Thursday, June 30, 2011

Evaluating the constitutional option

Let us assume, for the sake of argument, that the Democratic Party has decided the debt ceiling is unconstitutional. What next?

Well, Tim Geithner clearly believes it is, and that's him flashing the Fourteenth Amendment in his pocket constitution over to the right. It's probably the best picture you'll ever see on this blog.

Other than Tim Geithner, nobody can agree.

Ezra Klein says that a constitutional fight over the debt ceiling risks freaking out bond markets, which is the exact outcome we're trying to avoid.

Jon Chait says, "Sure, but what if no deal is forthcoming? Since the bond markets are going to melt down anyway, Obama should at least try to get rid of the thing!"

Yglesias adds that, even if a deal is struck, it's going to set a horrible precedent that leads, inexorably, to either default or a constitutional fight, at some point down the road.

For my part, I think Matt has the upper hand here. Klein's entire argument is based on a faulty premise: that the bond markets will stay calm so long as this debt ceiling fight stays "normal," and that they might implode if it starts to look a bit odd or anomalous. Fair enough, but there's one problem -- it already is odd and anomalous. In the past, Congress might have huffed and puffed about the ceiling, but it certainly never had the gall to demand major substantive concessions in exchange for not destroying America's credit.

Taking that into account, Klein's argument becomes, "This debt ceiling business actually is a mess, but the markets haven't noticed yet. Nobody... move... a... muscle." And that's not helpful, for the exact reason Matt says. Even if Obama does manage to work out a deal -- a horrible, no-good "compromise" that gives the Republican minority 95% of what they want -- and even if the markets stay fooled, well, guess what? We'll be back in this exact same boat the next time the debt hits the ceiling. So, within two years, probably. Congress will have learned that the minority has virtually unlimited leverage to demand concessions every couple of years, and there's no reason to think it won't leap at the chance to do so. And, as Matt says, the problem is severely exacerbated by the nightmare of institutional design that is the filibuster. If the minority party has 41 or more seats in the Senate -- something that describes every Congress in the last four decades -- then it has the ability to block the debt ceiling vote and demand concessions. Basically, we'd be creating a system where the majority governs 90% of the time, and the minority gets to hold the country at gunpoint and make demands the remainder of the time. And since the minority party would also have a large say in just how high the debt ceiling gets raised, what's to stop them from setting it so that they get to drag everyone back to the negotiating table nine months down the line?

There's only one way this can end. The majority puts its foot down, and either there's a default -- accidentally or on purpose -- or someone finds a way around the ceiling, such as striking it down judicially or abolishing it legislatively. In the meantime, that gives the bond markets many years to realize just how thoroughly broken America's political system is, and adjust our interest rates accordingly.

So I guess I'm of the opinion that we're better off dealing with this right now. Rip off the band-aid, so to speak. It might hurt a bit but in the long run we're better off for it. And if the ceiling can be thrown out completely, all the institutional risk attached to America's credit rating completely evaporates.

Still, it's easy for me to say that. I'm just some guy with a blog. If I were a Democrat in Congress, or worse yet, President Obama, I'd feel pretty sick about the whole thing. I'd want to keep my options open and I'd sure not want to imply that I'm going to stand and fight on constitutional grounds -- at least, until I didn't have any other choice. After all, if the bond markets are irrational to think that there's no real risk of default right now, they're certainly irrational enough to spaz out because the debt ceiling was dragged into courts. All of which is why I think the constitutional issue, if nothing else, is a useful measure of the progress of the debt ceiling negotiations. The more we hear about the Fourteenth Amendment, particularly from the administration, the worse the negotiations must be going.

One more thing: the constitutional option does seem to confer certain tactical benefits on the administration. As things stand, whatever happens, gets blamed on the president. Democrats are cornered into signing some sort of tremendously awful deal, entitlements get cut, and the economy struggles as a result? Obama's fault. We blow the deadline, there's no deal, the markets respond negatively, and Social Security paychecks stop going out? Also Obama's fault. But if the administration goes on the offensive against the debt ceiling, declaring it unconstitutional and continuing to borrow without congressional authorization, it puts the ball back in the GOP's court. Republicans would then have to go into court and argue that a certain segment of the US public debt is not valid. If we're past the Aug. 2 deadline by that point, they have to go into court and argue that the US should be in some form of default.

Would anyone actually want to make that argument? Right now, the Republicans benefit from being able to pretend that their hand is forced. They say that American finances are so bad, they simply can't raise the ceiling without some sort of deficit deal. But if Obama ignores the debt ceiling and the country doesn't self-destruct, the GOP's nakedly extortionate ends will be exposed. They'll be in the uncomfortable position of asking for their hostage back, so that they can return to making ransom demands. Oh, and if any judge rules in their favor, the markets really might go into a tailspin. Fighting the administration would be politically (and morally!) precarious, and I'm not sure the Republican leadership has the stomach to carry that fight to its natural conclusion.

Is the debt ceiling constitutional?

Yesterday, internet chatter exploded about a potential new solution to the debt ceiling standoff: just calling the debt ceiling unconstitutional and being done with it.

There's more than a whiff of liberal wishful thinking to this approach. If deemed legally sound, it would instantly end the debt ceiling debate, with nary a concession to Republicans. Poof! No more debt ceiling to reckon with, now or ever.

So is it legally sound? The answer is... no one really knows. No one has ever tested anything like the debt ceiling in courts before, so until the Supreme Court issues an opinion, there's simply not a "right" answer.

The argument against the debt ceiling is certainly credible, at least. It arises from Section 4 of the Fourteenth Amendment, which reads "The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned." This clause was inserted into the Constitution to reassure bondholders after the Civil War that the US government would continue to honor their debts. But it appears to extend beyond that narrow purpose, and create a constitutional bar to intentional default on the public debt that has been "authorized by law."

To a large extent, the strength of the constitutional argument depends on how you view the debt ceiling in the first place. Up until recently, the consensus view was that a failure to raise the debt ceiling would virtually mandate a US default. Essentially, the debt ceiling vote functioned as a big red DEFAULT button atop the federal government. And if that view is correct, well, it's probably unconstitutional, because Congress is constitutionally forbidden to opt for default. The Fourteenth Amendment prohibits big red DEFAULT buttons, and to the extent they exist, they shouldn't have any binding legal effect.

But there's an alternative view of the debt ceiling, espoused by, among others, Michele Bachmann. (I'm not trying to be cute here -- I literally just can't think of anyone else who had this view of the ceiling until recently.) In this conception, the question of whether to raise the ceiling is quite separate from the question of whether to repay our debt. Instead, these people argue that the debt ceiling is simply about the source of federal funding -- i.e., whether the federal government can borrow money for operating costs. If the ceiling doesn't get raised, the obligation to repay debts remains in place -- but in order to pay them, the government must find money elsewhere, by withholding or ripping up checks to military contractors, bureaucrats, soldiers, Social Security beneficiaries, and so on.

Proponents of the Bachmannite view would presumably argue that the Fourteenth Amendment applies only to debt "authorized by law." Since the debt ceiling, on its face, is about granting the government the authority to take on additional debt, the Amendment is inapplicable.

I, of course, prefer the former approach. A legalistic parsing of the Amendment's language might initially suggest that it draws a fine distinction between servicing preexisting debt and authorizing additional debt. More important, however, is the general thrust of the Amendment: "the validity of the public debt shall not be questioned." Rather than only forbidding certain budgetary practices, it appears to proscribe any activities that would call into question the soundness of preexisting loans to the US .

Would a congressional refusal to raise the debt ceiling call into question the soundness of preexisting loans to the US? Absolutely.

There are many, many problems with the Bachmannite understanding of the debt ceiling. Politically, it's devastating: we'd be literally taking money from the nation's grandmothers and turning it over to Chinese bondholders. How long could the government continue to service its debt before political pressure forced it to find some way out of its obligations to bondholders? Even if the government kept up payments on the debt, it's unclear whether US bondholders would be any more at ease. Sure, they're getting paid now -- but how much faith could they have in the US government's ability to make good on its long-term debt, if the government couldn't even make good on its short-term obligations to its own citizens?

Finally, and most importantly, while a failure to raise the debt ceiling may not trigger instantaneous default, hardly anyone believes that the country could avoid default without eventually raising the ceiling. In other words, there might be a timer on that big red DEFAULT button -- three weeks? four months? a year? -- but that doesn't change its nature. If Congress absolutely refuses to raise the debt ceiling, default will occur eventually, almost as assuredly as if it had passed a law announcing the total abrogation of all debtor obligations.

And that, in my view, makes the whole thing unconstitutional.

Nonetheless, Democrats would want to think long and hard before making this case publicly. The politics of doing so are complicated and risky. More on this topic later.

Wednesday, June 29, 2011

NIMBYs screwing us again

Is it just me, or is there something fairly breathtaking about closing down a nuclear power station worth billions and replacing it with... nothing?

And yet, that appears to be precisely what Andrew Cuomo plans on doing with the Indian Point station near NYC.

