a couple dozen veteran observers—officials, analysts, Hill staffers, other reporters—who they think would be a suitable replacement, from either party's roster. Nobody could think of anybody. This in itself is a bit disturbing.

Yes, that is disturbing. If it's true, that is. And it might not be: it's common to think of second stringers as perpetually second stringers until you actually promote one of them. Then all that gravitas you thought was missing is suddenly there. That might be all that's going on here.

Still, this would be an interesting topic to hear from other national security folks about. Is it really true that the bench of big-league talent in the top tier of the national security world is as thin as all that? And if it is, why?

Manufacturing Outrage

According to Bloomberg, Republicans are complaining that town hall protests against the Ryan Medicare plan are basically phony:

U.S. House Republicans pushing to overhaul Medicare dismiss the vocal opposition some have encountered from constituents as orchestrated by political foes.

They’re blaming much of the criticism voiced at town-hall meetings, which sometimes turned raucous, on activists dispatched by MoveOn.org and other Democratic allies, even as some of the lawmakers have taken measures to control the tone of forums. “This is not genuine anger over Medicare; it’s manufactured political anger that’s causing the disturbances,” said Representative Lou Barletta, a freshman Republican from Pennsylvania.

You know what? Barletta is mostly right. But that's not really the problem. After all, a lot of the tea party town hall protests in 2009 were pretty much orchestrated too. Here's the problem: liberals are lousy at pretending that their protests are organic. Ever since the Ryan plan has come out, I've been reading endless tweets and blog posts about how liberals need to create a ruckus at congressional town halls. Or, alternatively, complaining that liberals aren't doing a good enough job of creating a ruckus at congressional town halls. Or wondering when liberals are going to rise up in wrath. Or something.

As a result, even I haven't really taken any of these various ruckuses very seriously. They're just too obviously contrived to be our equivalent of the tea party protests. And my guess is that the press is yawning for the same reason. You can't make protest plans in public for a couple of weeks and then turn around and try to convince reporters that this is all a grass roots effort.

The left has always been pretty good at organizing large-scale marches and protests. But fake grass roots uprisings? Not so good. The right has us beat hollow on that kind of thing.

Paul Ryan vs. the Truth

Rep. Paul Ryan (R-Wis.).

There's a lot of annoying mendacity in Paul Ryan's budget proposal, but the most annoying by far is his repeated insistence that under his plan seniors would get "the same kind of health-care program that members of Congress enjoy." Aside from the fact that he's offered no details about how or why private insurers would magically decide to provide the same kind of benefits to the elderly that they do to members of Congress, he's just flatly lying about the most important part of his proposal: namely that it will force seniors to pay far, far more for Medicare than they do now — and far, far more than members of Congress pay for their health insurance. If you're a millionaire, maybe this counts as the "same kind" anyway, but for the rest of us it doesn't.

Here's the difference: under Ryan's plan, the government pays a set amount for Medicare and you pay for the rest. So far, that's pretty similar to the congressional plan. But that set amount goes up very slowly under Ryan's plan — much more slowly than the actual rise in the cost of health insurance — which means that seniors have to pay a bigger and bigger share of the total premium cost as the years go by. CAP's Tony Carrk and Nicole Cafarella ran the numbers to see how that would have worked out if Ryan's formula had applied to Congress over the past decade, and the dismal results are on the right, below.

Under the actual congressional plan, family premiums have gone up from $2,500 to $5,000. Under Ryan's plan, premiums would have gone up to about $8,300. That's a difference of $3,300 in only ten years. Over the course of 30 years, the difference would be more like $10-15,000.

That's a pretty whopping difference, and it would be even bigger for Medicare beneficiaries since Medicare starts from a bigger base. The result is that lots of seniors just flatly wouldn't be able to afford to buy Medicare. They wouldn't have enough money to pay their share of the premium, and that means they'd be uninsured and uncovered. Ryan has, of course, offered up a bunch of handwaving about how indigent seniors would get bigger subsidies, but unsurprisingly has been pretty sparing with any details. If he explained things, after all, everyone would immediately figure out (a) just how miserly his plan is, and (b) how much it would actually cost to support all those seniors who couldn't afford the astronomical premiums his plan forces on them.

