Kevin Drum

Supreme Court Kabuki

| Fri Jul. 17, 2009 11:05 AM EDT

David Savage sums up Sonia Sotomayor's testimony before the Senate Judiciary Committee:

Supreme Court nominee Sonia Sotomayor maneuvered through three days of an often-antagonistic confirmation hearing by portraying herself as a legal mechanic who would stick to precedent and never "make law." But in doing so she revealed almost nothing about the philosophy that would guide her on the high court.

It is not clear whether this play-it-safe strategy was a political calculation, perhaps dictated by the White House, or an accurate reflection of her background as a lower court judge who has not formed broader views on the law.

"It is not clear"?  Spare me.  It's crystal clear.  Back in the pre-culture war era, senators asked nominees questions and nominees more or less answered them.  And then, unless someone produced incriminating photos with a sheep, the nominee was confirmed.  A mere 20 years ago, Antonin Scalia, now a bête noire of the left, was confirmed unanimously after Ronald Reagan nominated him to the court in 1986.

But then things changed.  Robert Bork got borked in 1987.  David Souter and Anthony Kennedy turned out not to be as conservative as conservatives had hoped.  Clarence Thomas blasted his nomination hearings as a "high-tech lynching" and was only barely confirmed.  And everybody learned their lesson from this: nominate candidates whose views are clear (no more Souters!) and then make sure they say absolutely nothing about those views (no more Borks!).  Ginsburg and Breyer invented the technique, Roberts and Alito honed it, and as near as I can tell, Sotomayor has taken it to its reductio ad absurdum apex.  If it's something that might come before the court in the future (and everything comes before the Supreme Court eventually), tell 'em it would be inappropriate to answer.  If someone asks a more general question, say that you can't really answer in the abstract.  If more details are provided, switch gears and say that you can't engage in hypotheticals.  As near as I can tell, Sotomayor was barely willing to admit that she had a law degree, let alone that she had any opinions whatsoever regarding the law.

But look — that's the way the game is played these days.  Of course it was a political calculation.  Does anyone really seriously doubt this?

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Climate Change and Failing States

| Fri Jul. 17, 2009 10:05 AM EDT

Among climate change "skeptics," one of the favorite line of attacks is to admit that global temperatures are rising ("we're not deniers!") but then claim that spending money to reduce global warming is a waste.  There are plenty of more urgent problems, and we should simply deal with the effects of warming when they happen.  Well, they're happening:

Ninety percent of Pakistan's agricultural irrigation depends on rivers that originate in Kashmir....Traditionally, Kashmir's waters have been naturally regulated by the glaciers in the Himalayas. Precipitation freezes during the coldest months and then melts during the agricultural season. But if global warming continues at its current rate, the Intergovernmental Panel on Climate Change estimates, the glaciers could be mostly gone from the mountains by 2035. Water that once flowed for the planting will flush away in winter floods.

....Water is already undermining Pakistan's stability. In recent years, recurring shortages have led to grain shortfalls. In 2008, flour became so scarce it turned into an election issue; the government deployed thousands of troops to guard its wheat stores. As the glaciers melt and the rivers dry, this issue will only become more critical.

....In 2007, the London-based NGO International Alert compiled a list of countries with a high risk of armed conflict due to climate change. They cited no fewer than 46 countries, or one in every four, including some of the world's most gravely unstable countries, such as Somalia, Nigeria, Iran, Colombia, Bolivia, Israel, Indonesia, Bosnia, Algeria, and Peru. Already, climate change might be behind the deep drought that contributed to the conflict in the Darfur region of Sudan and hundreds of thousands of deaths.

Of course, it's already too late to do much of anything about Kashmir's glaciers, so I suppose that will become yet another reason for inaction.  And the aid to help Pakistan "deal" with global warming?  Somehow I have a feeling that's not going to happen either.

Via Hilzoy, who's hanging up her blogging spurs today back at my old home.  It's sad news for the blogosphere, and I wish her the best of luck.  I'll miss her.

Goldman's Billions

| Fri Jul. 17, 2009 12:28 AM EDT

Matt Taibbi on the $3.44 billion quarterly profit announced by Goldman Sachs yesterday:

One of the most hilarious lies that has been spread about Goldman of late is that, since it repaid its TARP money, it’s now free and clear of any obligation to the government — as if that was the only handout Goldman got in the last year. Goldman last year made your average AFDC mom on food stamps look like an entrepreneur. Here’s a brief list of all the state aid that is hiding behind that $3.44 billion number they announced the other day.

