Kevin Drum

Cash for Clunkers

| Tue Aug. 4, 2009 6:18 PM EDT

Has the Cash for Clunkers program been a success?  Justin Fox serves up this tidbit:

By all accounts the program has driven a rush to car dealers. Auto sales in July were at their highest pace in 11 months. In an e-mail to clients Monday, Credit Suisse economist Neal Soss revised his economic growth forecast for the third quarter from 1.3% to 2.0%, and for the fourth quarter from 2.0% to 2.5% — all on the basis of cash for clunkers' success.

I guess that's pretty good.  If it's true, anyway.  My own view has always been that although CfC would normally be a fairly lousy use of taxpayer money, the fact that I, the taxpayer, now own most of GM and Chrysler makes it a little more palatable.  I'm basically using my own money to help keep my own companies from collapsing.  Unfortunately, though, that doesn't seem to be the case.  According to Jalopnik, here are the top-ten cars purchased so far under CfC:

1. Ford Focus
2. Honda Civic
3. Toyota Corolla
4. Toyota Prius
5. Ford Escape
6. Toyota Camry
7. Dodge Caliber
8. Hyundai Elantra
9. Honda Fit
10. Chevy Cobalt

So we've got a single Chrysler model at #7 and a single GM model at #10.  Not exactly a groundswell of support for taxpayer owned auto companies.

Oh well. I just hope Soss is right.  Even if GM and Chrysler aren't getting much of a boost, an increase of half a percent of GDP for two consecutive quarters seems like a pretty decent return for an investment of a billion dollars or three.

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Modern Cookery

| Tue Aug. 4, 2009 5:31 PM EDT

Michael Pollan had a much-quoted piece in the New York Times magazine last week about the decline of actual cooking, the seemingly paradoxical surge in the popularity of TV cooking, and the evolution of what we eat.  Here's a piece:

After World War II, the food industry labored mightily to sell American women on all the processed-food wonders it had invented to feed the troops: canned meals, freeze-dried foods, dehydrated potatoes, powdered orange juice and coffee, instant everything. As Laura Shapiro recounts in “Something From the Oven: Reinventing Dinner in 1950s America,” the food industry strived to “persuade millions of Americans to develop a lasting taste for meals that were a lot like field rations.”

So here's something I've been curious about for a while: most people seem to treat cooking as a binary thing.  Either you do it or you don't. But there's actually a broad range here, and I wonder how many people are more or less like me on the cooking continuum?  I don't eat prepared food because I don't like field rations no matter how brightly they're packaged.  On the other hand, neither do I cook — at least not in the conventional sense of hauling out a recipe and making something.  For example, if I'm on my own1 here's my recipe for making salmon:

1. Place a piece of salmon in a baking ban.

2. Put the baking pan in the oven.

3. Take it out after a while and eat it.

So is this cooking?  On the pro side: it's from scratch!  On the con side: it only has one ingredient.  (In the main dish, anyway.)  I don't have the skill or the desire to do much more, but even at that I prefer a simple, freshly baked piece of salmon to, say, Lean Cuisine's "wild salmon on a bed of whole wheat orzo pasta with yellow and orange carrots and spinach in a basil sauce."  And my dinner doesn't take any more time to prepare than theirs, either.

Pollan demonstrates some sensitivity toward this continuum when he talks about what really counts as cooking and what doesn't.  Here he is talking to food marketing researcher Harry Balzer:

Years ago Balzer noticed that the definition of cooking held by his respondents had grown so broad as to be meaningless, so the firm tightened up the meaning of “to cook” at least slightly to capture what was really going on in American kitchens. To cook from scratch, they decreed, means to prepare a main dish that requires some degree of “assembly of elements.” So microwaving a pizza doesn’t count as cooking, though washing a head of lettuce and pouring bottled dressing over it does. Under this dispensation, you’re also cooking when you spread mayonnaise on a slice of bread and pile on some cold cuts or a hamburger patty.

....I kept asking him what his research had to say about the prevalence of the activity I referred to as “real scratch cooking,” but he wouldn’t touch the term. Why? Apparently the activity has become so rarefied as to elude his tools of measurement.

“Here’s an analogy,” Balzer said. “A hundred years ago, chicken for dinner meant going out and catching, killing, plucking and gutting a chicken. Do you know anybody who still does that? It would be considered crazy! Well, that’s exactly how cooking will seem to your grandchildren: something people used to do when they had no other choice. Get over it.”

So, returning to the excerpt that kicked off this post, here's the question: how many people are there who, like me, (a) resist eating processed food because it reminds them of field rations, but (b) can't really cook in the conventional sense and therefore just end up eating simple but freshly prepared dishes all the time?  Surely I'm not entirely alone in this, am I?

1As you might guess, this isn't very often.  Marian is quite a good cook and does most of the dinner preparation chez Drum.  It's a good thing, too.

