Monday, December 13, 2010

Safe Ground

Reformers who are always compromising have not yet grasped the idea that truth is the only safe ground to stand upon.

-- Elizabeth Cady Stanton, The Woman's Bible (1898)

In this week's Sift:

  • The Deal. We now know what President Obama got by agreeing to extend the Bush tax cuts. The agreement is defensible economically, but you have to wonder what's going to happen politically a year from now. Also, how to answer the "it's my money, not the government's" line.
  • Too Good, Too Easy, But … For years, educators have been working to close gender and racial performance gaps. A new technique seems to do just that … but it has nothing to do with the subject matter of the course. Why I'm not totally skeptical.
  • Elizabeth Edwards. I can't say I knew her, but I did meet her once. Her death gives me flashbacks to my wife's cancer battle.
  • Short Notes. Hottest year ever. Death panels in Arizona. Republicans rediscover earmarks. Suspicious behavior at WalMart. The difference between freedom and options. Living without Monsanto. The lack of Republican scientists. A smoking gun at Fox News. And more.


The Deal

Last week I expressed my bewilderment that the administration was planning to give in to the Republican demand to extend the Bush tax cuts for all income rather than just the first $250,000 of income. Well, the full deal was announced this week, and much argument has ensued. Let's see if we can sort this out.

As usual, the best spokesman for White House economic policy is Austin Goolsbee at the White House White Board. His basic message is that President Obama wanted another economic stimulus and the Republicans wanted another handout to the rich (whose stimulative effect is questionable). In the compromise, Obama got $238 billion of stimulus, while giving up $114 billion of handouts to the rich. (The rest of the $900 billion deal is the middle-class tax cuts that both sides claimed to support. Ezra Klein has a pie chart.)

The $114 billion for the rich means that they pay $91 billion less in income tax and $23 billion less in estate tax than if the Bush cuts had been allowed to expire.

The $238 billion of stimulus includes $104 billion of extended unemployment benefits, grants for renewable energy projects, and various tax credits targeted at low-and-middle-income people. This is good both in terms of compassion and economic stimulus (because poor people spend their tax credits while the rich may not).

Another $22 billion is for letting businesses write off their investments faster. This is good stimulus, because it might have a multiplier effect: The $22 billion in tax cuts might motivate a much larger amount of business investment. But I question listing it as "our" part of the deal rather than "theirs". (Paul Krugman laments: "how, exactly, did we get to the point where Democrats must plead with Republicans to accept lower corporate taxes?") This money will also go to the rich (though it will be in exchange for them stimulating the economy, rather than just a tribute to their wealth), so their take is really $136 billion. (114 + 22 = 136)

The remaining $112 billion on the stimulus side goes to the "payroll tax holiday", which is the most controversial part of the package. This lowers the tax that wage-earners pay into the Social Security fund from 6.2% to 4.2% for the next year. It replaces that contribution with money from the general fund, so that the solvency of Social Security isn't affected.

Whether this is a good idea or not depends on whether you look at it economically or politically. Economically, it is a very effective form of stimulus: Working people will see more money in their paychecks, which many of them will spend.

Politically, the question is what this is going to lead to. The plutocrat tax cut is for two years, the payroll holiday for one. So what happens a year from now? Greg Anrig of the Century Foundation worries:

Particularly if the economy remains weak, as seems likely, few politicians of either party will want to oppose an extension of the payroll tax holiday for another year. Because payroll taxes are taken straight out of paychecks, both a reduction in them and then a return to current levels would be highly noticeable to most workers.
Under that scenario, what would happen if the Republican candidate won the presidency? Given the conservative movement’s long-standing hostility toward Social Security, the likely next step would be to make the payroll tax cut permanent, while no longer replenishing the Social Security trust fund to make up for the lost revenue. That basic strategy of slashing the payroll taxes that support the program has been a central plank of right-wing think tanks for decades, but until this point it has never succeeded.

So the tax holiday could undermine the political case to preserve Social Security -- especially if it gets extended beyond one year, as it probably will. The reason we all feel so strongly that we deserve our Social Security benefits is that we paid for them already. If instead the Social Security trust fund is being filled out of the general coffers, then Social Security becomes more of a welfare program for old people, and the case against cutting benefits loses a lot of its force.


Michelle Bachman has a knack for spelling out the ridiculous stuff that other Republicans merely imply:

I don't think letting people keep their own money should be considered a deficit.

In other words, the laws of addition and subtraction should bend to conservative ideology. The deficit is expenses minus revenue, but cutting revenue shouldn't increase it.