Now, I understand concerns about keeping the plant so close to the city. Even if the chances of an accident are tiny -- and they're freakishly low, by all accounts, seeing as how the plant is built in a seismically stable region -- the New York metropolitan area would be just about the worst locale imaginable for a nuclear accident of any description.

But the solution to that problem is to eventually build a plant further from the city. Don't shutter the plant and fill the gap with energy from fossil fuel plants! And most definitely don't just build a natural gas plant in its place! The harm caused by the current Indian Point plant is completely hypothetical. Turning to dirtier alternatives would immediately cause real tangible harm, both globally and locally. Even discounting the effects of global warming -- and we absolutely should not -- the pollutants emitted from fossil fuel plants are probably more harmful than anything that will ever come out of Indian Point.

Do-gooders like Andrew Cuomo are doing society a disservice by humoring cries of "No nuclear power in my backyard!" We need more nuclear plants, not less. Building more is a long slog, because they definitely aren't cheap. Consequently, it's completely insane to shut down a perfectly functional plant without good reason. The cost of Cuomo's plan, far beyond the actual value of the plant, has to be measured in the thousands upon thousands of tons of additional CO2 it will release into the atmosphere. It's clearly not worth it.

Dog day afternoon on Capitol Hill

Yesterday, Vermont Senator Bernie Sanders -- one of the most left-wing members of the entire US government, and a bona fide socialist -- offered a dramatic new solution to debt ceiling gridlock: a 50-50 compromise on deficit reduction. Half the revenue for debt reduction would come from tax hikes, and the other half would come from spending cuts. It's hard to imagine a proposal that more thoroughly embodies the spirit of bipartisanship and mutual sacrifice towards a common goal.

He was, of course, promptly laughed out of the room.

Steve Benen says it best:
We have a Democratic Senate and a Republican House, but the notion of an equitable, 50-50 split is thought of as fanciful nonsense backed only by liberal extremists. When Republicans demand a 100-0 split in their favor, meanwhile, and failure to do so will mean they cause a recession on purpose, this is somehow just routine and predictable.

I suspect if a senator suggested a 100-0 split in the other direction — no job-killing spending cuts, only tax increases — GOP officials would simply faint, en masse, at the very idea.

It's actually worse than Benen says: out of the two elected branches, the Democratic party controls 1.5. If we go by that, the eventual split should be, if anything, closer to 70-30 in favor of the Democrats. But right now, any negotiated outcome to the debt ceiling standoff seems likely to favor Republicans by something more like 90-10.

In his post above, Ezra Klein attributes the unevenness of the negotiations to a debate that has "shifted far to the right." And that might part of the reason. But it's only part.

The main reason the debt ceiling debate favors the Republicans so heavily is because it's not a traditional debate or negotiation at all, where both sides want something different, and they each compromise in order to get as much of what they want as possible. Instead, it's very much a hostage situation. The Republicans want something (spending cuts), and in order to get it they've taken a hostage (America's economic stability). The Democrats want nothing in particular, other than to prevent Republicans from blowing up the economy.

Here's the thing about hostage situations: they're all-or-nothing affairs. They're binary. So long as the hostage-taker controls the hostage, he has all the leverage. Because nobody is going to negotiate for the life of half a hostage, the hostage-taker can continually make demands and the more reasonable people in the room are forced to consider them. On the other hand, as soon as the hostage-taker loses his captives, the negotiation's over. There's no reason left to talk to a hostage-taker without any hostages.

So really, there are only two outcomes to any hostage situation.
  1. The guy with the gun gets what he wants: the plane to Fiji, the million dollars in unmarked, nonsequential bank notes, the full pardon and release of nine members of the Asian Dawn movement in Sri Lanka.
  2. The SWAT team comes through the front door and it's game over, man. Hopefully, no one shoots the hostages before this happens.
You know how it never ends? The negotiator and hostage-taker agree to a 50-50 split. The hostages go free, but so does the guy who took them.

So really, it's little surprise that so far, negotiations have favored the Republicans. If it were any other way, the Democrats would be playing them for suckers. After all, what would the Democrats even say? "If you don't give us tax hikes, we won't raise the debt ceiling -- just like you're threatening to do yourselves." It's just not credible. In these things, concessions can only go one direction.

But it's a dangerous game for the GOP to play. Because if they lose, they're left with nothing. And if it goes right down to the wire, and it turns out they're not willing to pull the trigger, they're left with nothing. And if Democrats find some way to take the hostage away from them, they're left with nothing. Look, I've seen the movies -- these things never end well for the bad guys. Let's just hope it ends alright for the hostage.

Tuesday, June 28, 2011

For the sake of democracy, we should have no more votes

No, I'm not being ironic. It's counterintuitive, but true.

It's easiest to explain why we shouldn't need to vote if, first, we consider why we do it anyway.

So why do we vote? At the very heart of any democratic system is the notion that public opinion should be the primary determinant of government policy, at least on some level. Democratic leaders serve at the pleasure of the governed.

That seems simple enough. But democracy poses a practical problem: how do we discover what the governed really want, anyway?

Once upon a time, the easiest way to get a sense of the public opinion on a question -- e.g., "Would the country rather Martin Van Buren or William Henry Harrison be the next president?" -- was to set up polling places around the country, tell everyone to come by on the appropriate day, and get tallies ready.

Then everyone would vote (well, not everyone), and that's how the people would exercise their power over the state.

We still do the same thing today. In fact, the concept of "voting" has become so deeply intertwined with the concept of "democracy" that we often use them almost interchangeably.

But of course, that's not quite accurate, is it? It's like if you mistook "talking" for "communication," or "driving" for "travel." It's just one means towards a much more important end.

Today, there are other means towards the same end. I am, of course, talking about scientific sampling. It's not difficult for a reasonably talented pollster to get an accurate read of public opinion on an issue -- particularly a simple, binary issue like "John McCain or Barack Obama?" The vast, vast majority of the time, polls reveal current preferences without much ambiguity.

In fact, even when a poll result can't be considered an utter certainty, it would still provide a more accurate picture of public opinion than a traditional election testing the same issue. That's because voting elections systematically and predictably undercount certain groups of people -- dramatically so, in many cases. Minorities, young people, the poor: voting elections continually underrepresent all of them. By contrast, even if a poll undersamples one social group or another, the relative proportions of each group in society are a known quantity and poll results can be (and generally are) weighted accordingly. The poll, quite simply, is the superior method for finding public opinion.

Everyone is forever concerned with upping voter turnout, because that makes elections better and more accurate. Instead, we could make elections better by getting rid of all the voting, and making turnout a non-factor. Far from being unfair, it would be much more fair.

"Still," you might say, "how can polls be that reliable? Everyone knows pollsters don't always predict election winners. They thought Barack Obama was going to beat Hillary Clinton in New Hampshire!" And you'd be right. But there's a tremendous difference between determining the public's preference between two candidates, and accurately predicting which of those candidates will win a vote. Because we're using an antiquated system full of turnout quirks, election pollsters are forced to dilute their advanced sampling and weighting techniques with extra variables to account for turnout. Pollsters with different turnout models often predict completely different results.

There's also something a little silly about the practice of using extremely complex statistical models to forecast something as primitive as a voluntary vote. It's like if we got into the habit of racing ships across the Atlantic to find the fastest methods overseas. Then, eventually, someone invented airplanes -- and immediately set them to work flying to check on the ships, so we'd have a better idea of which ship might win. But it shouldn't even be about the ships anymore! Just use the airplanes instead!

So let's use them. Polling day will still be election day, but the polls will be surveys instead of votes. It wouldn't be that different, even. Campaigns would continue more or less as we see them now, except, the emphasis would be less on turning out voters and more on making a persuasive case to as many people as possible. On the appointed date, a very rigorous, very thorough survey will be conducted. The results will determine who advances into office and who does not. If the results are ambiguous -- no poll, whether conducted with samples or votes, is 100% accurate -- there's no reason another could not be commissioned. A recount, if you will.

I suspect some people will also object on the basis of "civic participation." We sometimes think of voting as being a duty, and a responsibility, as much as it is a right, and a privilege. If you start with that premise, it's easy to convince yourself that the participatory element of self-governance cannot be excised without somehow diminishing democracy itself. The system I'm proposing is unquestionably a government for the lazy, or at least, a government that includes the lazy.

The premise, however, is wrong, and its logic is circular. The only reason participation plays an important role in democracy is because, up until now, we've only been able to build democracies that functioned when people participated in them. If you live in one of those democracies, you may indeed have a civic responsibility to vote. But it's a second-order responsibility, reflecting only on the values of that particular form of government. It doesn't reflect at all on the larger purpose of all democratic states, which is to ensure that the government of a body of people is an instrument of those same people.

In fact, it's that larger democratic purpose -- far more fundamental than latter-day notions of civic engagement -- that is diminished every time a group is governed without any say in the direction of government. Modern technology has given us means to rectify this problem. Shouldn't we use them?

Monday, June 27, 2011

Debate tips: how to insinuate that someone is a Nazi and get away with it

There's a widespread misconception in modern life that you can't, in polite debate, call your opponent a Nazi. Totally untrue. It's a dangerous game, but with the right tools, you can play it. So without further ado, here are the four easy steps to implying that a perfectly rational human being is, in fact, a jackbooted stormtrooper thug.

