Barack Obama has pretty much caved in to the Republican contention that budget deficits are the biggest problem our economy faces. He's pretty much caved in to the Republican contention that higher taxes are bad for the economy. And he's pretty much caved in to the Republican contention that nothing big can done to improve the unemployment picture.

So what's his next cave-in on the economy? Apparently this. I guess regulatory uncertainty is what's holding us back after all. So much for the agenda-setting power of the presidency.

The Immigration Trap

Ed Kilgore notes that Rick Perry will be spending his Labor Day weekend in South Carolina and might end up walking into a buzz saw:

It’s well known that Perry’s record and positions on immigration represent the one glaring area where he’s significantly out of step with conservative orthodoxy. He has, after all, consistently supported a guest-worker program and a path to citizenship for undocumented workers, both positions contemptuously dismissed as code for “amnesty” by many conservative activists. Worse yet, from their point of view, he signed and still defends a state version of the DREAM Act, which provides in-state tuition rates at state universities for illegal immigrants brought to this country as children.

....So it’s well worth noting that the co-inquisitor who will be sitting next to Jim DeMint (along with right-wing Princeton professor Robert George) at the Palmetto Freedom Forum event on Labor Day will be none other than [Tom] Tancredo’s successor as Congress’ preeminent anti-immigration agitator, Representative Steve King of Iowa. King, whose views on the subject are so extreme that he was denied the chairmanship of a House subcommittee on immigration despite being its senior member, can hardly be expected to pass up an opportunity to bash Perry’s record in the forum’s one-on-one questioning format.

....If Rick Perry does walk into a beatdown by King in Columbia, and doesn’t handle it well, the political consequences could be pretty serious....If the extremely powerful Jim DeMint is looking for an excuse to support someone else or simply withhold his imprimatur, watching Perry squirm while his buddy King taunts him with a hot poker could provide an excellent excuse. And even more obviously, King is a major powerbroker back home in Iowa, and is likely capable of stopping Perry’s recent momentum in the state.

My guess is that if Perry has been able to handle himself on this issue in Texas, he can probably handle himself in South Carolina. Besides, where is the hardcore anti-immigrant vote going to go? Mitt Romney? Hardly. Michele Bachmann? Maybe. She's the obvious choice, and she's made a show of talking up immigration issues lately. What's worse, on immigration Perry really will have to contend with the ghost of George Bush, another Texas governor who held moderate immigration views and ended up getting pilloried by his own party for it.

Still, I suspect that Perry will he able to pivot well enough to avoid a disaster. He'll never be the favorite of the anti-immigration crowd, but he'll probably be good enough. It'll be worth watching how he does, though.

Another day, another lousy jobs report. The Washington Post headlined it like this:

Job creation in U.S. comes to a halt in August

At the risk of being tiresome, this isn't correct. We need to add about 150,000 jobs each month merely to keep up with population growth, which means that real net job growth is negative and has been for over a year. The chart below shows real net job creation over the past three years. We should do something about this. How about a trillion dollars for infrastructure?

Perry and the Press

Last weekend, Rick Perry held a private Q&A with evangelical leaders to assure them that he was Christian enough for their taste. Fine. Political leaders meet with interest groups all the time. But there's also this:

Attendees were struck not only by the clout of those who participated, but by the amount of time Perry spent with the group. The governor and his wife mingled with the Christian leaders Friday evening and for several hours Saturday, fielding questions about their faith and his record.

It would be nice if Perry were willing to spend this much time — hell, even half this much time — giving actual interviews to actual reporters. I mean, he is running for president, after all. If he can afford this much time on an evangelical panderfest, how about sparing a few hours for the press too? What's he afraid of?

ARRA and Unemployment

Should we spend a trillion dollars on new infrastructure, as I suggested this morning? Reasonable people can differ. But this comment via Twitter is sadly all too common:

Didn't we do this less than 2 years ago? Jobless went from 7.5% to 9.8%. Do it again, Jobless to 11%. Insane!!!