The standard Republican line about tax cuts ignores the deficit completely, but says that tax cuts don't have to be balanced with specified spending cuts because it's "letting people keep their own money".

The proper response to the "it's my money, not the government's money" line is "it's your government". This isn't the English king imposing taxation-without-representation on the 13 colonies. The government is Us -- We the People. That's what the Constitution is all about: establishing a structure by which we can make these kinds of collective decisions. Saying "it's my money, not the government's" is saying that the Constitution failed.

We the People spend our money in two ways: as individuals and collectively through public programs supported by taxes. Both are legitimate, but we can't spend the same money twice. If our democratically elected government-of-the-People has already spent the money, then it isn't "our money" any more to spend as individuals.


The most interesting response to the tax deal came from the market for U.S. government bonds, which plunged. The yield on 10-year bonds rose to 3.32% at Friday's close, up from 3.02% a week earlier.

I don't think markets are omniscient, but I do think they are honest. People might bluster in their public statements, but if an idea makes them move their money, they must really believe it.

If you don't speak bond-market language, let me interpret: The U.S. government wants you to give them dollars today, with the idea that they'll give those dollars back in ten years. How much extra you want in order to agree to that deal depends on two things: what you think dollars will be worth in ten years, and whether you think the government will be solvent in ten years.

If the interest rate goes up, that means investors are worried about those two factors. If it goes up quickly (and an increase of 1/3 of a percent in a week is quick in a market that is ordinarily very stable), that means that investors were not only worried, they were surprised. (If they'd been expecting to be this worried now, they'd have been only slightly less worried last week.)

So the bond market believes this deal is bad for the future value of the dollar and the future solvency of the federal government. And it didn't expect a deal quite this bad.


Kevin Drum isn't worried about what the payroll tax holiday does to Social Security.



Too Good, Too Easy, But ...

This sounds way too good and too easy to be true, but I don't see any holes in it. Discover reports on a simple classroom exercise that seems to undo the pernicious effect of stereotyping. It was originally developed to help black high school students, and has now been tested on female physics students. In short: groups that had a persistent test-score gap saw that gap substantially diminish when they did this exercise.

It's not some intensive coaching thing and has nothing to do with the subject matter of the course: Take 15 minutes and write about values that are important to you and why they are important. A University of Colorado physics class had students do this twice near the beginning of the term, and then proceeded normally.

The point, as I understand it, is to change the mindset of the student in that class. Having recalled and validated your core values brings your whole being into the room, and banishes the I-don't-belong-here mindset.

It sounds like another one of those new-agey things that never actually work when I try them, but here's what makes me give it some credence. Decades ago, as a teacher and graduate student in one of the prime gender-gap subjects (mathematics), I got to observe some of the nuts-and-bolts of the problem-solving process. Solving a hard math problem is a little like investigating a crime: First, you figure out who did it, and then you assemble a case to convince a jury.

In my experience, the mathematics gender gap was in figuring-out-who-did-it part. That kind of thinking is all speculative, and it collapses whenever the overall uncertainty overwhelms you. To succeed, you need to postulate something on intuition, and then have enough faith in your intuition to keep postulating on top of it until you have the outline of a solution.

My female students had a higher tendency to throw one speculative idea out there -- maybe even a correct one -- and then get stuck because they weren't sure they were right. Often the only coaching they needed was, "OK, suppose that's right. Then what?" Men were more likely to have the arrogance necessary to keep building their castle of speculation even though the foundations hadn't been established yet.

So this quote in the Discover article made a lot of sense to me:

if someone can’t hammer in a tricky nail, it might not be because their arm isn’t strong enough. It might be that they constantly have to look over their shoulders while they work.

Why the writing exercise solves this problem so easily is still a little mysterious, but it doesn't look as magical as it did at first glance.



Elizabeth Edwards

You probably already know that Elizabeth Edwards died. In a Facebook post a few days before her death she wrote:

The days of our lives, for all of us, are numbered. We know that. And yes, there are certainly times when we aren't able to muster as much strength and patience as we would like. It's called being human. But I have found that in the simple act of living with hope, and in the daily effort to have a positive impact in the world, the days I do have are made all the more meaningful and precious.

I met Elizabeth Edwards once, briefly, when one of my friends held a house party for her husband's campaign. And I heard her speak several times, with and without John. She wasn't the smile-and-wave type of political wife. She was passionately committed, knowledgeable, and she had to be careful not to outshine the candidate, who had a pretty good public persona of his own.