1. Don't use the words "Nazi," "Hitler," or "Holocaust." Too strong, too obvious. Refer to these things obliquely: by description, or by year. This way, you sound more learned and intellectually rigorous. Oh no, you're definitely not accusing anyone of mass murder here. There's just an apt comparison you would be remiss not to make.

2. Don't insult. Illustrate the similarities. Directly relating someone to Nazism will only get everyone up in arms. Instead, you should be drawing historical analogues. Making parallels clear. But no more than that. This is potent stuff, like fissile material. Too much of it in one place, and you just might get a runaway reaction. It's enough to put someone in the same room as it, and let the audience do the rest of the work. If you make the final connection yourself, you've advanced a bridge too far.

3. Never close with the Third Reich. Everyone knows the Nazi comparison is the strongest rhetorical weapon in the book, and so a lot of people want to build to it, grinding slowly to the finish, and then unleashing it in a final mighty blast. Amateur mistake: it only calls attention to your (alleged) rhetorical excess. Follow up it up with another, less explosive analogy, and you'll look methodical, dogged, and exacting. You see, you said it because it needed to be said; you'll keep making these and other comparisons until the other side sees the fundamental soundness of your position.

4. Never apologize. You did what you had to do. History will prove you right. Sometimes great misbehavior has to be met with great force. Explaining yourself, preemptively or otherwise, just makes you look weak. Have confidence in what you did and everyone will assume it was the right choice afterward.

If you follow these steps, you can totally get away with calling someone a Nazi. Everyone listening should come away quite convinced of your reasonableness, but with the vague and not-quite-definable impression that your opponents are, in fact, horrible, unforgivable war criminals.

Ten years ago, as seen from one hundred years ago

That's from this collection of French images from 1910, which imagine society in the then-distant year 2000.

My first instinct is to laugh at how silly the pictures are, and a lot of them are very silly.

But I think there's more to them than that.

What strikes me most is the predictions' conservativism. A few of the images include zeppelin-boats or robotic cranes, but in many cases, the technology they depict already existed in 1910. For instance, motorcycles:

Or compare the plane here:

With the plane on this brochure for a 1910 air show:

In many ways, the most dramatic predictions being made were not about the arc of technological development. They're about the broad dispersal of technology. Airplanes existed in 1910, but in 2000, everyone would own one:

In short, this wasn't so much a prediction about scientific advancement as it was a prediction about economic advancement. And in a way, they were right, they just chose the wrong technologies. In the year 2000(ish), hardly anyone owns an airplane. But everyone owns an electronic reading machine -- an accomplishment almost more remarkable than the fact that we invented electronic reading machines in the first place:

And many people have access to video phones:

That last image hints at the prognosticators' other great oversight. In it, video communication is only possible because of the private operator working the cranks and pedals of the phone-device -- private operators being, surely, a luxury of the rich. Attendants and operators and carriage drivers lurk around the edges of many of these pictures. To the 19th century mind, it must have seemed perfectly natural that these wonderful new household technologies would, like 19th century households, require hired help in order to function properly. And it must have seemed perfectly natural that society would provide such a person when necessary.

Whatever foresight inspired these illustrators when imagining the spread and development of new technology, it abandoned them when it came time to predict how that same technology would change social customs. Ironically, among all the pictures of electric trains and flying carriages, the most jarring element is the turn-of-the-century dress and decoration -- and the set of social relationships that those things imply.

I'm sure the illustrators would have been thrilled to learn that the technology they envisioned in this image, called "Phonographic letter," would come to pass -- and then some.

But I wonder what they would say, if they knew everything in it from their world -- the houseservant, the old aristocrat, even the ornate landscape paintings and the fluffy yellow drapes -- would eventually begin to disappear.

(h/t James Fallows)

Saturday, June 25, 2011

We're not leaving Afghanistan yet. But we should.

Have you heard? The war in Afghanistan is coming to an end! We killed bin Laden, and now we're finally leaving!

Or, well, maybe not.

This graph, from here, might be one of the more straightforwardly devastating rebuttals I've seen. You can't imply that we're leaving Afghanistan by 2012, if at the end of 2012, if there are 65,000 troops in Afghanistan, most of whom you sent there yourself.

I've always been ambivalent about the Afghan war -- I'll be the first to admit that I don't understand enough about the country to know when anything has been accomplished there. That makes it really difficult for me to talk about how long we should stay, or when we should pull out. After bin Laden's death, however, I've become quite convinced that, whatever the circumstances on the ground, now is the time to leave.

I'm basing this less on geopolitics and more on politics of the ordinary sort. The capture or killing of bin Laden might have been the only concrete goal the war ever had. The other goals -- suppressing the Taliban, preventing the further spread of radicalism into Pakistan, enforcing some rough facsimile of peace -- are less items to check off a list than plates that need to be kept spinning in the air. And no matter how well we're keeping them going (not very, by most accounts), the one thing all these goals have in common is that they're always going to be easier to accomplish when there are US troops on the ground. In other words, the argument that "We can't leave now, because everything will fall to pieces without the US military" might very well be true. The problem is that it'll always be true.

With that in mind, the death of bin Laden represents the final point where war skeptics can look at hawks and say, "Look, we finished what we came here to finish." It was the only thing left for us to do that no one can argue will be undone after we're gone. If we decide that bin Laden's death isn't sufficient reason to leave the country, then there are only two avenues for withdrawal left: waiting for some kind of victory, which absolutely no one seems to believe is forthcoming, or waiting for public opinion to force an end to the conflict.

Those of us waiting for a shift in public opinion might be waiting a very long time indeed. Despite the constant comparisons, Afghanistan is not Vietnam. Public opinion might be against the war but it's not an issue that has raised the ire of the population. For me, the graph above really drove home that point. The number of troops in Afghanistan increased by a factor of three in the Obama administration. But while the number of Americans in the war climbed dramatically, the war has remained completely notional to me. I don't really know anyone in Afghanistan and it's been many years since I've met anyone who joined the military. Troop levels can go up, down, or wherever, and without the New York Times to tell me about it, I'd never have the slightest idea. The war may as well be happening on Mars.

While I don't want to generalize too much, I don't think my lack of first-hand experience with the Afghan war is unusual. I don't mean to downplay the unimaginable havoc the war can wreak on the lives of the people involved, but to highlight that in our society there's not much overlap between those people and the people dwelling in the halls of power. I don't just mean congresspeople or Washingtonians, either -- I mean the academic elite, the moneyed elite, the influential professional classes, business leadership, entrepreneurs, the works. That's not an indictment of, well, anyone at all -- just an observation that the financial and social pressures that push people into military service mostly weigh down on a limited segment of society.

If we're expecting a revolt of the poor and politically powerless to change minds in D.C., we might as well also hope for the unconditional surrender of the Taliban and the full flowering of social democracy in Kandahar.

Bin Laden's death might be the best chance we get to dial down the war for a long, long time. I don't want US soldiers to be in Afghanistan for a long, long time. It's either now or never.

I do have to applaud, at least, the administration's rhetoric on the issue. They've acknowledged, so far as I can tell, the reality that military action in Afghanistan can and should eventually conclude. I truly believe that's a major step forward -- it helps transform the question from "How do we win the war?" to "How do we end the war?" It's important for war opponents to reward progress on this front. So long as Afghan skeptics will accept nothing short of total unilateral withdrawal, starting yesterday, the hawks look more reasonable by comparison. Politicians need to know they can win support by taking rational, feasible steps to downgrade the American presence in Afghanistan, or else they'll be forced to look for their support on the other side on the debate.

But still. That doesn't mean that leaving 65,000 troops in Afghanistan is a withdrawal. Precisely because most people don't have any personal sense of the scale of the conflict in Afghanistan, it's important that the administration be honest about what it's doing there. Ending part of its own troop surge, and then acting like we're pulling out for good, just won't do.

So in the end I have to say: not good enough. This process needs to move faster, before the window created by bin Laden's death closes completely, and Obama is left once again vying with generals who promise that they can keep the Taliban at bay, if only they had a few more troops. If we can't have our soldiers out of Afghanistan by 2012, let's at least hope that, by then, they'll know when they get to go home.

Friday, June 24, 2011

The debt ceiling debate is not suitable for public consumption

The Prospect (I link to them too much, don't I?) today posted this "noxiously xenophobic campaign ad" for a the Republican candidate in a Nevada special election.

Their main takeaway seems to be, "Wow, the GOP hatred of the Chinese is both completely irrational, and yet another reason Jon Huntsman can't win the nomination."

I agree! And I might emphasize even further the disturbing racial undertones in the ad. Consider the Chinese reporter's last line: "And that is how our great empire rose again." And then Mark Amodei's first: "It's not too late to stop this nightmare." There's more than a whiff of Yellow Peril to the whole thing.

But the writers at the Prospect (and now, me) are burying the lede. The most significant line in the ad has nothing to do with China. It's in the last few seconds: "As your congressman, I'll never vote to raise Obama's debt limit and risk our independence."