Click the link to read the rest.  And here's the New York Times on Goldman and JP Morgan: "Both banks now stand astride post-bailout Wall Street, having benefited from billions of dollars in taxpayer support and cheap government financing to climb over banks that continue to struggle."

Conservatives and Healthcare

| Fri Jul. 17, 2009 12:15 AM EDT

Over at the League of Ordinary Gentlemen, liberal Dan Miller jumps into a conversation about healthcare:

There’s a vast policy apparatus on the progressive side of the aisle built around health care, with industrious wonks digging into every nook and cranny.  Meanwhile, the right has...nothing....The right has basically abdicated its role in the conversation.  It has not and as far as I can tell will not treat health care reform as any kind of priority—every major player on the right is sitting on the sidelines.  If we’re lucky, we’ll get two GOP Senate votes.  And this after not one but two elections in which the right was beaten by historic margins.

Why is this?  Sometimes it's worth backing up a bit and looking at the fundamentals.  And we have two fundamentally incompatible desires here: the American public supports universal healthcare.  Conservatives support a free market approach to healthcare.  Unfortunately, the free market doesn't do universal.  That's why, for things like roads, national defense, the postal service, and old-age pensions — all of which we've decided ought to be available to everyone — we let the government do the job.

So if you want universal coverage, the government has to be involved.  Still, this doesn't necessarily mean the government literally has to provide healthcare to everyone.  If you want a more limited government solution you could instead fund healthcare only to the 47 million uninsured.  Since everyone else is already covered, that would effectively make healthcare universal.  Unfortunately, there's a problem with this too.

Let's take an analogous case: food stamps.  The government doesn't try to provide food to everyone, only to those poor enough that they can't get it on their own.  But what's to stop everyone from lazily quitting their jobs and living off food stamps?  Answer: you'd have to accept being poor.  There are some people willing to do that, but most of us aren't.  So it's a manageable problem.

But healthcare is different because most of us don't buy it directly out of our own pockets.  We get healthcare insurance from our employers.  So suppose the government stepped in to help out just the uninsured.  What would happen?

Well, for starters, the program could be limited just to the poor.  But that wouldn't make it universal since there are plenty of non-poor who don't have health insurance and can't get it through the private market.

No, we'd have to simply offer it to anyone who was uninsured, subsidizing the poor and charging full price to everyone else. But what would happen then?  Answer: employers would start dropping health coverage for their employees.  Why wouldn't they, after all?  Unlike the food example, where there are personal incentives against being lazy and living off the government dole, employers have no reason to hold back.  As long as a decent alternative is available, their incentive is to get out of the healthcare business, hand over the money they save to their employees, and tell them to sign up for the government program.  Before long, the government would be funding a huge portion of the private insurance market.

That will never fly, of course, so we'd need rules in place to prevent companies from dropping their healthcare plans.  But that would put existing companies at a disadvantage if new companies didn't also have to provide healthcare.  So we'd need rules that didn't just prohibit companies from dropping healthcare, but affirmatively required them to provide healthcare.  But which companies?  Lots of big companies don't offer healthcare right now, so this would be a brand new mandate.

And what about insurance companies?  Well, if we're relying on them to insure the people who aren't covered by their employers, they need to take all comers.  Coverage is supposed to be universal, after all.  This means that even people with expensive pre-existing conditions need to be included, and they need to be included at a reasonable price.  That's yet more regulation.

I could keep going, but you get the idea: by the time you're done you have a web of regulation so tight that you basically have the same same plan liberals offered up in the first place.  The only way to make healthcare universal is either to have the government fund it or to turn private insurers into little more than regulated utilities.  Either way, it's not a free market solution.

This, then, is the fundamental conservative problem: you can either have universal coverage or you can have a quasi-free market.  There's no way to have both, but no one is willing to say publicly that it's OK to leave millions of people without healthcare.  So instead conservatives hem and haw and nibble around the edges with things like HSAs and tax exclusions, even though these ideas don't do anything to make healthcare coverage more widely and securely available.  No free market solution can do that.

But that's what the public wants.  And so conservatives are stuck.

Credit Card Follies

| Thu Jul. 16, 2009 6:39 PM EDT

Ah, credit card interchange fees.  One of my favorite subjects.  Here's how they work: every time you buy something with plastic the merchant pays a 2-3% fee to the credit card company.  You never see this fee, though, because merchants are contractually forbidden from charging you an extra 2-3% for credit card purchases.  Instead, they just add it to the price of their products and pass it along to everyone, including customers who pay by cash or check.  The whole process is invisible.

Merchants are unhappy about this arrangement.  But generally speaking, what they're unhappy about isn't the invisibility.  They're unhappy about the size of the interchange fee, which they'd like to be lower.

