Kevin Drum

Morning Roundup

| Fri Oct. 9, 2009 9:49 AM EDT

Hey, good morning.  Anything new going on today?  Let's see.....NASA crashed a probe into the moon....a car bomb killed 49 people in Pakistan....Barack Obama won the Nobel Peace prize....

Wait a second.  Barack Obama won the Nobel Peace Prize?  What for?  Says here it's in recognition of "his extraordinary efforts to strengthen international diplomacy and cooperation between peoples."

I'm going to head out into the blogosphere and see what people think of this.  But before I do, I just want to say that this is ridiculous.  I mean, I'm all in favor of making wingnut heads explode, but the guy's been in office for slightly less than nine months.  That's barely enough time to make a baby, let alone bring world peace.  Shouldn't the luminaries in Oslo have waited until he had done something more significant than making nice with his former primary opponent before declaring him a man for the ages?

Oh well.  Sometimes people do dumb things.  At least we get to see wingnut heads explode.

UPDATE: OK, I've now spent a few minutes taking in reaction from all corners.  Is there anyone who's defending this choice?  Couldn't they have just given it to Bono instead?  At least then maybe we'd get some nice music at the awards ceremony.

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Getting Afghanistan Right

| Thu Oct. 8, 2009 5:58 PM EDT

In the Washington Post today, Rajiv Chandrasekaran has an inside look at the Obama administration's long deliberations over how to deal with Afghanistan.  Jason Zengerle says it's full of details that "make the Obama administration look more than a little inept."  Michael Crowley wonders how Obama's first review, back in March, "came up so embarrassingly short."  Matt Yglesias says it "makes the Obama administration look pretty foolish."

I'm not so sure.  Here's Chandrasekara's gloss of how last March's recommendation that we adopt a counterinsurgency strategy was intepreted at the time:

To senior military commanders, the sentence was unambiguous: U.S. and NATO forces would have to change the way they operated in Afghanistan. Instead of focusing on hunting and killing insurgents, the troops would have to concentrate on protecting the good Afghans from the bad ones.

And to carry out such a counterinsurgency effort the way its doctrine prescribes, the military would almost certainly need more boots on the ground.

To some civilians who participated in the strategic review, that conclusion was much less clear. Some took it as inevitable that more troops would be needed, but others thought the thrust of the new approach was to send over scores more diplomats and reconstruction experts. They figured a counterinsurgency mission could be accomplished with the forces already in the country, plus the 17,000 new troops Obama had authorized in February.

So the civilians screwed up.  They wanted counterinsurgency on the cheap, but that was never in the cards. Now they're scrambling to regroup.

Except that's not really what Chandrasekara says.  Later he explains why the March task force members thought that Obama's previous commitment to send 21,000 more troops to Afghanistan was sufficient:

Encouraging the view that a massive influx was not needed were statements from the overall U.S. and NATO commander at the time, Gen. David D. McKiernan, who said he had shifted his troops toward counterinsurgency operations. He was not asking for more forces beyond the 21,000 Obama had agreed to, plus 10,000 more in 2010, which the Pentagon told the White House it could address later in the year.

"Typically, you defer to the field for the resource needs," said one senior official involved in the review. "In March . . . we thought we had a handle on what McKiernan thought he needed."

A military official familiar with McKiernan's thinking said his request for 30,000 troops last fall was tempered by a belief that the Bush White House would reject it outright if he asked for more. As it was, Bush tabled the request, leaving it to Obama.

...."The military was not ready at that point to come to the president and say, 'Here's the number we think it's going to take,' " the person familiar with the conversation said. "They were satisfied that what they had put on the table at the beginning of the administration met their requirement for the moment."

If Chandrasekar's account is correct, the fault isn't really with the Obama administration at all.  It's with the military: McKiernan was on board with the counterinsurgency strategy but didn't indicate that he needed more troops to implement it.  Maybe this was because he was gun shy thanks to his experience with George Bush, maybe not.  But one way or the other, he didn't ask for more troops.  And considering the obvious political sensitivity of a troop increase, you just can't plausibly suggest that he somehow implied he needed one even though he never quite said so outright.  If he wanted more troops, he would have said so.

Later, of course, McKiernan was pushed out and a new commander took a fresh look at what resources were needed.  But that hardly reflects badly on Obama, and it doesn't really sound like anyone screwed up back in March.  Long story short, the military changed its mind about troop levels between March and September, and now Obama has to decide how to respond to that.  I don't really see a case for ineptness here, and I, for one, am perfectly happy that Obama and the generals are taking their time to hear everyone out and try to get things right this time around.  After eight years of futility, it's not as if a few more weeks to hash out internal differences and get some real consensus is a bad thing.

