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January 27, 2006

Are Europeans Against the Death Penalty?

Also in yesterday's New York Times op-ed page, Felix Rohatyn says that the Supreme Court should abolish the death penalty in order to improve our standing in the world. Sort of. I certainly oppose the death penalty, but I want to nitpick something here:

During my four years as the American ambassador to France, I discovered that no single issue was viewed with as much hostility as our support for the death penalty... Contempt for the laws of our allies is a major factor in our increasing isolation in the world...

Taking the views of 450 million Europeans into account is not a sign of weakness on our part, nor is it a commitment to change our views. It is simply recognition that the laws of our most important allies, our biggest foreign investors, foreign employers, foreign customers and trading partners are worthy of our attention.

But in all likelihood, we already are taking the views of "450 million Europeans" into account... by keeping the death penalty. International popular opinion, for the most part, is very much in favor of killing criminals. Canadians seem to love executions almost as much as Americans do—around 70 percent were in favor of capital punishment in 1995, although this support may be shallow. See similar results in Britain. And Italy. Even in Sweden and France the death penalty has close to majority support. It's just that their leaders disagree.

Admittedly, I don't think American political institutions are very democratic. Still, our politicians seem to have mirrored popular opinion on this issue, at least, better than parliaments in other countries. My guess is that this is because we vote for candidates rather than parties: a candidate can always use the death penalty debate to say something about him/herself as a person, so he or she is more likely to demagogue on the subject. In other words, candidate-centered systems may be more responsive to popular opinion on "moral" or "cultural" issues. (The downside is that the candidate-centric system also explains, in part, why we don't have universal health care—it's much easier for a centralized party to design, pass, and implement this sort of thing than it is a loose coalition of elected officials).

At any rate, it seems questionable that abolishing the death penalty would actually endear us to all Europeans. Of course, what Rohatyn really meant is that it will increase America's standing and respect—its "soft power," if you will—among European leaders. The sort of people that someone like Rohatyn would actually be talking to in his four years in France. Now that's an important goal, since it makes it somewhat more likely that those leaders will adopt American norms, or trust American intentions, or whatever. But respect among leaders and intellectuals isn't everything. Ideally we also want to increase our standing and respect among populations in other countries, since popular opinion constrains what those world leaders can do. And it's not obvious that abolishing the death penalty for minors will win us that many fans among the masses abroad.

How Many Innocent People in Prison?

The main point of Joshua Marquis' New York Times op-ed seems to be that most people in prison are guilty—that is, contrary to the sorts of things you see on "In Justice" or "CSI," courts don't send an overwhelming number of innocent people to jail, and the handful of death row inmates whose convictions were overturned on DNA evidence represent a very small sample. Overall, Marquis calculates, the court system has an extremely high (99.97) percent accuracy rate: "most industries would like to claim such a record of efficiency."

Okay, even if those numbers are right—and if they are, that's still no reason to get complacent about the problems with the justice system—I'd add one other statistic here. According to a 2002 Department of Justice study on recidivism, 51.8 percent of all ex-convicts end up back in prison within three years. Of those, over half go back not for committing new crimes but for technical violations of parole—a missed appointment, a failed drug test, not landing a job. Most people in prison are guilty? Depends on how you define it.

A Quality Flip-Flop

Kudos to the president, who looks like he's ready to do the right thing about Iran:

President Bush's endorsement of a plan to end the nuclear standoff with Iran by giving the Islamic republic nuclear fuel for civilian use under close monitoring has left some of his supporters baffled.

One cause for the chagrin is that the proposal, which is backed by Russia, essentially adopts a strategy advocated by Mr. Bush's Democratic opponent in the 2004 election, Senator Kerry of Massachusetts.

Well, yes, this was John Kerry's strategy in 2004, and he was roundly ridiculed for it at the time, but who cares? Everyone should continue advocating craven appeasement of Iran until it actually starts happening. As I've said before, there's no reason not to try an offer like this. At worst, the Iranians reject it (they're wavering now) and everyone goes to Plan B or C or D or whatever we're up to. At best, war is averted.

January 26, 2006

The Uninsured, Again

This is getting annoying. Once again, the White House is floating the notion (on page A1, no less) that its soon-to-be-proposed tax deductions for health expenses are somehow "designed to help the uninsured." They are not. Making progress on the 45 million uninsured people in this country will cost about $80-100 billion per year. There's no getting around that number. Bush will not propose anything of the sort.

