After Barack Obama won the 2008 election, conservatives started up a drumbeat of conspiracy theorizing about a secret liberal plan to reinstate the Fairness Doctrine. The idea, apparently, was that this would put Rush Limbaugh and other conservative talkers out of business and thus ensure both the perpetual domination of the Democratic Party in Congress as well as Obama's plan to become president-for-life. Don't believe me? The cartoon on the right is typical of the time. Click here for further pictorial proof.

This particular paranoid fantasy didn't get a lot of attention because there were so many other better ones flying around, but I had a loyal reader who kept emailing me about this, so I wrote a few posts about it. Today, I'm happy to report, Obama's FCC, responding to an Obama executive order, has finally nailed the coffin shut on the Fairness Doctrine:

The FCC gave the coup de grace to the fairness doctrine Monday as the commission axed more than 80 media industry rules.

Earlier this summer FCC Chairman Julius Genachowski agreed to erase the post WWII-era rule, but the action Monday puts the last nail into the coffin for the regulation that sought to ensure discussion over the airwaves of controversial issues did not exclude any particular point of view. A broadcaster that violated the rule risked losing its license.

....Monday’s move is part of the commission’s response to a White House executive order directing a “government-wide review of regulations already on the books” designed to eliminate unnecessary regulations.

Will this persuade anyone? Probably not. They'll just insist that Obama really did plan to bring back the Doctrine, and it was only their relentless opposition that forced him to back down. What's more, this is all just a feint. Obama may have lost a battle, but behind the scenes the war still goes on.

For the rest of us, though, this is the final chapter in the story of the Fairness Doctrine. Adios.

There are tyrants who got their position by inheritance, there are tyrants who got their position by election, and then there are tyrants who got their position by seizing power. With the apparent demise of Muammar Qaddafi, John Quiggin notes that there are damn few of the third kind left:

Now, there’s Mugabe clinging to a share of power in Zimbabwe, a couple of shaky-looking strongmen in the ‘stans, and that’s about it for tyrants in the classical sense (feel free to point out cases I’ve overlooked). There’s Kim jr, Assad jr and Castro minor, the first two of whom are certainly tyrannical in the ordinary modern sense, but all of whom inherited their positions, as of course, did the remaining absolute monarchs. More surprising to me are the number of cases where classic tyrants, having established one-party states, have been succeeded by self-selecting oligarchies — China is the most striking example. Looking at the evidence of the past, I would have predicted that such oligarchies would either collapse in short order or see the emergence of a new tyrant, but there is no sign of that for the moment.

I don’t have a good theory to explain the rise of so many tyrants in the modern period, beginning with Bonaparte (or maybe Cromwell), or the sudden disappearance of this form of government from around the mid-1960s. But it seems that it’s a development worth noting.

Is this true? In comments, Doug M proposes a whole slew of additional tyrants who have seized power and kept it. By country: four out of five of the stans, Cambodia, Zimbabwe, Ethiopia, Eritrea, Chad, Equatorial Guinea, Angola, Uganda, Cameroon, the Central African Republic, Sudan, both Congos, Rwanda, Djibouti, Algeria, Belarus, Fiji, and Burma. "A lot fewer than 40 years ago," he says, "but too many to claim that this form of government is 'disappearing.'"

I can't referee this, but thought I'd throw it out for comment. It's an interesting conjecture and an interesting rebuttal. Even if John miscounted in his original post, you can still say that (a) there are many fewer tyrannies that originated in a seizure of power than there used to be, and (b) outside of Africa there are way fewer. But why?

The Financial Times, speaking ex cathedra, says that the outlines of a stimulus deal are plain: "Cut the payroll tax, extend jobless benefits and subsidise new jobs; then curb entitlement spending by raising the retirement age." Matt Yglesias is unimpressed:

In my view, raising the retirement age is basically the worst possible form that credible longer-term fiscal restraint could take. The way this works is that if you’re rich, the benefit cut in dollars and cents terms is very small since your life expectancy at 65 is already high. But if you’re poor, the benefit cut is much more severe. Except in real psychological terms it’s even more regressive than that, since poor people are more likely to have jobs that are physically taxing and generally unpleasant. So it sounds like a stinker of a deal to me.

I'm perpetually amazed by the parade of pundits and talking heads who continue to insist that the first and best way of attacking entitlement spending is to raise the retirement age. In fact, as Matt says, it's probably the worst possible way of doing it: not only does it produce pretty modest savings, but it's savagely unfair to the poor and the working class. As the chart on the right shows, the life expectancy of upper income earners has gone up a lot over the past few decades, so even if you increase their retirement age they still have a lot more retirement years than they used to. But low earners? Their life expectancy has barely gone up at all. If you raise their retirement age, it entirely wipes out the tiny gains they've made. The bottom line is that high earners get longer retirements while poor people just tread water.