Swimming and Finance

| Tue Aug. 4, 2009 2:22 PM EDT

Alex Tabarrok comments on the arms race in swimsuits that's caused world records to topple like dominos over the past couple of years:

High-tech swimming suits [...] are primarily about distribution not efficiency.  A small increase in speed over one's rivals has a large effect on who wins the race but no effect on whether the race is won and only a small effect on how quickly the race is won.  We get too much investment in innovations with big influences on distribution and small (or even negative) improvements in efficiency and not enough investment in innovations that improve efficiency without much influencing distribution.

The phrase I elided in the first sentence was "and trading systems."  Alex is analogizing swimsuits to high-frequency trading, which he suggests is societally wasteful: it's not making stock trading any more efficient, it's just changing who gets the money.  The same is true of much modern financial innovation:

There is good reason to be skeptical about regulation in general but since this product, "financial innovation," is primarily about distribution I'm less worried about regulation in finance than in fields where innovation is more closely tied to efficiency.

High frequency trading is a good example of this.  Taken by itself, it's probably not that big a deal.  In the great scheme of things, the amount of money involved is small and the price paid by ordinary traders is microscopic.  Still, it's a pretty good symbol of what's wrong with the modern finance industry.  Even the CEO of a cigarette company can come up with something good to say about his product, but supporters of HFT mostly come up blank.  They mumble a bit about providing liquidity to the market, but it's obvious that even they don't really believe what they're saying.  In the end, HFT has a gem-like clarity to it: it's an unadulterated example of clever investors figuring out a way to siphon off cash from everyone else by manipulating the system in a way that has no relevance at all to the real world.  It's finance as pure game.

Others have made this point repeatedly and in better ways, but the entire purpose of the finance industry is to oil the gears of the business world.  Nobody objects (much) to Wall Street bankers earning their paychecks from things that do just that: loaning money, helping companies go public, underwriting bond issues, and just generally allocating capital where it can do the most good.  But when those become mere afterthoughts to the real money spinners — CDOs, credit default swaps, option ARMs, HFT, rocket science interest rate plays — all of which are almost completely divorced from providing more efficient services to the outside world, then the outside world starts to wonder what's going on.  As they should.  We need a finance industry that's about half the size it currently is and focused on providing actual financial services to the rest of us.  Until we get it, all we're doing is spending a lot of money on high-tech swimsuits instead of spending money on actually swimming better.

Quote of the Day

| Tue Aug. 4, 2009 12:42 PM EDT

From Arlen Specter (D–Pa.), responding to Joe Sestak's decision to run against him in next year's Democratic primary:

His months of indecisiveness on his candidacy raises a real question as to his competency to handle the tough rapid-fire decisions required of a Senator.

Rapid fire?  The U.S. Senate?  Are we talking about the same U.S. Senate here?

Ad Wars

| Tue Aug. 4, 2009 12:29 PM EDT

Dan Neil, whose day job consists of winning Pulitzer prizes for driving around test tracks in Porsches and Lamborghinis, also writes an advertising column for the LA Times.  And he says that in the healthcare war, liberals are getting their asses kicked:

There's some hope on the horizon, though, in the ad from Americans United for Change....To a kicky bass riff and the occasional cash register ring, the female narrator asks, "Why do the insurance companies and the Republicans want to kill President Obama's health insurance reform?" Note the yoking of insurance companies to Republicans. Note also that it's Obama's health insurance reform. Evil insurance.

The ad then lights into Cigna Corp. CEO Ed Hanway, who is retiring with a $73-million golden parachute. The GOP's prescription for the healthcare crisis? "Be as rich as Ed and you'll be happy too."

Of course it's disingenuous. Executive compensation at insurance companies is at best peripheral to escalating healthcare costs. For all we know, Hanway may be one of the good guys. The important thing is that the ad hominem ad is pointed, shrewd and manipulative.

Well, watch the ad and decide for yourself.  If you ask me, it's still got too light a touch.  And unlike Ezra, I can't say that I feel especially sorry for Karen Ignani, head lobbyist for the health insurance industry.  She's got a job to do, and she's doing it.  But the reality is that I don't think the insurance industry has actually conceded all that much during this round in the healthcare wars.  They were afraid of getting steamrolled, so they did what they had to do to survive.  Nothing more, nothing less.

Happy Birthday!

| Tue Aug. 4, 2009 11:46 AM EDT

Happy birthday, Mr. President!  Or is it?  If we don't really know where he was born, do we really know when he was born either?

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Who's the Boss?

| Tue Aug. 4, 2009 1:29 AM EDT

David Corn thinks Barack Obama needs to get angrier.  That's probably not going to happen.  But will he settle for Timothy Geithner?

