This amazing photograph comes via Michael Crowley. I’m speechless, so on to the links:
Marc Ambinder reports that Obama will announce his nominee to replace Justice Souter sometime next week, probably toward the end of the week. I predict a week and a half of baseless speculation, followed by widespread outrage.
His wife, meanwhile, is one of the subjects of a new J-Mart story. Supposedly, John Coale - Hillary in the primaries, Palin aide in the general, and Fox News in-law until death do them part - attempted to broker a deal in which Sarah Palin’s PAC (SarahPAC! Really!) would help out with Hillary Clinton’s campaign debt in exchange for which the Clintons would become her friends in a high-profile way, or make left wing Palin critics back off, or… something. Chalk full of sources-close-to-so-and-so, it’s the sort of piece that inspires outrage in the sorts of people who get outraged about journalistic practices.
Speaking of Sarah Palin, over at the Mudflats, the results are in for the Name Sarah Palin’s Book competition. How Winkin’, Blinkin’, and Todd failed to win is beyond me. Carpe per Diem is also pretty clever.
Maureen Dowd was busted stealing a paragraph from Talking Point’s Memo. Inexplicably, rather than going with the tried-and-true excuse that she meant to provide a citation, she claimed that she’d never seen the TPM post, and that she got the idea for the “line” from a friend who must have read it, which is a curious explanation for the near-verbatim reproduction of an over 40-word sentence.
Jerry Taylor continued to be savaged by the rank-and-file over at the National Review. Today he is guilty of “pseudo-principled indifference to public opinion”, the eigth deadly sin.
Ending two decades of civil war, and proving that these bullet points aren’t ordered by importance, the Tamil Tigers have been defeated, supposedly for good. Here’s hoping.
And, finally, our quote of the day, which is actually quite a few days old, from Matt Yglesias:
I’m actually 100 percent positive that were Oprah on the Supreme Court she would do a good job. In a lot of ways, it’s just not that difficult a job.
More effort is put into rebutting this notion than it deserves here.
Given a choice of three options, just 24 percent of voters can correctly identify the cap-and-trade proposal as something that deals with environmental issues. A slightly higher number (29 percent) believe the proposal has something to do with regulating Wall Street while 17 percent think the term applies to health care reform. A plurality (30 percent) have no idea.
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The political press has a very strong structural bias toward overestimating the extent to which the public has real opinions about hot political issues. I wish more pollsters would put these kinds of polls in the field that do something to probe the extent of public ignorance. Polls that attempt to directly probe the public’s views about cap and trade wind up measuring a lot of pseudo-opinion. As you can see right in this result, people are incredibly unwilling to admit that they “don’t know” something or other. Thus 46 percent of the public says they know what cap and trade is about even though they don’t, in fact, know what it’s about.
Yglesias is absolutely right about the media’s tendency to overestimate the general public - a tendency understandably shared by politicians. He’s also right that this is a good reason to view opinion polling about policy matters skeptically. If people were polled about what should be on display at the MOMA, they’d have answers, but that doesn’t mean many of them would notice or care when the decision was actually made.
On the other hand, Yglesias is way off in his number crunching, leading him to be far too kind to John Q Policywonk. He reasons that since 29% believe that cap and trade has to do with finance, and 17% believe it has to do with health care, 46% of the population is clueless but happy to bluff. The addition is spot on (credit where it’s due) but this only makes sense if you believe that of all the people who blindly guessed between three options, not a single one guessed right. I do not believe that. The disparity between the two wrong answers shows that not all options are equally attractive to those guessing - Wall Street regulation does very well, perhaps because it’s the most visible story right now and because the word ‘trade’ makes it sound financial. So one can’t immediately extrapolate the number of dumb luck answers in the survey. But zero is a very bad guess. I’m inclined to think the correct answer would do at least as well as health care. If that’s even close to right, the number of people who actually know more or less what cap and trade is about is in the single digits.
On the other hand, this is the whole point of cap and trade. People might not understand exactly what a carbon tax is, but they do know it has the word ‘tax’ in it, and that things with the word ‘tax’ in them generally make them angry. That a cap could - depending on the implementation - have much the same effect on consumers is well known to those who know even a tiny bit about it. But polling suggests that that isn’t a demographic worth worrying about.
Of course there are many illegal markets that would generate stimulus were they to be legalized. Here are some of the big ones.