And it's even worse than that. Not only do high earners get long retirements, but they've mostly spent their lives working in cushy jobs that don't wreck their bodies and are often fairly interesting. An extra couple of years of work isn't that big a deal for them. But for truck drivers and coal miners and nursing home workers? That's hard work that's hard on their bodies, and it's absolutely no fun. An extra couple of years of that is something to shudder at.

But wait! It's even worse than that! If raising the retirement age were the only way to address entitlement spending, maybe we'd have to bite the bullet and do it. But it's not. There are dozens and dozens of better ways to do it. Social Security is quite easy to fix without touching the retirement age: there's a nice list of options here from the CBO, and you'll note that raising the retirement age is barely even a blip compared to all the other options. Medicare is more complicated, but it's still the case that raising the retirement age (a) doesn't save very much money, since healthcare costs go up rapidly the older you get, and (b) doesn't change the rate of growth of Medicare, which is our key problem. Like it or not, the answer has to be found elsewhere.

So why does this zombie idea continually resurface with such clocklike predictability? Two reasons, I'd guess. First, it's a perfect sound bite. "Raise the retirement age" is a whole lot easier to understand than "Change the AIME bend points, reduce the top two PIA factors, and raise the taxable maximum to cover 90% of earnings." So that's what we get.

Second, all the loudest voices come from highly educated, white-collar folks who write and talk for a living. They belong to, and speak for, a class that has interesting jobs that don't tax their bodies, probably aren't planning to retire at 65 anyway, and in any case, get paid well enough that they can retire early on their investments if they want to, regardless of Uncle Sam's official retirement age. So it just slips their mind that a higher retirement age would be a way bigger deal to other people than it is to them. Basically, they need to get out more.

Raising the retirement age is an idea that really needs to be buried once and for all. Social Security's retirement age is already scheduled to rise to 67, and for medical care, age 65 is old enough already. There are plenty of other ways of tackling entitlements, ways that are both fairer and more effective. Anybody who really cares about this stuff needs to understand that.

Can We Fix the Economy?

I don't really have anywhere to go with this post, but I've been musing for the past few days over all the theories floating around that imply — or are used by others to imply — that we really can't do much of anything to help the economy recover, so there's not much point in pursuing either monetary or fiscal stimulus. Here's a brief list:

  • The basic Rogoff/Reinhart observation that financial collapses due to asset bubbles just take a long time to work through. Given the size of the 2008 collapse, historical evidence suggests that it's going to take five or six years to recover, and that's that.
  • The Tyler Cowen "Great Stagnation" hypothesis. We've picked through all the low-hanging economic fruit over the past century, and like it or not, we're now entering an extended period of low productivity growth because we're not inventing lots of cool new stuff.
  • The related (I think) investment drought hypothesis. Ben Bernanke famously ascribed the housing bubble partly to a "savings glut" from overseas, and the flip side of that is an investment drought. The reason financial assets became so popular is that, even with all that money sloshing around the system, there simply weren't very many high-quality investment opportunities available in firms that make real-world goods and services, and that hasn't changed.
  • The peak oil theory. Production of oil has pretty much maxed out, which means that every time the economy gets moving it will create a spike in oil prices, which will send the global economy back into recession. We're now in a continual oil-fueled boom/bust cycle that limits our long-term growth rate.
  • The Michael Mandel contention that increased consumption simply leaks out of the economy to China and other countries. Stimulating consumption in the U.S. just won't do much for the American economy if all those extra dollars mostly get spent on overseas goods and services.
  • Various structural explanations that suggest the United States has an increasing number of workers who flatly don't have the skills to do anything useful in the modern economy — a problem that was temporarily masked by the housing bubble and was only fully exposed when the economy collapsed. This takes various forms, both weak (workers can be retrained but it will take a while) and strong (forget it, they're simply useless).
  • The self-serving group of partisan hack theories: regulatory uncertainty is the real problem, taxes are too high, the EPA is strangling America, hyperinflation is just around the corner, markets are cowering in fear of future deficits, etc. etc.

Please note that I don't mean to suggest that Reinhart, Rogoff, Cowen, or Mandel are themselves arguing that fiscal and monetary policy are pointless. I'm just using their names for some of these ideas because they're the ones most associated with them.

Anyway, as I said, I'm not really going anywhere with this right now. I'm just collecting theories. Any others to add to the list?

From Rick Perry, on August 14th:

Have you read my book, "Fed Up!" Get a copy and read it.

From Rick Perry's communications director, Ray Sullivan, on August 18th:

The book, Mr. Sullivan said, “is a look back, not a path forward.” It was written “as a review and critique of 50 years of federal excesses, not in any way as a 2012 campaign blueprint or manifesto,” Mr. Sullivan said.