That line indicates the emergence of the debt limit debate into the cultural zeitgeist in a way that should be, frankly, a little bit frightening.

Prior to 2011, here is how debt ceiling votes generally proceeded: Everyone in Congress privately acknowledged the need to raise the debt limit. As a result, a sufficient number of congresspeople on both sides of the aisle would always vote to raise the limit. A certain number of opportunistic congresspeople (for example, Senator Barack Obama) placed a symbolic vote against the limit, sounding a note of protest against "out-of-control deficit spending." And then the whole sordid episode was forgotten until next time.

There's a certain variety of congressional point-scoring that nobody outside of DC notices, which the debt ceiling vote used to perfectly exemplify. In spite of all the unseemly posturing around the issue, voters on election day didn't know or care who had voted to extend the debt limit. And that was fine: the average voter probably didn't know that the extension was a foregone conclusion, either.

Now, all that has changed. The debt ceiling has gone mainstream. And we're getting candidates like Mark Amodei. Think again about what he says in his ad: "I'll never vote to raise Obama's debt limit and risk our independence."

"I'll never vote to raise Obama's debt limit"


These aren't the words of a man who understands and acknowledges the political realities of the debt ceiling. And they're certainly not the words of a man who is leaving himself room to cave on the issue, if necessary. There's no hedge in his statement -- no "unless accompanied by a path to a sustainable budget," or "until Obama accepts spending cuts." These are the words of a man who really believes he's going to get to Washington and, by god, vote against the debt ceiling. No matter what.

No candidate should make the deficit extension a major part of his platform, because there's only one rational position to take: it must be raised. Politicizing the issue, so that people are forced to take sides one way or the other, is dangerous. To the credit of the Republican congressional leadership, they seem to realize this. Ultimately, John Boehner and his high-level cronies will likely back down and vote "aye." To their discredit, they've not seemed to consider the secondary effects of demonizing the debt ceiling. The Republican willingness to play chicken with default, and use it as a substantive bargaining chip, has legitimized the idea that default is somehow a valid policy option. And we're just beginning to see what happens after that, as this concept worms its way into the brain of the Republican base. Cue Mark Amodei, running on very public, very unflinching opposition to further deficit extensions.

Hopefully, the problem will stay manageable. But Republican grassroots hysteria has gotten out of control before. And as we trudge towards yet another angry August, it would be good to remember that we simply can't afford to let it get out of control this time.

Rick Perry probably shouldn't be president

Up until, well, right this moment, I hadn't paid a minute's attention to the possibility of Rick Perry running for president. You'd hear rumors about it here and there, but like all campaign rumors, I figured they were the work a desperate press corps, still struggling to face the terrible reality of their fate: that they were going to spend the next year reporting live from the Pawlentomentum campaign bus, assuredly the most Sisyphean beat in all of political journalism. Anyway, at some point or another, every Republican governor in America has been rumored to be "seriously considering" a presidential run. What made Rick Perry any different?

Turns out the guy might be for real. And while he's a bit late to the game, maybe that's only sporting, given that his main opponents are Mitt, Tim, and Michelle. Even after graciously accepting this handicap, he'd still be very much in the running. So I guess it's worth taking a moment to think about this new development.

Unfortunately, the only thought I can muster is "Haven't I seen this show before?"
  • Evangelical
  • Governor
  • Of Texas
  • With moderate views on immigration
  • Who doesn't believe in global warming
  • Is pro-life
  • Opposes gay rights
  • Campaigned on being "tough on crime"
  • And tort reform
  • Cut taxes
  • Inherited his office from the previous governor
  • Who was George W. Bush
  • By all appearances wears George W. Bush's ties and shares his barber
  • Literally is also George W. Bush
Didn't we all decide back in 2008 that we didn't like this guy and weren't going to vote for him anymore?

President Pawlenty takes on the zombie apocalypse

As if his proposals weren't crazy enough already, a couple days ago Pawlenty upped the ante, and signed the Cut, Cap, Balance pledge. The pledge, designed by the totally-grassroots-we-promise organization Let Freedom Ring, reads as follows:

I pledge to urge my Senators and Member of the House of Representatives to oppose any debt limit increase unless all three of the following conditions have been met:

  1. Cut - Substantial cuts in spending that will reduce the deficit next year and thereafter.
  2. Cap - Enforceable spending caps that will put federal spending on a path to a balanced budget.
  3. Balance - Congressional passage of a Balanced Budget Amendment to the U.S. Constitution -- but only if it includes both a spending limitation and a super-majority for raising taxes, in addition to balancing revenues and expense.
    I've run out of ways to point out how the GOP's increasingly bold rejection of economic orthodoxy endangers America. Yes, cutting spending in a recession is bad. Yes, yes, minimizing tax revenues just makes the deficit worse. You all know the drill.

    So instead of talking about how the Cut, Cap, Balance pledge, if implemented, could imperil the recovery, or massively depress growth prospects, today I'm going to talk about how it locks the United States into a policy straitjacket. It cements into place a set of horrible fiscal decisions. That's bad enough, standing alone -- but should we ever face some sort of large-scale national crisis, it could prove incapacitating. Devastating. Ruinous.

    For instance: envision the coming zombie apocalypse.

    The dead rise. Lifeless hordes fill the streets. A terrified citizenry flees the reanimated corpses of friends and neighbors. Second Amendment absolutists are vindicated. People actually flock to shopping malls again. And the nation, searching for leadership, turns its eyes to President Pawlenty, elected on the strength of his pledge to Cut, Cap, and Balance government spending.

    Oh man, we're totally screwed.


    Let's start with "cut." Where did Pawlenty's "substantial cuts in spending" come from? Tim Pawlenty, like everyone else who's tried, no doubt found it difficult to enact major, long-term cuts to entitlements and other benefit spending. One is forced to conclude that Pawlenty, like Paul Ryan, sought a huge chunk of his spending cuts in the discretionary federal budget. Ryan (whose plan is actually less radical than the pledge Pawlenty signed) wants to cut discretionary spending from 12% of GDP to 3.5% -- in other words, approximately 75% of non-entitlement government services would get the axe.

    In short, under Pawlenty's pledge, pretty much every federal agency would feel the heat, and most of them would effectively cease to exist altogether. Goodbye, EPA -- it was sure nice when you were around to keep industrial waste out of our food and water! Ciao, FEMA -- if only the free market had your expertise in addressing widespread national emergencies! So long, CDC -- your dedication to preventing the spread of contagious disease was sorely missed!

    Then there's the "cap." There are many problems with the cap, but probably the most glaring is how utterly arbitrary it is. Where, exactly, do you cap spending? There's no ideal level which all successful nations adopt. You have, say, Switzerland, which spends about 35% of GDP on public services -- and Switzerland is a pretty nice place to live. Then you have Sweden, which spends closer to 55% of GDP on public services -- and is also a nice place to live!

    In other words, the ideal level of government spending is determined by factors unique to each nation. As demographics change -- the population ages, or shrinks, or the old and the slow and the weak are gradually culled from society -- so should the amount of government spending. As cultural preferences change -- more people want to move into the suburbs, or into the cities, or into impregnable concrete bunkers cordoned off by high-voltage electrical fencing -- so should public expenditure as a percentage of GDP.

    Under President Pawlenty's cap, no such flexibility is possible. Instead, we're stuck living in an ultra-conservative version of the United States, circa 2011, forever. Pawlenty's pledge assumes that the government's role in building, running, and preserving American society will never change. Easy to say... when you don't know what dangers are out lurking in the (figurative) dark night (of the future) for you.

    Finally, there's the looniest idea of all: the so-called Balanced Budget Amendment. The twist here is that it doesn't actually help us balance the budget at all. It just prevents the US from buying anything it can't immediately pay for through tax revenue.

    The American people have been borrowing money as long as there has been an "American people." We borrow in times of peace, and, especially, we borrow in times of war. We borrowed money to finance the Revolutionary War, and WWII, and every war since. The Balanced Budget Amendment puts an end to all that. No more borrowing! For any reason! It doesn't matter how an intractable a foe we need to defeat -- how badly the world needs us to land troops in Normandy, or Detroit. It doesn't matter whether we need a sudden infusion of funds to fight back against a shambling economy, or shambling of an entirely different sort. Without the ability to borrow, we never had a chance.

    It's worse than that, too. Not only does the Cut, Cap, Balance pledge require a total cessation of the insidious national tradition of borrowing money and then paying it back later, it also makes it virtually impossible to increase tax revenue. It demands that the Balanced Budget Amendment include a provision under which taxes can only be raised by a supermajority vote in Congress.

    Have you noticed many laws passing Congress with supermajorities lately? Probably not, because it doesn't happen very often. This requirement would result in the virtual elimination of tax increases in the United States.

    With no means of funding the operation of government beyond the collection of taxes, and without the ability to actually raise taxes, the provision of public services would become closely tethered to short-term fluctuations in America's prosperity.