Modern Journalism Watch

| Thu Oct. 8, 2009 3:03 PM EDT

The Financial Times is now basing front page stories on Facebook postings from Sarah Palin?  Seriously?  Did Rupert Murdoch buy them too while I wasn't watching?

Why We Spend So Much

| Thu Oct. 8, 2009 1:40 PM EDT

Bob Somerby wants to know why the media isn't a wee bit more interested in why the United States pays far more per person for medical care than other rich countries.  Here's the rough answer:

  • We pay our doctors about 50% more than most comparable countries.
  • We pay more than twice as much for prescription drugs, despite the fact that we use less of them than most other countries.
  • Administration costs are about 7x what most countries pay.
  • We perform about 50% more diagnostic procedures than other countries and we pay as much as 5x more per procedure.

Underlying all this is the largely private, profit-driven nature of American medicine, but regardless of how you feel about that, the main lesson here is how hard it would be to seriously bring these costs down.  We can jabber all we want about incentives and greed and systemic waste, but the bottom line is that if we want to do anything more than nip around the edges, we'd have to pay doctors and nurses less, pay pharmaceutical companies less, pay insurance companies less (or get rid of them entirely), pay hospitals less, and pay device makers less.  That's a lot of very rich and powerful interests who will fight to the death to prevent any serious cost cutting, and it's why Obama and the Democrats in Congress have largely chosen to buy them off instead.

If you're curious about this in slightly more detail, the chart on the right comes from a McKinsey Global Institute study of healthcare costs.  (An older but more interactive version is here.)  Healthcare spending tends to be higher in richer countries, and since the U.S. is a very rich country it's unsurprising that we spend a lot on healthcare.  However, even when you account for that, McKinsey figures that we still spend about $2,000 more per person than we should, a total of about $650 billion.  The chart shows where this extra expense comes from: the dark blue areas are places where we spend more than expected and the orange areas show where we spend less than expected.

No matter how you slice the healthcare pie, though, compared to other rich countries we spend far more, cover fewer people, get hassled a lot more, and don't get much better outcomes.  Unfortunately, there are a lot of people who profit handsomely from this state of affairs, so it's not likely to change radically anytime soon.  Baby steps, my friends, baby steps.

Upgrade Hell

| Thu Oct. 8, 2009 12:04 PM EDT

Is this really true?

XP owners, the biggest body of Windows users [...] have to wipe out their hard disks after backing up their files elsewhere, then install Windows 7, then restore their personal files, then re-install all their programs from the original CDs or downloaded installer files. Then, they have to install all the patches and upgrades to those programs from over the years.

In other words, for all practical purposes it's impossible to upgrade from Windows XP to Windows 7.  Jeebus.  Is Microsoft trying to give Apple fresh material for its TV ads?

Movie Theater Communism

| Thu Oct. 8, 2009 11:31 AM EDT

Nicholas Tabarrok (brother of Alex) is a producer of small indie films.  But he's frustrated because there's no way for him to increase his audience by lowering the price to see his pictures:

When I make, say, an $8M film it has to compete at the same price level as the studios' $80M or $100M film.  It costs the consumer the same $12 at the multiplex.

....A few years ago Edgar Bronfman Jr, during the time his family briefly owned the Universal film studio, suggested that theaters actually charge different admission prices for different pictures so those films that cost less to make had correspondingly lower ticket prices than the mega-budget studio pictures.  He was roundly ridiculed by the industry.  But truth be told I actually think the less-the-warm reception his proposal received had more to do with the fact he was an 'outsider' who had bought his way into Hollywood than on the actual merit of the idea itself.  Sound like good economic practice to me.

This same thought has occurred to me frequently.  Why don't big, blockbuster films try to squeeze a few more dollars out of each ticketgoer?  I mean, who wouldn't pay an extra couple of bucks to see Transformers 2?

Anyway, I've always assumed that theater owners are the roadblock here.  Right now, no one has any incentive to cheat: if I want to see Transformers 2, I just buy a ticket for it.  It doesn't cost me any more than the ticket to District 9.  But if it did cost more, then I'd be highly motivated to buy a ticket to the cheaper movie and then sneak into the more expensive one.  That would require a bunch of extra ushers to make sure no one cheated, and the whole thing would be a gigantic pain in the ass and probably revenue neutral in the long run.  So why bother?

Then again, maybe there's some other, far more interesting and sophisticated reason for this practice.  Anyone happen to know?

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Quote of the Day

| Thu Oct. 8, 2009 10:57 AM EDT

From Antonin Scalia, explaining why a cross at Mojave National Preserve isn't really a specifically Christian symbol:

The cross is the most common symbol of the resting place of the dead.

For the record, I think court cases objecting to religious symbols on public property have gone way beyond the point of diminishing returns.  Basically, I don't care anymore, and if it were up to me I'd leave the cross alone.

