Kevin Drum

The End of DADT is Near

| Mon May 24, 2010 7:58 PM EDT

We have some genuinely good news today. President Obama promised in his State of the Union address to work with Congress this year to "finally repeal the law that denies gay Americans the right to serve the country they love because of who they are." He hasn't exactly been a ball of fire on this topic since then, however, and Defense Secretary Robert Gates, though plainly in favor of repealing DADT, wants to wait until the Pentagon has finished studying how to implement repeal later this year. Meanwhile, Sen. Carl Levin has promised to put repeal in this year's Senate's annual defense spending bill but Rep. Ike Skelton hasn't been keen on doing the same thing in the House bill.

But now it appears we have a deal:

Under the compromise, worked out in a series of meetings Monday at the White House and on Capitol Hill, lawmakers will proceed to repeal the Clinton-era policy in the next several days, but that action will not go into effect until the Pentagon completes a study about implementing the repeal.

In a letter to lawmakers pushing for a repeal, the White House wrote Monday that "such an approach recognizes the critical need to allow our military and their families the full opportunity to inform and shape the implementation process through a thorough understanding of their concerns, insights and suggestions."

This is actually not much of a compromise. It's basically a complete win the DADT repeal forces, since implementation always would have taken some time no matter when repeal was passed. Pelosi and Reid already support repeal, and now, with Obama's active support, the chances of getting it through Congress are excellent. Adam Weinstein has more here.

So if things go the way I think they'll go, by later this year Obama, Pelosi, and Reid will have passed a historic stimulus bill, the Lily Ledbetter Act, healthcare reform, college loan reform, financial reform, repeal of DADT, and Obama will have withdrawn from Iraq.1 Not bad for 18 months of work. And who knows? There's even a chance that Obama's Afghanistan escalation will work. If it does, what president since LBJ will have accomplished more in his first term?

1Except for the pesky "residual force," of course. Still, once the combat forces are gone, it's hard to see a scenario in which they're ever sent back in.

Advertise on

Is Japan's Lost Decade Not Really Lost?

| Mon May 24, 2010 2:21 PM EDT

Whenever you hear people talk about comparative economic performance, you should always make sure to ask for figures about productivity per hour worked, not just overall GDP. The "productivity" part adjusts for differences in population and the "per hour" part adjusts for the fact that some countries choose to work less and have more leisure. Overall GDP is still a useful measure (for example, if you just want to know the international throw weight of one country vs. another), but if you're trying to compare the success of different economic systems you're better off with more granular measures.

That said, another measure is to look at GDP growth adjusted for the growth in the working-age population. If a country is experiencing the consequences of a baby boom, for example, you'd expect growth rates to be pretty high as the baby boomers all enter the workforce. But if a country is getting old and the workforce is retiring in large numbers, growth is likely to be low. Via Tyler Cowen, Tino Sanandaji runs the numbers for Europe, the U.S., and Japan:

In non-population adjusted figures, Japan's real GDP grew by 26% in total these years [1990-2007], the lowest in the OECD. In comparison the figures are 63% for the U.S and 44% for the EU.15.

But during this period the U.S saw its potential labor force (the number of people between 15-65) increase by 23% and the EU.15 by 11%, while Japan had a decrease of 4%.

Between 1990-2007, GDP per working age adult increased by 31.8% in the United States, by 29.6% in EU.15 and by 31.0% in Japan. The figures are nearly identical! Japan has simply not been growing slower than other advanced countries once we adjust for demographic change.

That's pretty interesting. Is Japan's "Lost Decade" (more like two decades now) just a statistical artifact caused by an aging workforce? It seems a little too simple. Is the date range cherry picked? Japan's productivity per hour worked, it's worth noting, is well below U.S. and European levels no matter how you measure it. But I'm throwing this out for discussion anyway. Any credentialed economist types care to weigh in?

What the Oil Spill Looks Like

| Mon May 24, 2010 1:51 PM EDT

I've been sadly negligent on the BP oil spill front, but if you're curious about whether oil has washed into shore yet, the answer is yes. It has. So why aren't we getting more coverage of this? Because BP is none too anxious to allow reporters to see it.  Check out Mac McClelland here to find out what it's really like once she finally got a look.

A Feeble Swipe at Identity Theft

| Mon May 24, 2010 1:02 PM EDT

The FTC has decided to lay down the law on identity theft:

The government says that businesses have the responsibility of making sure thieves don't use stolen information to buy goods or open phony accounts. And to that end, the Federal Trade Commission wants businesses that might be targets of identity thieves to develop written plans to spot "red flags" that fraud could be involved and prevent it.

