Matt Yglesias

Endgame

Where the vampires meet:

— Paradoxically, with Kagan’s confirmation done gay marriage is now mandatory despite sharia being in force.

— This article about the high age at which Finnish people complete college really ought to mention that they have nearly-universal male conscription. It’s relevant!

— Mitch McConnell’s thinks that all electoral outcomes should lead to center-right policies.

— If you love the Senate, you need to embrace reform.

— Schumer & McCaskill want to make it harder to cross the border illegally by making it more expensive to do so legally.

Nobody likes Stars’ post-Set Yourself on Fire work, but I do damnit! This is “We Don’t Want Your Body”.

Hard to Avoid Boosting Outsourcing

USAID seems to have a program in India that will “teach workers there advanced IT skills like Enterprise Java (Java EE) programming, as well as skills in business process outsourcing and call center support. USAID will also help the trainees brush up on their English language proficiency.”

An outraged David Sirota says:

Now look, I’m all for a robust foreign aid budget – we don’t do nearly enough to help the developing world. However, using foreign aid money to specifically help private corporations “take advantage of low labor costs” in the developing world – that’s not “aid,” that’s rank taxpayer subsidization of for-profit exploitation.

I think it’s hard to say. The fact of the matter is that one very reasonable thing to do if you’re Indian and can do some computer programming and speak English is get into business process outsourcing. It’s also the case that if you’re a company with some business processes that can be profitably outsourced to an Indian firm, you’re likely to do it. Suppose that instead of this program, we spent the money on building schools. Well, what if those schools taught math and English, skills that graduates could later put to use doing some business process outsourcing? Or what if we vaccinate some kids, and they grow up to learn English and computer programming and then they get into business process outsourcing?

I don’t want to defend this specific program in specific detail, but the point is that any efforts we make to improve public health, infrastructure, or education in a poor foreign country is extremely likely to lead to an increase in the number of for-profit firms taking advantage of new opportunities to source work to low-wage locales. Personally, I’m fine with that. I believe borders should be open to the flow of goods, services, and people and look forward to continued increases in India’s level of prosperity. But I think there’s a problem here for trade-skeptics. Unless we close our borders to trade, anything we do to help poor countries improve their productive capabilities will lead to more trade and more outsourcing. So are all effective aid programs, in effect, “rank taxpayer subsidization of for-profit exploitation”?

Can’t Imagine What Could Go Wrong

Heck of a job:

“Buy new with $1,000 down,” the advertisement says, the words resting atop a trim green clapboard house offset by a bright blue sky. “The time has come. Stop wasting rent check after rent check and start building equity in your own home. And with only $1,000 down, affordable monthly payments and no private mortgage insurance required, the dream is closer than you think.”

It sounds too good to be true. But it is true. This offer does not come from a subprime lender, looking to reel in thousands of unqualified and ill-advised homebuyers, only to slap them with add-ons, fees and variable rates. It is not a teaser or a trick. The advertisement references a program initiated by the National Council of State Housing Agencies and Fannie Mae, the taxpayer-backed, government-sponsored enterprise that buys up mortgages from lending banks.

Annie Lowrey’s story details the official reason why this time it’ll be different. As it always is. But I just didn’t expect this level of denial to re-emerge so quickly.

White House Deficit Commission to Present Highly Unpopular Recommendations

President Obama shakes hands with Honeywell CEO David Cote

By Ryan McNeely

Brian Beutler has spoken with a source with knowledge of the internal deliberations of the White House’s bipartisan Deficit Commission, and it turns out that the budget cuts may be somewhat selective:

A source familiar with the proceedings of the working group on discretionary spending tells TPM that some commissioners, including one military contractor, would prefer to save money by freezing military pay and scaling back benefits, rather than by eliminating waste in defense contracting…

“Coburn raised concerns about all of the cost overruns and redundant weapons system,” the source told TPM. “[Obama appointee & Honeywell CEO] Cote made excuses for it all.”

According to the source, Cote and other members, including the commission’s co-chair Alan Simpson, are focusing instead on “freezing military pay, making military people pay for their health care.”