I know this is just a conservative shoutfest talking point these days, but on the off chance that anyone still cares about the actual evidence, a chart of unemployment is below. In February of 2009, when the stimulus bill was passed, the unemployment rate stood at 8.2%. It peaked eight months later at 10.1% and then started to decline. If you want to, you can argue that ARRA had no effect on unemployment over the long term, but there's really no credible way to argue that ARRA was implemented so fast, and then had such an immediate effect, that it had any serious impact on unemployment up through the fall of 2009. CBO estimates that it lowered unemployment by 0.3% in the third quarter of 2009, and that's about the biggest impact, positive or negative, you can credibly suggest at that point. "Approximately zero" is probably the best estimate so soon after the law was passed.

The White House prediction that ARRA would lower the unemployment rate to 8% was one of the great messaging fiascos of all time. I hardly blame Republicans for throwing this back in the president's face. Nonetheless, private forecasts suggest almost unanimously that ARRA did lower the unemployment rate, and in any case, it certainly had nothing to do with the unemployment rate rising in the immediate few months following its passage. Those are just the facts.

A few weeks ago I rode an American train for just about the first time in my life. It was the 9:07 Metro North from Grand Central Terminal to New Haven, Connecticut, and I'm sort of embarrassed to say that I was slightly shocked by the experience. It's not that I had any problem getting to New Haven: The train left on time and arrived on time. But the two-hour ride itself was terrible: bouncy and loud and swaying and uncomfortable for practically the entire way. If you're not a car-happy Southern Californian like me, maybe this doesn't surprise you. But it did surprise me—at least a little—and there's a reason for this: Although I've never taken a train anywhere in the United States, I've been on plenty of trains in Europe. Not bullet trains, just ordinary intercity trains. And so I always figured this was what all first-world trains were like: fast and quiet and suspended on a railbed that's smooth as glass.

Go ahead and laugh. I deserve it. But although this is a minor annoyance in the great scheme of things, it's symptomatic of our deteriorating public infrastructure in the United States. A gas pipeline in San Bruno, California, exploded last year, killing eight people, and on Wednesday the chair of the National Transportation Safety Board announced the results of its investigation: The explosion was a story of "flawed pipe, flawed inspection, and flawed emergency response." It was, she said, "not a question of if the pipe would fail, but when." And this wasn't just a story about San Bruno or just about Pacific Gas and Electric: The rest of our national gas pipeline network is under similar strain.

Our electrical grid is just as famously antiquated. In 2003, the failure of a transmission line in Ohio, which should have inconvenienced a few thousand customers in the Cleveland area, instead produced a massive rolling blackout along the entire Eastern seaboard that affected 55 million people. Why? Because of aging and poorly integrated control equipment—equipment that, nationwide, hasn't improved much since. This is a problem almost everywhere. Our trains, even in the busy Northeast corridor, are second rate, our airports are embarrassments, our dams are leaking, and our bridges are crumbling. Taken as a whole, the average age of our public capital stock has risen from 16 to 23 years over the past four decades, "suggesting great underinvestment in public infrastructure," Mike Mandel says.

The American Society of Civil Engineers agrees. In their most recent report card, they gave our solid waste facilities a C+, our bridges a C, our rail a C-, our energy infrastructure a D+, our dams and schools a D, and our roads, levees, and inland waterways a D-. Nothing got an A or a B.

All of this is common knowledge. What's also common knowledge is that manufactured outrage over the deficit aside, the federal government can currently borrow money for free. Actually, it's even better than that: It can borrow money at negative interest rates. If we want to upgrade our national infrastructure, there's no better time to do it than right now. As Dartmouth professor Matthew Slaughter puts it, "There is a crucial connection between potholes and unemployment." Repairing our infrastructure will put people to work during a long and seemingly unending economic slump; it will provide us with the capital stock we need to compete on the world stage in the future; and it will cost us less now than it ever will again. It's a no-brainer.

