Matthew Yglesias's Blog, page 2380

Supply-Induced Demand for Military Intervention

One of the long-simmering controversies on the Internet is whether increased US investment in counterinsurgency capabilities actually makes it more likely that the US will engage in misguided "regime change" interventions in the future. Watching the Libya debate, whatever you think of the merits of intervening, I think clearly counts as data that supply-induced demand for military intervention is a real phenomenon. If it just weren't logistically possible for the United States to launch air strikes into Libyan territory, nobody would be saying that our inability to do so is scandalous or irresponsible. But given that we can intervene, it looks to many people like a failure of "leadership" to stand aside.

Conversely, one important reason we're ruling out ground troops right now is that we clearly don't have any to spare. But if in the future we develop more "excess capacity" in our national security apparatus, then the number of global problems that appear to call for killing people leadership will go up. Then when people wonder why our humanitarian concern seems so politicized and hypocritical we'll be urged to "grow up" and stop complaining.

Reading the Conditional Backwards

Licensed to sell.

Jaci Russo in Ad Age argues that we need more regulatory barriers to working at advertising agencies:

Even Realtors and interior designers require testing and certifications to practice their trade, and it just seems wrong that our industry does not require the same amount of quality control. In the end, I guess the question we need to answer should be, "Is what we do important?" How can we expect clients to respect us if we don't even take our industry seriously enough to insist on testing and licensing?

What about continuing education? Yoga teachers and speech pathologists are but a few of the professionals that are required to attend continuing-education classes to maintain their licenses. Yet advertising and marketing professionals have no such requirement. I don't think the human body has changed nearly as much as our industry in the past 10 years.

This is a correct analysis. Why should interior designers require licenses but art directors at ad agencies don't? The correct answer is that neither should require a license. But what we see here is that status quo bias drives a slippery slope. People see an arbitrary system of licensing requirements, assume that existing requirements are justified, and therefore reason that what we need is more licensing requirements to level the playing field.

The Limits of First Principles

(cc photo by smith)

Cato's Jim Harper rounds up a few links on the AT&T/T-Mobile merger and concludes "the federal government should not try to manage the development of the communications marketplace."

Of course the Cato Institute isn't allowed to reach any other conclusion. But what does this mean? The federal government has to have some kind of policy vis-à-vis the electromagnetic spectrum. As with monetary policy and intellectual property policy, I see this as an issue that a lot of right of center people want to resolve through first principles (small government, free market) but where the first principles don't really get you anywhere. You could have the government do nothing, which would mean there are no exclusive spectrum licenses and everything is wide open. Or you could have the government marketize everything, which would mean you auction everything off to exclusive owners. But either way, that would be a choice and in making the choice you'd be "managing" the development of the communications marketplace. And so once the government is in the business of managing the development of the communications marketplace, there's no obvious reason why it should be all or nothing. Why not auction some and some some unlicensed? Why not conditional auctions?

These are answerable questions, just like there are answers to questions about how copyright policy should work and how the country should manage its currency. But they're just not questions that can be resolved by consulting the Gospel According to John Locke or intoning "government bad, markets good."

Teacher's Union Backs Banks On Debit Cards

It's obvious to me that the "Durbin Amendment" regulating debit card interchange fees is a big loss for banks and a big win for retailers, but it's not clear to me that it advances any consumer interest. So I thought it was interesting to see that the National Education Association, America's larger but lower-profile teacher's union, has weighed in with a letter (PDF) supporting the banks' position.

Now I don't particularly think we should take the NEA's word for it, but I wanted to call attention to this simply because I think confirmation bias is one of the biggest problems we have on the web. It occurs to me that several bloggers who I normally agree with but who had strong favorable views about the Durbin Amendment that contrasted with mine—Kevin Drum and Mike Konczal in particular—are also people who've really taken the lead in making the case that labor unions are a crucial "counterveiling force" to advancing middle class economic interests. So I wonder if any of them are inclined to rethink their views of the swipe issue in light of this.

Supporters of Funding Planned Parenthood Shouldn't Vote For Bills That Defund Planned Parenthood

I've seen a number of people excitedly tossing around links to Senator Scott Brown's statement in support of Planned Parenthood funding, but I think this is the most important part of the article:

Earlier this month, Brown voted in favor the House GOP proposal that would have made the cuts, though he said at the time that he "would have had different priorities" in cutting spending. The Senate defeated the House plan, and a Democratic alternative, in a set of votes orchestrated by Senate leaders to force both sides back into negotiations.

Scott Brown's not a back bench house member. He's a Republican Senator from Massachusetts. He's at the pivot points. The way for him to get things done is to refuse to vote for bills that have provisions he opposes. If he's voting to defund Planned Parenthood, then all the statements in the world don't mean a thing.

The AT&T/TMobile Deal

Annie Lowrey says it's bad for consumers:

Merging AT&T and T-Mobile would reduce competition further, creating a wireless behemoth with more than 125 million customers and nudging the existing oligopoly closer to a duopoly. The new company would have more customers than Verizon, and three times as many as Sprint Nextel. It would control about 42 percent of the U.S. cell-phone market. That means higher prices, full stop. The proposed deal is, in finance-speak, a "horizontal acquisition." AT&T is not attempting to buy a company that makes software or runs network improvements or streamlines back-end systems. AT&T is buying a company that has the broadband it needs and cutting out a competitor to boot—a competitor that had, of late, pushed hard to compete on price. Perhaps it's telling that AT&T has made no indications as of yet that it will keep T-Mobile's lower rates.

