Matthew Yglesias's Blog, page 2421

Gone 'Till September

My dad's a cranky leftist of the old-school and, as such, was well-positioned to make a great point to me yesterday about this business of a six-month window before Egypt actually holds elections. This is a loooong time for every intelligence agency in the world to start setting up shop, bribing various people, cultivating sources, trying to rig things, etc. At a minimum the US, Israel, Saudi Arabia, and Iran will all have strong interests in this sort of activity and others with pretensions to geopolitical glory (China, Russia, France) might want to get in the game. Lesser regional powers could be involved, the US national security apparatus is prone to factionalization, and different elements in the Egyptian military will also presumably be trying to manipulate the situation in various ways.

What the actual output of that would be certainly isn't for me to say, but Cairo will probably be a very interesting place over the next six months for the spy set.

After Kevin Warsh

As I wrote last week, the Obama administration seems to have erred in being slow off the mark in terms of filling Federal Reserve Board of Governors vacancies out of an honest mistake—it just hadn't been the case for thirty or so years that Fed Board nominations were a big deal. But today we can see that it is a big deal, and as Paul Krugman notes the departing Kevin Warsh was one of the bad guys on the Board.

But the administration's mistake in this regard is just part of a larger progressive community failure. For example, with Warsh out where the talk about people who'd be good replacements? Ideally, I'd be looking for someone with:

— Real specialization in monetary economics capable of swaying the non-specialists on the FOMC.

— A commitment to monetary stimulus, none of this "structural" hand-waving.

— A skeptical view of the merits of a large and profitable financial services sector.

— A generally progressive & egalitarian outlook.

I don't really know what the list is. I hope some of our economist-bloggers out there will have some suggestions.

The Silent Justice

I suppose this doesn't help his reputation, but I find Justice Thomas' habit of not actually participating in Supreme Court arguments to be kind of charming:

A week from Tuesday, when the Supreme Court returns from its midwinter break and hears arguments in two criminal cases, it will have been five years since Justice Clarence Thomas has spoken during a court argument.

I feel like the really talking justices like Scalia and Roberts are just sort of showing off. The reality is that while being a Supreme Court Justice is unquestionably a very important job, I don't see much reason to think it's a particularly difficult one and all Thomas is showing is that a person can quietly go about the business of deciding which outcome he likes without raising a fuss over it. I'm really not looking forward to the spectacle of eight justices yammering away at a hearing over the Affordable Care Act pretending to be open-minded and ready to be persuaded by the quality of their students oral presentations. Thomas, sitting in his chair having more-or-less decided in advance what he thinks about major legal issues, seems like a more honest guy.

New Jersey's Millionaire Tax

I suggested on Saturday that tax-induced migration of rich people "is real, but limited, and the further you get from New Jersey the less real it becomes." Via a strangely irate Robert Waldmann I learn that there's a new attempt to empirically estimate this effect from Cristobal Young and Charles Varner in the National Tax Journal. Their conclusion in "Millionaire Migration and State Taxation of Top Incomes: Evidence From a Natural Experiment" is that when New Jersey imposed a millionaire tax under Jon Corzine this prompted little additional out-migration except among retirees and people who primarily earn their income from investments.

Harry Reid Is Majority Leader of the US Senate

Steve Benen: "Looking over the guest lists for all of the Sunday shows, viewers will see two Republican senators (McCain, Graham), three Republican House members (Boehner, Ryan, Schilling), three likely Republican presidential candidates (Barbour, Gingrich, Pawlenty) … and zero Democrats from Congress or the Obama administration."

This right-wing tilt of Sunday shows is nothing new, but it also seems to me to be part of a trend of the media being confused about which party has a majority in the Senate. If you think back to the dark ages of 2009 and 2010 you'll recall that the press generally took a skeptical view of liberal legislation passed by the House that stood no chance of securing 60 votes in the Senate. Such legislation would often be ignored as irrelevant, and coverage of it when it existed would focus on things like getting senators to point out that it was DOA or pestering House leaders about how they expected to get these ideas passed the Senate. And that was when Democrats actually had a majority in both Houses. But since the New Year, I keep hearing about the House GOP being lined up for confrontation with Barack Obama. But what about Harry Reid? Where are the questions for Paul Ryan, John Boehner, Eric Cantor, etc. about getting 60 votes for things? That means all the rock-ribbed conservative senators, plus Scott Brown and Olympia Snow and Susan Collins and Mark Kirk, then a dozen Democrats of one sort or another. That's a high bar to pass.