Now, it's obvious why merchants and banks fight over the size of the fee.  A big fee is good for banks and a small fee is good for merchants.  But they both seem to be fine with the invisibility of the fee.  Why?

Again, it's pretty obvious: If fees were tacked onto credit card purchases, people would use their credit cards less.  That's bad for banks.  But if they used their credit cards less, it probably also means they'd spend less, period.  That's bad for merchants.  It's better for both parties to keep the fees invisible and keep everyone spending lots of money.

This has recently become the subject of a major lobbying effort, but instead of trying to make interchange fees transparent, merchants are mostly just trying to convince Congress to regulate them downward.  Andrew Martin reports:

But retailers may have a tough time convincing Congress that consumers would benefit if the effective interchange rate, which has increased slightly in recent years, is dialed back. Many other countries, including Israel and Australia, have required banks that issue cards to reduce the fee. Yet there is little evidence that the savings were passed along.

In Australia, where regulators required banks to cut the interchange rate for Visa and MasterCard purchases to 0.5 percent from 0.95 percent, the banks offset their loss by reducing rewards programs and raising annual fees, according to a 2008 report by the Government Accountability Office.

So what's wrong with that?  In fact, I'd go further: let's kill two birds with one stone and just abolish interchange fees altogether.  Card companies would then be forced to charge higher annual fees to credit card users — fees that (a) would fall solely on the people actually using credit cards and (b) would make it obvious just how much credit cards actually cost.  That strikes me as an excellent idea.  Credit cards aren't a free lunch, and there's no reason that consumers should be fooled into thinking they are.

And if that means consumers end up using credit cards less — well, what's wrong with that?  It's the free market in action.

The AMA Comes Around

| Thu Jul. 16, 2009 2:28 PM EDT

Here's a pleasant surprise: the AMA has decided to endorse healthcare reform.  And not just any healthcare reform.  Jon Cohn reports that they've endorsed the House Tri-Committee plan, one of the better proposals out there:

This is unexpected. Or, at least, I wasn't expecting it. Recent signals from the AMA suggested they were reluctant to embrace reform, in no small part because they believed a public insurance option would underpay them. But the AMA letter contains no caveats. It is a straightforward endorsement.

And that makes it a pretty big deal. No, the AMA is not as powerful, nor as representative of the medical community, as it once was. But an unqualified endorsement for the most liberal plan out there has large symbolic value, given the role AMA played in killing health care reform for most of the 20th Century.

I'm not sure what all is going on behind the scenes (Jon thinks this might be a quid pro quo for higher Medicare reimbursements), but it's good news.  Max Baucus, please take note.

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The Climate Change Elevator Pitch

| Thu Jul. 16, 2009 1:55 PM EDT

Sarah van Schagen wants to know how to talk to a cab driver about cap-and-trade.  Matt Yglesias responds:

The main point has to do with car ownership. One good reason to take a cab somewhere is that you don’t own a car. Conversely, one good reason to drive somewhere is that having already bought a car you’ve incurred the bulk of the costs involved in driving anyway. So if you nudge people toward less car ownership, you’ll end up with fewer total vehicle miles traveled but more cab riding. It’s win-win. More generally, insofar as people live in denser patterns of settlements (which cap and trade certainly encourages) that’s more business for cab drivers.

Well....OK.  But I'd take this question a little less literally: not "what's in it for cab drivers," but "how do you convince an ordinary schmoe that higher energy prices are worth paying"?

Which is, admittedly, a very tough question indeed.  Unlike plain old regulation, in which the costs to consumers are hidden, cap-and-trade brings it right out in the open.  The whole point (well, one of the points) of cap-and-trade is to raise the price of conventional energy so that people will use less of it.  But who wants to volunteer for a higher electric bill or a more expensive fill up?

One tack, obviously, is to emphasize that your electric bill is likely to go up only modestly and that you'd get a rebate check that would cover some or all of the increase.  Another would be to point out that some of the money will be used to subsidize cleaner energy sources, something that most people support.  A third alternative is......

What?  Let's face it: this is a hard sell.  Global warming is a long-term problem that's hard to get people genuinely hot and bothered about.  What's worse, self-interest is far and away the most potent political force there is, and when policies leave the realm of airy rhetoric and enter the realm of kitchen table reality it's pretty hard to persuade people to vote against their self-interest with only a fig leaf and some righteous wonkitude as cover.

So I dunno.  Just keep plugging, I guess, with the understanding that there are a large number of people who won't ever be convinced to sacrifice even a small amount in return for a better planet in the future.  For people like this, it's probably best just to move on and save your energy for someone whose mind is yet to be made up.