Back in March, 2007, when I first heard about her cancer, I recalled my wife's experience with breast cancer and wrote a blog post advising John and Elizabeth to rethink this whole presidential-campaign thing, even though it was probably Elizabeth's last chance to see John in the White House. That post is as much about cancer and marriage as it is about politics, and I think it holds up pretty well from the perspective of three-and-a-half years.

Given how John's career flamed out, it can be embarrassing to remember that I supported him. But when I look back at what he was saying in 2007, it holds up pretty well too. Talking about the vested interests in the health care industry and the Powers That Be in general, he said:

If you give them a seat at the table, they'll eat all the food. You have to beat them. … You can't be nice to these people. We've been nice to them. That's the problem. And they haven't given up anything voluntarily.

Three years later, they still haven't.


Watching Cate Edwards eulogize her mother, I thought: The apple doesn't fall far from the tree. I didn't know that poise and presence were inheritable, but apparently they are.



Short Notes

In November, we continued marching on towards the hottest year on record. So much for that "global warming ended ten years ago" canard.


Sarah Palin told us there would be death panels, and sure enough there are. But it's got nothing to do with ObamaCare and everything to do with spending cuts. Governor Brewer has cut the Medicaid funding for transplants in Arizona. One guy who needed a bone marrow transplant is dead already, and Randy Shepherd is waiting for a heart transplant.

It's important to focus in on these personal stories, because conservative rhetoric wants you to think of "government" as some black hole that has nothing to do with people. So spending cuts only hurt "government" and "bureaucrats".

But spending cuts do hurt real people, sometimes fatally.


Here's another personal story that is not quite so horrible. It's just an everyday account of what working people have to do to get by these days. Your household needs two incomes to keep the house, but it only has one. You have a job, and your spouse has a 2-year offer far away. So: My Husband is Leaving Me.


I'm separating this from my Elizabeth Edwards piece, because I don't want it dirtied with partisan sniping. But John Edwards is a good example of how the standards are higher on the Left.

John cheated on his dying wife, and his career is over. Newt Gingrich did exactly the same thing, and he's on the short list 2012 presidential candidates.


Remember those promises of action to improve mine safety after 29 West Virginia miners died in April? Umm, never mind.

According to NPR, the Upper Big Branch mine that collapsed had "more serious safety violations than any in the country. But lawmakers say loopholes in the system allowed the company to file lengthy appeals that delayed penalties." And so miners died.

But changing the law is still "premature" according to Republicans. This is where we've gotten: Instituting a new regulation on a corporation requires a higher standard of proof than invading a country.


For some reason I haven't quite fathomed, there are things you just can't say in American politics. They're not false or disloyal or immoral, but announcing them in public is heresy of the first order.

One of those taboo statements is: "An awful lot of the federal budget is money well spent." That's heresy, because everybody knows that all non-military government spending is waste.

Well, it's fascinating (in an anthropological sort of way) to watch the new Republican majority in the House start coming to terms with this fact without admiting it. It's showing up particularly in their discussion of earmarks, which (as we all know) are worst kind of waste, bridge-to-nowhere type waste.

Now that they have the power to end all that waste, they want to, really. But then they have to wonder about the worthwhile projects in their own districts that have been funded so far by earmarks. Politico reports:

many Republicans are now worried that the bridges in their districts won’t be fixed, the tariff relief to the local chemical company isn’t coming and the water systems might not be built without a little direction from Congress.  So some Republicans are discussing exemptions to the earmark ban

WalMart stores are showing this strange video from the Homeland Security Department. "Homeland security begins with hometown security," says Janet Napolitano. So you should report to WalMart managers anything "suspicious" you see in the store or parking lot. Because, I guess, Al Qaeda must be just dying to hit some WalMart in the middle of Montana.

Here's the suspicious behavior I see at WalMart: Americans working for low wages and no health care. They have jobs, but they're on food stamps and Medicaid. The company is making billions, but intimidating its workers out of forming a union.

Report that to a manager.


Apparently the bizarre "War on Christmas" idea has reached the UK, and the BBC's Marcus Brigstocke is having none of it.


Last week I made the case that corporations are sociopaths, and observed how hard it would be to follow Martha Stout's advice on dealing with sociopaths -- namely, don't; get them out of your life as fast as you can.