1. Drugs
2. Guns
3. Prostitution (except in Nevada)
4. Gay prostitution (even in Nevada)
5. Gambling
6. Trade with Cuba
7. Liberalized immigration
I’ve heard a lot of that kid of thing lately, but though I’d be a supporter of several of the items suggested on the list, I’m a bit skeptical of the theory. These all sounds to me like things that would do more to raise the potential output of the economy than to raise the actual output of an economy that’s producing far less than capacity right now.
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With regard to things like drugs and prostitution, bringing some transactions that are already happening into the above-ground economy would certainly boost our GDP measurements. But these are transactions that are already happening. Shifting them from the illicit to the licit economy doesn’t actually change the fact that there are already people in America earning a living as prostitutes or pimps or drug dealers.
With so much incorrectness, it’s hard to know where to begin. Yes, it’s true that increasing measured GDP isn’t the same thing as getting richer, but making formerly black market activity legal isn’t just an accounting trick - you would actually be altering what happens in that economy substantively. For one thing, these activities would now be taxed. Of course, raising taxes isn’t generally stimulative, but presumably the tax burden would be more than offset by the lower cost of doing business without interference from law enforcement. More importantly, pimps and drug dealers would be able to deposit all of their income in banks. When drug dealers have, say, $26 million in cash lying around their houses, we are cheating ourselves out of vast sums of potential investment capital. And the rumor on the street is that the banks could use a little extra capital these days.
For the most part, the reflexively anti-stimulus crowd on the right have been dead wrong about our response to the crumbling economy. But there are, of course, degrees of wrong, and it irritates me to no end to hear their views repeatedly bashed as ‘neo-Hooverism’. The latest instance comes from our friend Matt ‘the YZA’ Yglesias. First, he cites Kevin Drum, coming correct:
Consider, after all, that our response to the Depression appears to have been 180 degrees wrong. We literally did almost everything possible to make it worse: we tightened the money supply, balanced the budget, raised interest rates, passed protectionist legislation, and allowed banks to fail by the hundreds. It escalated a panic into a Depression. And this time around? Just the opposite: interest rates are close to zero, we’re running an enormous budget deficit, protectionism has largely been kept at bay, money is being pumped into the economy prodigiously, and with the notable exception of Lehman Brothers banks are being saved right and left. These actions have reduced a panic to a severe recession. If we had taken the same policy actions that Hoover and Mellon took in the 30s, does anyone doubt that the results would have been another Great Depression? I don’t. We may still be doing a lot of dumb things, but we’re an awful lot smarter than we were 80 years ago.
Kevin’s right. The right-wing advocates of no bailout and “spending freeze” are, in essence, calling for a return to the Hoover-Mellon policies that had disastrous results in the past. The nature of those results is spelled out in the chart. What people are living through today is no walk in the park, but it’s vastly better than the alternative.
This is an extremely dishonest use of the qualifer ‘in essence’. (spending freeze + no bailouts) does not equal (no bailouts + tax increases(!) + higher interest rates + reducing the supply of money(!!!) + higher tarrifs). There is not a lot of enthusiasm for protectionism on the right, and just about no one is wondering why the fed isn’t pursuing a more contractionary monetary policy. The Hoover-era response to the depression and the response to our current troubles urged by Republicans and right-wing pundits are not the same. They are not essentially the same. They are not really even that similar. These ideas are bad enough as they are. Why lie about them?
I know I’ve had a lot to say about drug policy recently, and I don’t want to turn this blog into a one-trick pony, but there has been a whole lot of buzz about how great Mark Kleinman’s not-at-all-great idea for quazi-legalizing marijuana is, so I feel compelled to weigh in. Here’s the scheme:
Substantively, I’m not a big fan of legalization on the alcohol model; a legal pot industry, like the legal booze and gambling industries, would depend for the bulk of its sales on excessive use, which would provide a strong incentive for the marketing effort to aim at creating and maintaining addiction. (Cannabis abuse is somewhat less common, and tends to be somewhat less long-lasting, than alcohol abuse, and the physiological and behavioral effects tend to be less dramatic, but about 11% of those who smoke a fifth lifetime joint go on to a period of heavy daily use measured in months.) So I’d expect outright legalization to lead to a substantial increase in the prevalence of cannabis-related drug abuse disorder: I’d regard an increase of only 50% as a pleasant surprise, and if I had to guess I’d guess at something like a doubling.
So I continue to favor a “grow your own” policy, under which it would be legal to grow, possess, and use cannabis and to give it away, but illegal to sell it. Of course there would be sales, and law enforcement agencies would properly mostly ignore those sales. But there wouldn’t be billboards.
