Author Archives: Brad Warbiany

Quote Of The Day

Ahh, that veritable font of blogging material, Kevin Drum:

And yet, to a large extent, governments are merely responding to the wishes of the public. It’s a simple fact that the average Joe (or Dieter or Emile or Carlotta) believes pretty strongly in folk economics — low inflation, a strong currency, and balanced budgets — and decidedly doesn’t believe in bailing out people who aren’t them. On the latter front, this applies both to Germans who don’t want to bail out Greeks and Americans who don’t want to bail out underwater homeowners.

Apparently the problem in the world is that we’ve been listening to the folk economists, and following policies of low inflation, a strong currency, and balanced budgets. Damn our fiscal solvency getting us into all this trouble!

A Blow Against The Nanny State Struck In… California??

Yes, my good friends — Gov Jerry Brown has actually vetoed a nanny-state helmet law.

Can you believe it?

I’ve added the emphasis below. It’s almost refreshing to hear such a sentiment from a politician — a California politician at that.

To the Members of the California State Senate:

I am returning Senate Bill 105 without my signature.

This measure would impose criminal penalties on a child under the age of 18 and his or her parents if the child skis or snowboards without a helmet.

While I appreciate the value of wearing a ski helmet, I am concerned about the continuing and seemingly inexorable transfer of authority from parents to the state. Not every human problem deserves a law.

I believe parents have the ability and responsibility to make good choices for their children.

Sincerely,
Edmund J. Brown

Hat Tip: FreeRangeKids

Quote Of The Day

From a commenter over at Kevin Drum’s place. The discussion was about problems with the American educational system:

Yep. And as the posts by Aaron Carroll and Austin Frakt have shown over the last year (link below) the same is true of our health care system. We’ve gone through a 30+ year binge of hypercapitalism, naively believing the free market is a magic bullet for all problems. Health care and education stand as clear counter-examples and unless we get our act together national decline is inevitable.

Yes, the intense reliance on the free market in our education and healthcare systems clearly proves that capitalism doesn’t work. And here I thought that those areas of our economy were dominated by government, not the free market. Silly me!

Should Republicans Fight Gas Tax Renewal?

It appears that our Federal $0.184/gallon gasoline excise tax is set to expire in just under 2 months, on September 30. This was news to me. As my colleague Doug blogs over at Outside the Beltway, this is being batted around as potentially being big news — brought to you by Grover Norquist & the Tea Party — over the interim:

You can already see how this issue could play itself out a month from now. As it is the issue of increased energy prices is an easy one to demagouge with simplistic slogans (“Drill Baby Drill”) and even more simplistic ideas (anyone remember when Hillary Clinton and John McCain came up with the idiotic idea of a Federal Gas Tax Holiday during the 2008 campaign?). It’s not at all hard to see the argument over the the gas tax being boiled down to the slogan Barack Obama wants to increase the price of gas. Given that renewing the gas tax is going to require affirmative action on the part of Congress (rather than legislation to block it) I’d already say that the forces that come out against it are going to have the advantage here, especially given the partisan make up of Congress and the difficulty of getting anything through the Senate.

There are, in fact, some remarkable similarities between the just concluded debt ceiling showdown and the showdown that could result over renewing the gas tax. Like increasing the debt ceiling, the renewal of the Federal Gasoline Tax has been a fairly non-controversial action in the past.

Republicans and Tea Party folks can advocate this on two grounds.

The first, of course, is Federalism. It is inefficient and counterproductive to route all these dollars through the earmark meat-grinder of Washington when states are more than capable of maintaining their own roads. Simply put, outside of direct Interstate Highway planning (which may have interstate commerce implications), the Federal government need not be involved in intrastate maintenance. For a party that has paid so much lip service to the earmark issue, this is a natural progression.

The second is mere populism. The national price of a gallon of gas on the day Barack Obama was inaugurated was $1.68. Today it is $3.70. That’s more than doubled since election day, and while it’s certainly easy to point out that there are a lot of reasons NOT related to the POTUS that drive gas prices, the “drill baby drill” crowd can clearly point to the moratorium on offshore drilling to suggest that POTUS is not only driving up gas prices, but then wants to keep taxing on top of them.

There’s only one problem: it’s not going to work. As Doug & the original article point out, the public does see tangible benefit in a purpose-driven tax such as this — they have roads to drive on. While libertarians and free-market types can point out all the ways that government provides roads inefficiently and performs crappy maintenance, the public doesn’t see stripping the funding as a way to fix that.

But that doesn’t mean it’s not worth a fight. Just as previous debt ceiling increases were provided “cleanly” but this one was driven through brinksmanship to force a $2T budget cut to make it happen, it is clear that the gas tax renewal can be tied to being a package deal with something that Republicans want.

The natural package deal is allowing expanded drilling (incl. places like ANWR). Push that along with an end to most “green energy” subsidies, and you have a fallback position of simply allowing the drilling that will please most of the Republican base, potentially drive down long-term gasoline costs, and does so in a way that otherwise simply gives us the status quo (the current tax rates). Or tie it to different taxes (keeping the Bush tax rates, or tax reform in another area such as repatriation of foreign earnings), although these options might be a political loser as the two issues are so separate.