But it's not up to me, and once these cases go to court they don't deserve this kind of sophistry.  As Jonathan Kulick asks, "Does Justice Scalia actually not understand that the cross is, in the United States, the most common symbol of the resting place of the dead because most of those dead were Christians?"  Apparently not.

Laboratories of Healthcare

| Thu Oct. 8, 2009 10:17 AM EDT

In the seemingly endless healthcare reform debate, it seems like every day brings yet another proposal for a compromise on a public option.  Today brings word of one that might actually be a workable idea: a national plan, created by Congress and standardized for the entire country, but that allows states to opt out if they don't want to participate.  Ezra Klein:

That's a real improvement over Tom Carper's proposal allowing individual states to create their own public options, which would would be quite a bit weaker than a national program. It also creates a neat policy experiment: We can see, over time, what happens to state insurance markets that include the national public option and compare them with those that don't. We can see whether the worst fears of conservatives are realized and private insurers are driven out and providers are forced out of business due to low payment rates, and we can see whether the hopes of liberals are right and costs come down and private insurers become leaner and more efficient. Or both, or neither. It's an opportunity to pit liberal and conservative policies against each other, rather than just pitting liberal and conservative congressmen against each other.

Not bad.  Let's put those laboratories of democracy to work!  I'd add that this would also be an interesting political experiment.  The states that would benefit most from access to a public option are those in which there are the fewest private insurers.  However, those are also the states in which the insurers have the most political power and can lobby the most effectively to keep the public option out.  So which of these is the more powerful force?  I, for one, would be interested to find out.

Healthcare Reform Inches Forward

| Wed Oct. 7, 2009 4:42 PM EDT

Attention nerds: the Congressional Budget Office has released its preliminary assessment of the healthcare bill passed out of the Senate Finance Committee last week.  Basically, the news is good: it pays for itself over ten years, it pays for itself over 20 years, it covers 94% of the population, and it reduces Medicare spending by over $400 billion:

According to CBO and JCT’s assessment, enacting the Chairman’s mark, as amended, would result in a net reduction in federal budget deficits of $81 billion over the 2010–2019 period....CBO expects that the proposal, if enacted, would reduce federal budget deficits over the ensuing decade relative to those projected under current law — with a total effect during that decade that is in a broad range between one-quarter percent and one-half percent of GDP.

....By 2019, CBO and JCT estimate, the number of nonelderly people who are uninsured would be reduced by about 29 million....Under the proposal, the share of legal nonelderly residents with insurance coverage would rise from about 83 percent currently to about 94 percent.

....Other components of the proposal would alter spending under Medicare, Medicaid, CHIP, and other federal health programs....In total, CBO estimates that enacting those provisions would reduce direct spending by $404 billion over the 2010–2019 period.

There are still plenty of battles to be fought, including those over subsidy levels and the public option, but we basically have on the table a plan that's budget neutral (or better), covers most of the population, saves a considerable amount of money, and ought to be roughly acceptable even to the most timorous of the centrists.  That's more than anyone's ever managed to do before.  And remember: it took most European countries decades before they had more than 94% of their population covered, but they all got there eventually once they had a starting place.  There's plenty left to do, but as a starting place this isn't too bad.

Time to Cut the Payroll Tax?

| Wed Oct. 7, 2009 3:42 PM EDT

Alex Tabarrok on a proposal for further economic stimulus:

Support appears to be growing (finally!) for a payroll tax cut.  Here's Edmund Phelps....[snip]....I argued in favor of a payroll tax cut (and other supply side stimulus ideas) earlier this year so I am in agreement that this is late but still warranted.  Other economists in favor of a payroll tax cut include Keynes, Tyler (in his usual manner), Arnold Kling, Greg Mankiw, Russ Roberts, Robert Reich and Dani Rodrik.  The list could easily be extended and it easily crosses political boundaries.

I don't know what to think about this idea.  I guess I've just gotten too cynical.  On a substantive basis, I'm pretty sure I could be talked into it pretty easily.  It's fast, it gets a lot of money into the economy, and it benefits the poor and middle class.  Sounds like a good idea.

But....I can't help wondering: is this just another political trap?  If we cut the payroll tax, then obviously the Social Security trust fund will be in slightly worse shape, and that in turn means that projections of doom and gloom will be pulled forward.  A couple of years from now Republicans will be screaming not that Social Security will be bankrupt in 2040, but that it will be bankrupt in 2035.  Or 2030.  Or whatever.  Something must be done!

I suppose it's a good idea anyway.  But considering the screeching reaction we've gotten lately from Republicans over proposals to rein in Medicare costs — something they were actively in favor of until about two minutes ago — it's a little hard not to be suspicious these days.