What I learned one summer working at a company that did economic analysis of anti-trust issues is that there are always two sides to these stories. So to offer the optimistic take, what I would say is that in the current US cellphone Verizon is the market leader because it has the best network. AT&T had long been able to acquire a comparable strong position despite its inferior network thanks to a farsighted deal it signed with Apple years ago giving it exclusive access to the most popular phone. But the combination of Android entering the market and the iPhone going non-exclusive raised the prospect of a market in which Verizon utterly dominates on quality. Acquiring T-Mobile ("a company that has the broadband it needs") isn't so much about "cutting out a competitor" as it is about building a firm that's capable of competing with Verizon.

To actually see which of those theories predominates would require a more in-depth analysis than I'm capable of doing, but these are the kind of issues the FCC and DOJ are going to have to look at. Meanwhile, as best I can tell the key issue in wireless policy in the United States continues to be our bad habit of giving valuable spectrum away for free to legacy broadcast television operators rather than putting it up for auction so it can be put to its best use. Only by freeing up more spectrum for wireless broadband can you really have more competition.

A Better Chart on Taxes and Inequality

This from Karl Smith is a huge improvement on Greg Mankiw's malfeasance:

I think that by rightwing logic, Italy's unusually un-progressive tax structure should make it the star economic performer of the western world. As I've long said, I think progressives do tend to overemphasize the importance of progressive taxation as opposed to adequate taxation. But people should have the facts. The rich pay a huge share of the total taxes in the United States because they have a huge share of the money.

The Mystery of the Libyan Rebels and the Problem With Violence

One of the more distressing things about what's happening in Libya right now is that we the public know very little about the identity and agenda of the rebel movements we're not supporting. David Kirkpatrick has an excellent piece in the NYT that doesn't really answer the question but does at least ask it:

"It is a very important question that is terribly near impossible to answer," said Paul Sullivan, a political scientist at Georgetown University who has studied Libya. "It could be a very big surprise when Qaddafi leaves and we find out who we are really dealing with." [...]

The eastern region around Benghazi had always been a hotbed of opposition to the colonel, in part because tribes there had enjoyed the favoritism of the former king, Idriss I, whom the colonel overthrew, while he in turn favored the tribes of the central and western coast.

When the uprising came, many of the most significant defectors — including Gen. Abdul Fattah Younes, the rebel army head and a former interior minister — were members of the eastern tribes.

Completely leaving the question of US military intervention aside, back when the Libyan Revolution first turned violent I turned pessimistic about its prospects. You can understand why people take up arms against violent repressive regimes. But the fact of the matter is that armed conflict is generally a poor basis on which to establish a liberal democratic political order. Successful political transitions to democracy generally take place through exercises of non-violent "people power" as in the American South, the Philippines, Chile, Central Europe in 1989, and the general template followed in Tunisia and Egypt. Once a conflict is settled by violence and you're in a dynamic where political power grows from the barrel of a gun, then you've either laid the groundwork for further civil conflict or a new authoritarianism under new bosses.

In this particular case, the rebellion is obviously the confluence of some disparate forces. But the man leading the military aspect of it hardly appears to be a lifelong democratic reformer.

To The Point

I'm going to be on "On Point" with Tom Ashbruck today at 10AM on the not-yet-defunded NPR. It airs at different times in different markets which you can lookup here and it's also streaming live at that link.

Arab Autocrats Think Fighting Gaddafi Will Help Them Maintain Power

Interesting analysis from Michael Slackman in the NYT:

With his brutal military assault on civilians, and his rantings about spiked Nescafé, Col. Muammar el-Qaddafi handed many leaders across the Arab world what had otherwise eluded them: A chance to side with the people while deflecting attention from their own citizens' call for democracy, political analysts around the region said. And they really do not like him. Even Arab leaders most critical of the United States' intervention in the Middle East have reluctantly united behind the military intervention in Libya. That has given a boost to Arab leaders in places like Saudi Arabia who are at the same moment working to silence political opposition in their backyards.

[...] Saudi animosity runs deep. In 2004, Colonel Qaddafi was accused of being directly involved in a plot to assassinate King Abdullah, who was then the crown prince. Then in 2009, Colonel Qaddafi embarrassed the emir of Qatar, Sheikh Hamad bin Khalifa al-Thani, and infuriated King Abdullah, during an Arab summit meeting in Doha, Qatar.

This is why it's so nuts for intervention enthusiasts to dismiss out of hand the obvious concerns that have been raised about US-subsidized regimes in Yemen, Bahrain, and Saudi Arabia attacking un-armed protestors even as we intervene militarily in Libya to halt repression. There's an obvious question as to what, in reality, American policy in the Arab world is. Is this part of a policy of boosting democratic change in the region, or is it part of a policy of bolstering the position of the Persian Gulf dictators who are important clients of American arms manufacturers? Basically what Eugene Robinson said.