Kevin Drum

Marketing the Stimulus

| Wed May 12, 2010 11:36 AM EDT

A friend emails with a question that's nagged at me from time to time too:

As you know, Virginia is a pretty conservative state and as you can imagine there is currently a tremendous amount of complaining and griping about Obama's stimulus package and how it's just a waste of money and is causing the federal deficit to explode.

As I see it, one of the big problems is that there is absolutely no PR campaign that tells people where the stimulus money is going. If you have the time and energy you can find it on the Internet but there is nothing on site or on location that announces it as a stimulus project.

Every day for the past few months, I drive through or by a road project that is being funded by the stimulus package. But there is not a single sign or banner that announces it is an American Recovery and Reinvestment Act project. I'll bet you that 95% of the people who drive by this road project have no idea where the money for it came from. The local papers don't even talk about it.

Is this something unique to Virginia or are the funds being spent invisibly across the country? If that's the case, it's a huge mistake and it ought to be fixed ASAP (i.e. well before November).

I'd say that's true where I live too. Every local road project has plenty of signage telling us who's paying for it, but federal dollars are pretty hard to identify. There are occasional ARRA signs, but not many. How about in your neck of the woods? Are most projects (construction or otherwise) getting federal dollars signed so that people know about it? Or not?

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Chart of the Day: Oil Spill Coverage

| Wed May 12, 2010 1:57 AM EDT

The chart below, from Brad Plumer, shows the amount of media coverage that various oil spills have gotten over the past few decades. The Exxon Valdez spill in 1989 is naturally the biggest, but it turns out that the BP blowout off the coast of Louisiana is so far not even in the top five. Why? Not enough dead ducks:

After the Exxon Valdez disaster, you had scores of images of ducks and otters slathered in crude. There were pictures of dead whales washed up against gleaming black rocky beaches. It was lurid — and impossible to ignore. By contrast, Brulle points out, not nearly as much oil from the BP accident has reached the shores of the Gulf Coast yet. Even groups like Greenpeace have only been able to rustle up a few pictures of a handful of ducks covered with oil. That's not the sort of thing that drives TV coverage. And it may mean that the current spill makes far less of a dent in public opinion than past disasters have.

Brad has more over at his place.

Ignorance is Strength, Opt-In is Opt-Out

| Tue May 11, 2010 8:38 PM EDT

Via Twitter, Jack Schafer directs our attention to a New York Times Q&A with Elliot Schrage, Facebook's vice president for public policy. "Newspeak from Facebook's top flack," he calls it, and perhaps that's a wee bit unfair. Some of Schrage's answers are contrite ("we'll do better, promise") and some are admirably direct ("that's how Facebook works, get used to it"). But this one sure seems like classic Newspeak:

Why not simply set everything up for opt-in rather than opt-out? Facebook seems to assume that users generally want all the details of their private lives made public.

Everything is opt-in on Facebook. Participating in the service is a choice. We want people to continue to choose Facebook every day. Adding information — uploading photos or posting status updates or “like” a Page — are also all opt-in. Please don’t share if you’re not comfortable. That said, we certainly will continue to work to improve the ease and access of controls to make more people more comfortable. Your assumption about our assumption is simply incorrect. We don’t believe that. We’re happy to make the record on that clear.

Perhaps I should be charitable. Maybe Schrage misunderstood the question. Or maybe I'm misunderstanding something. But saying that "participating in the service" or uploading a photo constitutes opting in is sort of Orwellian, no? The issue, of course, is that the vast majority of Facebook users have no idea that the default privacy setting for their photo galleries is "friends of friends" or that the default setting for Likes is "everyone on the planet." They probably assume that only their friends can see this stuff. So why not make that the default, and allow users to affirmatively opt in to wider distribution if they want?

As a bonus, if this stuff were opt in, I'll bet Facebook would miraculously get a whole lot better at making privacy settings easier to use and more visible. It's funny how that works.

