Matt Yglesias

The Open Rule

To start off, let’s give John Boehner credit where due. When in opposition he promised to conduct the business of the House in a more open manner, I assumed he was just operating in bad faith as House Minority Leaders always are when they promise this. So far, though, he’s been true to his word.

Now let’s give John Boehner less credit. I assumed he was operating in bad faith like House Minority Leaders always do because trying to operate routinely under open rules with amendments flying everywhere is crazy. My preference, I suppose, would be for parliamentary leaders to actually physically whip members of congress into line (willingness to withstand lashing being a decent proxy for preference-intensity) but barring that the House’s tradition of iron-fisted rule-based discipline is a great model. I’m not sure reporters have picked up on it yet since everyone’s reveling in the sheer fun of unpredictable outcomes, but this may end up creating an accidental government shutdown.

Ezra Klein writes:

The open rules are leading to a lot of ad hoc coalitions between congressional Democrats and more mainstream congressional Republicans. If these two groups get used to working with each other on small things, such as funding for police, that might help them work together on big things, such as avoiding a default or shutdown.

What if it goes the other way. Suppose you have one large bloc of Republicans who vote vote for a continuing resolution that contains less than $X in cuts. Then on the other side you have a large bloc of Democrats who won’t vote for a continuing resolution that contains more than $Y in cuts. But every time Boehner brings a specific bill with $X cuts in it to the floor, ad hoc coalitions strip some $Z worth of specific items from the bill such that X-Z>Y and then the thing fails. That way instead of the big ideological standoff between the House and the White House that we’ve been primed to expect as a source of government shutdown, we’d get a shutdown driven by preference-cycling and perverse affection for open debate.

The Strangest Social Security Cut

The most regressive way to cut Social Security is to raise the retirement age, but the strangest is the one Brian Beutler reports on, a House plan to cut the Social Security Administration’s administrative budget:

The Republicans claim the cuts amount to about $1 billion below what President Obama requested. But when dig in deeper, Democrats have found the cuts add up to about $1.7 billion — a hefty chunk of SSA’s operating budget.

This includes rescinded stimulus funds, and the $500 million SSA currently has in its reserve account to meet legal requirements and other operating expenses.

This comes at a time when the Social Security Administration is already stretched thin. SSA is operating under a hiring freeze because its current allocations are too low. Democrats warn the cuts would cause blackout periods in SSA’s operations, and create a huge backlog of claims across the program.

Love it or hate it, Social Security is a pretty lean, mean, check-writing machine. Money comes in through payroll taxes and it comes out through checks. It’s practically automatic. But of course it’s not 100 percent automatic. It does need a few human beings to run it. But thinking that it’s somehow smart to try to trim the fat here is bizarre. Actually reducing the quantity of money in the checks would make old people mad but also save a ton of money. Gumming up the administration of the check-sending process packs a lot of oldster-aggravating punch but barely gets you anything. It’s weird.

Endgame

Never gonna reach you:

— China’s urbanization dilemma.

— The need to scale up the good charter schools.

— We’re more likely to become cyborgs than be replaced by robots.

— This guy’s missing the point.

— EPA regulation of greenhouse gasses is popular.

Cut Copy, “Need You Now”.

Why Federal Arts Subsidies?

Reading Isaac Butler’s defense of subsidies for arts and culture I have two main reactions. One is that I want off the Drum/Chait list of philistines. All I said about this is that the big federal arts subsidy is the indirect subsidy provided through the tax code. I think decentralized subsidization of aesthetic endeavors makes a lot of sense, I was just observing that perennial complaining about the NEA is kind of a sideshow.

Modern Art Museum of Ft Worth

In terms of direct subsidies, however, this is a relatively rare case where I think “federalism” is a non-BS issue. It seems to me that a city might want to spend money on an art museum for roughly the same reason it might want to spend money on a park—these things improve quality of life. But I think you’d like to see as much Tiebout competition as possible around this sort of thing. Expending resources on aesthetic matters, whether they’re arts or trees or what have you, is a perfectly defensible course of action but it’s basically a kind of local or community benefit.

“Shared Sacrifice” in Michigan

Normally, when conservative politicians say something, what they mean is “lower taxes on rich people.” When I saw that Michigan Governor Rick Snyder is proposing a budget calling for “shared sacrifice” I assumed that I was going to have another example for my file. It turns out, though, that he’s actually taking an innovative tack and by “shared sacrifice” he means “lower taxes on business.”