    Imagine a crisis in which millions of people lose their employers, and can no longer pay taxes. A crisis that transforms wealthy suburban subdivisions into virtual ghost towns. A crisis which reduces much of the the financial infrastructure to rubble, and devours pensions alive at a staggering rate. The government would be forced to immediately shrink in response, eliminating services and abandoning a desperate population at the exact moment everyone needed it most. As if that weren't bad enough, then consider how the diminishing government safety net -- or diminishing number of government safe zones -- would exacerbate the very crisis that's putting a crimp in revenues in the first place. With no shelter from the ravages of the outside world, even more Americans succumb to the encroaching catastrophe. The result: a feedback loop of ever-smaller and less-visible government. Pretty soon, it'll be every man for himself, scrapping it out for food, water, and ammunition. Don't go outside after sunset -- they've just turned off all the streetlights.

    Balanced budgets are nice when you can have them. But people can't eat a balanced budget -- and an unbalanced budget isn't going to eat you. There are worse things than borrowing a few dollars now and then.


    So there you have it. How Tim Pawlenty's Cut, Cap, Balance pledge doomed the United States... and the world.

    Of course, these ideas don't have any real credence among serious policy types. But in a way, that just makes their apparent popularity among Republicans all the more unnerving. If expert consensus and common sense can't keep this sort of stuff out of the highest echelons of politics, some measure of craziness is virtually guaranteed to escape into the statute books at some point. You have to wonder if Pawlenty thinks he'll never have to stand by his words -- or if he just doesn't care to learn anything about economic policy at all. So long as he's able to make bold statements that'll win votes, it doesn't really matter if he bothers to understand the consequences of those statements. And maybe he knows that, too.

    Hooverism has long been dead and buried. But for whatever reason, Tim Pawlenty and his Republican buddies seem determined to disinter its rotting corpse and jolt it full of unnatural life. Hopefully someone can put a stop to this particular zombie before it's unleashed on the unsuspecting people of America.

    Reposted without comment from the beginning of my entry-level econ textbook

    Thursday, June 23, 2011

    Duking it out with consumer information capture

    As some of you might know, the fine gentleman to the right is Duke Nukem, foul-mouthed star of the long-awaited video game Duke Nukem Forever.

    Some backstory for the uninitiated: Duke Nukem Forever had a long (really long -- like, fifteen years) and troubled development history. For a many years no one thought it would ever be released. Turns out we were all wrong: two weeks ago it appeared on store shelves, to thunderous hype and more than a little bewilderment.

    And it sucked.

    It must have really sucked, because it basically got panned everywhere. Video game reviewers are not a group known for their inviolable journalistic principles, or their habit of doggedly speaking truth to power, but they mostly agreed: DNF would probably have been better off left in limbo.

    It's not the game that's interesting to me, though. It's the controversy that's exploded after the game was released. Apparently, a member of the Redner Group, the game's PR firm, sent the following frustrated tweet:
    Too many went too far with their [Duke Nukem Forever] reviews…we are reviewing who gets games next time and who doesn’t based on today’s venom
    By"games next time," he's referring to the generally-accepted practice of publishers sending out advance copies of games to reviewers, in the hopes that early rave reviews will build sales momentum.

    To the gaming community, this all seemed a bit too close to blackmail. Angry posts were written, people were fired, PR contracts ripped up. Ill-advised defenses were mounted. Apologies were made and assurances given.

    The end? Not really. Just because Redner said the wrong thing doesn't mean that Redner is wrong. In fact, I almost appreciate their honesty. The distribution of review copies happens across the industry, and no one thinks they're sent out because of game developers' commitment to impartial consumer reviews. The practice is unabashedly a tit-for-tat exchange: we'll give you the games you need to ply your trade, and you give us the good reviews we need to sell our games.

    You might expect market forces to correct this problem: after all, a game reviewer who pays fifty dollars for each new game would surely earn more than fifty dollars worth of credibility with his readers. And if review copies were the only thing at play, I'd agree. But the flap over review copies is only representative of the real problem: access.

    A reviewer or reporter who rubs a game developer the wrong way could find himself without access to the precious lifeblood of games journalism: the ability to go behind the scenes with developers and see exciting new games. And game journalists know that preview stories, breathlessly detailing the Next Big Thing, are the bread and butter of their trade. Few press outlets could survive the total loss of access.

    I'm not saying that game developers use access rights as a bulwark against bad press (although I wouldn't be surprised if it were common). But everyone in the industry must be acutely aware of the way things work, anyway. Everyone must know who is holding all the cards. And there's no way that it doesn't impact what reporters write about games.

    The effect is easy enough to see: anyone who has ever picked up a game magazine knows what a joke preview articles are. You could read a hundred of them before you found even the slightest expression of skepticism. Either the writers are fawning idiots who are blown away by the repetitious mediocrity that is most games... or they're simply under pressure not to bite the hand that feeds them.

    What I'm describing is basically a form of informal regulatory capture. (I know that it's a bit strange to call game reviewers "regulators," but to a certain extent, that's the role most people expect them to play: punishing bad firms with bad reviews.) The interests of the regulators have become intertwined with the interests of the regulated. It's not an uncommon problem, of course. Even the access-for-coverage dynamic should be familiar to anyone who works in politics. (Think about this the next time you read an article that uncritically parrots the words of an "anonymous, high-ranking White House official." Why does no one ever seem to out that guy?)

    Ordinarily the solution to capture is conceptually straightforward (if difficult in practice): build better regulators. There's a vast literature on how to structure a regulatory institution so that it can resist industry influence.

    But that's pretty clearly not the solution here. That's because, understandably, there's no one around to do the building. It's just not important enough of an issue. The makers of Duke Nukem Forever hadn't dumped radioactive waste into the Mississippi. They weren't even designing SUVs that roll over, or selling toxic baby toys. They just made a crappy game and tried to pawn it off on as many people as possible. Life goes on.

    And honestly, we're not just talking about the video games industry. At the highest level of abstraction, you see a similar dynamic in many industries that provide consumer goods. The industry is holding all the goods and most of the money, and the consumer reporters and reviewers are forced to buddy up to the companies they're supposed to be criticizing. Cars! Wine! Consumer electronics!

    It must distort the market -- consumers need information to make purchasing decisions, and the information reaching their ears is skewed in favor of the firms already participating in the market.

    Anyway, I don't have any solutions here. On one hand, consumer goods are one area where I generally favor a laissez-faire approach (after addressing safety concerns and the like). On the other, I don't like having to say, "Well, these industries aren't important enough to regulate, so we'll just endure the costs." And those costs, taken in the aggregate, seem substantial! No one is going to be calling for a federal video game regulator because they disliked Duke Nukem Forever*. But how much money do we waste every year making bad purchasing decisions because we don't have access to good information? Probably a lot!

    The only response that jumps to mind -- and this is more a thought than a proposition -- is somehow placing all consumer reviews, for all the different products, under one very large roof. That way the welfare of the consumer reporters isn't dependent on any one industry, and heavily dependent on the credibility of the agency as a whole. Of course, there's about a thousand reasons this would be impractical and creepy, starting with implementation, and heading quickly into the inherent absurdity of living in a world where the National Board of Game Evaluation gives Modern Warfare 3 a 5.4, citing "lack of innovation" and "dull multiplayer."

    So where does that leave us? I'm not sure. I'd like to find a better way of doing things -- but I just don't see one out there.

    *Except maybe me, apparently.

    Wednesday, June 22, 2011

    Killing the economy to save the economy

    Okay, everyone, for this post to make sense, you're going to have to think all the way back to 2008, when credit default swaps were all the rage.

    Remember what a credit default swap is? No? Well, they're actually quite simple: in simple terms, credit default swaps are insurance that a lender can buy for a loan. In other words, if I loan out money, I can buy a CDS on that loan, and then if the borrower fails to pay me back, whoever sold me the credit default swap will pay me back instead. Naturally, the riskier a loan looks, the more expensive it is to buy insurance for that loan, in the same way it's expense to insure a risky driver or a beachfront property in Miami.

    So one way to measure the perceived riskiness of a loan is to look at the price CDS sellers are asking to insure it. If it's high, the loan seems risky. If it's low, the loan seems safe. And if it's going up, the loan seems to be getting riskier.

    With that in mind, check this out this graph of CDS prices for the debt of various countries:

    Note the sudden sustained spike in the CDS price for US debt a couple of months into 2011. That indicates that CDS sellers think that US debt got significantly riskier in that period.

    What could be causing this very sudden change in perceptions? The economy? No, the economy has been in the toilet for many months no . High government spending? No, there's been no sudden change in government spending priorities to cause that sort of reaction.

    Most probably, the spike is being caused by ongoing fight in Congress over the debt ceiling. Investors are worried that the US might not actually raise the debt ceiling, causing a sovereign default, and they're pricing their insurance on US debt accordingly.

    In short, this chart shows exactly why Congress needs to just bite the bullet and raise the debt ceiling already. ASAP.

    The current spike in CDS prices illustrates the completely loopy reasoning of the members of Congress (also known as Republicans) who are refusing to raise the debt ceiling until the deficit gets cut. That's because the number one danger of high government spending isn't actually sovereign default -- it's that lenders, wary that their loans will never get paid back, will demand higher interest. The increased cost of borrowing would create all sorts of difficulties for the United States, which, like all modern economies, will always rely on a certain degree of borrowing to finance its government.