Now, there’s nothing wrong with looking at military pay and health care benefits as part of a broader push to trim the defense budget. Larry Korb, Laura Conley, and Sean Duggan at CAP have noted that “premiums for TRICARE, the military’s health care system, have not been raised in 15 years” despite huge increases in healthcare costs and DoD’s own request for premium increases.

But this only makes sense in the context of a truly broader push to trim the defense budget. It’s the height of fiscal irresponsibility and cowardice to ask military personnel and families to sacrifice while giving a pass to hugely expensive and redundant weapons contracts. But that’s precisely the problem with this type of behind-closed-doors commission when the Honeywell CEO is invited as a good faith partner but a representative for “military families” doesn’t get a seat at the table.

Beutler also reports that “tax hikes aren’t gaining traction” so “the group is discussing ways to close loopholes, end exemptions, deductions, credits, etc. to limit tax expenditures.” If I were the President, the price of admission for my commission would be an openness to tax hikes as part of any serious attempt at deficit reduction. Instead we get Tom Coburn saying that “nothing’s off the table” when really he means “nothing except the most efficient way of raising revenue,” and we get this obsessive focus on helpful-but-insufficient closing of loopholes and ending credits and such simply because they don’t offend the conservative movement’s sensibilities.

I agree with Matt that the deficit commission’s recommendations are unlikely to be actually implemented. But I just don’t understand the politics at all. This is the Democratic White House’s Deficit Commission which will be making these recommendations, which are shaping up to be highly unpopular. Republican leadership in Congress will simply wash their hands of it all, as they did when the idea of creating the commission came up for a vote. On top of that, since the recommendations are likely to be voted down, the country doesn’t even get the benefit of a reduced deficit. If the headline over the holidays in December is “Republicans Successfully Block Obama Plan to Cut Military Pay,” the White House will have no one to blame but themselves.

Exports and Services

I saw Michigan Governor Jennifer Granholm at CAPAF earlier today and she naturally went on at some length about the importance of preserving manufacturing employment. In the course of doing so she very briefly made the more nuanced point that manufacturing activity supports considerable employment in manufacturing-related services. A new brief from Michael J. Ferrantino, Danielle Trachtenberg, Alison Weingarden (which I think I saw through Ryan Avent) called “Can the US manufacture employment through exports?” posits that this is going to be a crucial point moving forward.

Their answer to the question is, basically, no. Given the rate of productivity growth in manufacturing, there’s no plausible volume of exports that’s going to sustainably increase manufacturing employment. But that doesn’t mean that exporting more goods won’t boost employment:

What we’re seeing here is that during the pre-recession slump in manufacturing employment—a period in which manufacturing output was growing thanks to increases in productivity—that employment in services related to manufacturing was going up. What kind of services? “Upstream” services are basically professional services and office work related to the operation of the factory. It takes a lot of accountants to run General Motors. “Downstream” services are wholesaling and transportation. When output collapses, this dries up, but if we had an export-driven increase in output we’d see increases in these fields even if manufacturing employment per se doesn’t really rise.

Repealing the Affordable Care Act Would Make Health Care Less Affordable

There’s a reason I decided we should stop talking about “ObamaCare” and start calling it “the Affordable Care Act” and that’s because it reminds people that it makes health care more affordable which is a good thing!

Similarly, Igor Volsky draws our attention to a new paper from Jonathan Gruber (PDF) detailing the ways in which repealing the Affordable Care Act would make health care harder to afford:

On the plus side, repealing ACA would mean lower taxes for rich people and some medical providers.

Filibuster Reform is Not Unicameralism

Chris Dodd thinks that we need supermajority voting in the United States Senate:

“I made a case last night to about ten freshman senators, you know, you want to turn this into a unicameral body? What’s the point of having a Senate? If the vote margins are the same as in the House, you might as well close the doors,” Dodd told reporters in the Capitol.