Mr. Snyder, a newcomer to politics who ran on his business expertise as the former head of Gateway Inc., outlined his budget proposals before legislators at the state capitol. Mr. Snyder said that he hoped to address the state’s longstanding financial problems through “shared sacrifice.” [...]

Like many states around the country, Michigan is facing a huge budget deficit of $1.4 billion. Mr. Snyder’s budget would make $1.2 billion in cuts to schools, universities, local governments and other areas while asking public employees for $180 million in concessions. Mr. Snyder said that he would set an example by reducing his salary this year to $1.

Mr. Snyder’s plan also calls for big changes to the state’s tax system. He would eliminate the current business tax in favor of a flat 6 percent corporate income tax, resulting in $1.8 billion in tax cuts for businesses. To pay for those changes, he would eliminate many personal income tax credits and require pensions to be taxed.

So that’s lower government services for the poor and the middle class, plus higher taxes for the poor and middle class, plus lower taxes for business. Innovative!

The Impossible Dream of Majoritarian Democracy

(cc photo by kevindooley)

Watching all these scenarios for impossible “grand bargains” to emerge, my thoughts turn to an impossible dream . . .

. . . imagine politics playing out via regularly scheduled electoral contests between two political parties. And imagine that while the interest group coalitions behind the parties have a wide array of concerns, the voters are primarily interested in the growth rate of their real disposable income. Consequently, voters react poorly to cuts in spending, react poorly to increases in taxes, and react poorly to sluggish economic growth. What’s more, at these regularly scheduled elections one party “wins” and the other party “loses” at which point the “winning” party gets to make policy decisions until the next election. It seems to me that in such a system a governing party in office at a time of depressed output and near-zero nominal interest rates would calculate that the political penalty of deficit cutting measures exceeds the political reward of boosting growth by lowering interest rates. After all, rates are near zero so there’s no gain to be made this way. But if in the future circumstances changed and some combination of higher output and bigger deficits created a situation in which faster growth was worth paying the price for program cuts or tax hikes, then they’d cut the deficit. Then I wake up and . . .

. . . we have a broad elite consensus that American political institutions are perfect but the government needs to immediately enact short-term deficit cutting measures that have zero economic benefit and are therefore politically damaging to those who enact them and therefore must be enacted via a “grand bargain.”

The Value of Feistiness

More mail:

What’s your take on how people nominally to the left of you (firedoglake, digby, etc.) are responding to this whole deficit movement. Digby’s pretty apocalyptic about the whole thing. If you could at some point get into this I think it’d help out people like me (21 y/o) who form their opinions on macroeconomics basically by combing through trusted sources.

After I was invited to the White House to talk to David Axelrod, I did a grumpy post just summing up the fact that progressives generally think the strategy of unctuousness reasonableness isn’t as good an idea as Team Obama thinks it is. And I think that’s what a lot of Obama-bashing blogging amounts to. But over the years I’ve come to think that too high a proportion of political commentary is devoted to second-guessing the tactical political judgment of the professionals, and/or to criticize other people’s second-guessing of the tactical political judgment of the professionals. I don’t really think I add much value through those kind of activities and prefer to try to focus on calmly and clearly explaining the policy options and ethical choices confronting us. But I think it’s a good thing that we have a large and feisty left-wing community online and I hope it gets bigger and has more success in penetrating the media. A demobilized and perennially calm left wouldn’t help the country.

The Reagan Legacy

It seems to me that if you want to talk about the political economy of the national debt you need to look at this chart:

And when you look at this chart, you need to think of Ronald Reagan. It’s not that all deficits are Reagan’s fault, or that all deficits are Republicans’ fault, or even that all deficits are bad. But people generally think that the 1980 election was a big deal in American political history. As best I understand it, conservatives generally think that the 1980 election was a big deal in American political history. And one of the things that made it a big deal is that it inaugurated a structural shift from a politics of small deficits linked to the business cycle and shrinking debt burdens to the deficit politics we know today. Post-Reagan politics sometimes cares about the deficit, but it cares much more about low taxes and somewhat more about lavish military spending.

The Coming Abortion Backlash

Dave Weigel foresees a backlash looming against a lot of newly elected anti-abortion House Republicans, a group that “include[s] lots of people who took over suburban districts that had been trending more liberal.”