...."Once the information is in the hands of identity thieves, there's not much more the consumer can do," said Naomi Lefkovitz, senior attorney for the FTC, which will oversee enforcement of the rule as it applies to many — though not all — businesses. "Now it's in the hands of the businesses."....A department store that issues its own credit cards, for example, would qualify as a creditor under the new rule, and would have to develop a plan, according to the FTC.

Ha ha. Just kidding. The FTC isn't laying down the law. What they're actually doing is requiring businesses to "develop a written plan for identifying signs of identity theft." That's almost as toughminded as, say, putting together a blue ribbon commission to write a report on the problem.

Here's a data point to ponder. In 1968 Congress passed the Truth in Lending Act. Among other things, it capped consumer liability for lost credit cards at $50. Guess what happened? Since credit card companies were responsible for all the losses above that amount, they got very aggressive and very creative at figuring out ways to minimize fraud. They made it as convenient as possible to report a lost card. They provided merchants with loads of tools to identify lost cards. They developed computer algorithms to detect usage patterns so they could proactively shut down fraudulent use. They worked really, really hard on this stuff.

In a nutshell, we made banks responsible for the losses, and banks figured out ways to prevent losses. It was the wonder of free market capitalism at work.

Now then, suppose credit issuers were responsible for the costs of identity theft? That is, if you're responsible for issuing a card or extending credit of any kind under false pretenses, you're responsible for the losses and you're responsible for cleaning up the mess. Period. No excuses, no safe harbors, no nothing. If you extend credit to someone named Kevin Drum with my Social Security number, and it turns out that it wasn't actually me you extended credit to, then it's your problem. You pay the charges, you cancel the cards, you clean up my credit report, you contact my bank, you do everything. The basic premise should be: it's your responsibility to make sure you're extending credit to the person you think you are. If you don't, it's your responsibility to fix the mess. And if you don't fix the mess, you'll be liable in court for substantial damages.

What do you think would happen if that was the rule? Easy: banks and credit issuers would miraculously discover that there are lots of ways to tighten things up. Instant credit might become less popular, replaced by having to apply for a card and wait a few days for approval. Credit reporting bureaus would offer their credit protection services for free. (In fact, they'd beg you to sign up.) Credit locking — in which you have to actively allow access to your credit report on a case-by-case basis — would become the default, instead of a hassle that few people take advantage of. And those nifty computer algorithms that have helped with credit card fraud would turn their gimlet eyes on identity theft as well.

Right now, the reason identity theft is such a pain isn't usually the money involved. Quite often, in fact, the amount of lost money is fairly modest. What makes it a pain is that, basically, nobody except you cares about it. You're responsible for contacting your bank, your credit card company, the credit reporting bureaus, and a dozen other firms, none of whom really care about your problem and wants only to pass you along to someone else as quickly as possible.

There's no reason we should put up with this. Responsibility should lie with those who are at fault. If you extend credit carelessly, you should clean up the mess. And it wouldn't even be that hard. Hell, if we merely mandated credit locking instead of making it optional, it would probably eliminate about 95% of all identity theft. Applying for credit might take a day or two longer than it does now, but is that really such a bad thing? Or, perhaps we could mandate credit locking by default, and allow you to unlock your account only if you agree to accept full personal responsibility for any identity theft that might ensue.

Instead we're getting "written plans." Blecch. Perhaps our shiny new Consumer Finance Protection bureau will be able to do a bit better once financial reform is passed and it gets up and running.

Taking Sarah Seriously

| Mon May 24, 2010 11:39 AM EDT

Sarah Palin and White House Press Secretary Robert Gibbs dueled it out this weekend:

Pointing to what she termed the White House's relationship with "the oil companies who have so supported President Obama in his campaign and are supportive of him now," Palin questioned whether "there's any connection there to President Obama taking so doggone long to get in there, to dive in there, and grasp the complexity and the potential tragedy that we are seeing here in the Gulf of Mexico."

Gibbs, on CBS News' "Face the Nation," suggested Palin do some homework...."My suggestion to Sarah Palin would be to get slightly more informed as to what's going on in and around oil drilling in this country."

OK, I guess that's not bad. And since I read Jon Alter's The Promise last week, I'm still sort of stuck in Alter's universe, where Obama is the adult who insists on always taking the high road against his opponents and always turns out to be right about that. And hey, maybe so. Maybe he's right to be exasperated with people who are endlessly advising him to get more partisan and more fiery. And maybe he's right to insist that his staff act the same way he does.