What Have Atheists Lost?

| Tue May 11, 2010 7:18 PM EDT

I suppose it's pointless to continue engaging in this argument, but a few weeks ago I wrote a post about atheism that keyed off an essay by David Bentley Hart. Damon Linker responds today:

What’s most disappointing is Drum’s failure to grasp the culminating point of Hart’s essay, which, as I take it, is this: the statements “godlessness is true” and “godlessness is good” are distinct propositions. And yet the new atheists invariably conflate them. But a different kind of atheism is possible, legitimate, and (in Hart’s view) more admirable. Let’s call it catastrophic atheism, in tribute to its first and greatest champion, Friedrich Nietzsche, who wrote in a head-spinning passage of the Genealogy of Morals that “unconditional, honest atheism is ... the awe-inspiring catastrophe of two-thousand years of training in truthfulness that finally forbids itself the lie involved in belief in God.” For the catastrophic atheist, godlessness is both true and terrible.

....Yet the new atheists seem steadfastly opposed even to entertaining the possibility that there might be any trade-offs involved in breaking from a theistic view of the world. Rather than explore the complex and daunting existential challenges involved in attempting to live a life without God, the new atheists rudely insist, usually without argument, that atheism is a glorious, unambiguous benefit to mankind both individually and collectively.

But this is what I said toward the end of my original post:

Later in the essay, [Hart suggests] that the New Atheists haven't truly grappled with what a world without religion would be like. And perhaps they haven't. But interior passions and social mores work both ways. Did Isaac Newton feel a deeper aesthetic connection with the infinite when he was inventing calculus or when he was absorbed in Christian mysticism? Who can say? Not me, surely, and not Hart either. Likewise, the question of whether Christianity has, on balance, been a force for moral good is only slightly more tractable. Does keeping the servants from stealing the silver really outweigh the depredations of the Crusades and the Inquisition?

This is, obviously, just a throwaway paragraph in a blog post, not a long essay in First Things, but I plainly did entertain the possibility of tradeoffs. In fact, my own view is that the net impact of religion on human civilization has probably been zero: we would have developed all the same moral intuitions without it, but on the other hand, we also would have waged all the same wars. If religion hadn't been the excuse, something else would have been. And generally speaking, religious art and secular art have always struck me as about equally powerful.

Now, when Linker says that atheists refuse to entertain the possibility of tradeoffs, he had mostly transitioned to talking about guys like Richard Dawkins and Christopher Hitchens, not me. Still, he started with me, and he ought to at least acknowledge what I said. There are, quite plainly, tradeoffs involved both in religious beliefs and their lack.

But there's probably little chance of discussing this profitably, and not because of any absence of good faith on either side. It's just that the prospect of a Godless world is more salient for some than for others. Nietzche wrote about this in the broader cultural sense above, and Linker talks about it later in the personal sense: "There are no disappointments recorded in the pages of [New Atheist] books, no struggles or sense of loss. Are they absent because the authors inhabit an altogether different spiritual world than the catastrophic atheists?" Speaking for myself: yes. I have never in my life felt the need to believe in God, and that lack simply doesn't inspire any emotional resonance in me. I don't know why this is, but I do know that I don't feel empty inside, I'm perfectly capable of feeling wonder and awe, and there's no sense of loss or anything else involved in any of this. Linker might regard that as unfathomable, finding the tortured brooding of the catastrophic atheist more to his liking, but it's so. And I have no idea how you discuss this. Linker feels the pull of the supernatural and I don't, and all the conversation in the world won't change that or make it any more explicable.

But 2,000 years from now we'll probably still be talking about it anyway.

The Taxman's Bite

| Tue May 11, 2010 2:56 PM EDT

USA Today says that taxes are down:

Federal, state and local taxes — including income, property, sales and other taxes — consumed 9.2% of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis reports. That rate is far below the historic average of 12% for the last half-century. The overall tax burden hit bottom in December at 8.8.% of income before rising slightly in the first three months of 2010.

