Matt Yglesias

WSJ: Only Secret Illegal Surveillance Will Provide Accountability

I’d thought that one beneficial result of Barack Obama being elected president was that it might cause conservatives to think twice about their post-9/11 embrace of unlimited executive power. But instead The Wall Street Journal is still upset that the new, loophole-ridden FISA is too restrictive:

What Democrats have done, in essence, is to insert an unelected judiciary into the wartime chain of command. As Mr. Kelly notes, this is producing a “lack of accountability” and “the lack of transparency into the inner workings of the FISA process.” If some faceless FISA judge denies a surveillance request from Mr. Kelly and New Yorkers die as a result, that judge will answer to no one. Under current FISA rules, we won’t even know who that judge is.

To ease the Journal’s mind, part of the point of the last revision’s retroactive immunity for lawbreakers is that any restrictions currently on the books are purely make-believe. Everyone understands now that there will be no penalties for breakin the rules. Meanwhile, Tim Lee observes that “The whole point of the Fourth Amendment is that ‘unelected judges’ oversee the activities of law enforcement.” Indeed it is. This kind of thing is sort of integral to ideas like due process and the rule of law. If nothing is overseen by “unelected judges” then liberal democracy is out the window.

Who Needs Sunshine?

Spencer Ackerman writes: “I’m leaving for a brief trip to Toronto on Friday — where else would you go in December? — largely to get my head together and to see a Metric/Tokyo Police Club show.”

Fracking Finland where it’s not only cold, but it’s dark twenty hours a day, that’s where. On a more serious note, Metric is awesome, one of my favorite bands, wish I could be there, y’all should buy their albums.

Caroline Kennedy

This Caroline Kennedy concept doesn’t sound like a great idea to me for most of the familiar reasons, but give her this — unlike the current occupant of the seat she’s actually lived most of her life in the State of New York. I’d say that would be a step in the right direction for my homeland. Hillary Clinton turned out to be a fine Senator, but I always thought it was bizarre that she was given the nomination in the first place.

The Health Maw

Obviously, you don’t build a Finnish level of educational performance without the foundation provided by the egalitarian Nordic social/political/economic model. And you don’t build a Nordic welfare state without some taxes. But there are things besides tax rates that make it possible to afford to Finland’s relatively generous social provision. One such thing — lower defense expenditures. But another is lower health care expenditures:

If you can’t read that chart, click over here. It shows that the Finnish system is so much cheaper on a systemic basis than the American system, that public expenditures on health care actually comprise a slightly smaller share of Finnish GDP than they do of American GDP. This even though Finland’s public expenditures on health care are done in a far more egalitarian manner and cover far more comprehensive service.

And of course when private expenditures are factored it, Finland spends dramatically less on health care. And yet, we get little-to-nothing in terms of better health outcomes in exchange for our additional health care spending. The total gap — including both public and private expenditures — frees up almost 8 percent of Finnish GDP for productive investment in education, infrastructure, etc. in a way that allows reasonable robust growth to coexist with relatively high taxes and levels of social provision.

There would be nothing wrong with America spending a huge amount on health care if there were some evidence that it was making us an unusually healthy people, but there isn’t.

The Case for Books

Brad DeLong observes that whatever downsides books may have they don’t electrocute you in the bathtub:

My one serious complaint is that it is a book. That means that only one-tenth of the material comes from 2008 - the last-written piece was first published on April 27. A lot has happened since then. Right now I have the book at my left hand and my laptop at my right, with one window open to one of Lewis’ Bloomberg columns about the crisis (links.sfgate.com/ZFPG) and another open to his excellent piece of reportage “The End of Wall Street’s Boom” for the December issue of Portfolio (links.sfgate.com/ZFPL). As a person interested in the panic now and in the future, I find my computer more interesting. On the other hand, I can take the book into the bathtub - so it still has one key edge, even though its production process sacrifices timeliness.

The longer I own my Kindle the more I think that it’s a crucially flawed device in a number of respects. Respects that I expect to be resolved by some successor device in a few years that will position the eBook readers of the future to kill off the regular book. But this bathtub issue is hard to solve.

Qualifications I Can Believe In

I hadn’t realized that Amity Shlaes is a “senior fellow in economic history at the Council on Foreign Relations.” I kind of wonder what it takes to get made a senior fellow in economic history at the Council on Foreign Relations. She’s got a bachelor’s degree in English and her columns once won a prize from a libertarian organization for some articles that “compared the failing economy of high-taxed and over-regulated US state of Maine to the success of the increasingly economically liberal Ireland; and showed that US workers benefit from taking responsibility for their own pensions.” That’s it.