But it would be a shame to simply let this slide without a fight. This is a tax that’s set to expire unless Congress actively extends it. This means that the burden is on Congress to bring an extension to the floor and pass it. Given Republican’s recent fight over the debt, ending a tax which doesn’t have a lot of inherent opposition may not be feasible. But that doesn’t mean it should be a clean bill.

The 2-Minute Budget Deal Reaction: Open Thread

So I’ve had a tiny bit of time to reflect on the budget deal. Here are the key points:

  • $900B in immediate cuts [1/3 to defense], coupled to a $900B immediate debt ceiling increase.
  • Additional $1.2T-1.5T debt ceiling increase IF Congress either passes a balanced budget amendment or a bipartisan commission creates a debt reduction [tax revenue OR spending cuts] that can pass Congress by the end of the year.
  • If the above doesn’t occur, triggered spending cuts to defense and medicare [and possibly elsewhere] in the amount of $1.2T will occur along with a $1.2T debt ceiling increase. No revenue increases.

It could be better, it could be worse. I can see a few things here… First, we can throw out the BBA. That’s a non-starter. The whole reason that was added was for Tea Party buy-in, but it’s simply not going to pass. So we’re left with anywhere from $1.2T minimum in debt reduction, which is ALL cuts, to probably about $1.5T maximum (as there’s no political will for more) that can come from taxes or cuts.

With multiple paths going forward, I think we have to figure out what we’d like to see. And in my opinion, the BEST outcome is for the commission to fail and for the triggered cuts to occur. The commission has the capability to push for tax hikes, and I think in any scenario they’ll find a way for more than $300B of their package [assumed to be exactly $1.5T] to be increased tax revenues, meaning they’ll cut spending LESS than $1.2T.

Of the proposed cuts in the trigger, it’s about $600B over 10 years to defense, and a sizable chunk is expected to go into Medicare. While libertarians and Republicans may not find common ground on the defense spending, we’re talking about a total of $1T over 10 years, which should be feasible if we’re going to assume that we actually draw down in Iraq and Afghanistan. For the most part, that $1T will encompass keeping military spending roughly equal to what it is now, as those cuts are from a projected baseline which add at least $500B from what we’d spend by multiplying this year’s war-inflated spending out over 10 years.

The Medicare spending will put further pressure on reforming the program, and may give more political cover to performing drastic reforms such as the Ryan plan — voucherizing Medicare and pushing it to the Obamacare exchanges. Either way, we MUST restructure entitlements, and this is a start.

So I see a lot of danger in whatever the commission comes up with. Let’s start hoping the commission fails, and these already-planned $1.2T in cuts go into effect. Seems like the best option on the table at the moment.

This is an off-the-cuff reaction, of course. I encourage you guys to give your own thoughts on the plan in the comments.

Social Security Trust Fund: Accounting Kabuki

The looming government debt ceiling crisis has cause Obama to threaten inability to pay Social Security checks. It’s renewed the debate, which I’ve hashed out many times (here, here, here and here, for posterity’s sake), whether the Social Security “Trust Fund” is a veritable asset or merely a convenient accounting fiction used to hide deficits.

I, of course, believe it to be the latter. But M.S., writing for The Economist’s Democracy in America blog, tries to make some analogies about the trust fund’s “accounting kabuki”:

I mean, look, our bank accounts are an accounting fiction. Everyone knows exactly how much money is in anyone else’s bank account: none. There is no money “in” our bank accounts; our banks have already spent it. Our so-called bank account is just an IOU, a promise from our bank to pay us up to the amount specified in our balance.

There are two things here. The first is that the bank account is merely a promise, which is true. This is clearly analogous to the Social Security Trust Fund. The second part, though, is the problem. Making good on the promise is the bank’s responsibility, NOT MINE.

If I want to withdraw money from the bank, they have a legal and moral responsibility to give it to me. It doesn’t matter to me where they get it, but it creates no obligation on me to get that money back.

If they told me that they’d give me my money, but they’d have to garnish my wages for the next year in return, however, I’d be a little pissed off. That’s what the Social Security Trust Fund is.

The key is that American taxpayers are the ones who are being “paid back” out of the Social Security Trust Fund, while American taxpayers are also the ones doing the paying. It’s not an accounting fiction because we have two different line items on the bill, it’s an accounting fiction because the revenues ultimately come from the same place!

From the point of view of the Social Security Administration, of course, the IOU’s are an asset. They are a claim on future government revenue that is essentially on par with the debt that China or institutional investors buy from the US. I.e. from an accounting standpoint, it is a “promise” that carries some heft. However, from the point of view of the American taxpayer, it is additional debt that must be repaid through higher taxation. They’re going to get it from our paychecks, it’ll just come from the line that says “FED INC TAX” rather than the lines that says “SOC SEC TAX” or “MEDICARE TAX”. It still comes out of the same paycheck, which means whether it’s an accounting kabuki or not, it still costs us more money.

Quote Of The Day

Is Gold in a bubble? The Economist thinks so. But instructive is something they wrote back in 1980, just before the culmination of the last major gold bubble:

In equity markets, there is much truth to the saying never sell on a strike. In the gold market, which has become in some ways the reverse image of equities, a suitable variant might be never buy on the end of the world. You cannot, after all, take it with you.