This has been making all the usual rounds today, and why not? It's unusually dumb. Given the amount of — well, let's call it inconvenient bluster in the book — I guess Sullivan has to give this a try, but does he really think Perry can disown a book that he released nine months ago? That's not very swaggering and tea partyish. Sounds like Mr. Perry is all hat and no cattle.

Which of course makes this the perfect time for Sarah Palin to enter the race. We could use a common sense conservative who doesn't kowtow to the lamestream media. There's a real shortage of that in the Republican contest right now.

Does Rick Perry really think we should repeal the 16th Amendment and completely eliminate the income tax? This has been making the rounds, so I got curious. Here's what he says in his book:

This leads me to the great milestone on the road to serfdom: the passage of the Sixteenth Amendment....This was the birth of wealth redistribution in the United States.

....[One] option would be to repeal the Sixteenth Amendment [] and then pursue an alternative model of taxation such as a national sales tax or the Fair Tax....America needs a fairer, flatter, and simpler system, one which working families can complete without having to hire a bevy of professionals to assist them.

So that's the skinny. Obviously Perry doesn't think very highly of the 16th Amendment and believes that repealing it is an "option." That's pretty loopy, but it's actually what comes next that's really loopy: he'd like to replace all federal taxes with the Fair Tax, a proposal that basically levies a 30% sales tax on all goods and services — including housing, healthcare, food, and everything else. Mike Huckabee was touting this nitwit idea back in 2007, and Bruce Bartlett shredded it here pretty conclusively. My comment at the time:

What's really amazing is that Bruce can write a thousand words on this subject and maintain a calm and even demeanor throughout. After all, among serious tax analysts a national sales tax ranks right up there with eliminating the Fed and putting the United States back on the gold standard. It's crankery. And yet it keeps rearing its ugly head, like a vampire that just won't die. Anybody got a silver bullet handy?

This is really scary. At the time, I assumed that eliminating the Fed and putting the United States back on the gold standard were so obviously stupid that they were good examples of transparent economic crankery. But guess what? Both of those cretinous ideas have gained a lot of traction among Republicans lately. So it's hardly any wonder that at least one of their candidates has reanimated the zombie Fair Tax proposal too. I wonder what's next? No one's mentioned fluoride in the drinking water lately, have they?

Matt Ridley has an odd column in the Wall Street Journal this weekend called "A Truce in the War Over Smarts and Genes." He's optimistic that a recent discovery in molecular genetics conclusively demonstrates that intelligence does indeed have a genetic basis but also that it doesn't matter that much:

The immediate cause of this optimism is a recent paper in Molecular Psychiatry, which confirms that genes account for about half of the difference in IQ between any two people in a modern society, but that the relevant genes are very numerous and the effect of each is very small.

....It turns out the genetic differences may have been all just below the measurement radar. A new technique, which can now detect very slight genetic influences, has succeeded where the old techniques failed. The genes for intelligence are there, but there are thousands of them and each has only a tiny impact....So the old terror, which so alarmed many psychologists and educationalists, that one day people—or governments—would use genes to decide whom to kill, sterilize or prevent being born because of their intelligence, suddenly looks a lot less scary. There are just too many genes.

I don't get this. First, it's been a very long time since I've read anyone suggesting the existence of "an IQ gene." The proposition that intelligence and other cognitive traits are the product of lots of different gene complexes has been pretty well accepted for decades, even if definitive proof was lacking. So although this new result may be important, it doesn't seem all that earthshaking in the context of the nature/nurture wars.

Second, the reason that nature vs. nurture has been such a nasty battle hasn't really been due to fears of a new eugenics movement breaking out. It's been due to fears that if intelligence has a genetic basis, then it's also conceivable that different races have different inherent IQs. That's where the emotional core of the war has resided since at least the 50s and 60s, and it remains there whether intelligence is the result of one gene or thousands.

But I confess that I haven't paid very much attention to the nature/nurture debate over the past decade or so. So maybe I'm wrong about this. Anyone care to weigh in on the current state of the controversy?

Quick: does this diagram have more blue squares or more red squares?

Time's up! There are more red squares. But according to Berkeley's Eduardo Andrade, most people overestimate the number of blue squares when they're lumped in the middle like this. Scatter them around in different ways and you can reliably get people to guess that there are more red squares or that there are the same number of both. This makes the visual display of information important:

It is relatively easy to bias people’s visually-based estimates. As experiment 1 demonstrates, estimations of the actual proportion of winning squares differed by almost 30 percentage points when the winning-on-the-edge vs. winning-in-the-middle formats were contrasted (30.7% vs. 57.6%). Surprisingly, people are often tempted to rely on the costless and apparently ‘‘infallible’’ visual input. Experiment 2 showed that an astonishing 75% of participants in the ‘‘pictorial format only’’ condition acknowledged that they did not systematically compute the actual probabilities before making a betting decision that involved their own participation fee.