Tax deductions will do little to help those who currently pay no federal income taxes—or are in the 10 or 15 percent bracket—which includes the majority of the uninsured. Tax deductions will largely help those making over $50,000 who currently can afford insurance but just don't value it enough to get it. If the president's tax deductions look anything like what he proposed on the campaign trail, then, according to CBPP, they will actually increase the number of uninsured by 350,000 while costing tens of billions of dollars. That's all.

Hamas Wins Palestinian Elections

Marc Lynch raises some crucial questions about Hamas' victory in the Palestinian parliamentary elections yesterday:

Hamas winning and presumably moving to form a government is the first real instance of an Islamist movement on the brink of winning power democratically since 1992 [i.e., since the FIS won elections in Algeria, only to be denied power by a military coup].

If [Hamas takes] power, we are going to see some major political science propositions put to the test: does power moderate or radicalize Islamist groups? Will they be willing and able to work with non-Islamist parties in a coalition? Will they use their democratic victory to abolish democracy? Will Islamist groups concentrate on the pragmatics of rule or resort to foreign policy grandstanding? Will they use their position of power to pursue terrorism? Will they be willing to set aside doctrine and work pragmatically with Israelis and Americans? Will they use government power to impose unpopular sharia rule over their people? Will they oppress Christian and non-Islamist Muslims?

I'm not sure anyone knows the answers for sure. A handful of reasons for optimism: Hamas has mostly adhered to the ceasefire over the past six months, certainly more strictly than Fatah has; at the local level, where it has previously won elections, Hamas has been dealing with Israel regularly and for the most part has focused solely on day-to-day governing and economic development, rather than talking up the virtues of a sharia state. And judging from recent polling, most Palestinians would support a compromise peace settlement with Israel, and increasingly are souring on Hamas' armed wing, the al-Qassam Brigades. Popular opinion could prove a moderating force. On the other hand, this is Hamas, after all—it's still a terrorist group with extreme views, a bloody reputation, and clandestine wings ready to resume attacks against Israel at any time.

At any rate, here's an insightful—and I assume fairly firsthand—account of how and why Hamas actually won the elections, courtesy of a commenter on As'ad Abu Khalil's site:

It is only partially (and I stress partially) true that the vote for Hamas was a vote against [the largely corrupt] Fatah, but it was much more than a protest vote. The candidates that Hamas fielded were… by and large very qualified candidates who are well known and respected in their districts. They are well-educated professionals including doctors, professors, teachers, etc.

What struck me was the level of organization, dedication and quiet self-confidence of the Hamas campaign. In most polling districts Hamas volunteers, armed with computers, helped voters locate their names in the registries and their polling place. Early in the evening, most pollsters were predicting a Fatah win, but as early as 6 hours after the close of the polls, Hamas was quietly and confidently saying that their internal counts (based on volunteers at every polling station) showed them winning more than 70 seats (not far from the actual outcome). To me that was very impressive.

An interesting factor that could explain why the exit polls did not predict the outcome is that many voters (especially among police and security services) were afraid to tell the pollster that they had voted for Hamas.

A win like this does not come easy. Hamas worked hard in the face of large obstacles to achieve it. In the face of US and European financing for Fatah and some so-called "independents," Hamas financed its campaign (with a smaller budget) by asking for a 10% contribution from the salaries of its cadres. In addition, they received free support from thousands of volunteers. Hamas proved the value of its grassroots organization.

One could also wonder how much Western support ended up hurting Fatah at the polls. Also note that if more than 6 percent of the some 250,000 Palestinians living in occupied East Jerusalem had been allowed to vote, the election might have turned out differently. This bit, from the same commenter, is also interesting, and perhaps a sign of things to come:

The second observation is that Hamas, before and after the election, is reaching out to all Palestinians, including Fatah. There is no gloating in their victory; instead they emphasize national unity and partnership. During the campaign, I tried to keep up with the pronouncements of both Fatah and Hamas. To Hamas' credit they did not engage in smear campaigns, dirty tricks, name calling, etc which Fatah used. I think that Hamas set a much better tone and an example, and that, no doubt, helped it.