A year from now, I’d think that gold will be well under $1,000 per ounce, or as high as north of $5,000 per ounce. That’s not a recommendation to buy gold, however. If it’s north of $5,000 per ounce, that means that things in the United States will have gone so horrendously wrong that owning the gold at that price will be little solace, as you very well may not even want to trade it for dollars.

I learned years ago to never bet against my alma mater, the Purdue Boilermakers. Even if I win my bet, I’m still unhappy with the outcome. It’s much the same with gold. Betting on the end of the world sucks if you’re wrong, but sucks even more if you’re right.

My Take [So Far] On Google+

Having “grown up” online — a bit more than most of my contemporaries, as I had the techno-geek life of BBS’ing and AOHell in the early days of the internet — I’ve always had as much of an “online” presence as off. Today, this means that many of my personal hobbies, whether it be making/drinking beer, watching Purdue sports, arguing about politics, and making offensive jokes are activities coordinated and tailored to specific online forums as well. Homebrewing, Boilermaker football, and arcane anarcho-libertarian musings quickly bore the snot out of my friends and family in the offline world, and I’ve gotten in trouble with my wife more than once for those jokes.

In fact, it was the jokes that both largely made me effectively leave Facebook, and to be excited about the “Circles” feature in G+. Facebook has an inherently flat structure that ensures that if someone is your “Friend”, they can see essentially everything you post. This has two downsides:

1. It causes you to avoid friending certain people that you may not WANT to see every little thing about you.
2. It makes it bothersome to write about something that a small subset of your friends might be interested in, but others won’t care about.

I know that my beer friends don’t care about my political rants. My political friends don’t care about the status of my latest homebrew creations. I might occasionally want to highlight something I’ve written politically to my friends/family, but they certainly don’t want to be inundated with it. And my mother-in-law DOESN’T need to hear most of my jokes. And I’ve actively avoided friending many people in the political realm, many Purdue folks I know *only* through online sites, because I had no way to filter out the topics they wouldn’t be interested in. And I’ve especially never wanted to include coworkers or business contacts on Facebook, of course, because some of the discussions I get into would be completely inappropriate for a professional working relationship.

Circles changes that, and allows one to make a much LARGER social network that is more properly segmented based on common interests. And since people can reside within multiple circles at once, I don’t have to decide whether someone goes in “Friends” or “Beer”; they can be in both if we have that interest in common.

For that reason, I think G+ is a far better platform — for me — than Facebook.

However, Circles and “following” also allows a bit of Twitter-like asymmetric information dissemination that becomes very interesting. In essence, it’s like having your G+ account be both your Facebook social network and a more interactive Twitter account. With Twitter, the people who want to see my public status updates and the people who I choose to see don’t have to be the same. Ezra Klein has been talking about this quite a bit as G+ largely replacing Twitter for him, as he can reach the same sort of people, have more substantive discussions that can be more easily followed, but doesn’t have to necessarily subject his incoming stream to the rants of libertarian crackpots like myself.

Unfortunately, this becomes worlds less useful to me. The reason is simple — I have to tag posts as “Public” for those who are “following” me to see them. Most people who choose to “follow” me that I might not want to add to circles and have them appear in my timeline are in the political realm. I don’t particularly want to make my political posts “Public”, as that means anyone in my “Friends”, “Family”, “Beer”, or “Coworker” circles can automatically see them — creating the very annoyance factor that Circles are meant to avoid. This may be acceptable for Ezra Klein, who is a public figure due to his prominence as a political journalist, but not something that my non-political friends want to be subjected to from me.

For me, then, I’m left with a dilemma. Twitter is designed to be a broadcast medium, and it’s generally understood that you take the good with the bad if you choose to follow someone. Those who want to hear about my beer or politics know to ignore me during Purdue football games, just as I ignore many of them during specific things they tweet about that I don’t particularly care about. The etiquette of the medium is different than it is on Facebook, and people who will be annoyed by seeing more than three Facebook status updates a day from one person find that to be a slow day on Twitter.

I believe that the etiquette of G+ will more closely echo that of Facebook, which is why the different circles allow you at least filter certain people out of certain subjects. Thus, I can’t see myself sending many things out as “Public”. As a result, the very benefit of an asymmetric network is lost. What I’d really like is the ability to filter certain circles out of my ‘standard’ timeline — that way I can put all my asymmetric follows into a circle, and only go and have that circle show up in my timeline on demand. Otherwise, I simply won’t add those people to any circles, and since I essentially avoid “Public” posts most of the time, they won’t be able to see almost anything I write.

Google+ has the built-in structure to fundamentally change the way that we structure social networks. People I’d never have friended on Facebook previously (i.e. work colleagues, acquaintances, people I *only* know online, etc) now have a place and I can segment my message based on the audience likely to see it. That seems like it might be a game-changer, but needs a bit of tweaking before it’ll be 100% there so that people can figure out the new etiquette of the medium.

Does Gay Marriage Imperil Free Speech?

One would think that one has very little to do with the other. That is, unless one is Gary Bauer, who seems to be taking a tactic I’ve seen too often out of leftists suggesting that if someone in the private sector wants to fire you for saying something bigoted, that it’s an assault on your freedom of speech.