It seems to me that unicameralism works fine for Nebraska and Denmark and de facto unicameralism works fine for Canada and the United Kingdom so this is hardly a knock-down argument. That said, even if we accept that unicameralism would be terrible, a majority rules Senate would hardly be the same as unicameralism. After all, routine supermajority voting is a relatively new phenomenon in the American political system and nobody thought we were a unicameral system in the 1930s or 1960s. Meanwhile, the main “point” of the Senate seems to me to have always been to overrepresent the interests of low-population states. A secondary objective was to create a legislative body that would be relatively immune to short-term fluctuations in public opinion. And a majority rules Senate—which the country had for most of its history—would fit both of those goals.

Chinese Regulators Tell Banks to Prepare for Home Price Declines of As Much as 60 Percent

One thing we’ll soon have a fair amount of data is on how much of a difference does it make for a country’s policymakers to be well-aware that they’re presiding over an unsustainable real estate bubble. Key US leaders spent the 2003-2007 period either in the dark or in denial about the nature of housing market trends, but story after story out of China indicates that the PRC leadership sees what’s happening. It’s just not clear that awareness has made much of a difference. The latest:

Banks were instructed to include worst-case scenarios of prices dropping 50 percent to 60 percent in cities where they have risen excessively, the person said, declining to be identified because the regulator’s requirement hasn’t been publicly announced. Previous stress tests carried out in the past year assumed home-price declines of as much as 30 percent.

The tougher assumption may underscore concern that last year’s record $1.4 trillion of new loans fueled a property bubble that could lead to a surge in delinquent debts. Regulators have tightened real-estate lending and cracked down on speculation since mid-April, after residential real estate prices soared 68 percent in the first quarter from a year earlier, according to estimates from Knight Frank LLP, the London-based property adviser.

Insofar as prices soared 68 period in one year, 60 percent decline doesn’t sound like much of a worst-case scenario.

Against Fatalism

Sometimes people can be wrong without actually saying anything that isn’t true. That’s how I felt about the posture of fatalism that Carmen Reinhart adopted talking to Ezra Klein:

EK: There’s a lot of the discussion about what Washington should do, but you seem to be saying that this is just going to take time.

CR: That is certainly my view. It’s not that governments are powerless. The government has been a key player in preventing a catastrophic global shock. We didn’t end in a depression. I can’t stress that enough. It’s played already a much larger role in placing a much higher bottom. But we built up this debt not overnight, but over years. And now we expect the resolution to be very rapid. This is not something that policymakers can undo quickly. If you look at the big, historic panaroma, deleveraging takes time. It’s not pretty. It’s not the answer people want to hear, but these debt cycles are lengthy.

To be clear, I don’t disagree with any of that. But the message seems to be—calm down. Be more patient. Be less critical. And I do disagree with that. The recession has already been a long one. If it takes us three more years to achieve full employment, that will be a long time. If it takes us six more years, that will also be a long time. But in terms of actual human beings’ lives, it makes a great deal of difference which one happens. So given that “it’s not that governments are powerless” it’s important to focus attention on the need to use those powers. Small, recession-hit countries with the ability to devalue need to do so. The government of Hungary is screwing up badly. The European Central Bank and the Federal Reserve need to get inflation expectations up. Good policy won’t make the recession quick and painless, but it’ll make it shorter and less painful and that’s important.

Solidarity on the Right

Tim Fernholz: “The mainstays of conservative Christian activism — the Family Research Council and the Christian Coalition — are launching a new campaign to protect the wealthy from tax increases, according to subscription-only Roll Call. The tax hikes, they say, are a ‘family values issue.’”

The logic here is wanting, but I think the value of a solidaristic political movement in which the moving parts support each other’s campaigns is pretty clear and it’s something the left generally lacks. We’ve done better on this score over the past few years than we have historically, which is part of the reason the 111th Congress ended up producing the greatest volume of progressive achievements in over 40 years, but there’s still no comparison. As a bonus, Fernholz observes that Christian Right groups are even willing to go out there and straight-up lie on behalf of the tax cut agenda: “spreading rumors that the Obama administration will seek to roll back the child tax credit and lower-income tax cuts” even though the administration favors neither move.