All of us have our fantasies about what we'd like President Obama to say in his big speech next week about jobs. Here's mine: ask Congress to appropriate a trillion dollars to be spent on infrastructure upgrades over the next five years. That's it. That's the jobs plan. A trillion dollars to make us into a first-world country again. And as part of the enabling legislation, ask for emergency powers to temporarily streamline the regulatory red tape, interagency approval processes, environmental-impact statements, and labor rules that might otherwise keep the money from being put to work speedily.

Will a Republican Congress agree to do this? Almost certainly not—at first, anyway. But building and repairing infrastructure is no boondoggle. It needs to be done, it needs to be done now, and it would be an easy sell to a public cynical about the government's ability to do anything concrete to help them. Make the case aggressively and you never know. Free money is free money, and even Republican voters like the idea of clean water, safe bridges, pipelines that don't blow up, electrical grids that work, and dams and schools that aren't crumbling.

So that's it. A trillion dollars for infrastructure. That's the plan. Let's do it.

Is Barack Obama's relentless love affair with regulatory overkill choking the life out of America's small business owners? McClatchy's Kevin Hall decided to go out and ask them:

McClatchy reached out to owners of small businesses, many of them mom-and-pop operations, to find out whether they indeed were being choked by regulation, whether uncertainty over taxes affected their hiring plans and whether the health care overhaul was helping or hurting their business.

Their response was surprising. None of the business owners complained about regulation in their particular industries, and most seemed to welcome it.....Rip Daniels [] owns four businesses in Gulfport, Miss.: real estate ventures, a radio station and a boutique hotel/bistro. He said his problem wasn't regulation. "Absolutely, positively not."

....For many small businesses, their chief problem is an old one: navigating the bureaucracy of the Small Business Administration to secure government-backed loans....Other small firms say their problem is simply a lack of customers.

"I think the business climate is so shaky that I would not want to undergo any expansion or outlay capital," said Andy Weingarten, who owns Almar Auto Repair in Charlotte. He's thinking about hiring one more mechanic. Added Barry Grant, the regional president of Meritage Homes Corp., in California, "It starts with jobs....There's an awful lot of people sitting on the fence; they're waiting for a sign."

Well, I guess these responses might be surprising if you subsist on a steady diet of Fox News and Chamber of Commerce press releases. For the rest of us, not so much. The small business owners that Hall talked to complained about the banking system, workers' compensation, the Small Business Administration, insurance, and competition from the internet. And they talked about a lack of customers.

In other words, all the usual stuff that's been around forever, plus a lack of demand because the economy is in lousy shape. Maybe we should consider doing something about this?

Courtesy of the Wall Street Journal, this table shows manufacturing activity (as measured by the ISM's Purchasing Managers Index) around the world. Only China and the Czech Republic are showing positive improvement. Three countries are contracting, but doing so a little bit slower than last month, and everyone else is just plain doing worse. Not good news.

Is piracy of digital information (music, videos, ebooks, etc.) the same as stealing?  Matt Yglesias says no:

The two acts have almost nothing in common besides being illegal. If I email you a copy of the new Fountains of Wayne album, then nobody has less stuff than they had pre-emailing. By contrast, if I break into Adam Schlesinger’s house, take his shoes, and then give the shoes to you, the upshot is that Schlesinger has less shoes than he had before.

I've always been bothered by this argument. Let's take a closer look at it.

First, what's the effect of stealing Adam Schlesinger's shoes? Saying that he has "less shoes" than before is correct, but in a money economy, if you want to compare two different things you really want to convert them into dollar values first. So what is Schlesinger's financial loss here? Is it the retail price of the shoes? That's one way of looking at it. But in the real world, we usually make some adjustments. If Schlesinger bought the shoes at a discount store, they're worth less to him. If the shoes are old, they're worth less still. If Schlesinger never liked the shoes in the first place and doesn't wear them anymore, maybe they're worth almost nothing. Who knows? Basically, though, what you can say is that his financial loss is the retail price of the shoes modified by some factor that depends on circumstances.