It sounds plausible to me. Anti-abortion activists quietly cemented their control over even northeastern outposts of the GOP back during the 2000s, as witnessed by Chris Christie’s pre-primary abortion flip-flop. Clearly, though, the surge in GOP vote in 2010 relative to 2008 and 2006 wasn’t actually driven by a shift in the ground on abortion.

Booze Gap

Via Robert Farley, the USA is more sober than most European countries:

Farley deems this “a national disgrace.” Given prevailing land use patterns and automobile dependency, I say it’s a good thing Americans don’t drink very much. Indeed, Americans almost certainly drink too much relative to their transportation strategies. I think it’s an underrated problem. One that, obviously, I prefer to see solved on the land/transportation side.

Retracted Claim of the Day

Upon consideration, I don’t think what I wrote on Tuesday about Presidents getting things done in their second term is supportable. One mistake is that in my head, I’d mistakenly attributed the welfare reform and the 1996 Telecommunications Act to Bill Clinton’s second term. With those bill correctly located in his first term, then clearly Clinton signed more significant bills in his first term than in his second. With that as the context, then I agree with Scott Lemieux that the incredibly productive 1965-66 congress in Lyndon Johnson’s second term starts to look a lot like a classic instance of the “exception that proves the rule” since in so many ways that was like a first term.

The other thing, as I’ve just been reading from David Mayhew is that it’s worth trying to distinguish between legislative initiatives that come at the request of the White House and legislative initiatives that are more congressionally generated. Stuff gets done all the time, including in circumstances of divided government, but there’s a special kind of “getting stuff done” that happens when a new president sweeps into town and issues a bunch of proposals.

The Ugly Truth

Chris Christie is a Republican statewide elected official in New Jersey. New Jersey is the second-richest state in the union, but it’s also quite progressive on cultural matters. Consequently, what one would expect from a Republican politician achieving some measure of political success in New Jersey is a fanatical commitment to the interests of wealthy people. So when Chris Christie delivers a speech and says “You’re going to have to raise the retirement age for Social Security” I’m not surprised. This is unquestionably the policy option that best serves the interests of high-income New Jerseyites.

But given journalists role to comfort the afflicted and afflict the comfortable, I’m surprised to see Dana Milbank of The Washington Post offer this as an example of the following:

But his physique also works to his advantage by reinforcing Christie’s appeal as something other than the blow-dried politician who says whatever the voters want to hear. Christie isn’t pretty, and he tells ugly truths.

For “you’re going to have to raise the retirement age for Social Security” to count as an “ugly truth” assumes that it’s true. And yet it’s not true. Closing the projected actuarial gap in Social Security requires some combination of more immigration, higher taxes, and lower benefits. Relative to higher taxes, lower benefits tend to be preferred by richer people. And of all the different ways to reduce benefits, raising the retirement age is the one that does the most to punish the poor and demands the least sacrifice from the rich. Christie, it’s true, isn’t saying “whatever the voters want to hear” but he’s not telling the truth either. What he’s doing is saying what rich people want middle class people to believe.

The particularly confusing thing, though, isn’t that Christie lied but that I read in The Washington Post that Christie’s lie is the truth. Doubly confusing is that I read a Washington Post article a few months ago by Ezra Klein that laid this out pretty clearly describing a “conversation in Washington, where affluent people who like their jobs propose cutting benefits for the poor (which is, after all, what raising the retirement age would do) rather than lowering benefits or increasing the payroll tax on, well, themselves.”

Urban Planning in South Sudan

Southern Sudan, the world’s newest country, seems to me to be off to a bad start with its urban planning concepts:

And:

I don’t think you necessarily want too much “planning” of a growing city at all. I’d like to see land used roughly as densely as market conditions warrant. But laying out street grids and such is necessary, and the goal should be to create a large number of relatively small streets—short blocks are good for walking, bicycling, etc. That kind of thing is especially important in poor countries; urban design that privileges the car is very bad for people who can’t afford one.

Government By The Rich

Via Kevin Drum, a Martin Gilens paper (PDF) on the most important fact about inequality and American politics—when rich people and average folks disagree, rich people always get their way:

I actually sort of disagree with Gilens and Drum that “the most obvious source of influence over policy that distinguishes high-income Americans is money.” I would say the most obvious mechanism here is socialization. The president, the senior White House staff, the cabinet secretaries, the senators, the House members, the senior congressional staff, and the lobbyists, association heads, business executives, governors, mayors, foreign officials, and media celebrities who they interact with are all personally pretty high income. You get into the top decile of the US income distribution with a household income of $138,000, so the entire congress is in the top ten percent. What’s more, political elites tend to have college roommates, siblings, in-laws, etc. who are also prosperous.