Not quite. According to the BEA, personal income in 2009 totalled $12 trillion and personal current taxes totalled $1.1 trillion. Sure enough, that's 9.2%. But, ahem, there's also $967 billion in "contributions for government social insurance." That's taxes to you and me. So that's $2.1 trillion in taxes, or about 17% of personal income.

But according to the OMB, federal tax receipts in 2009 totalled $2.1 trillion. And according to the Census Bureau, state and local tax receipts in 2009 totalled $1.2 trillion. That's $3.3 trillion, not $2.1 trillion. Do we really have $1.2 trillion in taxes not being paid by individuals? State and federal corporate taxes only amounted to about $200 billion. Are they not counting the employer portion of payroll taxes?

In any case, our total tax bite, which is eventually paid by individuals no matter what channel it goes through, was $3.3 trillion in 2009. That's 27.5% of personal income, not 9.2%. Caveat emptor.

Faisal Shahzad and the No-Fly List

| Tue May 11, 2010 2:19 PM EDT

So how did Times Square bomber Faisal Shahzad make it onto an Emirates Airlines flight to Dubai last Monday even though he had already been put on the no-fly list? The latest story, apparently, is that it was semi-deliberate:

Because it sometimes takes hours, or even days, for all airlines to enter new no-fly listings in their reservation computers [...] Homeland Security does maintain procedures for sending out what amounts to an APB about the new listing....However, the officials said, at the FBI's request, some, but not all airlines, were notified of the new listing. The official said the FBI was concerned that giving out Shahzad's name to too many people might fuel news leaks that grew into a torrent during the afternoon of May 3. Among the airlines that were not phoned with the APB about the new no-fly listing for Shahzad: Emirates Airlines, the very carrier Shahzad had chosen to try to evade a massive dragnet by the FBI and various local partners, including New York Police Department, had set up to collar the Times Square attack suspect.

Was this the right call? Beats me. But it sounds like a policy issue, not a screwup.

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Tackling the Deficit

| Tue May 11, 2010 1:16 PM EDT

Responding to Jonathan Chait, NRO's Kevin Williamson says he'd support a compromise plan to reduce the deficit that included both spending cuts and tax increases. But he's gloomy about the prospects:

Closing the gap from revenues that equal 15 percent of GDP and spending that equals 25 percent of GDP still looks pretty hard to me. To repeat yesterday's thought-experiment, say we construct a point-by-point trade-off, equalizing spending and revenue at 20 percent of GDP. I don't see Republicans supporting a 33 percent tax increase or Democrats supporting a 20 percent spending cut. Lots of readers have made clever suggestions about how we get there, but none of them seem convincing to me. The trade-offs would have to be pretty significant, like collecting that 20 percent of GDP via a flat tax and enacting deep entitlement reform.

I think you need to look at this two ways. First, there's medium-term deficit reduction, which is perhaps a little easier than Williamson makes it out to be. A lot of the current federal deficit is driven by a combination of increased spending and decreased tax revenue caused by the Great Recession, and as the economy improves and stimulus spending ends the deficit will drop dramatically all on its own. Further combinations of spending cuts and tax increases to reach primary balance (i.e., excluding interest payments) would be on the order of $250 billion or so. In rough numbers, this means a 5% increase in taxes plus 5% decrease in non-entitlement spending. That's a lot, but it's not fiscal Armageddon.

Longer term, the problem is worse, primarily because of growing healthcare costs. But while I may be a crazy optimist, I think there's at least some hope of getting a bipartisan consensus on long-term cuts to the growth of Medicare and Social Security combined with long-term tax increases to support somewhat more modest versions of those programs. I know there doesn't seem to be much hope of that at the moment, but the only question is how long it's going to take before everyone's heads get banged around enough that they realize they have no choice. Maybe in 2013, after Obama has won a second term and the screechers in the Republican Party have yelled themselves hoarse and the adults finally decide to take over. It sounds like a longshot, but it's not impossible.