I think lying to your own supporters is ultimately a counterproductive move in political advocacy, but obviously it can have short-term benefits. The larger point, however, is about cooperation. To move forward on the progressive agenda, I think we’re going to need advocates to spend less time on “their issue” and more time on cooperating against cross-cutting structural features of the political system that make it hard to do anything. But just the general spirit of cooperation is noteworthy. If the right behaved like the left it’d be just as easy to imagine the FRC and the Christian Coalition spending most of this week whining that Mitch McConnell’s not spending enough time talking about their issues. Instead, they’re pitching in.

Priorities In an Era of Deficit Anxiety

Mark Kleiman sums it up well—in order to overcome filibusters in the Senate, Harry Reid’s had to agree to pay for avoiding teacher layoffs by cutting nutrition assistance to poor families while in order to secure passage of the New START arms reduction treaty it’s necessary to agree to tens of billions of dollars in deficit-financed spending on new and unnecessary nuclear weapons.

This kind of mentality, refusing to invest in the future of the country while insisting on massive unproductive defense expenditures has been very costly to the country over the past thirty years and it only seems to be getting worse. The hypocrisy of so-called “deficit hawks” who want to lavish cash on the top two percent and sundry defense contractors rankles, but hypocrisy aside the choice of absolute priorities is just laughably misguided. Meanwhile, the level of state and local government fiscal assistance purchased through those SNAP cuts won’t be enough to prevent massive cutbacks in early childhood education.

Even in strict national security terms, if you think about what’s going to matter in determining the US-China balance of power in 2050 the performance of our education system this decade—a major determinant of our future level of prosperity and technology—will be much more important than whether we stockpiled nuclear weapons in 2010.

The Prop Eight Overturn

Whenever a favorable-to-progressives judicial ruling come down, the concern trolls come out of the woodwork to fret about the backlash. So in the wake of a win for the left on Proposition 8 in California, I wanted to go on record alongside Ryan as thinking such concerns are, when genuine, wildly overblown.

The American political system has a lot of features that differentiate it from most modern liberal democracies. These features include an unusually large number of veto points and also a greatly empowered federal judiciary. I’m not a huge fan of either feature*, but the system is what it is and the interplay between the two means that responsible political advocates will always want to use all the levers at their disposal—including litigation—in order to get their way. Once laws are on the books, overturning them is generally an extremely cumbersome process. Merely persuading most people that you’re right doesn’t do the trick. And the system doesn’t really function in a “majoritarian” way at any level so the non-majoritarian aspects of seeking policy objectives through the courts don’t differentiate them from anything else.

Which is simply to say that legal details aside (I’m not a lawyer, but you can play one on TV by reading the decision) this seems like a clear victory for moral justice and nobody has any reason to have mixed feelings about it.

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Put the “Playbook” Down

One of George Packer’s observations about the Senate that’s not amenable to formal procedural reform:

One day in his office, Udall picked up some tabloids from his coffee table and waved them at me. “You know about all these rags that cover the Hill, right?” he said, smiling. There are five dailies—Politico, The Hill, Roll Call, CongressDaily, and CQ Today—all of which emphasize insider conflict. The senators, who like to complain about the trivializing effect of the “24/7 media,” provide no end of fodder for it. The news of the day was what Udall called a “dust-up” between Scott Brown, the freshman Massachusetts Republican, and a staffer for Jim DeMint, the arch-conservative from South Carolina; the staffer had Tweeted that Brown was voting too often with the Democrats, leading Brown to confront DeMint on the Senate floor over this supposed breach of protocol. Bloggers carry so much influence that many senators have a young press aide dedicated to the care and feeding of online media. News about, by, and for a tiny kingdom of political obsessives dominates the attention of senators and staff, while stories that might affect their constituents go unreported because their home-state papers can no longer afford to have bureaus in Washington. Dodd, who came to the Senate in 1981 and will leave next January, told me, “I used to have eleven Connecticut newspaper reporters who covered me on a daily basis. I don’t have one today, and haven’t had one in a number of years. Instead, D.C. publications only see me through the prism of conflict.”