The end result of all this is debatable. What's not debatable, however, is whether his plan is "the same kind of health-care program that members of Congress enjoy." It's not. It's not even close.

IQ and Incentives

Via Tyler Cowen, this is a genuinely startling result:

....material incentives in random-assignment studies increased IQ scores by an average of 0.64 SD, suggesting that test motivation can deviate substantially from maximal under low-stakes research conditions. The effect of incentives was moderated by IQ score: Incentives increased IQ scores by 0.96 SD among individuals with below-average IQs at baseline and by only 0.26 SD among individuals with above-average IQs at baseline.

Let me translate this into English. On IQ tests, a single standard deviation equals 15 points. So if this research is right, giving people actual incentives to do well on IQ tests (money, for example) has the following effect:

  • Those with low IQs scored 14 points higher.
  • Those with high IQs scored 4 points higher.

In other words, giving people an incentive to do well collapsed the gap between high and low by ten points — and bigger incentives created even bigger effects. These results are based on a meta-analysis of previous studies, not on new research, and metastudies are notoriously tricky to do properly. So take this with the usual grain of salt until these results get replicated elsewhere.

But ten points is a helluva lot. If this holds up, it's pretty significant.

The Real Message of Obama's Birth Certificate

A friend of mine reads National Review's leading lights so I don't have to:

The Corner is funny today. No, this is not an embarrassing day for the right. Quite the contrary. That speech was way, way too petulant. (Seriously. Go back and watch it again. Did you see it? ...Okay, try watching it again. ...Still no? Just trust me. He's a ball of rage.) He was so unlikeable when he was releasing his birth certificate. And you know what the real question is: why did he wait so long to release it?

Also, you know why the media covered the Birther issue? It has nothing to do with the fact that the majority of the primary voters in our Party are Birthers, or that they have been kicking this story around for more than two years, or the fact that the presidential "candidate" who is now leading in many polls has made this his main issue. No. That would be embarrassing to admit. Which we don't have to, because the real reason the media covers it is this: because Obama's budget plan doesn't add up!

Plus, you've got to give Trump credit for forcing the issue here. Am I right?

Finally putting the Birther thing to rest: a bad day for Obama.

This is great. And while we're on the subject, I'd like to encourage the rest of my friends to write my blog posts for me too. It really makes my job a lot easier.

Rich Man, Poor Man

Everyone thinks they're middle class. This isn't a big surprise: the word "rich" has specific connotations (servants, mansions on the Gold Coast, 200-foot yachts, etc.) and even someone making $200-300 thousand a year probably doesn't have any of that stuff. What's more, most people in that income range were likely raised middle class, so culturally they still think of themselves that way even if their incomes give them a pretty comfortable lifestyle.

But Catherine Rampell notes something more interesting today. Researchers surveyed 1,100 households in Buenos Aires and asked them a purely objective question: what decile do you think your income puts you in? The bottom decile means you're part of the poorest 10%, the fifth decile means you're right in the middle, and the tenth decile means you're part of the richest 10%. Here's how things shook out:

Fascinating! The very poorest thought they were actually in the fourth decile — just barely below average. The very richest thought they were in the sixth decile — just barely above average.

If the same thing is true here — and I wouldn't be surprised if it were — it could go a long way toward explaining the political dynamics of taxation and economic policy in the United States. After all, if the poor don't really know they're poor, they're never going to mount much of a fight for more egalitarian public policies. And if the well-off don't know they're well off, they're going to strongly resist more egalitarian public policies. The result can be startling increases in income inequality without anyone really knowing it's happening or caring very much about it.

Vaccines and Ideology

Is vaccine denial primarily a leftie/hippy/Hollywood phenomenon? There's apparently no really good data on this, but Chris Mooney rounds up what he can and concludes that the whole issue is pretty nonpolitical: "Bottom line: There’s no evidence here to suggest that vaccine denial (and specifically, believing that childhood vaccines cause autism) is a distinctly left wing or liberal phenomenon." More here.