Obviously the fact that rich people have money to spend on politics doesn’t hurt either. But I would never underestimate the human desire to believe that one is doing the right thing, and thus the importance of socialization to determining bias. Nobody in Washington seems to know that the public is clamoring for higher Social Security benefits and more federal spending on health and education largely, I think, because this isn’t what the people they know personally are clamoring for.

One Man’s Health Care Costs Are Another Man’s Way Of Earning A Living

Nicholas Wade reports a fascinating story about a Ecuadoran villagers with a rare genetic abnormality that makes them very short but also seems to grant extraordinarily low rates of various illnesses.

Of course, if I had a dime for every promising-looking breakthrough in medical science that didn’t pan out in the end I’d be rich. But what if it does pan out?

That reminded me of some recent posts from Steve Randy Waldman and Ryan Avent that seemed to me to be walking up toward a Marx-style theory of overproduction, crisis, and the collapse of capitalism. Like suppose scientists did come up with a pill that grants you good health up to the year 100, at which point you quickly and painlessly drop dead. I’d take a pill like that. and I bet most everyone would join me. The short-term result would be . . . catastrophic economic collapse as the bulk of the health care sector is rendered obsolete.

Which in turn is a reminder that while it’s easy to talk about “controlling health care costs” in practice these “costs” are also known as “income” for a lot of people. The Internet has allowed for a revolution in reducing newspaper article distribution costs, also known as the collapse of the bulk of the American newspaper industry. Anything that works in a really radical way to make health care cheaper would create serious problems for lots of people and lots of firms and thus prompt fierce resistance.

The Price of Life

A reminder that a certain level of arbitrariness invariably creeps into any cost-benefit calculus comes from Binyamin Applebaum’s article on how Obama-era regulatory agencies tend to value life more than did its Bush-era predecessors (also a reminder that partisan control of the White House matters in a lot of below-the-radar ways). The interesting thing is that the US government as a whole doesn’t have a consistent line on this:

The Environmental Protection Agency set the value of a life at $9.1 million last year in proposing tighter restrictions on air pollution. The agency used numbers as low as $6.8 million during the George W. Bush administration. The Food and Drug Administration declared that life was worth $7.9 million last year, up from $5 million in 2008, in proposing warning labels on cigarette packages featuring images of cancer victims. The Transportation Department has used values of around $6 million to justify several recent decisions to impose regulations that the Bush administration had rejected as too expensive, like requiring stronger roofs on cars.

The gap between the EPA and the DOT is downright gigantic. It amounts to running a buy two get one free sale on human life in transportation-related mishaps. Meanwhile, I would say the case that we’re overemphasizing terrorism as a problem is basically sealed by the fact that “A report last year financed by the Department of Homeland Security suggested that the value of preventing deaths from terrorism might be 100 percent higher than other deaths.” We should not let 1,000 people die in car accidents or of pollution-related illness in order to prevent a terrorism from killing ten people somewhere. Violent murder is awful, and we should try to stop it, but having your husband die in a construction mishap or your wife be killed a drunk driver is also awful.

Meanwhile note that while there certainly are misguided regulations in this country, it’s not like what the business community wants is to rescind a couple dumb rules and streamline things. They’re very upset about the higher valuation of human life, because their goal is to maximize profit by any means necessary up to and including getting people killed.

Endgame

I’ll tell you what I know:

— GOP looking to find a way to “tackle entitlements” strictly by screwing over the poor.

— Fed forecasting slightly faster growth.

— I’m all for a higher inflation target.

— Taxes and incentives.

— “Creating Subsidized Employment Opportunities for Low-Income Parents”.

— Coal is expensive.

In honor of efficient allocation, Belle & Sebastian “For The Price of a Cup of Tea”.