That beautifully-crafted policy has only two major defects that I’m aware of: it wouldn’t create tax revenue, and no one but me* supports it. On the drug-warrior side of the argument, even those who can read the handwriting on the wall won’t dare to deviate from the orthodoxy. As we did with alcohol, the country will lurch from one bad policy (prohibition) to another (commercial legalization). I just hope the sellers are required to measure the cannabinoid profiles of their products and put those measurements on the label.
I am extremely skeptical of the motivation here. That first paragraph rests on a whole host of presuppositions that, in my estimation, range from the questionable to the deranged. I wonder where Kleinman gets his standard for marijauna addiction and the distinction between excessive use and plain old use. More substantively, I wonder how much dosage patterns for recreational drugs are ever dictated by marketing strategies. Especially in the case of tobacco, which can’t advertise on television, I don’t see much evidence at all that the sellers are doing an effective job of advocating heavy use; rather, they’re advocating plain old use, and relying on the fact that they are selling one of the most addictive substances known to man to do the rest.
I don’t think that begins to exhaust what’s wrong with the motivation for this compromise, but its the proposed solution that I really want to focus on. Legalizing private growing only would be an improvement over the status quo, but not much of one. To start with the drawback that Kleinman aknowledges, the tax revenues forfitted are non-trivial: by his own estimation, domestic marijuana purchases are in the neighborhood of $10 billion a year. The revenue from a direct tobacco-style tax on that, plus the income taxes of marijuana industry workers brought into the mainstream economy, plus the transfer of earnings from mattresses to banks (I gather they could use a little more capital) is nothing to sniff at.
Furthermore, I think we should always be hesitant to pursue policies that increase the number of laws we ignore by common consent. There will always be rules on the books that society winks at, but it’s a situation that encourages abuse and corruption, as Kevin Drum points out. Most marijuana consumers are not realistically ready, willing, or able to grow their own. This policy wouldn’t do all that much to decrease the size of the illegal industry.
Meanwhile, if there is any reason to think this would actually address the problems Kleinman is worried about, he doesn’t mention them. Wouldn’t small-time growers be exactly as dependant on heavy users as would massive pot corporations? Illicit vendors can’t advertise conventionally, but they obviously have marketing strategies. What reason is there to assume that the legal approach to weed pushing would lead to heavier users than the illegal approach? Did prohibition lead to an era of people responsibly having one glass of blackmarket red wine a night to help fight heart disease?
Speaking of prohibition, this sentence is worth re-quoting:
As we did with alcohol, the country will lurch from one bad policy (prohibition) to another (commercial legalization).
Kleinman doesn’t say what a better alcohol policy would be, but if we take his marijuana suggestion as a model, he presumably thinks we should be drinking legally-produced bathtub gin in illegal but tolerated speakeasies. I suspect that policy wouldn’t be so popular.
The fact that the top 0.1 percent control 8 percent of national income is hugely relevant to thinking about how to understanding living standards in the United States. We have a similar per capita income to Finland, but our top 0.1 percent is way better off than Finland’s, whereas Finland’s child poverty rate is immensely lower than our own. Various countries come out as slightly poorer on average, even though the average resident of those countries actually has a higher income than the average American.
For some reason, people love to bring up the top 1 percent and the top .1 percent in discussions of inequality. The Times’ graph even lists the top 400 taxpayers. But, pace Yglesias, this is not ‘hugely relevant’ to thinking about how bad inequality is. If you’re actually worried about inequality - and you should be, we have a lot of it - you’re probably worrying about how well off the poor and the middle class are relative to how rich the country is as a whole. You might, if you’ve got an especially big heart, or if, say, you’re blogging career is going very well, care about how the modestly wealthy are doing relative to the whole. But does anyone seriously care how evenly income or wealth is distributed within the top 10%?
Assuming the answer is ‘no’, then once you have established that 10% of the population earns 44% of all income, you are adding exactly nothing of substance to the discussion by adding that .1% of the population earns 8% of the nation’s total. The latter is, of course, a much more shocking figure at first glance. But it contains no new information that we should care about. Whether the top of the income pyramid is made up by people all earning many millions of dollars a year, or by a bunch of people earning only a million or so and an even luckier few earning tens of millions a year is not something that should be keeping us up at night. Throwing these numbers around is an intellectually dishonest scare tactic.
We need to get to the place in this country where no institution is too big or too interconnected to fail.
Hmmm. Is this even possible? Trying to regulate leverage is hard enough, but trying to directly regulate size and “interconnectedness”? Do we really want to do that?