I think it’s odd how dominated political professionals’ attention is by this kind of nonsense. And the weird thing is—nobody makes you do it. You can live and work in Washington DC in a politics-related job and not read “the Playbook” or any of the rest of it. This stuff doesn’t just not matter in the sense that the fate of the Affordable Care Act will have little relevance to the grand sweep of human history. It doesn’t matter at all, even in terms of narrow politics. Of course if you’re working on a particular issue, inside baseball articles about subcommittee hearings on your issue are relevant. But the general morass of political gossip and speculation has just nothing to do with anything.

Even if your sole interest is in electoral politics, then the vast majority of your attention should still be focused on home-district news and smart coverage of the global and international economy. Neil Irwin’s coverage of the Federal Reserve in the Washington Post has much more relevance to the 2010 midterms than does Chris Cilizza’s speculations about tactics.

Birtherism and Partisanship

Brendan Nyhan makes a chart based on CNN’s latest polling of the question “Do you think Barack Obama was definitely born in the United States, probably born in the United States, probably born in another country, or definitely born in another country?”

The partisan gap is the noteworthy result here. I also wonder how much the very act of polling this question pushes people toward the “probably” categories who wouldn’t otherwise have had any doubts about Obama’s place of birth. After all, now that you ask me do I really really really really really know where Obama was born? Well, I don’t! It’s just that I have no reason to doubt the official story beyond crank conspiracy theorists. But then here’s CNN asking me about the controversy, so there must be some doubts, right?

Endgame

When the violent win blows the wires away:

— Not enough money to educate the next generation but plenty of funds to try to conquer Afghanistan!

— Krugman: “the Israel-is-always-right crowd has gravitated to people who don’t have any problem with the occupation — which means the American hard right, including the Christian right.”

— Why do Presidents even try to do anything.

— Against salary freezes.

— Senators filibuster deficit-reducing jobs bill to be pains in the ass.

Arcade Fire, “Month of May”.

Obstruction Cuts Both Ways

David Boaz attempts to mount a libertarian defense of the filibuster:

In the long run, though, establishmentarians like the New Yorker’s George Packer think that the purpose of government is to pass new laws, regulations, and programs; and they complain when the Senate or any other institution stands in the way of such putative progress. Those of us who prefer liberty, limited government, and federalism appreciate the constitutional and traditional mechanisms that slow down the rush to legislation.

That’s a bizarre argument. Bills to reduce taxes are “legislation.” Bills to relax regulations are “legislation.” People who want to move public policy in the United States in a more libertarian direction support the idea of having congress pass legislation. As I was able to get Jonathan Bernstein to agree, the impact of the idiosyncratic elements of the American political system is to enhance the influence of interest groups and decrease the influence of ideologues and technocrats. Libertarians shouldn’t like that very much, it seems to me.

The Paul Ryan Solution to the Individual Mandate Dilemma

With the moral and legal legitimacy of an “individual mandate” to purchase health insurance continuing to be the subject of controversy, it’s worth observing that conservative hero Paul Ryan lights the path to reformulating the exact same policy in a manner that seems to pass the right’s ideological litmus test. After all, once Ryan abolishes Medicare what does he want to replace it with? Well, with vouchers to buy private health insurance. And what’s the structure of the Affordable Care Act? Well, it’s vouchers to buy private health insurance. So why did Barack Obama’s proposals include an individual mandate and Ryan’s don’t? Simple. Ryan has solved the adverse selection problem without a mandate by simply saying that everyone gets a voucher, but the voucher can only be used to buy health insurance. In principle you “could” opt out from this system but nobody would.

The way it would work is that instead of imposing a mandate, and then offering subsidies to low and middle income people in order to help them comply with the mandate, you’d impose a progressive income tax (whose constitutionality I take it is not in doubt) and then hand everyone a flat voucher that could be used only to buy health insurance.

My proposed revision to the plan would make the underlying nature of the proposal more transparent, and in that sense would be a marginal improvement over the way the ACA actually works. But the point is that in practice they’d be exactly the same. And the latter policy—taxes to fund vouchers—is so uncontroversial, that even Paul Ryan thinks it should be allowed. So anyone who thinks about the issue for a bit will swiftly recognize that there’s no real principled objection here coming from the right. The real difference between Affordable Care Act coverage and RyanCare is that the idea of the ACA is to ensure that everyone—even poor people—get adequate health care. Under RyanCare, by contrast, over time only rich people will be able to afford health care. But with the money Ryan saves by not ensuring adequacy of care, he’s able to ensure that rich people will pay much lower taxes. This, unlike mandate nonsense, is a real point of divergence between the right and left in America.