Unless, of course, you have a better idea.  Which you might.  I remember once trying to explain something to a group of order entry clerks and having no luck.  They just didn't get it.  But the manager of the group understood what I was getting at and rephrased it in a way that wouldn't have occurred to me in a million years.  Immediately they all nodded their heads.  Mission accomplished.  So maybe all we need is the right translator.

Books That Defeated Me

| Thu Jul. 16, 2009 12:28 PM EDT

What famous books haven't you read?  That's too easy a question.  Tons of 'em.  But what famous (or, in a pinch, reasonably well known) books have you given the old college try but just couldn't get past the first hundred pages or so?  I can think of five big ones off the top of my head:

Ulysses
Moby-Dick
Bleak House
The Brothers Karamazov (twice!)
Foucault's Pendulum

I'm not sure what sets these books apart.  It's not that I'm allergic to long books.  I plowed through War and Peace, Les Miserables, and Infinite Jest just fine.  I've read plenty of other Dickens (though I'm not really much of a fan) and nearly everything by Dostoyevsky except the Brothers K.  Ulysses is famously difficult, so no surprise there, but I'm not sure why I gave up on Moby-Dick.  Probably the middle third did me in.  Just wasn't interested enough in whales.  And frankly, I don't even remember Foucault's Pendulum, let alone why I gave up on it.  And I suppose I ought to throw the Bible onto this list too, since I've often thought I should read the whole thing but then given up pretty quickly for fairly obvious reasons.  How about you?

Are the Culture Wars Winding Down?

| Thu Jul. 16, 2009 11:38 AM EDT

Demographics guru Ruy Teixeira says that the era of the culture wars is drawing to a close.  Why?  Demographics, of course:

First, Millennials — the generation with birth years 1978 to 2000 — support gay marriage, take race and gender equality as givens, are tolerant of religious and family diversity, have an open and positive attitude toward immigration, and generally display little interest in fighting over the divisive social issues of the past.

....Second, the culturally conservative white working class has been declining rapidly as a proportion of the electorate for years.

....Other demographic trends that will undermine the culture warriors include the growth of culturally progressive groups such as single women, and college-educated women and professionals, as well as increasing religious diversity. Unaffiliated or secular voters are hugely progressive on cultural issues and it is they — not white evangelical Protestants  —who are the fastest-growing “religious” group in the United States.

Over at the Democratic Strategist, somebody named "staff" predicts a positive feedback loop that will soon turn culture war issues into a political backwater:

The point here isn't, or isn't just, that the American population is becoming more progressive on cultural issues. It's that as cultural issues lose political punch, the incentives for conservatives to focus on them decline, further reducing the politicization of culture.

Teixeira himself says that while this may eventually be the case, it could take a while before the culture warriors calm down: "Indeed, reaction to their current desperate plight may lead them to intensify their efforts in some states, especially where demographic change has been slow or where local right-wing culture war institutions retain strength." I think that's right.  Barack Obama has been remarkably successful at marginalizing culture war issues so far, but it's not clear to me that he can keep this up forever.  It's going to be a rough road before we get to Teixeira's promised land. Fasten your seat belts.

Chart of the Day

| Thu Jul. 16, 2009 10:37 AM EDT

Via Conor Clarke, this chart shows the effective federal tax rate paid by the rich over the past 15 years.  The basic story is simple: As their incomes have gotten ever higher, their tax rates have gotten ever lower.  So if tax rates on the rich are raised to help pay for healthcare reform, as some Democrats are proposing, it would just return us to the rates of the early 90s, not some hellish confiscatory dystopia.  Bruce Bartlett says that if this happens, Republicans have only themselves to blame:

For many years, I have urged conservatives to think about ways of raising new net revenue for the government. My fear has always been that sooner or later, pressure to raise taxes will become overwhelming. If there wasn't a conservative option available, then the default policy would be to sharply raise tax rates on the wealthy. Now it looks as if that day has arrived.

....In the end, higher tax rates on the rich are inevitable if only because of expiration of the Bush tax cuts next year. Since that would just return rates to where they were in the 1990s when growth was robust, any claim that this will destroy the economy should be taken with many grains of salt.

Still, it would be better to pay for health reform some other way. But if Republicans refuse to propose any alternative, insisting instead that taxes should never be raised for any reason, they pretty much guarantee that Democrats will raise the top rate. If that happens, Republicans will bear some responsibility as well.

Yep.  If I were designing a system from scratch I'd probably finance it differently too.  But Republicans have been so successful at demonizing taxes over the years that there aren't very many practical alternatives open any more.  Returning top marginal rates to the level they were at in the 90s is one of the few left.