Frederick pointed this out the other day. Is Kevin Drum reading the Despot and counting on our low profile to prevent his plagiarism from being detected? I can’t prove that he isn’t.
Yglesias asks why banks that are too big to fail are allowed to exist. He suggests that no bank be allowed to grow too big to fail:
As a tradeoff, banks that rested in the small-enough-to-fail category could be allowed to operate with much, much laxer oversight and regulation since everyone would understand that if they fail they’re going to sink. Presumably, there are some efficiency gains associated with the economies of scale involved in big financial institutions. But there would also be efficiency gains associated with relaxing the regulations on financial institutions. And the only reasonable way to seriously relax those regulations would be to commit to a no-bailouts scenario. But to do that, we need to make sure the banks aren’t too big to fail. So why not focus the regulatory effort on that — on making sure that institutions don’t get so big that they need bailing out?
Answer: because you can’t put a hard cap on growth. At least, not in America. It’s both a terrible idea - imagine the unintended consequences and weird corporate behaviors as banks approached the size limit - and unmarketable. You might as well try to limit personal success as part of your big new anti-jealousy initiative.
Remember when John McCain wouldn’t shut-up about corporate tax rates in Ireland? Wasn’t that really bizarre? Well, guess who’s back, courtesy of Matt Yglesias and his buddies at ThinkProgress:
John McCain expended a lot of time on the trail slamming America’s corporate income tax and lauding Ireland as a superior model. And guess what? McCain was right — Ireland is a better model. Unfortunately, McCain’s actual plan wasn’t to make our corporate income tax more like Ireland’s. Instead, he wanted to leave the loophole-ridden mess as it stands and then cut rates.
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Ireland raises more not less income from their corporate taxes. That’s because their lower rate is levied on a broader tax base, with many fewer loopholes.
I’m entirely with Matt on the underlying point: for any given amount of tax revenue you want to raise, it’s better to raise it via a lower rate that gets applied to all of the relevant income, rather than a higher one that lets a lot slip through various loopholes. But the comparison with Ireland is drivel. There are many ways in which ThinkProgress’s analysis oversimplifies the issue, but none of that matters as far as Yglesias’s point is concerned, because his own numbers don’t even come close to backing him up.
To begin with, it is an odd sort of gotcha to point out that Ireland raises more (’more‘, even) tax revenue than the US. McCain’s complaint was never that we were collecting too much money, but rather that taxes were too high. And it is flat out untrue that this is “because their lower rate is levied on a broader tax base, with many fewer loopholes”. According to the ThinkProgress article he is referencing, exemptions reduce the effective corporate tax rate in the US from 35% to 25.3%, still over twice as high as Ireland’s rate. How does Ireland end up raising more money from corporate taxes, as a percentage of GDP, than we do, despite having lower taxes? By having much higher corporate earnings as a percentage of GDP. And they do that, in part, by having absurdly low corporate taxes, attracting corporations from around Europe to use them as a tax haven. Which, after all, was exactly McCain’s point.
This doesn’t necessarily mean that he was right. There are more than two or three variables at work in an economy, and we shouldn’t be looking to Ireland as a model. Slashing taxes to attract Canadian and Mexican corporations is probably not the way to maximize tax revenue, though it might be fun to try, just to see if Krikorian and Steyn’s heads exploded. Still, either Matt doesn’t really understand the chart he’s looking at, or he’s indulging in a little intellectual dishonesty to take another shot at McCain.
Hillary Clinton recently repeated one of the tropes of the campaign:
“I think you have to ask yourself and it’s a little exercise I’d like everybody in the press, and really all of us, to go through: Would the same thing be said about a man in a similar position and the answer 99 times out of 100 is no. I think it’s been a long time since anybody covered what Barack Obama, Joe Biden, or John McCain wear or their hairstyle or any other personal characteristic like that.”
Second, in our society women have a broader range of clothing choices than men. In this, our society is like every other society ever in the history of humanity. These choices are an expression of identity; you might complain about this on “don’t judge a book by its cover” lines, but that’s adolescent - shut up and dress respectable like for your sister’s play, junior. And since women have more choices in clothing, they have more opportunity for expression, and this is a valid topic for comment.
Below the fold, a bonus edition of “Yglesias being wrong” (a copyrighted feature of this blog).
Matt Yglesias usually tempers his populist rhetoric with some respect for the free market as a powerful tool that, though usually used to promote the well being of a kleptocratic cabal, could perhaps some day be used to advance causes that are enlightened and just; the current crisis has him pretty worked up, however, and there are signs he may be getting a bit carried away:
Of course it would hardly make a dent in the overall $700 billion cost of the bailout, but it seems to me that we should be seizing all the homes belonging to all the executives of companies in need of bailing out and selling them to raise some of the bailout funds. Maybe they could get real jobs and work for a living.