Yes magazine's April D├ívila demonstrated that when she tried to live without Monsanto. Monsanto's genetically modified corn, soybean, sugar beet, and cotton seeds are planted by countless farmers, and the resulting foods and fibers are very hard for a consumer to trace. Just about any processed food has high-fructose corn syrup in it, and probably there's some Monsanto corn in there somewhere. Going organic helps avoid Monsanto's bovine growth hormone (given to dairy cattle), but legally "a Monsanto seed that is grown organically is still organic."

The whole point of a market economy is that consumers are (as Milton Friedman's book says) "free to choose". But more and more the market resembles a computer game: We are not actually free, we are just given options within a scripted scenario. Deciding you don't want to deal with Monsanto or don't want to support genetically modified crops isn't in the script.


By the way, here's a cool thing about Yes magazine: People vs. corporations is a category on their web site.


Also from Yes: a call for a constitutional amendment to undo the Citizens United decision that allowed corporations to spend unprecedented amounts in the recent elections.

This is another example of the difference between real freedom and options-within-the-script. Polls show a significant plurality of people support such a constitutional amendment. Will that get it onto the public agenda? In the normal course of things, no. That option is not in the script. Getting an issue like this on the public agenda, so that candidates have to take positions on it and low-information voters realize they should have an opinion on it, will take some creativity -- much more stuff like the Target Ain't People protest and video.


I doubt you're shocked to hear that Fox News slants its coverage. But now we have the internal emails to prove it.


The week's strangest opinion piece: Slate's Daniel Sarewitz laments the lack of Republican scientists (OK so far), and thinks that scientists need to do something about this. The fact that Republicans have consistently chosen ideology over truth has nothing to do with it.


You don't have to be a sports fan to be amazed by the video of the Metrodome's inflatable roof collapsing under snow.

The Weekly Sift appears every Monday afternoon. If you would like to receive it by email, write to WeeklySift at gmail.com. Or keep track of the Sift by following the Sift's Facebook page.

4 comments:

DavidW in SF said...

Another great Sift with lots to ponder.

I think Kevin Drum is out to lunch on the question of the "temporary payroll tax holiday" for at least two reasons.

The first is evident in his first sentence. He categorizes the tax cut as "small". It is in fact a tax cut of 32% (from 6.2% to 4.2% of salary under the cap), which is HUGE. Even worse, to restore it, you are talking about nearly "a 50% tax increase (4.2% to 6.2%). Drum was clearly asleep when he wrote this, and clearly asleep during the recall of California's Governor Gray Davis over restoral of a "temporary" reduction in the auto registration fee that was only a couple hundred dollars. I guess he didn't notice Governor Arnold Schwartzenegger.

The second is that he thinks since it isn't tax cuts for the wealthy that their hearts wouldn't really be there in demagoguing it. This issue involves the potential permanent eradication of Social Security, or at least the possibility of raiding its funds. Of COURSE they will demagogue this, and they will likely win. (See Governor Schwartzenegger and the devastated California budget.) The other reason they will be further engaged in demagoguing it is it involves destroying a Democratic President, and painting Democrats as "tax and spend liberals". A fifty-percent tax increase is just too juicy to pass up.

After this article I will be forever skeptical of anything Drum writes and will double-check sources.

Speaking of standing up to scrutiny, there are likely very few Republican scientists because none of their dogma stands up to scrutiny. You just can't be both a scientist and a modern Republican. Some of the comments in response to the Salon piece were well-articulated and dead-on in mapping this out. Particularly, one responds that scientific research regardless of political structure, leading ideology, etc. throughout the industrialized world agrees on a number of issues contrary to to Republican dogma -- for example, evolution and anthropogenic climate change. Much of the rest of Republican dogma similarly does not hold up to scrutiny. The author's basic premise holds no water when viewed from a wider perspective than parochial US partisan politics, and nearly holds water even under those constrained conditions. My conclusion: The author is a very silly person.

DavidW in SF said...

In the next to last sentence "nearly" should read "barely". (Damn you, Autocorrect!)

John L said...

Re the payroll tax cut, I understand it to cut the employer side rather than the employee side, so takehome pay won't change unless employers raise nominal salary to compensate. (Fat chance.) I think this puts it squarely on the Republican side.

Doug Muder said...

The White House web site says:

"The agreement reached by the administration and embodied in the Tax Relief, Unemployment
Insurance Reauthorization, and Job Creation Act includes an about 2%, employee-side payroll tax cut
for over 155 million workers – providing tax relief of $112 billion next year."

That's at: http://www.whitehouse.gov/sites/default/files/101210-tax-relief.pdf