Ideally, what I'd like to see takes a few different tacks. First, national defense needs to be on the table for spending cuts every bit as much as any other discretionary program. Second, we need to get serious about reining in healthcare spending. This really does require bipartisan consensus since neither party can afford to make the unpopular decisions this will require on their own. Third, do a simple deal on Social Security that balances its long-term prospects with a modest basket of growth cuts and payroll tax increases. This really ought to be easy since Social Security's deficit is genuinely small and manageable. And fourth, start thinking seriously about alternative sources of tax revenue. It doesn't have to be income taxes and it doesn't have to be a VAT. The combination of a financial transaction tax and a serious carbon tax would raise a considerable sum of money and would do it by taxing activities that we'd like to see a little less of anyway.

This is all pie in the sky at the moment, and I think Williamson's dream of keeping federal spending to 20% of GDP is just that: a dream. But at some point in the near future we either get our act together or else the entire country turns into California. And we've already got one too many Californias.

Askers vs. Guessers

| Tue May 11, 2010 12:10 PM EDT

According to the Guardian, a short comment to a 2007 blog post that asked for advice about how to deal with a visiting friend has "achieved minor cult status online." The poster and his wife were annoyed with someone who had asked if she could stay with them in their apartment for a few days and were anguishing over how to turn down the request politely. Andrea Donderi responded:

This is a classic case of Ask Culture meets Guess Culture.

In some families, you grow up with the expectation that it's OK to ask for anything at all, but you gotta realize you might get no for an answer. This is Ask Culture.

In Guess Culture, you avoid putting a request into words unless you're pretty sure the answer will be yes. Guess Culture depends on a tight net of shared expectations. A key skill is putting out delicate feelers. If you do this with enough subtlety, you won't even have to make the request directly; you'll get an offer. Even then, the offer may be genuine or pro forma; it takes yet more skill and delicacy to discern whether you should accept.

Sadly, I'm a Guesser. But I wish I were an Asker, and I wish everyone else were too — though that's assuming that Donderi is right about Askers all taking turndowns in stride. I have my doubts about that. Still, I hate Guess culture. And yet I'm a Guesser. We all have our little problems, don't we?

But at least I learned about a minor internet tradition today. And now, back to my cave, where I have to neither Ask nor Guess. Can I just be a Writer instead?

Is a Climate Bill Dead?

| Tue May 11, 2010 11:20 AM EDT

I think climate change legislation is dead. There's not enough time for a bill to go through the committee process, get passed by the Senate, sent to conference, amended, and then passed by the full Congress before the midterms, and after the midterms Democrats will probably be reduced to 53 or 54 members in the Senate. Some of them won't vote for a climate bill, which means you'd need to find ten or a dozen Republicans to break a filibuster, and that's just not gonna happen.

But Dave Roberts thinks there's still a slim chance:

There is still a narrow (and, yes, improbable) path to passage. Here's how it goes: Kerry and Lieberman introduce their bill on Wed., looking roughly like it looks now, with drilling provisions intact like Lieberman wants. It fizzles, lost amidst Elena Kagan, tornadoes, and Gordon Brown. After a couple weeks, buoyed by public opinion that is clearly turning against drilling and in favor of clean energy, Reid takes control of the process, strips drilling out, boosts the energy efficiency and renewable energy provisions, and gives the bill a big, public push.

For this to happen requires two things, which also require each other. First, public opinion has to keep moving and getting louder. There has to be a sense of urgency behind passing a bill....But for public opinion to crystallize and become a serious force, it must be echoed, amplified, and directed by the only politician that most Americans still trust: Barack Obama. I've said this before and it remains true: the only way this thing gets done is if Obama lays himself on the line for it. (It would also help, incidentally, if the left pushed to mobilize the public behind a bill, though at this point the left seems content just bitching and moaning about it, as they've done throughout the entire process.)