Yglesias is no doubt employing his highly developed sense of irony for comic effect here, but still, I expect a little more tolerance for non-manual labor from those who blog in glass cubicles.
On top of his concrete concerns about Paulson’s bailout plan - some of which I share - he has some meta-concerns about Democrats dropping the ball:
It’d be one thing for a bunch of conservative politicians to ram a terrible policy through. Then we could say “well, if some progressives win the next election things will be different.” But if this comes through an allegedly progressive congress then the whole enterprise starts looking pretty hollow.
That’s the second time in the post Yglesias refers to the Democratic majority as ‘alleged progressives’, which got me wondering: who ever alleged that? Who other than Yglesias has regularly referred to the left as ‘progressives’ at all? I looked into that question for a few minutes, but instead found this:
You know, I really dislike the use of “progressive” in the place of “liberal”. Among other things, it makes the Jonah Goldberg-style conflation of the Progressives of the 1920s with contemporary American liberalism that much easier.
Quite so only one shouldn’t even really blame Jonah Goldberg in this instance. The people who went about rebranding liberals as “progressives” were clearly and deliberately inviting this conflation. But while the historically Progressives did stand for some good things, and are a part of the backstory of contemporary American liberalism, they also stood for some very bad things. Certainly, whatever sins liberalism may have committed in the 1970s as it fell into disrepute were distinctly minor compared to the problems with the Progressives.
“Liberal,” by contrast, is an important term with a noble history and a contested legacy. I think the notion that something like contemporary American liberalism is, in fact, the correct instantiation of the historic liberal project for our times is a proposition that’s worth fighting for.
Things are unquestionably very bad in the economy right now, but there’s always room to make things worse. Here’s an idea:
But if the government directly controls major financial institutions, that would give the new administration extraordinary leverage over the national economy. Suppose the new CEO of AIG decided he didn’t want to insure assets of companies whose executives make unseemly multiples of the national median income? There are all kinds of crazy things you could do. And of course not all of them woul dbe good ideas. But some of them would! And the smart folks on our side need to be figuring out which ones they are. It seems doubtful to me that a progressive administration would ever be able to get away with this much nationalizing of everything, but what’s done is done and I think it creates a real opportunity for “socially conscious insurance underwriting” or whatever you care to call it.
I care to call it terrifying. Whatever the case for intervention, this is why the government needs to get whatever they can back into private ownership as soon as possible, and the rest under independent control immediately.
Adam LaDuca, 21, the former executive director of the Pennsylvania Federation of College Republicans, wrote on his Facebook page in late July that Obama has “a pair of lips so large he could float half of Cuba to the shores of Miami (and probably would.)”
How a bigoted college kid who, as Yglesias points out, isn’t so clear on the Republican Party’s position on Cuba, became a news item is beyond me. Of course, to Matt this is just more evidence - if not a full-blown proof all by itself - that conservatives are a bunch of nasty racists. He drives the point home with his favorite rhetorical device, sarcasm:
I, for one, am absolutely certain that five or six weeks went by during which zero members of the Pennsylvania College Republicans saw the Facebook page of the group’s executive director. That must explain why he was forced out only after The Pennsylvania Progressive drew attention to his remarks. If any PA conservatives had seen it first, certainly LoDuca would have been forced out preemptively since, as Anthony Pugliese is quoted as saying later in the article, “The P-A College Republicans do not accept or tolerate racism in any way.”
In the post Frederick mentioned earlier, Yglesias is right that the Democrats shouldn’t be so worried about Palin’s speech last night, but he’s very wrong about why:
It was competent, but no more than that. And it wasn’t a speech that even tried to do either of things that John McCain’s campaign needs to do — separate McCain from George W. Bush or convince people that McCain can improve the economy. It didn’t even try to address those subjects.
Actually, it was a lot better than competent, but that all misses the point. Even if she’d one-upped Churchill, everything that was wrong with her on Tuesday would still be wrong with her today. After all, there has been no uproar about her being unqualified to appeal to religious conservatives; nor is there an ethics investigation in Alaska looking into her public speaking ability. She will still be deposed about Troopergate, she still has an ugly record from Wasilla, and she even repeated, word for word, the lie about the Bridge to Nowhere. It’s still possible that she won’t prove to be a disaster for McCain, but nothing that happened last night really bears on that question at all.