Now, what if we steal a copy of his new album? What's his financial loss? Is it the retail cost of the album? Again, that's one way of looking at it. But in the real world we make adjustments. If the album is normally sold at a discount, it's worth less. If we only care about Schlesinger, and not the rest of the production chain, then his loss is the royalty payment he won't get on the album you didn't buy. On the other hand, if you just downloaded the album on a lark and never would have paid real money for it in the first place, his loss is almost nothing. Who knows? But again, what you can say is that that his financial loss is the retail price of the album modified by some factor that depends on circumstances.

Economically, this is all that matters. In both cases, you're causing Adam Schlesinger to take a financial loss. Maybe it's big, maybe it's small, but it's theoretically quantifiable. That makes these cases very similar.

Now, it's true that there are lots of ways of causing people to take a financial loss, and not all of them come under the rubric of stealing. So at first glance, it might seem fair to object to the word in a digital context. But in actual operation, this objection rarely strikes me as arising out of sophisticated arguments about nonrival goods. Rather, it mostly seems to be a way of avoiding the very real fact that you've caused someone a financial loss by appropriating something you haven't paid for. In that sense, "stealing" is a whole lot more descriptive than "copyright infringement" or "illegal downloading."

None of this is meant to take sides on the broader questions of appropriate copyright policy or intellectual property law in general. For the most part, I tend to agree with the pro-reform camp on these issues, and I think that lots of corporate abuse of current IP law is both foolish and blinkered. Still, no matter what kind of IP rules you favor, if you break those rules I think that calling it stealing is pretty close to the mark. Matt finishes with this:

In some ways I think the decision of the pro-copying community to try to appropriate the language of “sharing” as an alternative to the language of “piracy” simply served to obscure how genuinely different digital copying is. Even if you and I “share” a physical object, there are still limits. If I borrow my girlfriend’s car to drive somewhere, I haven’t stolen it from her, but it’s genuinely the case that she can’t use it until I bring it back. If she copies a file I own, then we both have it.

True enough. But if he had a draft magazine article stored on his hard drive, and his girlfriend copied it and sold it somewhere without his knowledge, I'll bet he'd consider it stolen — possibly with the word emphasized by hurled crockery and intemperate language. He'd consider it stolen even though, technically, he still has a copy too. And he'd be right to. Before the theft, he had the potential to earn a certain amount of money by selling the publishing rights to his work. Afterward, he didn't. That potential may not be a tangible physical object, but that doesn't make it a nonrival good. Once it's gone, it's gone.

Yesterday I posted a chart from a group called Medical Billing and Coding Certification that featured an astonishing statistic: in the U.S., one out of seven hospital-acquired infections (HAIs) leads to death. That's 14%. In Europe the number is only 1 out 122, or a mere 0.8%.

I guess it was too good to check, so I didn't check it. But a reader emailed this morning to suggest that this was preposterous, and he seems to be right. I checked the references at the bottom of the MBCC chart, and none of them seemed to back up their numbers. What's more, a few years ago the CDC estimated 99,000 deaths per year out of 1.7 million HAIs, a mortality rate of 5.8%. For the EU, the European Centre for Disease Prevention and Control estimates 146,000 deaths per year out of 4.5 million HAIs (see p. 27), a mortality rate of 3.3%.

That's a modest difference, and it gets even more modest when you read more about these estimates, which are very, very rough and depend strongly on exactly how you count infections and how you attribute deaths. You can read much more about it in this WHO report if you're interested. The chart below, from the WHO report (with U.S. figures added from here), shows HAI prevalence rates in various high-income countries, and on this score the U.S. does pretty well. Most likely, the U.S. is about average both in prevalence of HAI and in mortality rates from HAI. Apologies for the error.