Treasury Secretary Timothy Geithner blasted top U.S. financial regulators in an expletive-laced critique last Friday as frustration grows over the Obama administration's faltering plan to overhaul U.S. financial regulation, according to people familiar with the meeting.

....Friday's roughly hourlong meeting was described as unusual, not only because of Mr. Geithner's repeated use of obscenities, but because of the aggressive posture he took with officials from federal agencies generally considered independent of the White House. Mr. Geithner reminded attendees that the administration and Congress set policy, not the regulatory agencies.

Apparently Geithner is pissed off at all the Fed, SEC, and FDIC folks who keep badmouthing his regulatory reforms to Congress.  "Administration officials say they aren't worried about the overhaul's prospects," the Journal reports, and I imagine they do say that.  But I'll bet they don't believe it.

Democrats Want to Kill Your Grandma!

| Tue Aug. 4, 2009 12:46 AM EDT

As you may be aware if you pay attention to other precincts of the blogosphere, Betsy McCaughey was on Fred Thompson’s radio show a couple of weeks ago warning listeners about a hidden outrage in the House healthcare bill:

McCaughey said "Congress would make it mandatory — absolutely require — that every five years people in Medicare have a required counseling session that will tell them how to end their life sooner."  She said those sessions would help the elderly learn how to "decline nutrition, how to decline being hydrated, how to go in to hospice care ... all to do what's in society's best interest or in your family's best interest and cut your life short."

This is so ridiculously untrue that you almost have to admire the sheer brass of the thing, but in any case it's lit up a firestorm in right-wing circles.  Mickey Kaus has some advice:

Tip for Dems: If you don't want people to think that subsidized, voluntary end-of-of-life counseling sessions are the camel's nose of an attempt to cut costs by limiting end of life care, then don't put them in a bill the overarching, stated purpose of which is to cut health care costs! ... I mean, did that provision have to be in the bill? If it really was just an added "benefit" for patients that had nothing to do with cutting costs (which I don't believe for a minute), did it even belong in the bill? Isn't there some group of Congressional Democrats — let's call them "the leadership" — whose job it is to prevent their co-partisans from inserting into major legislation relatively minor provisions that will have the effect of sinking the whole package?

I get Mickey's point, but I wonder if he's asking the impossible.  As near as I can tell, movement conservatives are geniuses at plucking obscure provisions out of bills and twisting them with an abandon that would make Huey Long blush.  Maybe it's a dark art, but it's still an art — and conservatives are its Rembrandt.

Now, maybe Dems should have figured this out anyway and ditched the relevant wording before the bill got out of committee.  After all, if you're playing in the big leagues, you have to hit big league pitching.  Still, think about this: we're talking about someone who saw a routine provision about advance care directives and somehow realized she could turn it into "Democrats want to kill your grandma!"  And it worked!  What sane person could have seen that coming?  What's more, even if some bright Democratic staffer had seen it and presciently sent it to the deep freeze, does anyone doubt that someone who could sniff out such murderous possibilities in a funding provision for advance care planning would have any trouble finding something else to take its place?  You'd have to gut the entire bill before you could be sure it was sufficiently sanitized against satanic skills like that.

No, the only answer is to assume that this kind of chain email fodder is always going to crop up and be ready to fight back against it.  Which, so far, doesn't really seem to be happening.  That's the real problem.

Mobile MoJo

| Mon Aug. 3, 2009 6:13 PM EDT

As it happens, I myself own a dumb phone.  A very dumb phone.  But it's sufficient for my needs because, basically, I never use it anyway.

However, if you have a smart phone, you can now do something even smarter with it: read Mother Jones online.  You can read the magazine.  You can read our online web articles.  You can read my blog.  You can read our other blogs.  You can read everything.

Now, since I don't have a smart phone myself, I can't honestly tell you how well this works.  But give it a try and let me know.  It's time for me to replace my old phone anyway, so maybe this will be enough to get me to replace it with something smarter.  More details here.

Fighting Back

| Mon Aug. 3, 2009 5:50 PM EDT

The latest schtick from right wing activists is an organized effort to disrupt town hall presentations from members of Congress who are in their home districts during the August recess.  According to Robert MacGuffie, who runs the website rightprinciples.com:

Tea partiers should "pack the hall... spread out" to make their numbers seem more significant, and to "rock-the-boat early in the Rep's presentation...to yell out and challenge the Rep's statements early.... to rattle him, get him off his prepared script and agenda...stand up and shout and sit right back down."

Lovely.  But Mark Kleiman has the same idea as me:

If I were a Member of Congress threatened by this nonsense, I wouldn't stop holding town meetings; I'd start out each meeting by welcoming my constituents and warning them that there's an organized group in the hall planning to disrupt the proceedings. Never pass up an opportunity to portray your opponents as extremists, especially when they are.

I might be careful about doing this in states with concealed carry laws, but otherwise it sounds like a pretty good idea.