Emergency Room Dilemma

Doctor Katherine Fullerton, a pediatric emergency physician, describes a dilemma she dealt with on a daily basis until quite recently:

Our [Electronic Medical Record] and record of past medical problems is a wonderful asset when I’m treating a sick child. Often the families are stressed, and forget many of the pertinent details, and this way nothing is missed. But could this same EMR be a barrier for these children when they become young adults and are trying to obtain their own insurance? Could the adorable 3 year old who is wheezing in room three, have been denied insurance as an adult because I wrote in the medical record that she has asthma? Will the six-year old hemophiliac in room five who is bleeding from a minor abrasion after wrestling with his cousin be denied insurance when he’s reached adulthood?

That’s a difficult problem. A doctor wants to treat a patient in the best way possible, but a doctor also doesn’t want to compromise the patient’s long-term health by taking steps that will make it hard for the patient to get treatment in the future. But there’s good news:

I am thankful that because of the health reform law, they can no longer be denied insurance for a pre-existing condition. With the new law, I do not have to worry that my careful history taking will harm their future.

Treatment of patients is best done in the context of maximum possible information about a patient’s health status. But this kind of disclosure has perverse consequences when it comes to insurance underwriting. Over time, we’ll presumably have technological improvements that allow us to read more relevant information off a person via genetic analysis. From a health standpoint, we’ll want to be able to do that. But we’ll only be able to apply this technology in value-adding ways if we move forward with ACA-style reforms of the insurance industry or else its supplantation with something more like Medicare.

Alternatives to Inefficient Ticket Pricing

As history’s greatest monster, I’ve long been disturbed by good bands’ aversion to efficient demand-based pricing for their shows. Annie Lowrey’s article about LCD Soundsystem’s anti-scalper efforts is confirming my priors:

But LCD fans were not left out in the cold. The debacle attracted the wrath of the band’s charismatic front man, James Murphy. On LCD Soundsystem’s blog, he wrote: “this here is just to say that we were more than taken aback and surprised about the speed of ticket sales for the april 2nd MSG gig, as well as the effectiveness of scalper pieces of fucking shit at getting their hands on said tickets before fans could, and it’s knocked us on our asses.”

The market had failed in his mind. He told fans not to pay thousands of dollars to get into the Madison Square Garden show: “I will try to figure a way out to fuck these fuckers. NO MATTER WHAT WE DO, IT IS NOT WORTH THAT KIND OF MONEY TO SEE US!” Soon enough, he realized he had an ace up his sleeve. He flooded the market, adding shows, upping ticket supply, and hopefully pushing prices down. (Those shows will go on sale this Friday.)

This is my current understanding of the dilemma. Optimal allocation of LCD Soundsystem tickets requires demand-responsive ticket pricing. But good rock bands are not composed of narrow-minded amoral profit-maximizers. Consequently, they’re motivated to price tickets at a lower level than the market will bear leading, in turn, to middlemen getting the rents. What’s needed is a way for bands to price tickets at demand-responsive levels in a way that’s consistent with the norm that the guys in a cool band shouldn’t be narrow-minded profit-maximizers. The best solution here, I think, is charity.

Someone (Bono?) needs to set up a trust fund to which bands will allocate the excess revenues that accumulate when the market price of concert tickets exceeds the “fair” price as determined by the bands’ moral intuitions. In that case, instead of a situation where “[t]ickets with a face value of $49.50 were going for 12 times that” on a secondary market you’d have a scenario where tickets are going for $500 and $450 out of that goes to the trust fund. The fund could take the money and give it to poor people in Africa and India. They need the money a good deal more than LCD Soundsystem fans do. You could say, very legitimately, “it’s too bad that not every fan can see the show, but we need some allocation mechanism, and I’ve tried to pick the one that will do the world the most good.” Hopefully Jeff Sachs would vouch for the plan.

Efficiency And Progress Are Ours Once More

Sallie James on House Republicans’ spending priorities:

The administration’s proposal would affect only about 2 percent of the total recipients of direct payments — subsidies that flow every year regardless of prices or farm output to owners of land that may or may not still be used for farming — and it does not by any means go far enough. But at least it is a start.

On the other side of the aisle, the Republicans followed their Republican Study Committee colleagues in failing to propose any cuts to “farm subsidies” as we typically understand them in their FY2011 budget proposal. To be sure, 22 percent of the $60 billion in cuts they propose would come from the “agriculture function,” and they indeed get rid of entire programs, but they are mainly to the nutrition and conservation areas of the USDA’s responsibilities. Nothing, so far as I can tell, from the commodity programs.

Money for rich landowners, but not enough for poor kids. It’s a problem of bad morals.