In that vein, the International Crisis Group paper on how the U.S. and Europe can encourage a moderate Hamas-led government is interesting:

Western countries have not done the one thing that might have had a positive impact: try to shape Hamas’s policies by exploiting its clear desire for international recognition and legitimacy. There is every reason for the West to withhold formal dealings at a national level, at least until it renounces attacks against civilians and drops its opposition to a two-state solution, but the current confused approach – boycotting Hamas while facilitating its electoral participation; facilitating its participation without seeking through some engagement reciprocal concessions – makes no sense at all.

Without conferring immediate legitimacy on Hamas, engaging its national officials or removing it from the terrorism list, the EU in particular – which has more flexibility than the U.S. in this regard – should encourage the Islamists to focus on day-to-day matters and facilitate a process of potential political integration and gradual military decommissioning. With Prime Minister Sharon’s sudden incapacitation, an already impossibly perplexing situation has become more confused still. Using Western economic and political leverage to try to stabilise the Palestinian arena would be far from the worst possible investment.

All of that seems sensible, worth trying, and hardly naïve about what Hamas is and what it's known for. As Marc Lynch points out, if the United States doesn't even give Hamas a chance, that will further undercut perceptions about its commitment to democracy in the Middle East. On the other hand, Israel may not prefer to try to moderate Hamas—after all, it's much easier to justify the security barrier and settlements in the West Bank if there's an extremist group on the other side. I guess we'll find out when the Israeli elections come around.

more: Jonathan Edelstein is, as always, endlessly informative.

January 25, 2006

Mercury News Investigates the Justice System

Over the past week, I've been reading the San Jose Mercury News' massive and much-recommended five-part series, "Tainted Trials, Stolen Justice." Based on a three-year investigation, the report looks at 727 court cases in Santa Clara County over a five year period. In over a third of the cases, the paper found, trials were marred by questionable conduct that worked against the defendants—who, judging from the case studies, tended to be minorities and poor—and a number of cases led to wrongful convictions. Among the findings:

In nearly 100 cases, prosecutors engaged in questionable conduct, including withholding evidence, defying a judge's orders or misleading juries. "Experts say individual prosecutors reflect the dominant culture in their office, and too often it's all about winning rather than ethics and fairness." Often district attorney offices are extremely slow—taking years and years—to discipline prosecutors who overstep their bounds.

In about 100 cases, defense attorneys neglected to do even the most basic independent investigation—interviewing witnesses or gathering evidence—or to raise objections to questionable prosecution tactics. In some cases they didn't even appear to know basic criminal law. Note that this applies to both public defenders, who are notorious for this sort of behavior, and private attorneys, who will often take cases for relatively low fees and make profits by avoiding a time-consuming trial.

In over 160 cases, judges failed to oversee trials impartially—allowing improper evidence or improperly favoring the prosecution—and repeatedly failed to properly instruct juries. This may partly come from the fact that judges are elected, and no one wants to appear "soft on crime." (This also means that judges tend to come from the ranks of prosecutors, and the relationship between the two groups is fairly cozy.)

In more than 100 cases, the 6th District Court of Appeal upheld verdicts even while acknowledging trial errors, deeming them ``harmless.'' While that might have been true in some of the cases, judges devised questionable rationales to dismiss others.

It's shocking stuff, even for those already cynical about the justice system. The 6th District Court, by the way, upholds 97 percent of all convictions yet publishes only 2 percent of its rulings, which is the lowest in the state, so a bit of transparency certainly seems in order here.

The Mercury News was "unable to determine" whether Santa Clara County was particularly dysfunctional or whether its problems mirrored those of justice systems elsewhere in the country. I'd note that Santa Clara, while relatively liberal in most things, is considered a "tough on crime" region, one of the six highest sentencing counties in California during the '90s, with law enforcement agencies that practiced "broken windows" policing and invoked the "Three Strikes" law at extremely high rates. Interestingly, in the 1990s, San Francisco under the "ultraliberal" DA Terrence Hallinan saw its crime rate decrease much more rapidly than Santa Clara's did. Go figure. At any rate, read the series, it's a good one.

When have we heard this before?

There has been a near total lack of cooperation that has made it impossible, in my opinion, for us to do the thorough investigation that we have the responsibility to do.
The Bush administration is stonewalling the Congress.

We have been trying--without success--to obtain Secretary Rumsfeld's cooperation for months.

Though these statements sound like statements made during the September 11 Commission's failed attempt to get the administration to cooperate with its investigation, they are, rather, statements recently made about the administration's failure to cooperate with two Congressional committees investigating the response to Hurricane Katrina.