Obama Brazenly Lying Once Again

I see that even our own Tim Murphy has fallen for the White House's "long form birth certificate" scam this morning. How disappointing to see one of MoJo's own being so credulous. This "official" copy has obviously been doctored, as anyone can see clearly by looking at the bottom of the form. See line 23? "Evidence for Delayed Filing or Alteration"? If this were a true copy, it would carry an official stamp saying "None" to indicate that it hadn't been altered. But obviously the form has been altered, to remove the official evidence of alteration. This story is far from over, my friends. Far from over.

UPDATE: A reader emails to point out that Fox News is taking an appropriately skeptical stance about all this. Kudos to them. I'm glad there's at least one news organization left that doesn't just accept White House agitprop at face value.

UPDATE 2: From commenter dennisS:

     You call that a long form?! It's not even 8.5 x 11 !! I want the reeeeeallllly loooong form!!

The rest of the comments are good too!

Is Obama a Republican?

Ezra Klein argues today that Barack Obama is, historically speaking, a moderate Republican. On three big issues, he says, Obama has championed approaches that Republicans themselves supported only a couple of decades ago:

Take health-care reform. The individual mandate was developed by a group of conservative economists in the early ’90s. Mark Pauly, an economist at the Wharton School of the University of Pennsylvania, was one of them. “We were concerned about the specter of single-payer insurance,” he told me recently.

....The story on cap and trade — which conservatives now like to call “cap and tax” — is much the same. Back then, the concern was sulfur dioxide, the culprit behind acid rain. President George H.W. Bush wanted a solution that relied on the market rather than on government regulation. So in the Clean Air Act of 1990, he proposed a plan that would cap sulfur-dioxide emissions but let the market decide how to allocate the permits. That was “more compatible with economic growth than using only the command and control approaches of the past,” he said.

....As for the 1990 budget deal, Bush initially resisted tax increases, but eventually realized they were necessary to get the job done....That deal, incidentally, was roughly half tax increases and half spending cuts. Obama’s budget has far fewer tax increases.

This is a fairly common argument on the left, but I really think it's mistaken. What conservatives want hasn't changed all that much. They want government out of the healthcare business; they want minimal environmental regulation; and they want to keep taxes low. What has changed has been purely tactical. In the early 90s it seemed likely that Democrats could push through single-payer healthcare and a command-and-control solution to acid rain. Republicans felt like they had to have competing solutions, so they offered something a step to the right. Likewise, the 1990 tax bill was merely a compromise that Bush felt pushed into, not conservative dogma of the era. Far from it, in fact: conservatives were opposed to the deal from the start, and Bush himself repudiated it shortly after it was signed into law.

The individual mandate and cap-and-trade may have originally been "Republican" ideas in some technical sense, but they were adopted under duress. They never truly represented things that Republicans supported. The same was true of the Bush tax hike, which even at the time conservatives viewed as the work of an apostate. So it's only natural that they haven't supported any of these things under the Obama adminstration. They never really did, after all, and this time around they felt that flat-out opposition was politically feasible. So that's what we got.

That said, it's true that the GOP has moved considerably to the right over the past couple of decades. Today's crowd wouldn't vote for these things even as a disagreeable but unavoidable compromise. As Joe Klein says:

The Republican party has [...] gone off the deep end on taxes. It has denied the long-term economic and societal benefits of universal health insurance. It has gone into climate change denial...it is hard for any card-carrying Republican to say: I believe that Darwinian evolution is God’s plan.

....A hundred years from now, historians will be having a field day: How did the Republicans go so far astray? Why did it work, from time to time, electorally? Why weren’t the Democrats more effective in stopping them? Why didn’t the society’s major conservative economic stakeholders (outside the uber-reactionary Oil Patch) renounce the sideshow and demand a more reasonable brand of conservatism?

Two words immediately come to mind: Fox News. And two more words: Rush Limbaugh. And two more words: Newt Gingrich. And two more: Frank Luntz.

This is unquestionably true, and it's obviously worth trying to figure out why this rightward shift happened and how it's retained so much public support. But I still don't think it's fair to say that government-mandated health insurance, cap-and-trade, or tax hikes were truly Republican policies 20 years ago. They were merely things they felt compelled to offer as compromises to stave off even worse liberal ideas — the same way that I compromised by supporting Obama's healthcare plan last year. If I get the chance, I'll support full-fledged single-payer healthcare 20 years from now, and it won't be because I've gotten more politically radical. It'll be because I think it's politically feasible.