The Win-Win Nature of LGBT Impact Litigation

By Ryan McNeely

When Ted Olson announced his intention to partner with David Boies to challenge Prop 8 in federal court, many observers suggested that while his goals were noble, he was not “right about the timing.” Some gay rights groups, wary of Olson’s track record, actually did question his motives — and many went on the record to say explicitly that the decision to bring the suit was a mistake, that Olson would lose, and that this loss would do serious damage to the movement.

There’s a general hesitancy in some quarters to use the courts to advance marriage equality at all, the theory being that it actually does more harm than good in the long run. Matt responded to a nice example of this type of thinking, when Megan McArdle argued that “If socially conservative voters hadn’t felt they needed to protect themselves from activist judges, we wouldn’t be seeing these provisions written into state constitutions…In general, courts are the wrong place to press these sorts of claims.” In Lawyering for Marriage Equality, Scott Cummings and Douglas NeJaime address this head-on:

Finally, we find that the evidence in support of the backlash account’s causal claim is weak…By focusing solely on court decisions, the backlash thesis fails to account for the influence of nonjudicial factors. Specifically, the legislative push for domestic partnership in California motivated, at least in part, the statutory prohibition on marriage for same-sex couples embodied in Proposition 22. And during their television advertising campaign, Proposition 8 proponents emphasized the specter of same-sex marriage being taught in schools over the fact that the right to marry for same-sex couples derived from a court decision, suggesting that the schools issue resonated more powerfully with voters.

Now, a new report empirically validates this thesis: Prop 8 was almost certainly approved due to false and misleading advertising that had absolutely nothing to do with any sort of backlash against “activist judges.” Cummings and NeJaime also hit on a key point that somehow constantly gets ignored by the process nitpickers: “Opponents were mobilized to place a constitutional ban on the ballot irrespective of the form in which marriage equality was passed.”

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Are Bicycles a Plot to Surrender the United States of American to UN Control?

One of the most unfortunate aspects of transportation policy in the United States is that it winds up playing as a “culture war” issue. It’s a contingent aspects of American life that the sort of people likely to live in walkable urban areas are overwhelmingly liberal, and this creates large distortions in the discourse around what should be rather dry policy debates. For example, John Hickenlooper is running for governor of Colorado. He’s currently mayor of Denver. And like many mayors, he’s acted recently to promote bicycling as a way to get around the city. There’s no particular reason that “100 percent of the space on roads should be allocated for the use of motor vehicles rather than bicycles” should be an article of faith of conservatism (you won’t find it in Hayek or Burke or what have you) but in practice it often is, so you get this kind of nonsense:

Republican gubernatorial candidate Dan Maes is warning voters that Denver Mayor John Hickenlooper’s policies, particularly his efforts to boost bike riding, are “converting Denver into a United Nations community.”

“This is all very well-disguised, but it will be exposed,” Maes told about 50 supporters who showed up at a campaign rally last week in Centennial.

Maes said in a later interview that he once thought the mayor’s efforts to promote cycling and other environmental initiatives were harmless and well-meaning. Now he realizes “that’s exactly the attitude they want you to have.”

I don’t really think bike commuting is going to take America by storm next week, but it is a cheap and healthy way to get around that will appeal to some people. And since in addition to being cheap and healthy, it’s also better for air quality than driving a car, it makes perfect sense for municipal leaders to try to ensure that transportation infrastructure accommodates cyclists.

“Animals Are Funny” Journalism Comes to ABC News

As I noted yesterday it’s both the case that scientific experiments involving animals also sound funny, and also the case that scientific research into important subjects often involves animals. There’s a case to be made that it’s a bad idea for the government to fund scientific research in general, but most people shy away from making that case because the arguments in favor of it are extraordinarily weak and exploring the issue would generally highlight that libertarian dogmatism is dumb. Instead, many in congress and the media seem inclined to simply apply an “Animals Are Funny” standard and decide that any American Recovery and Reinvestment Act projects that involve animals are per se wasteful.

