Kevin Drum

Shut Up!

| Tue Oct. 13, 2009 12:33 PM EDT

Disagreements about healthcare policy or cap-and-trade emission auctioning are all well and good, but if we're going to yell at each other about something, shouldn't we yell about TV ads that yell back at us?  Over at his blog, Berin Szoka provides a libertarian laundry list of reasons why the government shouldn't enact rules that regulate the audio volume of TV commercials.  Here's one of them:

I understand that most users probably do wish that commercials probably weren’t so loud. But, this very fact, combined with the ease with which users can now skip all commercials (36% of U.S. homes have a DVR), creates a pretty powerful incentive for the TV industry to self-regulate the volume level of advertising. “Noisy or strident” advertising is just another example of the “tragedy of the commons” at work: Absent any rules, every individual advertiser has an incentive to jack up the volume in order to attract attention, and doing so will probably work up to a certain point of increased annoyance by the user. But collectively, such ads hurt all advertisers because they increase ad blindness, ad deafness, and/or outright commercial skipping.

The same dynamic plays out on the Internet, where flashing, blinking, bouncing, strobing dancing ads really drive users nuts and make them turn to tools like AdBlock Plus and Flashblock — which is why ad networks like Google have policies that implement their own “time, place and manner” rules out of pure self-interest. Such rules are useful and valuable. They benefit advertisers, consumers and the ad network alike, because there exists a basic harmony of interests between them: annoying ads don’t really benefit anyone in the long-term.  Do we really want government bureaucrats making these decisions instead?

Yes.  Yes I do.  You see, blaring TV commercials have been an obvious and fixable problem for several decades and no "basic harmony of interests" has yet manifested itself.1  This suggests to me that it never will unless the industry is pressured into doing it.  Plus there's this: the industry has been promising to enact voluntary standards off and on for years, but oddly enough, they never seem to make any progress unless Congress starts making threatening noises about doing it for them.  Since I expect this state of affairs to last approximately forever, I would be delighted to see Congress call their bluff and just pass a bill setting out some reasonable standards.

This comes via Peter Suderman, who agrees with Szoka and is therefore now my sworn enemy.2  Nothing personal, of course, just business.  However, I did learn something new from him.  Namely that "there are various technological solutions from companies like Dolby and SRS that help keep TV volumes on a more even keel."  Really?  I didn't know that.  But click the links and judge for yourself.  This technology doesn't appear to be very widespread yet, and I suspect that managing volume at the source is a better approach anyway (especially since the most annoying ads are deliberately engineered to be annoying).  Still, it's better than nothing since neither the industry nor Congress has made much progress over the years.

But does it work?  Does anyone out there have one of these wonder devices?  What's the skinny?

1A shortcoming, by the way, that's made worse by the artistic decisions of certain shows.  The worst for me is 24, which I have to crank up in order to hear the hoarse stage whisper that Kiefer Sutherland affects in his Jack Bauer role.  The ads are loud even at the best of times, but they're really loud when you've already turned up the volume just to hear the show itself.

2This is an issue, like the Do Not Call registry, that transcends politics.  I don't really care whether volume regulations are liberal or conservative or trample the Bill of Rights or whatever.  I just want the noise to stop.  If it takes jackboots to stop it, then so be it.

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Is Cost Shifting Bogus?

| Tue Oct. 13, 2009 11:37 AM EDT

If the government cuts Medicare reimbursement rates, will healthcare providers just make up for it by charging the rest of us more?  This is called "cost shifting," and Keith Hennessey doesn't believe it:

While doctors and hospital administrators swear by it, I have always been skeptical of the cost-shifting argument.  If you believe that a hospital will raise the prices it charges privately insured patients in reaction to cuts in reimbursement rates from government programs, you must believe (1) the hospital has pricing power and (2) it has until now charged less than it could.  (1) is quite plausible in some circumstances.  I find (2) incredible.  If someone has pricing power, I generally believe they will exert it.  Are we to believe that providers of medical care were charging privately insured patients less than they could have before the cuts in government payment rates?  I am happy to hear arguments on the other side.

Austin Frakt makes a similar argument here, but I'll push back a little bit on this.  My experience is that companies as a whole (or divisions of companies) will often tolerate underperformance in one area as long as they're meeting their overall goals.  Whatever performance measure they use — earnings, return on equity, stock price, etc. — they're frequently satisfied if they meet it for the entire operation.

Strictly speaking, this is irrational.  Businesses should insist that every individual operation be as profitable as possible.  But humans just don't always work that way.  There are only so many hours in the day, only so much bandwidth you can expend on problem areas, it's not always clear how far you can push things, and competitive pressures are different in different areas.  However, if companies fail to meet their broad performance measure, then the pressure builds to start taking a closer look at individual operations, and as a result they might push harder to raise prices in places they haven't before.