Recently, Frank Turek, an employee for computer networking firm Cisco Systems, was fired for authoring a book titled “Correct, not Politically Correct: How Same-Sex Marriage Hurts Everyone.” Turek had a stellar work record and never talked about his religious or political views on the job.

But after a homosexual manager at Cisco Googled Turek’s name, learned about his views and complained to a human resources professional at Cisco, Turek was immediately fired.

Also recently, Canadian sportscaster Damian Goddard was fired for declaring his opposition to gay marriage. Rogers Communications fired Goddard after he tweeted his support for Todd Reynolds, a hockey agent, who had earlier voiced his opposition to the activism of Sean Avery , a New York Rangers player who was part of the New Yorkers for Marriage Equality campaign in the lead-up to the same-sex marriage vote in the New York State Legislature.

Now, I don’t know the workplace policies of either corporation, but I would assume that in the first case, Turek violated some section of his employment contract with Cisco. I might call that an overreaction, but I wouldn’t call it a violation of his freedom of speech. It was, rather, an exercise in freedom of association (or, in this case, disassociation). The second case, the sportscaster is a public figure, and I think it’s quite likely that Rogers Communications might believe that his thoughts on gay marriage would impact ratings or the bottom line.

Should either corporation be forced to retain an employee that publicly espouses values — values that I’d call bigoted — inconsistent with those of the corporation? Cisco is a multinational company with highly diverse employees, and it’s quite possible that someone hired to put together leadership seminars [as Kurek was] may not be seen as a leader himself if he publicly advocates legal oppression against people who he is to lead.

But let’s take it a step farther. Let’s assume instead that either Kurek or Goddard were advocating against interracial marriage. Let’s say that Kurek was writing books claiming interracial marriage hurts families, and that the races shouldn’t mix. After all, many of the arguments at the time of Loving v. Virginia were based on religious beliefs. Would Gary Bauer be defending either? I fail to see any difference in principle here — in both cases, one would be arguing against legal equality based upon one owns religious convictions of what defines a proper marriage. And in both cases, the issue at hand LEGALLY [not morally] is whether the state can withhold access to a LEGAL CONTRACT between two adults.

Bauer continues with a slightly more thorny issue:

Same-sex marriage is already having a chilling effect on religious freedom. In states that have legalized civil unions or gay marriage, Catholic adoption agencies have been shuttered or lost their tax-exempt status for refusing to let gay couples adopt children.

Last week in Illinois, Gov. Pat Quinn affirmed a decision by the Illinois Department of Children and Family Services not to renew adoption contracts with Catholic Charities for the same reason because of the state’s law recognizing same-sex civil unions.

This seems like outright state hostility to religion, when viewed through Gary Bauer’s eyes. However, from a legal perspective, the 14th amendment demands equality before the law. If gay marriage is legal, then gays should be allowed the same rights as straights when it comes to adoption. And if an agency looking to work with the state on adoptions refuses to comply with equal protection clauses, those agencies should not get state funding.

Again, this can be greatly simplified if we refer back to other cases of equality before the law. Should adoption agencies be free to take state funds and refuse to allow interracial straight couples to adopt? Should state charter school funds be given to schools which admit white and asian students, but bar blacks and hispanics? The state itself is barred from discrimination in most cases, and while some wholly private organizations can discriminate, state adoption contracts and state school funding are most certainly not wholly private. If a religion wants to work WITH the government, they have to do so on the government’s terms.

I would think that if the arguments were advanced today, Gary Bauer would call the person advocating against interracial marriage a bigot. I think if someone were arguing for re-segregating the schools, Gary Bauer would call that person a bigot. A Gary Bauer of 50 years ago, I’m not so sure.

Of course, a Gary Bauer of only 3 years ago might give us a different tone:

Last week, a few days before Pope Benedict XVI’s visit to America, TV talk show host Bill Maher went on a profanity-laden tirade against the Pope and the Catholic Church. On his HBO Real Time program, Maher claimed that the Pope “used to be a Nazi,” and called the Catholic Church a “child-abusing religious cult” and “the Bear Stearns of organized pedophilia.”

The result: (Cue sound of crickets chirping.)

Maher believes he can get away with such overt bigotry under the pretext of “creative license.” As Maher said in his non-apology apology: “Now first of all, it was a joke, during a comedic context…”

And when the Catholic League confronted HBO about why it continues to give Maher airtime, the station insisted that his anti-Catholicism was a matter of “creative freedom.” Needless to say, such “creative freedom” would not be extended to those who make racist, anti-gay or anti-Muslim remarks. Ask Don Imus.

Based on a *very* charitable reading of that op-ed, one can potentially infer that Bauer things nobody should be fired for bigoted remarks, and that he’s merely upset at the double standard of the left. It seems, based on my reading of his article, that his concern with the double standard is that Bill Maher isn’t punished, not that right-wingers who make bigoted statements are.