I have a really, really, really hard time imagining the CFR doing something comparable for a liberal with so little in the way of relevant qualifications or track-record outside an ideological cocoon. Just saying. Where’s my fellowship?

The Mattress

Hey now:

In the market equivalent of shoveling cash under the mattress, hordes of buyers were so eager on Tuesday to park money in the world’s safest investment, United States government debt, that they agreed to accept a zero percent rate of return.

You sometimes hear people snarking “remember fiscal responsibility …” or some such, but this is an example of why, yes, we shouldn’t care about some things we normally care about. When yields reach these kind of levels, it’s a no-brainer to start looking for useful public projects to finance with borrowed money.

The Blimp Era

Apparently Robert Gates staying on at the Pentagon means fewer big weapons projects and more blimps. Very strange.

Blagojevich

Obviously I’m way behind the curve on this, but the Ron Blagojevich story is really stunning. There’s probably nothing novel I can say at this point, so I’ll just add that on a personal note, John Wyma was Chuck Schumer’s chief of staff back when I was a lowly Schumerland intern, and so I’m heartened to see him doing the right thing here.

For a while at progressive politics’ post-9/11 low ebb, Blagojevich’s Illinois was a lonely holdout with a Democratic governor and state legislator, so corruption aside it was an important staging ground for some good initiatives on health care and preschool and so forth. Fortunately, progressives now have better political leaders to work with.

24 Hour Day Care People

Another place we visited yesterday was one of Helsinki’s 10 — nine public, one private — 24 hour day care centers. Of course it’s not really “day” care if it’s provided at night. But the basic philosophy here is that some people have to work at night — shift workers at hospitals, people working in public services doing transportation or police work, people working at the airport, etc. — and some of those people have kids, too. The exact details of how the center works were a bit complicated and not terribly interesting, but it’s a great example of Finnish public policy’s strong commitment to meeting family policy needs.

The Basics

Early childhood policy in Finland in a nutshell:

Mothers are entitled to five weeks maternity leave. After that, there’s a parental leave period of ten additional months that can be taken by either mother or father or divided between the two. After that, children have an “unconditional right to day care.” That can be provided either at municipal-run institutions or else at private ones. There are fees day care charged on a sliding scale according to income that max out at 233 euros per month. That’s far less than the cost of care, which, clearly, is heavily subsidized. A family that prefers to have a parent stay home and take care of the children can do so and receives a home care subsidy. Thus, the system is neutral between traditional and working-mother models. About 30 percent of Helsinki children are in the home care / allowance system.

Private daycare facilities are eligible for the same level of public subsidy as municipally run ones. This isn’t really a profitable line of work and so there aren’t many providers — just five percent of Helsinki children are enrolled in a private center.

That leaves the other 65 percent of Helsinki kids in the municipal centers. Centers have two kinds of staff members — “kindergarden teachers” who have bachelor’s degrees and “practical nurses” who have less education. For every four children under the age of three you need one staff member. For every seven children between the ages of 3-6 you need one staff member. And for every two practical nurses you need one kindergarden teacher. So a section of 21 older kids would be taught by one kindergarden teacher assisted by two practical nurses.

Tricky Situations

Mark Kleiman says:

If Jon Kyl carries out his threat to filibuster Obama’s judicial nominees he’ll put some of his colleagues in a tricky position. Graham, Snowe, Collins, and McCain were all members of the Gang of Fourteen, whose statement said “Nominees should be filibustered only under extraordinary circumstances.”

This is actually not that tricky. If Senators want to hypocritically violate the spirit of the “Gang of Fourteen” compromise they’ll pay no political price for it whatsoever. That’s just the way the world works. A clever person can find some rationale, nobody who pays attention will really buy the rationale, and no swing voters will really care.

I think that for completely independent reasons it would be very difficult for the GOP to succeed in maintaining filibusters against Obama’s nominees. It’s important to Sens. Collins, Snowe, and Specter that they’re seen as pro-choice and sometimes secure support from liberal interest groups. But that’s separate from saying that fidelity to the spirit of an old compromise will stop them from filibustering.

Immigration and Early Education

I’m going to do a bunch of posts about Finland over the course of this trip that won’t necessarily be conclusion-driven. The basic spirit is that (a) it’ll be content, (b) it’ll be a useful exercise for me to just try to summarize things I’m learning, (c) someone might find it interesting, and (d) there’ll be time to reach meaningful conclusions later.