As before, the White House is citing executive branch confidentiality in refusing to turn over requested documents. These documents include Katrina-related emails and other communications among White House staff members. The administration has also refused requests for testimony from White House chief of staff Andrew H. Carrd Jr., deputy chief of staff Joe Hagin, domestic security advisor Frances Fragos Townsend, and her deputy, Ken Rapuano.

Senator Susan Collins, says it is "completely inappropriate" that that witnesses "have told us when we begin to ask about any communications with the White House" that they cannot respond, even if the discussions are not related to specific advice given to the Bush that could "legitimately" be held back under executive privilege.

The White House, for its part--and we've heard this before, too--maintains that it is thoroughly cooperating with the investigation and has handed over thousands of documents, as well as providing multiple witnesses.

In the early morning hours of August 29, a memo was sent from the Department of Homeland Security to the White House situation room which warned of a possible breach of levees in New Orleans and a resulting crisis. A few days later, Bush said: "I don't think anyone anticipated the breach of the levees."

Overspending on Weapons...

Here's a great headline from the AP:

U.S. says Venezuela spending too much for military items.

WASHINGTON (AP) -- Venezuela is planning a "buying spree" for military equipment that goes beyond the country's legitimate needs, the State Department said Friday.

In recent days, the United States has sought to block proposed sales of military planes and other equipment to Venezuela by Spain and Brazil.

The transactions are part of what "we would consider an outsized military buildup in Venezuela," State Department spokesman Sean McCormack said.

In other news, the Pentagon's latest Quadrennial Defense Review is out, and as Noah Schachtman notes, it's chock full of proposals for multi-billion dollar weapons systems to prepare for some future war or other with China…

Reviving the Doha WTO Talks

According to UPI, ministers from 25 "major trading powers" are now trying to resuscitate the Doha round of WTO trade talks that stalled in Hong Kong last month. The EU, it seems, wants to see more concessions from developing countries to reduce their tariffs before it will agree to open its own agricultural markets. Okay, fair enough. But I still don't see what incentive developing countries have to make large concessions, or how, as The Economist put it by way of chiding those stubborn holdouts, "the Doha round… is geared specifically to help poor countries." How much help are we talking here?

Not very much, it seems. Two months ago, an extensive study from the World Bank found that under "likely Doha scenarios" for cuts to agricultural subsidies and tariffs, and reductions in industrial tariffs, liberalization would provide the world a one-time gain of between $17.9 to $119.3 billion by 2013. Not a whole lot, when it comes down to it, and most of those gains go to the developing world. An analysis of the World Bank study by Frank Ackerman the Global Development and Environment Institute suggested that the "most likely scenario" would boost the world's income by a mere $96 billion. Of that, $80 billion would go to developed countries, and $16 billion to poor countries—less than a penny per day per capita.¹

Meanwhile, the World Bank found that the vast majority of those gains would go to eight nations: Argentina, Brazil, China, India, Mexico, Thailand, Turkey, and Vietnam. Other developing countries will likely be hurt by the reduction in agricultural subsidies, especially those that are net food importers. The Middle East, parts of Africa, Bangladesh and Mexico would be all net losers from "likely Doha scenarios," and those are already countries that have the most difficulty attracting investment and growing.

Now in a sense, this is an overly dire picture. A "mere" $16 billion to the developing world is still better than nothing. And surely lifting 2.5 million people out of poverty, as the Bank estimates for "likely scenarios," is worth doing. Even if these gains aren't huge, why not take them? (Although it does reaffirm the fact that trade can only be a small part of any poverty-reduction agenda.) Plus, these numbers may well understate the side benefits that supposedly come with trade liberalization: like "better institutions," or increased foreign investment, or whatever sort of magic free trade is supposed to create. (cf. "New Evidence" that trade liberalization "has robust positive effects on growth," etc.)

On the other hand, these projections may not be dire enough. The World Bank study, for instance, presumes that developing countries will instantly make up the revenue they'll lose from slashing tariffs by raising domestic taxes. Is that realistic? According to UNCTAD, for developing countries, tariff collection accounts for 20 percent of government revenue in some developing countries. Quite the tax. UNCTAD predicts that tariff revenue losses could amount to up to $60 billion for these countries (I assume annually), dwarfing the estimated benefits from trade, and would lead to either cuts in social services or domestic taxes that would create their own distortions, just like tariffs do now.