I don't know if this is really all that surprising or not, but there you have it. In any case, this reminds me of the old chestnut about why, when you look up something in a map book, the thing you're looking for always seems to be right on the edge, forcing you to flip back and forth between two pages. Answer: because most of the map is on the edge. The outermost 15% of a page contains half the map. The outermost 20% contains two-thirds. So the odds of finding something near the center seems like it ought to be high but in fact is surprisingly low. Thus the annoyance factor.

Via Kevin Lewis of the Boston Globe.

Endgame in Libya

Multiple media reports suggest that Libya's rebels are close to victory over Muammar Qaddafi. This isn't due solely to fighters from eastern Libya — who have been the focus of most of the combat until now — moving west and surrounding Tripoli, either. It's apparently been largely due to an uprising within the city itself, something that Juan Cole is pleased about:

Those who were expecting a long, hard slog of fighters from the Western Mountain region and from Misrata toward the capital over-estimated dictator Muammar Qaddafi’s popularity in his own capital, and did not reckon with the severe shortages of ammunition and fuel afflicting his demoralized security forces, whether the regular army or mercenaries. Nor did they take into account the steady NATO attrition of his armor and other heavy weapons.

This development, with the capital creating its own nationalist mythos of revolutionary participation, is the very best thing that could have happened. Instead of being liberated (and somewhat subjected) from the outside by Berber or Cyrenaican revolutionaries [from central and eastern Libya], Tripoli enters the Second Republic with its own uprising to its name, as a full equal able to gain seats on the Transitional National Council once the Qaddafis and their henchmen are out of the way. There will be no East/West divide. My hopes for a government of national unity as the last phase of the revolution before parliamentary elections now seem more plausible than ever. Tellingly, Tunisia and Egypt both recognized the TNC as Libya’s legitimate government through the night, as the Tripoli uprising unfolded. Regional powers can see the new Libya being born. 

From the New York Times:

With turmoil inside Tripoli, and a vaunted line of defense outside the city appearing to have done little to contain the rebel advance, the events suggested a possibly decisive shift in the six-month uprising against Colonel Qaddafi, which has already become by far the most violent of the Arab Spring uprisings. 

....Of particular note on Sunday, the rebels seemed to meet little resistance from the 32nd Brigade, a unit NATO had considered one of the most elite in Libya, commanded by Khamis Qaddafi, one of Colonel Qaddafi’s sons. The so-called Khamis Brigade was one of the key forces enforcing the defense lines around the capital, extending about 17 miles outside Tripoli to the west and about 20 miles outside the capital city in the south.

I've been a skeptic of the Libyan operation from the start, but if this keeps up — and if the revolutionary government goes on to establish a decent regime — then it looks like President Obama's judgment in this matter may indeed have been better than mine. At a modest cost in dollars, virtually no cost in coalition lives, and no requirement for postwar occupation or rebuilding, we've backstopped an indigenous uprising against a brutal dicatator who was on the verge of slaughtering thousands of his own people. Not bad.

There are still some big ifs here, but at the moment things look better than I imagined they would. Keep your fingers crossed.

When it comes to the temporary Bush tax cuts on the rich, Republicans insist that allowing them to expire would be a tax increase that they're flatly unwilling to even consider. However, when it comes to the temporary Obama payroll tax cut on the middle class, they say that letting it expire is OK. It's not a tax increase in this case, and our looming budget deficit is so critical that we can't afford to keep it in place. Steve Benen comments:

If I had to guess, I'd say Republicans probably support an extension of the payroll tax cut, but just aren't willing to say so. Why not? Because then they lose leverage — GOP officials know the White House wants this, and if they simply agree to pass the measure, they won't get anything extra out of the deal. Hostage strategies have become an instinctual norm for Republicans.

I think I'd take issue with this in two ways. First, I'm honestly not sure Republicans do support an extension of the payroll tax cut. Historically, their focus has always been on upper-income marginal rates, and they've never brought quite the same fervor to middle class levies like the payroll tax or the gasoline tax as they have to things like capital gains taxes and estate taxes. They're just really, really focused on keeping taxes on the rich low.

But even if this is just a bargaining ploy, it's not fair to call it a "hostage strategy." In the case of the debt ceiling fight, that was appropriate language because Republicans were genuinely threatening fiscal Armageddon if they didn't get their way. That's hostage taking. The payroll tax debate, conversely, is just garden variety politics. Presidents and members of Congress have bargained over stuff like this forever, and it's perfectly normal to play hardball in order to seek the strongest advantage for your own side. This is logrolling and dealmaking and favor trading, not hostage taking.

What's more, it's a good thing. Frankly, we could use a little more logrolling and dealmaking and favor trading, not less. The fact that Republicans these days are so unwilling to make compromises of any kind is a major cause of our current legislative paralysis. I'd like to see more of it, not less, no matter how shrewdly the game is played.