Gary Bauer is not fighting for religious freedom, he’s fighting for the right to espouse bigoted politics with no social cost. Sorry, Gary, that’s just not how it works. You might not think that treating gays like they’re not worthy of the same legal rights is bigotry, but I’m afraid that an ever-growing portion of the country disagrees with you on that. If we call you on it, that doesn’t mean you’ve lost your right to free speech. It means we think you’re a bigot.

Government: Shows A Loss While Selling Money

I was passed this story by a relative, and thought it was absolutely genius:

Would you take advantage of a federal loophole that gives you a free first-class flight anywhere on Earth?

That’s what hundreds — possibly thousands — of shrewd travel enthusiasts are doing, in light of a 2005 law that unwittingly created a weird case of supply and demand.

The law intended to push more $1 coins into circulation. Dollar coins are cheaper for the U.S. Mint to maintain because coins don’t need to be replaced as often as the $1 bill.

The U.S. Mint sells the coins at face value, using taxpayer money to cover shipping and handling costs. If you want to buy $1,000 in coins, you simply pay $1,000 on your credit card and wait for the shipment to arrive in the mail.

Credit card rewards enthusiasts leapt at the program. They use a simple strategy: Purchase coins. Wait for coins to arrive in mail. Deposit. Use deposit to pay credit card. Repeat.

Brilliant! It’s a bit of a hassle, but no more of a hassle than dealing with the TSA. At least if you’re in the middle of a government groping, you can bask in the solace that your flight is free.

Now, some may suggest that taxpayers paying the shipping & handling is worth it if the coins are making it into circulation, given that the coins themselves are a better deal for the US Mint. So what happens to those coins?

A spokesman for the U.S. Mint calls this an “abuse.” Depositing the coins directly in a bank doesn’t put the coins in circulation. The banks simply send that money back to the Federal Reserve — often still clad in its original U.S. Mint packaging.

Yep. The government doesn’t have the balls to discontinue the dollar bill, so they set up a “voluntary” (& subsidized through packing/shipping costs) circular trade that does nothing but increase costs on all aspects of our system and doesn’t even manage to put the coins in circulation.

Well done, Washington!

Quote Of The Day

Apparently Federal Employees in many jobs are more likely to die than be fired… And we’re not talking the Dept. of Defense here…

Of course, it’s entirely understandable, as the Federal Government only hires dutiful, public-minded and competent people:

HUD spokesman Jerry Brown says his department’s low dismissal rate — providing a 99.85% job security rate for employees — shows a skilled and committed workforce. “We’ve never focused on firing people, and we don’t intend to start now. We’re more focused on hiring the right people,” he says.

Spoken like someone who has never had to decide anything based on P&L, in an industry without competition.

And, of course, there’s the implication that greedy money-grubbing corporations are less focused on hiring the right people. Considering they have a bottom line to meet, I’d say they’re *more* likely to be so focused.

Hat Tip: Reason Hit & Run

Kevin Drum Is An Innumerate Hack

Kevin Drum don’t grok numbers. I think we all knew that. But occasionally he goes so far over the edge that it calls for correction, and today’s one of those days.

Kevin has taken a handy chart (originally here), and drawn some trendlines onto it to proclaim that we don’t have a spending problem at all:

I’ve added some handy lines to show the general trajectory of spending and taxes over the past three decades. Putting aside the Great Recession, which has temporarily cratered revenues and imposed a burst of stimulus spending, the trend is clear: spending has generally gone down, but so have taxes. Future healthcare expenses are a big issue, but the current deficit just hasn’t been primarily a spending problem. It’s been a tax cut problem.

So let’s start at the beginning:

  1. Based on his graph, we don’t have a problem at all. Spending as a percentage of GDP is clearly trending down, as is revenue. If his trendlines are accurate and continue, I’m a happy guy.
  2. In fact, spending is trending down FASTER than revenue, so deficits as a percentage of GDP would be shrinking. Also makes me happy.

The fact that Drum doesn’t even SEE either of these points when he draws his trendlines is further proof that he’s an innumerate hack. If his trendlines were accurate (and they’re not, which I’ll cover later in two ways), they actually suggest that we really don’t have much of a problem at all. Certainly that’s not what he’s trying to prove.

Further, he blames the tax cuts on the spending drops, despite seeing a big jump in revenues after the Bush tax cuts. What he overlooks is that the mid-90’s revenue boom was economy-related, based on the tech bubble, and the mid-00’s revenue boom was economy-related, based on the housing bubble. The current 15% revenue is caused partly by tax rates but mostly by the recession, just as the current 25% spending is caused partly by stimulus spending but also largely by stagnation in GDP. He sees lines on the graph but doesn’t understand their meaning.

But all that analysis belies the point that his trendlines are utter bunk. First, they’re hand-drawn with no rhyme nor reason whatsoever. Warren Meyer at Coyote Blog used Excel to draw proper trend lines, and while the direction of trend is accurate, the slope of the spending drop is MUCH more gentle than Drum’s line. Drum shows spending dropping from 23% of GDP in 1981 to roughly 19% in 2010. Warren’s line shows spending dropping from 22% of GDP to only 20% of GDP. Doesn’t look so striking, does it?