The latest comes from ABC News’ Jonathan Karl who apparently thinks it’s none of the government’s business to ascertain threats to local agriculture:

ABC’s Jonathan Karl, who cited “among the highlights” of the McCain/Coburn press release not only the monkey study but also “nearly $1 million for the California Academy of Sciences to study exotic ants.” That’s doubly funny because they’re bugs and they’re “exotic.” But the reason you would want to study exotic insects (meaning non-native) is that they’re a threat to agriculture, either current or potential. Agriculture is a $36 billion-a-year industry in California–but this crucial context was ignored by ABC.

This seems important to me. More broadly, increasing the stock of human knowledge is important. You do that by funding scientific research. Including, yes, research on animals. Even “exotic” ones. It would be interesting to have a real debate about the merits of scientific research in general, but this business of trying to pick out individual “funny-sounding” projects and denouncing them is really shameful and pathetic.

Moral Consequences of Economic Collapse

When not marveling at Democratic reluctance to stand up for values of religious freedom that Republicans used to uphold until all the sane ones suddenly went MIA, I’ve been marveling lately at the surge of enthusiasm for repealing the 14th Amendment so as to modify the birthright citizenship proposal. Many countries don’t follow American practice in this regard, so if you want to play make-believe you can simply pretend that right-wing politicians suddenly noticed this fact and are intrigued on the merits by the Norwegian approach to citizenship or something.

Obviously, though, in the real world mainstream politicians were not up in arms about this a few years ago and they didn’t change their minds thanks to a close reading of Gerhard Schröder’s immigration reforms.

But what you’re seeing in both cases is more than mere opportunism. It’s the result of the years of very bad economic performance. One of the most important political books of recent years is Benjamin Friedman’s The Moral Consequences of Economic Growth. He details the fact that growth tends to foster liberal sentiments and open societies, whereas periods of growth failure undermine them. And we’re seeing that very dynamic unfold before our eyes in the United States today. The poor performance of the economy is dragging down liberalism as a whole into the ditch and not just because slow growth will impact the midterms. In terms of larger, underlying social dynamics people turn more selfish, more xenophobic, more suspicious, and more illiberal the longer these kind of conditions persist.

Raising Compensation at Low-Skill Jobs

Ezra Klein reproduces a chart from David Autor’s “Polarization of Job Opportunities in the U.S. Labor Market” (PDF):

The structure of job opportunities in the United States has sharply polarized over the past two decades, with expanding job opportunities in both high-skill, high-wage occupations and low-skill, low wage occupations, coupled with contracting opportunities in middle-wage, middle-skill white-collar and blue-collar jobs. Concretely, employment and earnings are rising in both high education professional, technical, and managerial occupations and, since the late 1980s, in low-education food service, personal care, and protective service occupations. Conversely, job opportunities are declining in both middle skill, white collar clerical, administrative, and sales occupations and in middle-skill, blue-collar production, craft, and operative occupations.

This relates back to the point about education and wages that I was trying to make last week. The wages earned by food service workers isn’t a fixed element of the natural order. A cook in India makes less than a cook in Mexico who makes less than a cook in Germany. That’s not because cooks in Germany make better food than cooks in Mexico or India (indeed, in general the reverse is probably true). It’s because the overall level of skills and wages is higher in Germany than in Mexico or India. So if we get more people into the high-skill category, that not only raises those people’s wages it increases incomes across the board. Alternatively, increased immigration by foreign professionals would raise the incomes of non-professionals in the United States.

Alternatively, there’s evidence that if we sharply curtailed immigration from Mexico we’d raise wages for Americans who haven’t finished high school, especially Hispanics, albeit at the price of reduced living standards for the vast majority of the North American population.