It's also not clear what the effect of the new agreement on intellectual property will be, although allowing developing countries to import generic drugs more easily seems like an obviously good idea (here's a more in-depth look by the Asian Development Bank that I haven't read). Still—and I'm willing to be convinced otherwise—the idea that there's so much at stake for poor countries in the Doha rounds that they can't afford to see this fail seems a bit overstated.

[1] The summary of the World Bank study claims a $287 billion one-time gain by 2013, but that's an estimate for complete trade liberalization, which isn't under discussion right now. At any rate, only 40 percent of that gain would go to the developing world; less than 7 cents per day per capita.

New at Mother Jones

Can This Palestinian Election Succeed?
By Mark LeVine
A win for Hamas could be the best hope for peace.

The Rise of Political Islam
By Dilip Hiro
The Palestinian election and democracy in the Middle East

A Man's World
By April Dembosky
A review of Norah Vincent's Self-Made Man

Back to the Future: Economics for the Real World
By Thomas Palley
A progressive economics for the 21st century

January 24, 2006

Hayden Defends the NSA

Glenn Greenwald has a must-read post eviscerating NSA Director Gen. Michael Hayden's defense of the NSA domestic spying program. From all appearances, the NSA wasn't doing any sort of data-mining, as previously thought (although Hayden's denial is vague enough that this could still be a possibility). Instead, it was, apparently, illegally lowering the standards required for monitoring U.S. citizens and circumventing the FISA Court by refusing to get warrants, which are required by law. It's hard to see how this isn't illegal.

Meanwhile, in his Q&A session, Gen. Hayden never really gave any indication that the new program—or the new, illegal criteria for monitoring domestic suspects—actually works, or has led to arrests or any sort of tangible domestic security success. And no one seems to have really pressed this point. Granted, this sort of pales beside the issue of whether the administration broke the law or not, but it's still a pretty crucial question.

Inside the Defense Budget

Winslow Wheeler, a former staffer for Sen. Pete Domenici, has an article in Counterpunch explaining how Congress can secretly add $12 billion in pork projects to the last defense appropriations bill while simultaneously reducing the apparent size of the bill by $4.4 billion. (Answer, they hide the money rather than cutting anything.) It's one of the better explanations around of how Congress fiddles with bills to sneak in projects here and there. Wheeler, after all, helped design some of these tricks—for instance, "cutting" programs only to stuff them later into "emergency" spending bills, so that the money is spent but doesn't show up on budget projections.

If that's all that was going on, that would be bad enough (mind you, usually pork is just pork; a small waste, sure, but things wouldn't get done without it—but the ever-inflating Pentagon budget is far more disconcerting, I think). But Wheeler points out a few places where actually crucial funds seem to have been cut in the appropriations bill—for instance, $1.3 billion for "Peacetime Training" and "Operations Support"—and then weren't put back in the emergency bill, as they were presumably supposed to be. A bit of a morass, to say the least.

Will Bush's Plan Help the Uninsured?

So the president, as we know, wants to "do" health care in his upcoming State of the Union address. Any talk of reform would, ideally, begin by addressing the 45 million Americans who go uninsured each year. There are several things that make the United States a second-rate nation, but one of the biggest, I think, is that 11.2 percent of all children in this country—8.3 million—lack even basic health insurance. Judging from Peter Gosselin's overview, President Bush has no interest in tackling this little problem next Tuesday, although there's some talk that his "Health Savings Accounts" will lower the cost of health care so dramatically that many more people will be able to afford insurance.

Is this even remotely plausible? Well, no. Not really.

To recap: HSAs were introduced in the 2003 Medicare bill, and now Bush wants to expand them. Basically, you purchase a high-deductible policy—one with lower premiums that forces you to pay, say, the first $2,000 of your medical costs out of your own pocket—and then you can get a savings account into which you can deposit tax-deductible money each year, up to $2,000, to pay for those out-of-pocket costs. The money rolls over each year. As Ezra Klein points out, it's a good deal if you're healthy (or have a spare $2,000 stuffed under your mattress), not a great deal otherwise.

The idea behind thinking that HSA plans will help the uninsured is that high deductible policies have lower premiums than traditional insurance, and that market competition among companies offering high-deductible plans will reduce costs further. Plus, since patients with these policies will have to pay a lot out of their own pockets, they'll be more careful about spending money on frivolous care, which will constrain costs. It's like magic!