    But this chart illustrates that what worries lenders the most isn't government spending at all! No -- lenders are much more concerned about the prospect of a congressionally-induced default than they are about runaway spending. And this worry isn't just theoretical or speculative -- the debt ceiling standoff is impacting the market around US debt instruments as we speak. What we fear is already happening, and we're causing it.

    Obviously, the chart hardly illustrates an impending crisis. For reasons that aren't quite clear to me, there was a similar spike -- though only half the size -- at the same time in 2010. And if Congress does manage to reach a bargain (and that bargain doesn't include economy-killing spending cuts), everything will hopefully return more or less to normal.

    But maybe not. Because even if a compromise is reached, the financial world will remain acutely aware that one day, the debt ceiling will need to be raised again. And they'll know just how close to the line Congress is willing to walk. They'd be crazy not to price that possibility into their financial instruments.

    In fact, if anything, I think the financial world remains underappreciative of the Senate's dysfunctionality. It's hardly inconceivable that some mixture of congressional brinksmanship and parliamentary procedure could cause an accidental default -- particularly if recalcitrant Tea Party Republicans, many of whom seem to genuinely believe that the debt ceiling doesn't need to be raised, get involved. The debt ceiling represents a truly horrendous piece of institutional design -- essentially a sort of reverse self-destruct button, which must get pressed every year or the country automatically destroys its own economy -- and one day it's going to come back to haunt us. Just because we avoid disaster this one time doesn't mean everyone will forget that the potential for disaster is still built into the system.

    But all prognostication aside, the chart suggests that, already, right now, today, the quantifiable negatives of a political fight over the debt ceiling have eclipsed the quantifiable negatives of actually having a large national debt in the first place. Damage has already been done to lender expectations, and as long as Congress holds this issue on its plate, there's a risk it'll get worse. If Republicans had any sense at all, they'd take evidence like this as a sign that they should back off and find new avenues to pursue deficit reduction. (Might I suggest fixing health-care spending?) Instead, they seem determined to forge ahead, causing the damage they're ostensibly trying to prevent.

    (h/t Felix Salmon)

    Tuesday, June 21, 2011

    On Dubai

    Something about this short Anne Applebaum piece really rubs me the wrong way. It compares present-day Dubai to 19th century urban America: a new type of city, strange to foreign visitors, but ahead of its time in many ways. She concludes, "Like the Europeans before me, I resist the idea that Dubai heralds the civilization of the future. But I have to concede that in some senses it might."

    Now Dubai, of course, is enormously wealthy -- although not from oil, as most people believe. It derives its modern wealth from its zeal for the provision of unregulated financial services, and its location as a center for trade through the Persian Gulf (in particular, trade coming across the Gulf from Iran). And Dubai, of course, has hardly been modest in showing its prosperity, containing a good percentage of the world's tallest skyscrapers and some of the most extravagant construction projects ever attempted.

    But how does Dubai represent the city of the future, exactly? To Applebaum, Dubai's modernity is expressed in its lack of any discernible history, culture, or heritage. As evidence, she cites the (in my opinion, extremely dubious) architectural similarities between Sears Tower and the Burj Khalifa, as well as the open expropriation of cultural indicators from around the world, ranging from Venice and Paris to Las Vegas. She talks about the mix of races and ethnicities living side-by-side in the city. To her, I suppose, Dubai has taken the funds it wrung from the global economy and used them to whitewash the streets, building thousands of feet of shining steel overtop any relic of past cities. She doesn't approve, but she notes that "there have always been people who dream of escaping from their culture, who long to forget their history, and who are content to live without the past."

    Well, okay. I've never been to Dubai so I can't speak to how thoroughly adrift from history it really is. But I do know that Dubai is a very strange place. For instance: by a ratio of nearly 3 to 1, most of its residents are non-citizens. By a ratio of nearly 3 to 1, most of its residents are male. This is because a huge portion of its residents are undercompensated laborers living in camps outside the city, trucked into town every day and set to work building the towers, manning the shops, and cleaning the streets. And Dubai appears to require enormous amounts of labor to run, much more than an ordinary city. It maintains a huge tourist economy, and seems to cater almost exclusively to wealth, with all the trappings that catering to wealth entails.

    One assumes that Applebaum didn't stay in -- or even see -- the labor camps that house most of the population. It stands to reason that most of the Dubai's residents would find her experience of the city unfamiliar -- maybe even unrecognizable. So while she's eager to declare Dubai's sleek capitalistic polish "vulgar," there's something equally vulgar about her willingness to expound on the "civilization of the future," while living in that civilization's palaces and, apparently, rarely peeking behind the curtain.

    For Westerners, Dubai is by all accounts a fantasy of wealth. It's a gilded Potemkin village, where the walls are propped on the backs of imported Indian labor. It's those laborers that build and run the fake Louvres, the cavernous malls adorned with international trademarks. In other words, the reason Dubai doesn't have any history is because it (barely) paid hordes of politically powerless workers to scrub all the history away.

    And that leaves us with a question: how does she propose that the ahistorical cities of the future accomplish the same, without doing the same? She thinks she's describing a future in which people live in a gray void of cultural ennui, but she's wrong. She's describing a future where most people live miserable, impoverished existences, scrapping out a living by serving their social betters. Her city of the future isn't soulless -- it's nightmarish.

    I think the best story to tell about Dubai isn't about the rise of rootless capitalist culture, or about a fortunate few can escape to its towers, where they'll only ever be confronted with familiar names and clean, empty spaces. It's about the city's sewage system -- or rather, its lack of one. Instead, in the middle of every night, hundreds of trucks travel around the city, draining septic takes. They take all the waste that would otherwise flood the streets and carry it into the desert. Some of them deliver it to a treatment plant; other, less scrupulous drivers simply dump their cargo into the Gulf.

    It's an absurd system, no doubt undertaken at absurd expense. It barely seems sustainable, or even rational. And despite the city's best efforts, it's not terribly functional: enough of the waste pollutes the waters of the Gulf that beaches outside the billion-dollar hotels have become a health hazard.

    It's the perfect metaphor for Dubai: you have workers, under the cover of darkness, literally spiriting away all the filth generated by normal human society. It's the only way a city like Dubai works. And yet it all floats back to them in the end. It turns out, the way you build something -- and why you build it -- is important. Whoever does end up building the cities of the future should keep that lesson in mind.

    Sunday, June 19, 2011

    An objective measure of celebrity

    Currently, there are 527,227 English-language Wikipedia pages about a living person.

    Globally, that means one person out of every 12,850 is important enough to have their own Wikipedia page.

    So now you know.

    Econ textbooks are awful

    I'm taking an online summer microeconomics class (it's a stupid degree prereq) and it's reminding me why I hated taking econ in undergrad so much. Whoever writes these textbooks apparently cannot resist the temptation to take their (perfectly valid!) basic economic principles and then set them to use making (broad, unsupported!) political arguments.

    For instance, check out this passage:
    [T]he growth rate of a nation's productivity determines the growth rate of its average income. The fundamental relationship between productivity and living standards is simple, but its implications are far-reaching. If productivity is the primary determinant of living standards, other explanations must be of secondary importance. For example, it might be tempting to credit labor unions or minimum-wage laws for the rise in living standards of American workers over the past century. Yet the real hero of American workers is their rising productivity.
    They sound pretty sure of that, don't they? Productivity is king. If you want more prosperous workers, increase productivity -- all that other stuff is secondary. Well, they are economists, so I'm sure the evidence will prove them righ-

    Oh no! Something's gone wrong! Whatever could it be?!

    Of course, nothing they've said is false, strictly speaking. As society gets richer, mean incomes go up, and sure enough, that's one kind of average. And real wage increases would be impossible if productivity hadn't increased.

    But the textbook authors have conflated mean income with "living standards of American workers," a formulation which contains an unspoken assumption that income growth is distributed evenly. Increasingly, it's not.

    In short, their example suggests a number of conclusions that simply aren't borne out by the evidence. And they could have avoided the mistake altogether if they'd avoided the temptation to include an underhanded little jab at unions and worker protections.

    Friday, June 17, 2011

    Budget deal on the way; or, zen and the art of deficit reduction

    Lots of signs coming out of DC that a budget deal is in the process of being cut, or will be cut soon. I can't post links right now* so just go read Ezra Klein's blog for the details. But the gist of it seems to be some sort of entitlement reform, spending cuts, and a collection of spending caps in exchange for closing tax loopholes.

    Okay. Deep breaths.

    Part of me wants to panic: spending cuts are dumb, dumb, dumb. Spending cuts hurt the economy in the short term - that's not remotely controversial. And right now, the economy is weak. Making it weaker -- or god forbid, tipping it back into a second recession -- means reduced revenues and then even bigger deficits and even more reason for the right to demand even more spending cuts and so on and so forth. It would also probably cement Republican control of Congress for the time being, meaning more tax cuts and spending cuts, meaning weaker revenues and a weaker economy and a larger deficit and so forth and so on.