Ezra Klein passes along a Lewin Group study that suggests, on average, about a 40% cost shift in one particular area of medical care.  That strikes me as about right: sometimes reduced payments will prompt healthcare providers to push back in other areas, sometimes they won't.  It depends on the bigger picture, which makes it more an empirical question than a theoretical one.  It might also be a place where the long-term effect is quite different from the short or medium-term effect.  More research, please.

Cable News

| Tue Oct. 13, 2009 10:47 AM EDT

I remember the first time I happened to read an article about the size of the audience for cable news.  It was years ago, and at first I thought I was reading it wrong.  Were the numbers in millions?  Or indexed in some weird way I didn't understand?  But no.  The audience for cable news throughout the day tends to be in the hundreds of thousands.  In other words, maybe 1% of the country on a good day.  Matt Yglesias comments:

The three networks combined have an aggregate daytime audience of roughly zero. But even though the audience, looked at nationally, amounts to rounding error the networks are hugely popular among the tiny number of people who work in professional politics. Just like traders have CNBC and Bloomberg on in their offices, political operatives are constantly tuned in to what’s happening on cable news. The result is a really bizarre hothouse scenario in which people are basically watching . . . well . . . nothing, but they’re riveted to it. How things “play” on cable news is considered fairly important even though no persuadable voters are watching it. And cable news’ hyper-agitated style starts to infect everyone’s frame of mind, making it extremely difficult for everyone to forget that the networks have huge incentives to massively and systematically overstate the significance of everything that happens.

I guess I'm lucky in a way.  I find TV so distracting that I can't really write when it's on.  So, since I write for a living, that means I never have it on.  It helps keep my blood pressure — well, not low, exactly, but at least I'm not having hourly seizures.

On the other hand, it also warps my view of the political world.  An awful lot of the frenzy in politics is driven by cable news, and I hardly ever see it.  My view of the world is driven mostly by reading the mainstream print press and partly by reading blogs.  And while the blogosphere is doing its best to evolve into a written version of cable news, it's not quite there yet.  So on a day-to-day basis, things actually seem calmer and more sober to me than they really are.

I'm not sure what to do about that.  Probably nothing.  In a way, I'm missing out, but in another way, my view of the world is actually closer to that of ordinary people, who aren't immersed in this hothouse and have no idea that most of the micro-frenzies we write about every day have even happened.  But it's worth noting that this is something that makes politics even more inscrutable to most people than it should be even on its own merits.  Things happen that make no sense, and the reason they make no sense is because the driving force behind them is some passing daily outrage that no one except Wolf Blitzer and Sean Hannity and their few thousand viewers care about.  Unless you're one of those few thousand — and very few of us are — you'll be forever perplexed.  This is, needless to day, probably not a great idea in a liberal democracy.

How Many Troops in Afghanistan?

| Tue Oct. 13, 2009 12:02 AM EDT

I'm confused.  This is from the LA Times last month:

U.S. officials are planning to add as many as 14,000 combat troops to the American force in Afghanistan by sending home support units and replacing them with "trigger-pullers," Defense officials say....Services performed by troops that are no longer considered crucial could be outsourced to contractors or eliminated, officials said.

And this is from the Washington Post today:

President Obama announced in March that he would be sending 21,000 additional troops to Afghanistan. But in an unannounced move, the White House has also authorized — and the Pentagon is deploying — at least 13,000 troops beyond that number, according to defense officials. The additional troops are primarily support forces, including engineers, medical personnel, intelligence experts and military police...."Obama authorized the whole thing. The only thing you saw announced in a press release was the 21,000," said another defense official familiar with the troop-approval process.

So the Pentagon is pulling out 14,000 support troops and replacing them with combat troops, and then they're sending over 13,000 new support troops to help out all the combat troops.

That can't possibly be right, can it?  Perhaps Julian Barnes and Ann Scott Tyson could get together and write a joint story clearing this up.

Economy Still Moribund, News at 11

| Mon Oct. 12, 2009 8:46 PM EDT

Today we've got some good news and some bad news.  The good news is that corporate earnings are up.  The bad news is that it's not because business is improving:

In an ominous sign for the economy, much of the profit is being eked out through cost cuts. Executives say they are hesitant to reinvest such profits into their businesses. With large portions of their factories, fleets and warehouses sitting idle, some say they probably won't see reason to do so for a year or more.