Now true, this didn't work in South Africa, where HSAs became massively popular yet health care costs skyrocketed—as it turns out, individual consumers have less ability to bargain down the costs of medical services than large insurers do. And there's no conceivable way HSAs can reduce the vast bulk of health care costs in America: The rule of thumb, after all, is that 20 percent of patients account for 80 percent of costs, and since these are generally catastrophic costs over $2,000, HSAs won't change the amount consumers are spending. They just can't.

On the other hand, early "trials" with HRAs (a similar system) have shown that the accounts might prove moderately effective at constraining costs for the rest of us—see this hardly-unbiased Aetna study or John Bertko's testimony about Humana, Inc.'s experience with a "consumer directed health plan." Whether this is because workers were being smarter about their care or because they were foregoing much-needed care is an open question. Meanwhile, since the healthy people are all fleeing traditional insurance plans and signing up for HSAs, the premiums for traditional policies could rise unduly, although there are, in theory, a few ways that employers can reduce this "adverse selection."

Back to the main point. Even if "consumer-directed health plans" do control costs and reduce premiums, they probably won't make a significant dent on the numbers of those without insurance. As this Kaiser study shows, people generally don't have insurance because either their employer doesn't offer it, they can't afford the premiums, or they can afford the premiums but can't afford the surcharges for their age or pre-existing conditions. The reduced cost of high-deductible insurance won't make a difference for many of these people, especially if they would have to pay more out of pocket. (Many of the uninsured also don't have $2,000 to spare on out-of-pocket costs.)

Moreover, most of the uninsured are in the 10 or 15 percent tax bracket, and would not see enough of a tax benefit to take advantage of the HSAs. A Commonwealth Fund study pointed out that HSAs will mostly make a difference to higher-income uninsured individuals (those making over $50,000) who currently can afford insurance but just don't value it enough.

Now in his FY2005 budget, the president proposed to allow premiums for high-deductible policies to be claimed as a deduction. This would substantially reduce the cost of insurance—and cost the Treasury $25 billion over 10 years. On the other hand, Edwin Park and Robert Greenstein of the Center on Budget and Policy Priorities estimated that this deduction would increase the number of uninsured by 350,000—inducing some people to buy insurance on the one hand, but inducing many employers to drop health coverage on the other. On the other hand, the HSA Coalition, an advocacy group, argued that Bush's proposal would reduce the number of uninsured by 1.2 to 4.3 million, although this is based on data from an HSA company whose customers may not be representative of the general population. (See CBPP's response here.)

So at absolute best, the U.S. government could spend about $35 billion and cover 4 million new people. At worst, this would have no effect. Ultimately, there's no free fix for achieving universal coverage. Uwe Reinhardt has often said that barring comprehensive reform, a good rule of thumb is to assume that covering the 45 million uninsured—or the 60 million Americans who go uninsured at some point during the year—will cost at least $80-100 billion a year. (Jonathan Gruber has shown that the cheapest way to do this—i.e., covering the uninsured without inducing a lot of the currently-insured to drop their coverage and go for what the government's offering—is simply to expand Medicaid.) Any proposal that falls short of this rough dollar amount, as Bush's is sure to, is not likely to do much for the uninsured.

January 23, 2006

Key Katrina recovery Congressman not interested in Baker Plan

Congressman Tom Davis of Virginia, who chairs the committee investigating issues surrounding Hurricane Katrina, is not like most of New Orleans' recent Congressional visitors. Davis is not a fan of the Baker Plan, which would provide a federal buyout of damaged houses, he says he is not ready to support Category 5 storm protection for New Orleans, and--as the New Orleans Times-Picayune pointed out on Sunday--he does not want to hear about the federal government's role in the failure of the city's levees.

Davis's objection to the Baker Plan is that it places a huge burden on the federal government in order to help people who did not buy insurance. This type of reasoning may get applause from the "no handouts" crowd, but it is flawed to the point of being deceptive. First, a lot of New Orleanians did not buy flood insurance because FEMA told them they were not in a flood zone and therefore did not need insurance. Many of the houses in the hardest hits areas of New Orleans are in federal "no flood" zones.

Second, even those who had flood insurance are not likely to receive a high enough insurance benefit to pay off their mortgages. And then there is the matter of the 17th Street Canal and London Avenue Canal levees. The Army Corps of Engineers declared them safe. They were not, so the flooded residents should be punished?

Finally, as the Times-Picayune editorial points out, in 2000, 26,000 New Orleans families were living in poverty and could not afford insurance even if they lived in designated flood zones.