Further, Meyer takes Drum to task for his selection of 1981 as a start point. 1981 was a local maxima of revenue as a percentage of GDP (remember that we were just trying to come out of stagflation at the time), so Meyer draws a similar graph with 1950 [chosen to ensure the extreme spending spikes of WWII were not a factor] as a start date instead, and when you look at Meyer’s graph, you see a much more stark difference in trendline. Frankly, believing as I do that Drum is an innumerate hack (and seeing the source of his graph), I don’t suggest that Kevin Drum chose 1981 deliberately; I personally think Drum isn’t capable of even understanding the point of Meyer’s criticism here.

So I decided to take Drum at face value, and use the President (via OMB) & Congress’ (via CBO) projections of spending and revenue over the next 10 years, keeping Drum’s 1981 start date, to see how those trend lines line up. After all, if we’re going to criticize Obama’s spending and taxation, we should probably criticize the spending and taxation that this President and this Congress are authorizing, not the past.

Here are the trends:

As you can see, 1981-2010 revenue & spending is identical, but the projections diverge somewhat.

  • The CBO projections MUST assume that all current law executes without change. As I pointed out previously, this assumes that ALL of the Bush tax cuts expire, ALL of the temporary stimulus spending expires, and actually assumes that discretionary spending tracks inflation, which is lower than historically occurs. Thus, they’re not only assuming that the tax cuts “for the rich” expire, they’re assuming ALL the Bush tax cuts expire, as is currently slated by law to occur.
  • The OMB budget assumes both lower spending and lower revenues than the CBO, but I haven’t looked in detail to see how they’re getting there. I generally trust the OMB less than the CBO, but I wanted to provide both sets of numbers as the OMB is essentially the number based upon Obama’s policy.
  • In both cases, defense spending as a percentage of GDP drops significantly over the course of the decade, as wars in Iraq and Afghanistan wind down. Thus, the spending impact of defense is not driving this spending jump. However, nondiscretionary spending in the Medicare/Medicaid & Social Security ARE big drivers of that spending jump.

That said, you can see in both cases that the trendline for revenues is up, and the trendline for spending is up, BOTH based upon the start date of 1981, which — deliberately or not — skews the numbers to higher start points for both revenue and spending. And you can see in both cases that the slope of the spending line rises faster than the slope of the revenue line. This is true even in the CBO projection, which fully ends the Bush tax cuts in 2012.

What does it mean if you completely end the Bush tax cuts and quickly wind down the cost of Bush’s wars, and spending STILL rises faster than revenues? Sounds like a spending problem to me…

As I said before, I don’t think Kevin Drum is being deliberately manipulative with these numbers. To believe that, I would have to give him credit for understanding these numbers. Instead, I believe he’s an innumerate hack. I’d ask myself why he continues to be paid, but judging by the grunting matches in his comment section between tribes of Republican and Democrat apes, it appears that there’s a market for his particular brand of mindless drivel.

The Painful Human Cost Of Government Shutdown

We runs out of da booze:

Hundreds of bars, restaurants and stores across Minnesota are running out of beer and alcohol and others may soon run out of cigarettes — a subtle and largely unforeseen consequence of a state government shutdown.

In the days leading up to the shutdown, thousands of outlets scrambled to renew their state-issued liquor purchasing cards. Many of them did not make it.

Now, with no end in sight to the shutdown, they face a summer of fast-dwindling alcohol supplies and a bottom line that looks increasingly bleak.

“It’s going to cripple our industry,” said Frank Ball, executive director of the Minnesota Licensed Beverage Association, which represents thousands of liquor retailers in the state.

The Ugly Mug, a popular bar near Target Field, doesn’t have enough beer to get through the baseball season.

“Our inventories are diminishing rapidly over the next month,” owner Erik Forsberg said. He was among a cluster of bar and restaurant owners who appealed Tuesday to a court-appointed special master to be allowed to continue buying alcohol during the shutdown. “When [the Twins are] back on Thursday and people can’t get Budweiser and they can’t get whatever, they’re just going to go somewhere else.”

Come Labor Day, cigarette smokers will be in the same bind.

The state has stopped issuing the tax stamps that distributors must glue to the bottom of every pack before it’s sold for retail.

I wonder what’s going to happen to all the normal restaurants because they can’t renew their state-issued food purchase licenses? And to the gas stations who can’t renew their state-issued gas purchase licenses? If the government doesn’t exist to grant its blessing to purchases, isn’t the state going to entirely shut down?

Perhaps I’m being a bit flippant here. But more accurately, we’re simply looking at an unintended consequence of antiquated blue laws that suggest that state government has a legitimate role in the controlling the wholesale distribution of alcohol — NOT the retail distribution, mind you. I’m sure the liquor licenses of these vendors aren’t in question, or they couldn’t serve booze now. So this restriction is doing nothing to change whether or not underage minors can purchase liquor — only whether legitimate liquor-license-holding bars and restaurants can purchase form wholesalers.

This, more accurately, is simply a problem that is to be expected when you must ask government permission in order to operate and earn your livelihood. When the government isn’t around to answer their phone, you’re stuck in the unenviable position of losing your income or breaking the law. The fact that individual establishments need a license to even purchase wholesale liquor is the problem. That some bars may run dry due to this government shutdown is merely a symptom.