....Already, the economy is being starved of investment it needs to spark growth. Net private investment, which includes spending on everything from machine tools to new houses, minus depreciation, fell to 0.1% of gross domestic product in the second quarter of 2009, according to the latest government data. That's the lowest level since at least 1947.

And that's even with a massive stimulus, interest rates near zero, and trillions of dollars in Fed support.  Count your blessings, such as they are.

Obama, Gays, and the Military

| Mon Oct. 12, 2009 1:55 PM EDT

After a huge gay rights rally in Washington DC, John Harwood of CNBC reported this in a segment on MSNBC:

If you look at the polling, Barack Obama is doing well with 90% or more of Democrats so the White House views this opposition as really part of the “internet left fringe” Lester.  And for a sign of how seriously the White House does or doesn’t take this opposition, one adviser told me today those bloggers need to take off their pajamas, get dressed and realize that governing a closely divided country is complicated and difficult.

The blogosphere went nuts. But wait:

In an email to the Huffington Post on Monday, Harwood clarified that the quote was not meant to convey any displeasure on the part of the administration for the gay community's public advocacy.

"My comments quoting an Obama adviser about liberal bloggers/pajamas weren't about the LGBT community or the marchers," he wrote. "They referred more broadly to those grumbling on the left about an array of issues in addition to gay rights, including the war in Afghanistan and health care and Guantanamo — and whether all that added up to trouble with Obama's liberal base..."

You know, blind quotes are blind quotes.  You either take them seriously or you don't — and there was never any reason to take this particular quote any more seriously than any other blind quote.  And sure enough, not only does this one not necessarily represent widespread opinion in the White House, it turned out not to even have anything at all to do with the LGBT community.

Still, even putting that aside, there's a big segment of the gay community that's pretty pissed off at Obama right now.  In one sense, I understand: they supported him, his record on gay issues is pretty modest so far, and the only way they're going to get what they want is by keeping the pressure on him.

At the same time, some of the criticism is way over the top.  Obama doesn't suddenly become a different person whenever he's dealing with whatever your particular hot button issue is.  He's the same guy all the time: cautious, tactical, organized, and prone to prioritizing things pretty carefully.  For better or worse, he's also sensitive about learning lessons from the Clinton administration, and Clinton obviously failed miserably when he tried to force the Pentagon to accept gays early in his administration.

Obama plainly plans to avoid that trap.  Military policy toward gays is a huge hot button, it can be changed only by Congress, support isn't there yet, and in any case Obama pretty clearly told us last year that his major priorities at the beginning of his term were going to be Iraq, Afghanistan, the economy, healthcare, financial regulation, and global warming.  That's a massive agenda.  Given all that, there was never the slightest chance that he'd put a ton of energy into gay issues in his first year.

Instead, he's slowly building up support for change.  He — very smartly, I think — wants to make sure that when Congress takes up gays in the military, it doesn't look like a liberal Democrat trying to force something on the service chiefs.  He wants Gates to support it, and Mullen, and the rest of the Joint Chiefs, and maybe a few high-profile commanders and conservative opinion leaders as well.  Failure in Congress does no one any good, and like it or not, this kind of widespread support within the military is what it's going to take to get Congress to vote to change the current policy.

For my money, Obama tends to be too cautious, tactical, and organized, and the kind of pressure he feels from the blogosphere is a good thing, regardless of what Mr. Blind Quote thinks.  But there's still an objective reality out there, and the fact that Obama recognizes it doesn't make him a sellout.  It just makes him human.

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Quote of the Day

| Mon Oct. 12, 2009 1:03 PM EDT

Speaking of the Nobel Prize, Ezra Klein gets Quote of the Day honors for this.  Or should I say, Quote of Day Honors in Memory of Alfred Nobel?

Ross Douthat [] says it will be "offensive when Obama takes the stage in Oslo this November instead of Morgan Tsvangirai, Zimbabwe’s heroic opposition leader." By that same logic, it seems a bit offensive for Douthat to spend his column arguing that Obama should give back the Nobel rather than devoting his column to the struggles of Tsvangirai, who has never before been mentioned in one of Douthat's op-eds. That's all the more true given that Douthat chooses the subject of his columns, while Obama does not choose the recipients of the Nobel.

Quite so.  And while we're on the subject, I wonder if any of these guys criticizing Obama have given even half a minute's thought to the optics of a presidential refusal?  Frankly, I can't think of anything that would look more arrogant than turning down the Nobel Prize.  What, it's not good enough for him?  He's above such things?  Euro-weenie prizes have no place in the White House?

That's how it would look.  Not humble or self-effacing.  Arrogant.  I don't think the Norwegians should have awarded Obama the prize, but once they did, even the most minimal considerations of graciousness and respect required him to accept it.