Yesterday’s visits in Finland were focused on their early education system. One important new challenge to that system, as to many dimensions of European social policy, relates to dealing with immigrants. Finland’s immigrant population is still relatively small, but in the city of Helsinki it’s pretty big, and immigrants are disproportionately fecund so it’s a big deal for the education system especially in the city.

The early education system is, in principle, a huge opportunity in terms of hopes of building a successful system of integration and assimilation. Kids come in to Finnish early education at very young ages — sometimes just one or two years old — at a time when their linguistic capabilities are developing rapidly and at a point where foreign language acquisition is relatively easy. Thus, this is a great opportunity to teach Finnish to foreign-born children or to the children of foreign-born (most often Russian or Somali) parents. One interesting element to this is that Finnish center-based early childhood services are universally available but by no means mandatory. Many children are taken care of at home or by relatives. And since unemployment is higher among immigrant communities and immigrants also tend to come from families with more traditional gender/family ideas the objective need for child care services in the immigrant community isn’t necessarily enormous.

In the United States, many if not most local governments would take a look at the reduced budgetary costs associated with immigrant families choosing to keep their kids at home and conclude that it’s all good. But the Finns regret the missed opportunity to ensure that immigrant kids learn Finnish and are able to hit the ground running once “real” school starts at age seven. So they make special efforts to try to do outreach and encourage immigrant families to send their kids to early childhood education centers even if they’re unemployed and capable of taking care of them at home. It’s an interesting peek at the difference between social services that are grudgingly provided (as is typical in the US) and a mentality that looks upon them more positively as things that are being offered because it would be good for them to be used.

A related aspect of this is, of course, that it’s easier for immigrant children to learn Finnish if their playmates in school are predominantly Finnish. And this is a point where educators observed that the success of their mission winds up depending on policies made by totally different branches of government. In particular, for the schools to be integrated enough to do language education with maximal success, you need housing policy to put an adequate mix of units of different types and affordability levels in different neighborhoods. The Helsinki authorities reportedly do accomplish this to some extent, with public housing scattered somewhat around the city rather than in a concentrated ghetto. But there seem to be some real limits to the scope of this policy — one school we visited was a bit over 50 percent immigrant, which makes their task difficult.

On a related note, a teacher at that school observed that since that school — with a relatively high number of immigrants, a high number of low-income families (both native and foreign born) and a high number of kids from single-parent families — had a relatively more challenging task than other preschools in Helsinki, it really ought to get more funding on a per capita basis. That seems correct to me — the flat distribution of funds they have in Finland isn’t really appropriate. On the other hand, it’s about a million times more appropriate than the American system which generally allocates the least funding to the communities most in need.

No Blame, No Credit

James Suroweicki makes the case for John Thain’s $10 million bonus:

It’s also true that Thain hardly needs the money, considering the hundreds of millions of dollars he made when he was at Goldman. But it’s also true that Thain probably is one of the few executives in corporate America who actually earned a bonus this year. To be sure, Merrill’s stock price is down almost seventy-five per cent from where it was when Thain took over the company, last November. But one would be hard-pressed to blame Thain for that, given the general collapse of the market and, more important, the fact that most of Merrill’s massive losses this year were the result of huge bets made long before Thain took office.

Here’s what I’d say. You learn in the downturn that the business community believes that the profits and losses of major firms has a lot to do with the general economic climate, and relatively little to do with the particular decisions of particular executives. You hear about things like “the general collapse of the market.” But these concepts seem to go mysteriously missing during boom times. But it can’t be both ways. Either executives should benefit when their company prospers and suffer when it doesn’t, or else variation should be sharply curtailed in either direction. The currently prevailing rule is “double-super-duper bonuses when things go up, and large bonuses when things go down.” It’s a stupid system.

Credit Agencies

I’ve heard it argued that we could get along without things like government inspections of food safety. After all, consumers would still want to know that their can of black beans contains black beans rather than poison. So bean sellers, in order to bolster consumer confidence in their brand, might pay firms that specialize in food certification services to inspect their plants and proclaim them okay or not. Wouldn’t the certification firms have a huge conflict of interest? Well, no, the theory goes. Certification would only be worthwhile to the bean seller if the certification firm had a very strong brand. And a certification firm could only maintain its strong brand by doing the certification job with integrity. Thus we march along the libertopia without all dying of botulism.

Of course, things don’t work like that. Except, it turns out that this basically is the system we use to rate the quality of bonds. But as a system it’s failed miserably:

Since the subprime mortgage troubles exploded into a full-blown financial crisis last year, the three top credit-rating agencies — Moody’s, Standard & Poor’s and Fitch Ratings — have faced a firestorm of criticism about whether their rosy ratings of mortgage securities generated billions of dollars in losses to investors who relied on them.