    The refusal to consider new taxes is also worrisome, because how much money can actually be raised by closing tax loopholes? The less that can be raised, the bigger the spending cuts have to be.

    On the other hand! As it turns out, hundreds of billions actually can be raises by closing loopholes. Entitlement reform can also save quite a lot of money, and is not necessarily a bad thing if structured correctly. And closing tax loopholes is good for the economy even independently of its effect on the deficit, because it squeezes out inefficient rent-seeking behavior by industries and corporations.

    (Spending caps are a bad idea, but it's impossible to say how bad until you know where the cap is set.)

    And there's also history. Every time Obama cuts a deal with Republicans, the Republicans win the message and he wins the substance. The tax cut deal enraged the left but was a huge win for Obama. The budget deal contained much smaller cuts than anyone initially realized, and they were structured in just about the least objectionable way possible. And when it comes to a lot of these cuts, Democrats are plain better negotiators than Republicans, because Democrats actually care about making the social safety net sustainable and, frankly, have most of the policy expertise in their corner. And so I'm resisting the temptation to run around and freak out until someone has numbers they can run through a computer.

    But still. It's hard.

    I'm writing this from my phone at Netroots Nation (#bravenewworld #nowimoneofthem) so I can't link, or, tragically, italicize.

    Would free energy save us all?

    Over at the Prospect, Paul Waldman asks whether "thorium will save us all." Apparently, thorium can be used in conjunction with super hi-tech particle accelerator thingamajigs to create a cleaner, safer, more efficient form of nuclear fission. Some scientists have gotten pretty excited about the process. Naturally, this also has the potential to excite climate hawks, because cheap, clean energy would, for the first time since the industrial revolution, disconnect economic growth from carbon emissions. If thorium reactors work, and if they're adopted rapidly enough, and if they're paired with a transition to electric transportation, this is a technology that could reduce global carbon production pretty much to zero.

    Paul gives a verdict of "maybe." Not being a nuclear physicist myself, I'll side with him.

    But I've long thought that people are actually much too sanguine about the environmental value of free or cheap energy. It's true that energy production and exploration consume massive resources and produce toxic substances. And it's true that one of those substances, carbon, causes the most pressing current environmental issue in the world.

    But people also do lots of other things that destroy natural resources and produce toxic substances! Low-density development takes up space, ruins habitats, consumes water, and produces waste. So does the production of consumer goods. So does food production. So does building transportation infrastructure. And so on.

    Free energy gives societies much more flexibility in how to approach these other tasks. But it doesn't replace them. We're still going to need food and places to live. Presumably, even in a world where energy is free, we're going to want new clothes and gadgets and gizmos for ourselves. And when addressing these needs, we're still bound by technological and physical limits. No matter how much energy we can produce, or how cheaply, we still aren't able to manifest food out of the void, a la Star Trek. All the clean, free energy in the world wouldn't make you a steak dinner -- you still need a cow (not to mention food for the cow itself).

    On top of that, cheap energy actually has the potential to exacerbate other environmentally damaging activities. Right now, energy production is just one more bottleneck on economic growth. It limits how much stuff we can build, and how fast we can build it. Ease that bottleneck, and growth potentially increases in tandem -- until we reach the next bottleneck. There's no telling what it could be: lack of raw materials? Unavailability of fresh water? Or perhaps something even less foreseeable?

    Of course, none of these obstacles is insurmountable, either -- particularly if you have extremely cheap energy. And maybe one day a fleet of robots will sort through the world's landfills, recycling every object, in order to ensure the constant of availability of resources for the underground factories building the iPhone 40GS.
    But while carbon-free energy creates the potential to address new environmental issues, we still have to actually build the infrastructure and develop the technology to do so. In other words, no matter what happens in the field of energy production, environmental thinking is here to stay. And the sooner we solve the energy problem, the sooner we're going come face to face new challenges.

    Wednesday, June 15, 2011

    And I take one step further into the liberal hivemind

    I'm headed to Netroots Nation tomorrow. Pretty much on a whim -- it's in Minneapolis, I'm in Minneapolis, they'll feed me lunch, so why not? On the other hand, I'm a little worried about running into Matt Yglesias or someone, because of, well, this:

    A hard-line agenda deserves a hard-line candidate

    Kevin Drum, reacting to the debate yesterday, points out that several of the candidates made extremely radical claims that have gone virtually unremarked upon in the subsequent media coverage. Michelle Bachmann promised to abolish the EPA. Mitt Romney argued that virtually every function of government should be relinquished to the states or private industry. To that list, I'd add Gingrich's contention that Muslims might not belong in government, as well as the entire field's inability to admit that maybe, just maybe, certain sectors of the economy might need some marginal amount of regulation.

    A while back I wrote up a jokey post suggesting that I was supporting Bachmann in the presidential race. But some part of me actually, genuinely thinks it would be for the best if she (or one of the other nutball candidates) won the nomination, even with the knowledge that the nominee has a substantial chance of winning the election.

    The reason I say this is because, in regards to the GOP primary, the optics have overwhelmed the policy. Conventional wisdom says Bachmann and Santorum and Paul and Palin are bonkers, while Pawlenty and Romney and Huntsman are dull, sedate, and unremarkable. But those impressions are more deeply rooted in the candidates' public personas than in the substance of their platforms. As last night demonstrated, there's just not that much disagreement between the candidates on substance. At the moment, you simply can't find that much breathing room between the policy prescriptions of, say, Bachmann and Romney. Worse still, this apparent consensus has coalesced around views that, as recently as three years ago, would have been closely associated with the political fringe.

    Think back to 2008 and early 2009. Who in government, besides hard-line Republicans, was saying that the correct response to the economic collapse was to cut spending, deregulate banks, and let the states take care of everything? Today, how many Republicans of any stripe are saying anything else?

    For me, this naturally raises a concern: if Romney or Pawlenty or Huntsman does win the nomination, would those policy prescriptions suddenly be granted a veneer of rationality and sobriety just because their most notable proponent seems rational and sober? After all, most people, and most pundits, generally lack the capability to independently evaluate policy in a void. In American politics, ideas regularly shuttle between the fringe and the mainstream, and unfortunately for us, there's no invisible barrier which filters out the crazy ones. Equally unfortunately, most modern reporters are very reluctant to stand up and evaluate an idea on its merits once that idea has achieved a certain degree of purchase in the mainstream. In other words, the Tea Party's loony agenda could suddenly become credible, after being passed on to Romney or Pawlenty in some sort of Relay Race to Public Acceptance. That's no good. If the Tea Party's ideas are destined to be tested on a national stage, Bachmann and Co. should be the ones to carry them there, just so everyone can see who's been carrying them all along.

    Tuesday, June 14, 2011

    Get ready to party like it's 2008, because here come the Wordles

    I wordled my blog.

    It contains a secret subversive message:

    "Left tax. Now better schools maybe never. Think right, people. Much government. Republican Senate already."

    Monday, June 13, 2011

    Final candidate scores from the debate

    Okay, a couple of other thoughts. I'll just go candidate-by-candidate:

    Santorum: Pretty boring. He seems to have taken the mantle of "placeholder Republican" from Pawlenty for the night. Seemed nervous a lot. Funniest moment: Explaining that illegal immigrants only want "government benefits," as opposed to legal immigrants, who want "freedom." Grade: B-

    Bachmann: She did surprisingly well, if you ignore the content of her ideas. Kept the crazy out of her eyes and voice. A lot of people lately have been saying Bachmann is going to replace Palin as the Tea Party's favorite candidate, and I'm not sure they're wrong. On the other hand, Bachmann's much more policy-oriented, and therefore more prone to saying truly nutty things, than Palin. Palin's gaffes seem mostly rooted in her straightfoward, unfiltered stupidity, and are easier to characterize as homespun wisdom. Funniest moment: The opening speeches quickly turned into a game of family-values one-upsmanship, where the candidates listed how many members were in their immediate family, and mostly forgot to mention their experience in public service. Bachmann won in over-the-top fashion, when she told us she was the proud mother of five, and proud foster parent of twenty-three. Grade: B+

    Gingrich: Probably did the worst out of all the candidates. Hardly ever spoke, and when he did, came off as a slow-witted, listless contrarian. He also seemed really, really old (him referencing his legislative work during the Reagan presidency didn't help). He seemed strangely concerned with majoritarianism, explaining early on that the president can't repeal the ACA without congressional help, and expressing a great deal of ambivalence over Ryan's plan for Medicare "because it doesn't have the support of the American people." These surprisingly honest positions did him no favors and opened him up to attack from, well, everyone else. Funniest moment: Gingrich tried to take a bold stand on the space program. Then he walked it back. Then he seemed to walk back the walking back. His apparent conclusion: the space program is okay, just so long as the rockets aren't physically riveted together by Washington bureaucrats and launched off the National Mall. Grade: F

    Romney: As if it weren't clear already, Romney was the obvious winner, and barring some sort of collapse I can't conceive of anyone else winning the nomination. He was professional, confident, and basically spoke and acted like a guy who should be running for president. That might have something to do with the circus atmosphere fostered by the rest of the candidates, but... well... those are the rest of the candidates. Funniest moment: Romney occasionally took a break from smirking at the other candidates to make bold statements that proved his conservative credentials. His zeal for privatization and against health care reform were pretty entertaining to witness, if only because they're so utterly implausible. Grade: A