The point either way is that “good” and “bad” jobs aren’t ontological categories. On the one hand, goodness and badness are relative—working at McDonald’s is a pretty good job compared to the job the average Chinese person has. On the other hand, precisely because of this relativity, broader social factors play a big role. Since labor market opportunities in China are generally unappealing relative to those in the United States, McDonald’s pays Americans much more than it pays Chinese people who, living in a country where the per capita GDP is $6,500 would be confused by the idea that making

Autolib

Car-sharing schemes have a lot of promise, in my opinion. Automobiles are extremely useful devices, so people generally want to be able to have access to them. Thus insofar as the only reasonable way to have access to a car is to buy one, people will tend to buy cars. Then, having bought a car and already committed to incurring most of the price of ownership (sale price, insurance, etc.) you may as well drive it a lot. Convenient short-term car rentals change the calculus—the amount you pay is pretty strictly proportional to the amount you drive, so you’ll still drive in circumstances when car-use is genuinely valuable to you, but in other circumstances you won’t drive. That leaves more money in your pocket for other uses and less pollution in the air.

Paris is getting in on the act:

Paris plans to launch the world’s largest electric car access scheme in September of next year. The city is hoping to emulate the popularity of its easy rental system for bicycles, known as Velib.

This time around, Autolib, which stands for auto liberte, will allow Parisians to rent an electric vehicle whenever they need to, with the goal of cutting down on car ownership, traffic and pollution.

I do think it’s a mistake to think programs like this will significantly reduce traffic congestion in major cities. Traffic congestion is caused by the same thing that causes bread lines in the Soviet Union—underpricing of a valuable resource. To curb congestion in a serious way, you need to do congestion pricing. But car-sharing has a lot of virtues.

Amare Stoudemire: Good for the Jews?

The world of Jewish sports fans has been roiled for a week now by speculation around New York Knicks acquisition Amare Stoudemire’s trip to Israel and Twitter-born hints of Jewish roots. The Wall Street Journal delivers the clearest explanation of the situation that I’ve seen:

Mr. Stoudemire said it was his family’s dedication to biblical scripture and his attendance at Sunday school that planted the seeds of an affinity to Judaism that he says has grown over the past decade. While he doesn’t consider himself religiously Jewish, he said he feels spiritually and culturally Jewish. [...]

Mr. Stoudemire’s interest in Judaism coincides with a stepped up relationship over the past three months with Idan Ravin, a private trainer who works with NBA players. Mr. Ravin says Mr. Stoudemire’s Hebrew comes from lessons in recent weeks with Mr. Ravin’s Israeli mother, a teacher in a Jewish school in Washington, D.C. Mr. Ravin, who accompanied Mr. Stoudemire on the trip, said Mr. Stoudemire is a quick read on foreign languages, and he speculates the skill is linked to his ability to decipher an opposing defense.

Not nearly good enough for the Law of Return, but should be good enough to serve as a marketing aid in the NYC market.

Vikram Pandit’s Ignorance

One problem any large organization—be it the United States government or a multinational financial services corporation—faces is that it’s hard for the guy at the top to fully figure out what’s happening. Economics of Contempt pulls out an interesting, and slightly frightening, example from the handwritten notes of Thomas Fontana, head of risk management in Citi’s Global Financial Institutions group, from a September 14, 2008 (i.e., right before Lehman went under) meeting at the New York Fed:

First, we learn that Vikram Pandit, CEO of one of the largest bank holding companies in the world (Citigroup), apparently didn’t know what Section 23A was. For non-finance types, Section 23A is the law that governs transactions between commercial banks and their non-bank affiliates. If you’ve ever worked at a big bank, you know what 23A is — unless, apparently, you’re the CEO. This definitely isn’t a lawyers-only thing either — Fontana is a risk manager, and he was so surprised that he felt compelled to write, “VP [Vikram Pandit] doesn’t know what 23A is?” Oh, Vikram.

Good stuff. We also learn in the same post that Treasury Secretary Hank Paulson expressed specific concern that if Lehman failed it would cause big problems for money market funds, which is precisely what happened after Lehman did fail. There’s a been a common assumption that it was allowed to fail because policymakers in general, and Paulson in particular, didn’t appreciate this risk but perhaps they did.