State governments need to start treating alcohol more like any other product — at least in the distribution pipeline. At the retail level, it can clearly be argued that laws against underage purchase are justifiable, but in the distribution chain, the state government need not be involved AT ALL.

Double Standards

Now, I’m not one to regularly bang the feminist drum around here… But this is f’ing ridiculous:

Officer Sashay Brown returned to work in May after having her second child. At first, she worked a desk job. Soon after, though, she was forced to patrol the city streets under a new department policy that was meant to force officers who had made dubious claims of health issues back to the street. The Washington Examiner first reported the new policy last week.

“Because of my condition, I am unable to wear my [bulletproof] vest,” Brown wrote in her June 12 request to be detailed back to her station on limited duty. “Wearing my vest is extremely painful and could clog my ducts and slow down the production of my milk supply.” She was then checked out by a department doctor, who advised that Brown be given a limited-duty desk job.

In a June 24 memo to Brown, medical services branch director William Sarvis wrote, “I have reviewed your case and determined that you will not receive authorization to participate in the limited duty work program.”

Sarvis said that until department doctors determine Brown is fit for full duty, she’d either have to take sick leave, or unpaid leave if she didn’t have sick days left.

I’ve been known to offer criticism for some police policies, such as the paid vacations administrative leave that officers often get placed on after shooting someone in a questionable fashion. Or, of the viability at all of public sector unions that work to allow “spiking” of pensions to ensure that officers retire at higher pensions than they ever received in salary. That goes without even getting into the militarization of police in the drug war and the “thin blue line” mentality towards whistleblowers that seems to pervade the industry.

I just don’t understand how you can have a workplace where all that goes on, but if a woman who wants to continue working, and has been advised by the department’s own doctor to go on limited duty, she gets told she has to take sick time or unpaid leave.

I simply can’t imagine such a double standard to be evidence of anything other than outright discrimination.

My family and I spent the past weekend with some friends in northern California, both of whom are police officers. We were discussing work, vacation time, etc, and the husband asked me how my employer accounts for sick time, and I told him that sick time is paid, accounted for separately from vacation time, and generally not really worried about unless someone abuses it to the point where it needs to be addressed. His response: “At least in the private sector you’re allowed to address it. We have some guys taking the max 25-30 days sick every year and can’t do a thing.”

I’m sure the new department policy in this case was put in place to crack down on people abusing the system — something that likely has been going on for many years. Applying the policy in what appears to be such a tone-deaf discriminatory manner is not likely to win them any PR points, and might get them slapped with a lawsuit. Well done, morons!

Kevin Drum’s Guest Bloggers Upholding The [ahem] Fine Standards He Has Created There

Kevin Drum is on vacation this week. While I thought that might leave me without boneheaded material to criticize, I’m afraid he’s found guest bloggers as credible and clueless as himself. Today we have Andy Kroll, who wants to delve into meta-debates about rights and entitlements with Wisconsin Gov. Scott Walker:

But the statement that really jumped out from Walker’s interview is his own perception of the bargaining fight:

“They defined it as a rights issue. It’s not a rights issue. It’s an expensive entitlement.”

What’s his first step to show how wrong Walker is? Well, he skips right to the United Nations, a body whose Declaration of Human Rights clearly states that you can use your rights as long as you don’t do so in a way “contrary to the purposes and principles of the United Nations” (Art. 29, Sec 3). He starts there and follows on with a lot of other legally-created privileges that he calls rights:

Hmm. I’m pretty sure the Universal Declaration of Human Rights, passed by the UN after World War II (and drafted and adopted by the US), says that collective bargaining is in fact a human right. Oh, yes, there it is, in Article 23 of the Universal Declaration:

4. Everyone has the right to form and to join trade unions for the protection of his interests.

Then there’s the National Labor Relations Act (NLRA) here in the US, which “explicitly grants employees the right to collectively bargain and join trade unions,” according to the scholars at Cornell University Law School. Or as the National Labor Relations Board’s website puts it, the NLRA “protects employees’ rights to act together, with or without a union, to improve working terms and conditions, including wages and benefits.”

All of this analysis has one critical flaw: it doesn’t properly recognize that there are multiple kinds of rights, and that a right which the government shall not deny is, well, slightly different than one that it grants. I left the below in a comment to that Kroll’s post at the original site:

Are you even familiar with the distinction between “negative rights” and “positive rights”?

Negative rights are rights that you have unless someone else infringes upon them. You have a right to life, but not to force others to produce the food and shelter you need to live. You have the right to freedom of speech, but not the right to force anyone to listen (or, in the case of blogging, to force a blog to print your comments to a post). A right to healthcare or education — if you define it as me not being stopped by government or highway robbers from freely purchasing health or education services on an open market from a willing seller — is a negative right.

Positive rights are rights that require someone else to procure them to you. A right to healthcare — if you assume that those who can’t afford care should be covered by “society” — is a positive right. A right to an education — if you assume it should be paid for by government taxes — is a positive right. A right to food — if you define it as foodstamps for the indigent — is a positive right. *ALL* positive rights can be described as “entitlements”, as they’re what we as a society might define all people are entitled to be provided to them if they cannot do it themselves.