The agencies are supposed to help investors evaluate the risk of what they are buying. But some former employees and many investors say the agencies, which were paid far more to rate complicated mortgage-related securities than to assess more traditional debt, either underestimated the risk of mortgage debt or simply overlooked its danger so they could rake in large profits during the housing boom.

Relative to the hypothetical bean scenario in which this sort of thing works out, we seem to have had a few issues here. One, for this scheme to work, the rating agencies need to place a higher value on the long-term viability of their brand than on short-term profit opportunities. But of course we know that people are often short-sighted, and often heavily discount the future relative to the present. Relatedly, for the scheme to work we need the firms to be primarily concern with the long-term interests of the firms rather than the interests of the managers. But even if Moody’s, qua company, winds up taking a giant hit over this, it’s still not clear that Moody’s top executives won’t have come out ahead.

Last of course there’s the simple issue of limited options. If two of the ratings agencies had stayed on track but one had gone in for a lot of bad actions, then the one firm might have profited in the short-run but would be dead now. But instead all three went chasing the money, so nobody gains a competitive advantage.

All of which is a long-winded way of saying that it would make a lot of sense to try to develop a public agency that rates credit instruments. Wouldn’t stop anyone from relying on private sector ratings if they wanted to. Nor would it guarantee that the public agency would always get things right. But it would provide a check on some of the distortions that the current system produces.

Discuss Amongst Yourselves

I understand that liberals are either outraged by something Steve Hildebrand said, or else think that it was a really clever trick to reframe progressive goals as centrist ones. Which do you think?

For the Record

I’m having incredible difficulty finding a reliable Wifi (or as they say in Finland, “WLAN”) connection near my hotel so posting may really trail off this week. Either that or the hotel may fix its network. The future is cloudy.

Power and Influence

Doug Merril at A Fistful of Euros has, I think, gotten the right answer to the “soft power” issue:

Here’s a suggestion cribbed from an adaptation of an old tabletop game: power and influence. Roughly speaking, power is the ability to make people do things (or suffer the consequences); influence is the ability to get people to do things on their own (to gain the benefits). NATO has lots of power (and a good bit of influence), while the EU has an enormous amount of influence, but less power. Pointy-haired bosses use their power; good businesspeople use their influence.

Influence is not a second-rate type of power (soft rather than hard); it’s a separate, if related, capacity. So: power and influence.

I think that captures it correctly. In particular, I like that this power/influence issue doesn’t precisely track military/non-military distinctions. For example, while it’s certainly true that the EU doesn’t have as much power as (say) the United States it’s still the case that economic giants like the EU and Japan have a decent amount of power. Economic coercion is, at the end of the day, still coercion and it can be made to work in the right context.

The Strategy Gap in Afghanistan

I agree with Steve Clemons that we need to hear a lot more about what the strategy in Afghanistan is supposed to be. I think a decent case can be made that more troops are needed in select areas in order to facilitate a more targeted approach that involves fewer air strikes. But be that as it may, there’s a need for real political strategy in the country beyond the details of military tactics.

Until quite recently, the international military presence in the US was pretty broadly supported among Afghan civilians, but the popularity of ISAF and the Karzai government is plummeting and the record of foreigners trying to impose their will on Afghanistan is not very good.

Health Care Woes

Sweet, sweet employer-based health care:

As jobless numbers reach levels not seen in 25 years, another crisis is unfolding for millions of people who lost their health insurance along with their jobs, joining the ranks of the uninsured.

The crisis is on display here. Starla D. Darling, 27, was pregnant when she learned that her insurance coverage was about to end. She rushed to the hospital, took a medication to induce labor and then had an emergency Caesarean section, in the hope that her Blue Cross and Blue Shield plan would pay for the delivery.

Needless to say, this is an insane way for a country to organize itself. And of course if you lose your job and are looking for a new one, becoming ill and unable to get treatment for yourself doesn’t help.

The Fashion Case Against Eric Shinseki

Unanimous praise is boring, so let’s all be thankful one of James Fallows’ diligent readers has stepped up to the plate:

From everything I’ve heard, Eric Shinseki is an admirable and decent man and deserves commendation for his service aside from having been visionary about stabilizing postwar Iraq.