Congressman Davis is not alone. So far, he has the support of George W. "We will do what it takes" Bush, who has dodged every question about the Baker Bill, which will soon be re-introduced in Congress, has made it clear by silence and evasion that he is not going to suppot the proposal the second time around. In the meantime, New Orleanians who want to return to their city have no way to rebuild.

The End of Deterrence

Is "mutually assured destruction" on its way out? Apparently so. Keir Lieber and Daryl Press, two defense analysts, reportedly have a new paper out suggesting Russia's nuclear capabilities have decayed to the point where the United States, perhaps, can no longer be deterred:

In a feat of technical sophistication and strategic insight, Lieber and Press have modeled a U.S. first strike against Russia. … To be conservative, it assumes that U.S. nuclear weapons will perform with much less accuracy and reliability than should be expected. Even so, the authors conclude, a U.S. attack today would destroy the entire Russian nuclear arsenal.

Part of this analysis depends on the observation that recent improvements to the American nuclear arsenal—the Navy, for instance, recently deployed 400 missiles with warheads five times as powerful as those on Cold-war era Trident II missiles—only really make sense if you assume that the Pentagon is trying to develop the ability to "win" a nuclear war outright. Insane, yes, but that seems to be the order of the day:

Lieber and Press emphasize that their analysis doesn't prove that a U.S. first strike would succeed, but it highlights a development that is grave if only because it's one that prudent planners in Russia and China, who conduct similar analyses, are no doubt already surmising: that their countries can no longer be confident of having a viable deterrent. Surely adding to their alarm is the realization that the nuclear imbalance, troubling enough already, will only grow in the coming years.

Washington's withdrawal from the Anti-Ballistic Missile Treaty and its concomitant pursuit of a national missile-defense system will greatly enhance its offensive nuclear capabilities, because although critics of missile defense correctly argue that it could never shield America from a massive full-scale nuclear attack, it could quite plausibly deal with the very few missiles an adversary might have left to deploy after a U.S. first strike. What's more, the United States is actively pursuing a series of initiatives—including further advances in anti-submarine and anti-satellite warfare; in missile accuracy and potency; and in wide-area remote sensing, aimed at finding "relocatable" targets such as mobile ICBMs—that will render Russia's and China's nuclear forces all the more vulnerable.

That explains the rationale for the missile defense system, apparently. And what does all this mean for foreign relations?

To be sure, America's emerging nuclear hegemony could bring benefits, including potential leverage vis-à-vis our superpower counterparts in such areas of competition as the Balkans and Taiwan. It will also force China to divert defense resources from its power-projection efforts in East Asia. (This, however, would be both a blessing and a curse: "We should expect a new, prolonged, and intense nuclear arms race," Lieber and Press conclude.) But whether or not America has deliberately pursued the ability to win a nuclear conflict, that capability will increase the risk of great-power war. U.S.-Chinese relations are bound to be edgy or worse for the foreseeable future, and although relations between Washington and Moscow are nowhere near their Cold War nadir, actual and potential strains remain formidable. Each country has nuclear-armed missiles that can be delivered against the other within minutes—and in America's nuclear-war plans the overwhelming number of targets remain inside Russia. Most important, any shift in the nuclear balance itself will engender a volatility that could cause seemingly small conflicts between countries to quickly spiral.

Confronted with the growing nuclear imbalance, Russia and China will be forced to try to redress it; but given America's advantages, that effort, as Lieber and Press note, could take well over a decade. Until a nuclear stalemate is restored—if it ever is—Moscow and Beijing will surely buy deterrence by spreading out their nuclear forces, decentralizing their command-and-control systems, and implementing "launch on warning" policies. If more than half a century of analyzing nuclear dangers and "crisis stability" has taught us anything, it is that all these steps can cause crises to escalate uncontrollably. They could trigger the unauthorized or accidental use of nuclear weapons; this could lead to inadvertent nuclear war.

I may be in the small minority that doesn't quite understand why we'll simply have to fight a war with China someday, but the fears above seem reasonable. China and Russia are far more likely to be "edgy" when it comes to foreign policy if they can no longer be confident of their nuclear deterrents. And that really could make conflict more likely. Pleasant thought.