A “right” to organizing a union is a positive right (inasmuch as it restricts and employer’s ability to fire people for trying to exercise it). If we so choose, in our democratic society, that people should be allowed to unionize to counterbalance what may be perceived as in unfair labor advantage to the employer, we can call it a “right” all we want, but it’s a positive right, not a negative right. As such, calling it an “expensive entitlement” doesn’t seem all that out of the ordinary. I don’t see any real disconnect in what Walker said.

Now, I was a bit unclear in that final paragraph. What I intended to say was this: The right to form a union is a negative right. It is inherent in the right to freedom of association. The right to collective bargaining is a negative right. It is inherent in the right to freedom of speech. As you point out (and as I intended to), it becomes a positive right when we write laws or regulations forcing businesses to the other side of the table. Forcing an employer to actually deal with them on those collective terms is the “entitlement” of that positive right.

Andy Kroll waded into deep water here, and it’s clear he didn’t want to recognize that. It’s also potentially true that Gov. Walker did the same — the original linked article doesn’t make clear whether Walker’s statement about entitlement had deeper context. Kroll is trying to use one line from an already snipped interview to make Gov. Walker sound like a simpleton who doesn’t understand the nature of rights. In doing so, Kroll only proves that to be the case about himself.

Will Individualized Medicine Increase Health Inequality?

Ezra Klein has a rather thought-provoking post today about human genome sequencing and its ability to allow doctors to better-tailor treatment to the specific needs of an individual patient. It presents a phenomenal opportunity to both make medicine more effective, and IMHO to make it cheaper by spending less time and energy on substandard treatments. Ezra raised a different point, though, and I think makes a logical error that warrants further discussion:

If that’s the path that medical advances ultimately take, one byproduct will be an immense explosion in health inequality. Right now, health inequality, though significant, is moderated by the fact that the marginal treatments that someone with unlimited resources can access simply don’t work that much better than the treatments someone with more modest means can access. In some cases, they’re significantly worse. In most cases, they’re pretty similar, and often literally the same.

But as those treatments begin to work better, and as we develop the ability to tailor treatments to individuals, we should expect that someone who can pay for the best treatments for their particular DNA sequences to achieve far better health-care outcomes than someone who can’t afford the best treatments and has to settle for general therapies rather than individualized medicine.

I believe Ezra makes assumes the premise that the “best” treatments are also the most expensive treatments. I believe this to be unsupported by evidence.

Suppose 10 different people all happen to have the same malady. To use a common one, let’s say that the malady is hypertension. Multiple drugs today exist for the treatment of hypertension. Some of them may be specific variants (branded or generic) of medications all within a specific class, but often multiple classes of drugs may be used to treat hypertension. Those multiple classes will affect different people in different ways, but my guess is that a typical doctor will offer a “standard” treatment regimen for hypertension and only deviate from that standard if something doesn’t appear to be effective. What’s further important to note is that different doctors may have different “standard” regimen, based on their own experience rather than exact current medical literature.

What the idea of genome sequencing may bring to the table is that medical research can form stronger predictions of a particular person’s response to certain medicines based upon their specific genes, and it is easier to tailor the treatment to the patient. This doesn’t mean that the rich person’s treatment will be more expensive than a poor person’s, but it does mean that someone who has genome sequencing will likely have more effective treatment than someone who does not. What it also means is that someone who has genome sequencing may actually have less expensive medical treatment than someone without, as less effort and dollars can be used adding treatments that are statistically likely to be ineffective.

And herein lies the rub. Will a rich person have better access to genome sequencing than a poor person? Not if we have Ezra’s wet dream: government socialized health care. Once effectiveness at reducing costs is shown, government in its awesome authoritarian-ness will undoubtedly use the desire for cost-cutting in medical treatment to demand genome sequencing of anyone participating in Obamacare. Sure, we civil libertarians will soundly object to government getting access to everyone’s DNA, but I’m sure they’ll tell us, much like they do with the TSA pornoscanners and told us with our social security numbers, that there’s NO CHANCE the genome information will ever be used for anything other than our medical care, and will be completely confidential. And since nobody listens to us civil libertarians today, they’ll get it done.

If Ezra looks at the potential from this angle, I think he’d change his tune. If he sees genome sequencing as a potential cost-cutting measure, rather than an inequality-increasing measure, I’m sure he’d actually push for wider adoption of it. And like any government authoritarian impulse, if something is good [and if we’re paying for it with tax dollars], we might as well make it mandatory, right?

Wrangling Long-Term Costs

Ezra Klein, on education & health care costs:

I’m not going to end this post with some wan paragraph explaining how to transform these two industries into something closer to their potential. My ideas on health-care reform are available elsewhere on the blog and I don’t know enough about education to say anything worthwhile. But if you asked me to paint an optimistic picture of the American economy over the next three or four decades, the story I’d tell you would mainly be about how we finally figured out how to drag health care and education into the 21st century. And if you asked me to paint you a pessimistic story of the next three or four decades, it’d be about how we failed to do that, and the two sectors continued eating up more and more of our money while delivering less and less value.

Well, good news, Ezra! Those two sectors are increasingly coming under bureaucratic government control, so I’m just sure we’ll figure out the answers to these hard problems! It’s not like Washington has any history of eating up more and more of our money while delivering less and less value

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