That said, in my year-and-a-half since putting on ACUs [Army Combat Uniforms] I’ve heard only bad things said about him by the rank and file, and that’s for something unrelated to Iraq: Shinseki is apparently the genius who decided that we should all wear the beret (which is useless as it provides no shade or or rain or wind protection, and particularly nasty because it takes two hands to put on right, and weighs a ton when wet) as part of our regular uniform in garrison. For that, well, I resent the dude a little as do I think most soldiers.

Still think it’s a good pick.

The Malcolm Gladwell Backlash

I’ve really been taken aback by a lot of the hostile response to Malcolm Gladwell’s Outliers that I’ve read. This isn’t a book without flaws. But the flaws in the book are flaws that have long been present in Gladwell’s writing. And at the same time, Gladwell has long been one of America’s most successful and celebrated non-fiction writers. And that’s because the flaws in his work are, frankly, pretty darn forgivable. Nothing he writes is up to the standard of a peer reviewed scientific journal, and everything he writes is about a million times more readable than anything you’d find in a journal. Yes, some of the stuff in Outliers (in particular, the bit about airplane crashes) doesn’t really seem relevant to the main point, but that’s true of The Tipping Point and Blink as well and folks didn’t seem to mind too much. Nor should they mind too much — the bit about plane crashes is fascinating.

At the end of the day, it’s hard for me not to reach the conclusion that the backlash is, not coincidentally, coming just as Gladwell’s hit upon a politically charged topic and reached conclusions that are discomfiting to the very successful. I’ve seen a few people express the notion that Gladwell’s conclusion — that success is determined largely by luck rather than one’s powers of awesomeness — is somehow too banal to waste one’s time with. I think those people need to open their eyes and pay a bit more attention to the society we’re living in. It’s a society that not only seems to believe that the successful are entitled to unlimited monetary rewards for their trouble, but massive and wide-ranging deference.

Beyond that, it’s a society in which the old-fashioned concept of noblesse oblige has largely gone out the window. The elite feel not only a sense of entitlement, but also a unique sense of arrogance that only an elite that firmly believes itself to be a meritocracy can muster. Gladwell not only shows that this is wrong, but he does an excellent job of showing why it feels right. He explains that success does, in fact, require hard work — lots of it — and that people who think they got where they are through effort rather than good fortune are at least half right. The issue is that in some ways the best luck of all is the luck to be in a position to do hard work at a time when it pays off. Bill Gates, Gladwell explains, put in vast hours programming computers at a very young age at a time when almost nobody in the United States even had the opportunity to put in that kind of time in front of a computer screen.

It’s a discomfiting thought. And an important one. So I hope people read Outliers. Or at least David Leonhardt’s review rather than Michiko Kakutani’s. And could someone tell me what the deal is with The New York Times reviewing some books twice?

Transit and Crisis

Mass transit ridership hits new record.

Of course mass transit systems generally receive a lot of funding from tax revenues. And tax revenues everywhere are going to be falling because of the recession. That will likely lead to funding cuts and reductions in service. One easy and highly beneficial form of stimulus would be for the federal government to inject funds into transit systems allowing them to increase service levels and reduce fares. This can be done a lot more swiftly than new public works but will also help lay the groundwork for good things in the long run.

Krugman: Car Industry is Doomed

I imagine these remarks from Paul Krugman will attract a lot of discussion:

“It will do so because of the geographical forces that me and my colleagues have discussed,” the Princeton University professor and New York Times columnist told reporters in Stockholm. “It is no longer sustained by the current economy.” […]

Speaking to reporters three days ahead of the Nobel Prize ceremony, Krugman said plans by U.S. lawmakers to bail out the Big Three automakers were a short-term solution, resulting from a “lack of willingness to accept the failure of a large industry in the midst of an economic crisis.”

He clarifies on his blog that he doesn’t mean no cars will be built in the United States, but rather “that the concentration of the industry around Detroit would disappear.” One thing here is that as best I can tell none of the five countries — US, Japan, Germany, France, Korea — with substantial auto industries are willing to let their national favorites fail. And yet there seems to be substantial global overcapacity in car manufacturing. If a few of the existing firms are allowed to fail, then the survivors will be in good shape. But if nobody fails, then all the firms worldwide will be left suffering because of overcapacity problems, all potentially drawing bailouts and subsidies indefinitely.

Change I Can Believe In

How nice it is to have a pro-labor president:

President-elect Barack Obama put himself on the side of the workers at the Republic Windows and Doors factory Sunday:

“When it comes to the situation here in Chicago with the workers who are asking for their benefits and payments they have earned, I think they are absolutely right,” Obama said Sunday at a news conference announcing his new Veterans Affairs director. “What’s happening to them is reflective of what’s happening across this economy.

I like it.