Living Wage Battles

Last Sunday, Jon Gertner had a good piece for the New York Times Magazine about the living wage campaigns that are proving extremely popular—and successful—in cities across the country. The main point of the piece is that the progressives running these campaigns tend to make their appeals in moral, rather than economic terms, and suggests that its popularity could even make it a liberal wedge issue; as one living-wage advocate says, "This is our gay marriage."

But Gertner also takes time to point out that the economic case for raising the minimum wage can hold its own too. Here, for instance, is what happened in Santa Fe, which voted to raise the local minimum to $8.50 an hour in 2003. Granted, Gertner considers "data" a plural word (which is strictly correct but still ludicrous), but the rest is good:

To look at the data that have accumulated since the wage went into effect is to get a more positive impression of the law. Last month, the University of New Mexico's Bureau of Business and Economic Research issued some preliminary findings on what had happened to the city over the past year and a half. The report listed some potential unintended consequences of the wage raise: the exemption in the living-wage law for businesses with fewer than 25 employees, for instance, created "perverse incentives" for owners to keep their payrolls below 25 workers. There was some concern that the high living wage might encourage more high-school students to drop out; in addition, some employers reported that workers had begun commuting in to Santa Fe to earn more for a job there than they could make outside the city.

Yet the city's employment picture stayed healthy - overall employment increased in each quarter after the living wage went into effect and was especially strong for hotels and restaurants, which have the most low-wage jobs.

That jibes with what economists David Card and Alan Krueger found in their study on the minimum wage. Why wouldn't a wage hike force employers to hire fewer workers? They reasoned that in the actual, existing labor market, employers might often have various undue advantages over their workers and as a result, businesses are able to bargain wages below what they would be in a market where wages were determined solely by supply and demand, in order to raise their profits. A minimum wage simply corrects this imbalance. Back to Gertner:

Most encouraging to supporters: the number of families in need of temporary assistance - a reasonably good indicator of the squeeze on the working poor - has declined significantly. On the other hand, the city's gross receipts, a reflection of consumer spending and tourism, have been disappointing since the wage went into effect. That could suggest that prices are driving people away. Or it could merely mean that high gas and housing prices are hitting hard. The report calculates that the cost of living in Santa Fe rose by 9 percent a year over the past two and a half years.

Opponents of the minimum wage tend to argue that hiking the floor for wages will only increase inflation, as businesses are "forced" to increase prices, but they rarely cite any sort of proof, and it remains to be seen whether this is actually what happened in Santa Fe. It's worth noting that last year, after Florida raised its state minimum, prices in local restaurants only rose about 3 percent. It's also worth noting that workers will almost certainly come out ahead even factoring in for inflation—that was the case in Baltimore after living wage laws went into effect in 1994. (Granted, runaway inflation would definitely hurt workers, but as James K. Galbraith pointed out a while back, there's no evidence that an inflationary spiral induced by a wage increase has ever occurred.) One more quote:

Rob Day of the Santa Fe Bar and Grill sees this [i.e., the high cost of living] as the crux of the matter. In his view, the problem with Santa Fe is the cost of housing, and there are better ways than wage regulations - housing subsidies, for example - to make homes more affordable. In the wake of the wage raise, Day told me, he eventually tweaked his prices, but not enough to offset the payroll increases. He let go of his executive chef and was himself working longer hours. "Now in the matter of a year and a half, I think there is a whole group of us who thought, If we were going to start over, this isn't the business we would have gone into," he says.

Some of Day's concerns are valid, and it's true, some individual businesses may suffer, but on the whole, it's hard to be sympathetic here. Between 1968 and 2004, domestic corporate profits rose 85 percent while the minimum wage fell 41 percent and the average hourly wage fell 4 percent. In the retail sector, profits have gone up 159 percent. Obviously capitalism wouldn't work very well if no one made a profit, but even a living wage is hardly going to put that in danger. (Moreover, some evidence, again, from Baltimore's experiment with a living wage in the 1990s, suggested that some employers absorb the increase in labor costs through efficiency gains, especially lower turnover and "reduced shirking" at work.)

At any rate, owners and managers who have to work more thanks to a wage hike may find life a bit more burdensome, but presumably less burdensome than families who, at the federal minimum of $5.15 an hour, have to get by with a little over $10,000 a year. (And yes, despite the myth that only teenagers work for $5.15 an hour, most minimum wage workers tend to be breadwinners—Heather Boushey has estimated that the average minimum-wage worker earns 68 percent of his or her family's income.) If we're matching sob stories here, it's not really a contest, which partly explains the success of these campaigns.