    Pawlenty: Early on, someone on Twitter pointed out that Pawlenty seemed physically intimidated by Romney, and it's true. The worst moment came when John King tried to get Pawlenty to explain his "Obamneycare" quote from a few days ago. Pawlenty should have taken the chance to highlight the clearest difference between him and Romney. Instead, he hemmed and hawed and acted like a guy who had just gotten caught in a lie. No, Tim, Obamacare and Romneycare really are the same! You should say so! But his reaction was in keeping with his performance all night, which revolved entirely around his ability to echo empty conservative platitudes while taking very, very few actual policy stands. Funniest moment: Time Pawlenty is congenitally incapable of being funny. Grade: C

    Herman Cain: I have no idea. He didn't stand out much, has no experience to speak of, and just basically came off as "some random guy who wanted to run for president." He seemed slightly more eager to talk about the primacy of business and the many subtle joys of entitlement privatization than the other candidates, but only very slightly. Funniest moment: Explaining that he's not racist because he only discriminates against Muslims when he thinks about "the ones that want to kill us." Nah, man, that's pretty racist. Grade: C

    Ron Paul: Pretty much spent the entire debate seething with indignation at the temerity of anyone who dared suggest that the government has any role in anything. Mentioned the tyranny of the Federal Reserve early and often. At least the man is consistent. Funniest moment: Whenever he spoke. Grade: 24 karat

    My thoughts after the Republican debate in New Hampshire

    There is absolutely no way anyone but Mitt Romney can possibly win this campaign. All the rest of these people are clowns.

    Actually, I'm just going to live-blog this

    7:13 PM: Ron Paul totally losing it about the Federal Reserve -- we're in the middle of "unwinding a seventy-year-old Keynesian bubble."

    7:15 PM: Michelle Bachmann claims "the CBO says Obamacare will kill 800,000 jobs." This, for the record, is not true.

    7:16 PM: Romney is trying to distinguish the ACA from his health care plan in MA. But not well. "My plan was a state plan, so if people don't like it, they can change it." Errrr....

    7:18 PM: John King trying to start a fight between Pawlenty and Romney. Romney just just smirks while Pawlenty dodges and weaves.

    7:19 PM: This is all ridiculous, though. "Romneycare" and "Obamacare" are incredibly similar.

    7:20 PM: Gingrich points out (correctly!) that the president can't unilaterally repeal a law passed by Congress. No, Newt! Bad!

    7:22 PM: Rick Santorum seems like the nerdy kid who always runs for class president.

    7:22 PM: Michelle Bachmann says the Tea Party is made up of "disaffected Democrats" and "a wide swath of Americans coming together." This, for the record, is not true.

    7:23 PM: John King is pathetic. "Alright. Okay. Alr -- Oh -- Alright. Uh -- Alright. Yeah. Okay. Uh."

    7:25 PM: Someone just asked how the candidates would increase manufacturing jobs. Prediction: they'll say "Cut taxes, cut regulations."

    7:26 PM: Yep.

    Although Ron Paul also said we should strengthen the currency, which, as everyone knows, makes American labor cheaper and more attractive.

    7:29 PM: Michelle Bachmann says the answer is to "Repeal the EPA."

    7:30 PM: Santorum says cut the capital gains tax, so that "wealth can really trickle down."

    7:32 PM: Gingrich: "Why would you want to be California when you could be Texas or North Dakota?" #republicans

    7:35 PM: Santorum picked Leno over Conan, proved his unfitness for office once and for all.

    7:37 PM: A union leader asked Ron Paul how'd he have government assist and subsidize private enterprise. Ron Paul is flabbergasted at the question, can barely speak, stutters his way through an outraged response. #perfectstorm

    7:42 PM: No one is willing to stand behind the wildly successful auto bailout. Not surprising, but no less absurd for that.

    7:46 PM: Truly bizarre disagreement about the space program. Gingrich: "NASA's gotta go." Pawlenty: "No, let's not get rid of government space travel." Gingrich: "I'm not saying get rid of it, I'm saying move it out of Washington, decentralize it." As best I can tell, Gingrich is proposing state-sponsored space launches.

    7:49 PM: Big moment as Herman Cain says the government should inspect food. First point for government regulation all night.

    7:50 PM: Romney: "Every time you take something from the federal government and send it back to the states, that's the right direction. And if can send it all the way back to private enterprise, that's even better." Even on a stage with Ron "tinfoil hat" Paul, this is the craziest thing anyone's said yet.

    7:54 PM: Oh, wait, I forgot that Ron Paul just came out in support of the collapse of the housing market (because it's propped up by government dollars, you see) a few minutes ago. Nevermind.

    7:55 PM: John King keeps asking "This or that" questions. "Blackberry or iPhone?" "American Idol or Dancing with the Stars?" #thedeclinistsareright

    7:56 PM: Ron Paul suggests a Medicare opt-out. "Let people take themselves out of the system! Take care of themselves!" Huh?

    8:03 PM: Romney refuses to say that the debt ceiling should be raised. Uh oh.

    8:05 PM: John King is my least favorite person on the stage. #stoptalkingIhavetoaskyoumorequestions

    8:10 PM: Herman Cain just said A. he wouldn't be comfortable with a Muslim in his administration, B. that there's nothing wrong about giving extra scrutiny to Muslims as long as they're "the Muslims who are trying to kill us," and C. that he is opposed to Sharia law. Massive applause.

    8:11 PM: Romney backs freedom of religion, non-discrimination. Genuinely admirable moment for him.

    8:12 PM: And then Newt Gingrich went on a horrifying rant about how there's nothing wrong with excluding Muslims, because many Muslims don't believe in America. "We did it to the communists and Nazis, and it was controversial then, too."

    8:13 PM: And finally, John King interrupts the candidates for the most powerful office in the world, who are currently railing against religious minorities, in order to announce that it's time for a commercial break. But first, he has one more question for Herman Cain: "Deep-dish or thin crust?" "Deep-dish," says Cain. Cut. #theterroristsareright

    8:19 PM: Bachmann, Paul, Cain all prefer leaving gay marriage to the states. Everyone else wants an amendment to make it unconstitutional.

    Then Bachmann clarifies her answer, "I would support a constitutional amendment. I just wouldn't support overturning state laws." Okay, "clarifies" might have been the wrong word.

    8:25 PM: Questioner points out that Romney "changed his mind" on abortion. Despite occasional jaunts into crazyland, Romney has been by far the most impressive candidate in this debate. He's also the one who agrees with Democrats the most. #surelyacoincidence

    8:28 PM: Next up: illegal immigration. Santorum says the people who come here legally "came for freedom." But the rest, apparently, "come for government benefits."

    8:33 PM: Pawlenty talks up his immigration credentials. "I sent the Minnesota National Guard to protect the border." Not the border they're talking about, dude.

    Also he just claimed that birthright citizenship isn't in the Constitution. Hm.

    8:35 PM: The union leader who asked Ron Paul about when government should help industry now asks him if eminent domain should ever be used. #trollspotted

    8:41 PM: The US literally cannot achieve energy independence by ramping up oil production. There is not enough oil. This is a thing you cannot say out loud and be elected president. Urghhhhhh

    8:43 PM: There's more genuine disagreement about foreign policy than anything else so far. Although Romney's "I don't want to fight someone else's war for them in Afghanistan" has a pretty huge asterisk in the form of "depending on what the generals say."

    8:47 PM: "Should the price tag be a factor in military action?" Wow, John King, way to ask the tough questions. I wonder what they're going to say.

    8:48 PM: Gingrich and Bachmann both believe Libyan rebels are probably al Qaeda. Not sure what policy response this new information necessitates. Change sides and start bombing the rebels, maybe?

    8:49 PM: Herman Cain: "To paraphrase my grandmother about these situations in Libya and the Middle East, these are not simple situations." #agebringswisdom

    8:51 PM: "Unh. Unh. Unh. Unh. Unh. Unh. Unh. Unh. Unh. Unh. Unh. Unh. Unh. Unh. Unh. Unh. Unh. Unh. Unh." --John King, moderator extraordinaire

    8:55 PM: John King reads off a bunch of "great questions from the public" about foreign policy. Doesn't ask them to anyone. Food for thought, maybe? "Have you considered... Israel?"

    In unrelated news, CNN spent a total of nine minutes on foreign policy.

    8:57 PM: King asks whether McCain or Obama made a better vice-presidential pick. Pawlenty says Biden has been wrong about everything in his life, ever. Romney says anyone in the debate would be a better president than Obama. There is a zero percent chance he believes this. Bachmann says she will pick her vice president through an American Idol contest, but it was probably a joke.

    8:59 PM: John King: "Er..- Uh..-- Mister-- Mister Speaker-- Uh-- Right-- Uh-- Uh-- Yeah-- Right--"


    And that's a wrap. God have mercy on the United States of America.