Unfortunately, I don't think there's any chance of Reid taking over the bill after only a few weeks. He's pretty deferential to the committee process. And even if he did, the words "Harry Reid" and "big public push" don't often show up in the same sentence. Reid is an inside guy, not an outside guy.

As for Obama, who knows? But my take is pretty simple: if there's one thing that Obama has demonstrated for us over and over again, it's the fact that he's pretty sensitive to the political tea leaves. He doesn't tilt at windmills, and he certainly doesn't ask members of his own party to take seat-threatening risks shortly before an election in service of a lost cause. It's just not his style. So I'd be pretty shocked if made the kind of public push Dave wants, and I'd be surprised if it worked even if he did.

I'm not sure what the next step is. Assuming that Dems still control both houses of Congress next year, we can try again. But the left's bitching and moaning has mostly been a reaction to the relentless watering down of the current climate bills, and if you think this year's bills are watered down, just wait until you see what a Congress with a hair-thin Democratic majority produces. The left will not be pleased.

If I had to guess, I'd say that cap-and-trade (or a carbon tax) is dead for the near future, and our best bet is to regroup and attempt to pass a bill without it. There are actually plenty of things we could do to reduce carbon emissions in the short term that don't involve carbon pricing (in fact, carbon pricing in the near term would have only a small impact even if we put it in place immediately), and maybe we're best off focusing on that stuff for now and waiting for a better opportunity to get a carbon fee established. Opinions?

The Market Tank: Take 2.5

| Tue May 11, 2010 2:12 AM EDT

The Wall Street Journal has a long story today about Thursday's big stock market tank that roughly confirms the one I wrote about last Friday. In their version, the market was already skittish over Greece and the euro when Universa, a hedge fund advised by Black Swan author Nassim Nicholas Taleb, placed a biggish bet that stock prices would fall. The guys on the other side of the bet sold stocks to hedge their position, and before long things had started to spin out of control:

By 2:37 p.m., the overload seemed to have taken its toll on the NYSE's Arca electronic-trading system. At that point, its rival, the Nasdaq, owned by NASDAQ OMX Group Inc., detected what it felt was questionable information in the data. It sent out a message saying it would no longer route quotes to Arca.

This step — known as declaring "self-help" — doesn't happen often among the major exchanges. But in the coming minutes, the BATS exchange also stopped automatically routing orders to Arca.

For a crucial set of players — high-frequency-trading hedge funds — all this turmoil was becoming too risky to handle. One fear that would prove all too real was that in the extreme swings, some — but not all — trades would later be canceled, leaving them on the hook for unwanted positions.

....With the high-frequency funds either selling or pulling out of the market, Wall Street brokerage firms pulling back and the NYSE stock exchange temporarily halting trading on some stocks, offers to buy stocks vanished from underneath the market. Normally there can be hundreds of offers to buy the iShares Russell 1000 Growth Index exchange-traded fund, but at 2:46 p.m., there were just four bids north of $14 for a fund that had been trading at $51 minutes earlier, according to data reviewed by The Wall Street Journal.

Even if this turns out to be the right story, it still doesn't explain everything. Universa's trade only totalled $7.5 million, not really that big even against the background of an already agitated market. So how could a trade that size cause a trillion dollar meltdown? "It did point out that there is a structural flaw," said Gus Sauter, chief investment officer at Vanguard Group, and that seems like an understatement. The Journal authors point out that high frequency trading has become so ubiquitous (accounting for two-thirds of all stock market volume) that in practical terms HFTs are now responsible for maintaining an orderly market. Unfortunately, they don't have any regulatory responsibility for this, and when markets become disorderly they simply flee, causing the problems to become even worse. The solution isn't yet clear, but we'd better figure out something before HFTs become 99% of the market.