The Nobel Effin Prize in Economics

| Mon Oct. 12, 2009 12:44 PM EDT

We all have pet peeves, and I'm afraid one of mine is people who insist on pointing out every year that the Nobel Prize in Economics isn't really a Nobel Prize.  It's actually the Sveriges Riksbank Prize in Economic Science in Honor of Alfred Nobel, it wasn't part of Nobel's original will, it's a party-crasher that was tacked on a mere 40 years ago, blah blah blah.

Come on, people.  It's awarded by Royal Swedish Academy of Sciences, just like the Physics and Chemistry prizes.  It follows the same rules as the other prizes.  The Nobel Foundation bought into the idea and lists it on their website along with all the other prizes.  (Yes, it's carefully referred to only as a "Prize," not  a "Nobel Prize," but still.)  And it's presented on the anniversary of Alfred Nobel's death at the same awards ceremony as all the others.  Don't believe me?  Here's Nobel Prize winner Paul Krugman at the awards ceremony last year right alongside all the "real" winners.  Hell, Krugman even looks a little bit like Alfred Nobel.

So it's a Nobel Prize.  End of micro-rant.  You may now continue with your previously scheduled Columbus Day festivities.

Jingle Mail

| Mon Oct. 12, 2009 12:07 PM EDT

Time magazine reports on the rise of jingle mail:

Homeowners of a new and unattractive breed are plaguing the Federal Housing Administration these days. Known as "the walkaways," they are people who find themselves unable to meet their mortgage payments — and to solve the problem simply move out their belongings at night, drop their house key in the mailbox and disappear.

....The rate of mortgage foreclosures has tripled during the past ten years, to an estimated 3.77 per 1,000 mortgages. Most housing economists agree that the leveling off of home prices in many parts of the U.S. accounts for most of the increase. As long as home prices were rising, a homeowner who could not meet his payments could always sell out — usually at a profit. Now, with prices steady, an overextended homeowner must either sell at a loss or face foreclosure.

....Confides a leading West Coast banker: "Again and again I have to tell my branch managers that I would rather have a soundly conceived mortgage at 5¾% than one at 6¼% which goes bad." Unless the branch managers take this advice to heart, today's overambitious mortgages will create tomorrow's walkaways.

That's from 1962.  Good times.  (Via Felix Salmon via Mark Gimein.)

Running the Traps

| Mon Oct. 12, 2009 11:40 AM EDT

So what kind of options is President Obama getting from his military commanders regarding Afghanistan?  Here's Martha Raddatz of ABC News on the advice he's getting from Gen. Stanley McChrystal:

The three options are, option one: send no more troops to Afghanistan, considered a "high risk option;” option two: send 40,000 more troops, and option three: a major increase in troops, a number that has not been made public but that is far more than 40,000....We’re told that number is [...] well more than 60,000, but under 100,000. But this high option is not the one McChrystal favors.  He favors the middle option.

And here's the New York Times:

Officials said over the weekend that Gen. Stanley A. McChrystal, the top NATO commander in Afghanistan, had prepared options that include a maximum troop increase of about 80,000, a number highly unlikely to be considered seriously by the White House. Much of the official focus has been on a lower option that the general presented, for 40,000 additional troops.

A couple of months ago Rajiv Chandrasekaran wrote a piece in the Washington Post about the post-Petraeus Pentagon's focus on "a new kind of military leader," one who was "able to nimbly run the troops on the ground as well as the traps in Washington."  Stanley McChrystal was said to be just such a leader.

And apparently he is.  Nobody takes the 80,000 number seriously, and McChrystal certainly knew that would be the case.  Apparently he didn't even endorse it himself.  So why include it?  All part of nimbly running the traps in Washington, I imagine.  If you toss in a higher number, then the natural compromise figure becomes 40,000, the place he wanted to be all along.  It's one thing for Obama to eventually decide on a figure a little lower than the high-end option, but once everything has been properly leaked it's a lot harder for him to publicly defend a figure that's less than even McChrystal's pre-packaged "compromise" position.

This is all pretty obvious stuff and I don't want to make too much out of it.  But I'll repeat something I said earlier anyway: I'm not really thrilled at the idea of the Pentagon focusing its energies on promoting generals who are good Washington gameplayers.  If McChrystal truly doesn't favor the higher option, we'd all be better off if he just left it out and instead made the recommendation he really believes in.  Trying to box in the commander-in-chief may be business as usual when it comes to things like F-22 acquisitions or base closings, but I don't have to like it.  I especially don't have to like it when it comes to things a little more important than Lockheed-Martin's balance sheet.  And I don't.