Maybe, maybe, maybe. But honestly. Isn't it time for guys like Gibbs to finally just say something like, "Bob, we're not still treating anything Sarah Palin says as actual news, are we? Let's move on." After all, even Bob Schieffer can't possibly take it seriously when Sarah Palin — Sarah Palin! — suggests that Barack Obama has failed to "grasp the complexity" of the oil spill.

Shilling for America

| Mon May 24, 2010 10:41 AM EDT

Matt Yglesias and Ezra Klein are both in China on some kind of junket, and both are complaining about the corporate shillishness of the American pavilion at the Shanghai World Expo. One of the videos that comprise America's message to the world, says Ezra, is just a "long series of advertisements from the pavilion's corporate sponsors, including a representative from Chevron who tells us that oil will have to be part of our energy future and actually uses their marketing buzzwords 'human energy.'" But hey — that's a World Expo for you. Compare and contrast this to a souvenir coin from the 1939 Golden Gate Expo in San Francisco, which happily informs us that "A dollar spent for petroleum products never stops circulating. It pays for wages, taxes, materials and brings countless benefits to every business." Indeed. And still does, apparently.

Anyway, I have no real point to make. I just wanted an excuse to post a picture of that coin again.

Advertise on

The End of Lost

| Mon May 24, 2010 9:40 AM EDT

So: what did you think of the Lost finale? I gotta say, when the show's creators told us a few months ago that they weren't going to answer every question, I was OK with that. Gotta maintain an air of mystery, keep the focus on characters instead of obsessing over minutiae, etc. etc. But honestly, I wasn't expecting them to answer no questions. Shouldn't they have at least answered one or two just as a demonstration of good faith?

Crankery 101

| Sun May 23, 2010 12:54 PM EDT

Here's a quick rule of thumb: You can judge the Crank Factor™ of an op-ed about the financial crisis by how long it takes the author to say something like:

Yet in truth, it was government housing policy that was at the root of the crisis.

It takes AEI president Arthur Brooks about a thousand words to get there in the Washington Post today. That wouldn't be too bad, actually, except that it's a 2,500-word piece. That's about 40% of the way in, so let's give Brooks a CF of 60. Frankly, I think he could have done better.

I can't figure out why conservatives insist on repeating this nonsense. The evidence against it is overwhelming, so they can hardly be unaware that they're BSing. (Details here.) And usually you save BSing for arguments that actually have some traction. But this one doesn't. As near as I can tell, even tea partiers don't really buy it unless you throw in a bit of CRA/minority lending demagoguery — which, at least in this piece, even Brooks doesn't quite have the brass to try to pitch. Maybe he saves that for the Wall Street Journal crowd.

Anyway, you can add "government housing policy caused the financial crisis" to this handy list of phrases that immediately let you know that you've been sucked into reading not a judicious exposition of conservative thought, but the most vapid, PowerPointy form of right-wing crankery:

  • Supply side economics: Arthur Laffer showed that tax cuts pay for themselves.
  • Healthcare: It can take as much as a year to get a hip replacement in Canada.
  • War on terror: Saddam Hussein supported al-Qaeda.
  • Tax policy: Half of all Americans don't pay any taxes.
  • Climate change: McIntyre and McKitrick have shown that global warming is a fraud.

Roughly speaking, no one who's actually serious about any of these topics would write any of this stuff. If you see it, it's as much a flashing light as pining away for the gold standard or railing about the giveaway of the Panama Canal. Got other examples? Feel free to add to the list yourself. And conservatives are welcome to construct a similar list for liberals. Have at it, folks.

Off to Chicago

| Sat May 22, 2010 2:56 PM EDT

In a few weeks Marian and I are going to Chicago to visit for a few days. Aside from the obvious (Art Institute, Magnificent Mile, Field Museum), any recommendations? All help much appreciated!

Friday Cat Blogging - 21 May 2010

| Fri May 21, 2010 1:57 PM EDT

Ah, the glories of a wide angle lens. Domino looks like she's a furry python or something. If furry pythons also had whiskers and paws, that is. Over on the right, we have a repeat of last week. What can I say? Inkblot was out in the garden again yesterday, Marian plonked him down on a rock, and this is the picture that came out. Anyway, I figure it won't be spring forever, so we should enjoy the flowers while we can.

(And what is Inkblot looking at? Birds, of course. There's a nest in our neighbor's tree nearby and the birds get pretty territorial about the whole thing. But their strategy is bad. All their chirping and buzzing just makes Inkblot all the more curious. Luckily for them, he's also gravity bound and has a short attention span. So they're in no danger.)