Dollar Dollar Bill

Not that this is the source of the long-term budget deficit or anything, but as long as we're looking at small-bore spending cuts, before we take away poor people's subsidized heating oil maybe it would be smart to take a look at the sorry state of our physical money. According to the inflation calculator, a penny in 1970 would be worth five cents in 2009 dollars. I wasn't alive in 1970, but many of this site's readers were. Were people walking around forty years ago saying "damn, these pennies have too much purchasing power, we really need a coin worth one-fifth that much?" I doubt that they were. So let's stop wasting money minting pennies.

Similarly, the 1970 quarter is worth even more than today's paper dollar bill. If we stop printing paper dollars, people will get used to using dollar coins which are much more durable and won't need frequent replacement. Again, money saved. And in both cases, nobody in need would suffer at all. You can't balance the budget with this kind of small change (ha ha ha) but it really doesn't make sense to waste money, and as long as we're having a misguided conversation about short-term spending cuts some genuine waste deserves to be on the table.

A Post Islamic Revolution

It's in French, but Olivier Roy has a smart piece in Le Monde on Egypt as a post-Islamist revolution. The key bit:

Cette nouvelle génération ne s'intéresse pas à l'idéologie : les slogans sont tous pragmatiques et concrets ("dégage", "erhal") ; il ne font pas appel à l'islam comme leurs prédécesseurs le faisaient en Algérie à la fin des années 1980. Ils expriment avant tout un rejet des dictatures corrompues et une demande de démocratie. Cela ne veut évidemment pas dire que les manifestants sont laïcs, mais simplement qu'ils ne voient pas dans l'islam une idéologie politique à même de créer un ordre meilleur : ils sont bien dans un espace politique séculier.

Roughly:

This new generation isn't interested in ideology, their slogans are all pragmatic and congrete; they don't speak of Islam the way their predecessors did in Algeria in the late 1980s. Above all they reject corrupt dictators and demand democracy. That's not to say that the demonstrators are secular, but simply that they don't see Islam as a political ideology to be used to create a better order, they're well inside a secular political space.

This is a continuation of Roy's work over the past several years on "the failure of political Islam." The basic idea here is that in part thanks to the example of Iran, you just don't have a mass constituency that's prepared to believe that Islam or Islamic rule offers answers to the concrete problems of poverty, corruption, and slow economic growth. People may be religiously observant or culturally conservative in ways that western liberals (or even western cultural conservatives) would find alarming, but the Egyptian people are asking "where are the jobs?" and don't think the answer is going to be found in the Koran.

Social Security & Medicare Are Government Programs

Catherine Rampell reproduces Suzanne Mettler's amazing chart from "Reconstituting the Submerged State: The Challenge of Social Policy Reform in the Obama Era."

The tax credits and deductions that lead this list are actually designed so as to obscure their government program nature. But it's pretty amazing that 44.1 percent of Social Security beneficiaries seem to have convinced themselves that the single largest government social program—a program that consists of the government mailing checks to people—is not a government social program. And then there's Medicare, the largest forward-looking source of budget deficits. This is all especially galling since in the Obama Era the over-65 demographic has become by far the most conservative group in America, even as it's the group that gets the lion's share of the benefits from big government.

Disrupting College

I want to say more about it later, but for now I just wanted to take the opportunity to recommend that you take a look at a report on "Disrupting College" that Clayton M. Christensen, Michael B. Horn, Louis Soares, and Louis Caldera did for cap. Christensen is of the excellent book The Innovator's Dilemma which is a great look at how "disruptive" innovations like the personal computer can come into marketplaces dominated by higher-quality alternatives with radically higher cost structures.

The basic intuition behind the paper is the idea that the traditional university is something like a company that builds mainframes and that to take tertiary education to the next level in this country we need something more like PCs.

Tyranny Response Team

I have no problem with the idea that law-abiding people should be allowed to buy and store guns if that's what they want to do. But the waft of macho BS coming off this sort of thing is really pretty incredible. When protesters were gathered in Tahrir Square in Egypt, we didn't see a "tyranny response team" sweep in from the USA guns blazing to defend freedom.

And more to the point, it would have been overwhelmingly counterproductive for Egyptian protestors to take up arms and start trying to go head to head with the state's security forces. Everyone would have gotten killed and the chances for a happy outcome would be much bleaker than they are today.

The fact of the matter is that tyranny is a serious problem, and it calls for serious solutions and serious responses. The idea that the common man is going to use small arms to fight off a modern, 21st century military organization is ridiculous. And the idea that there's going to be widespread household ownership of the kind of anti-tank missiles and other weapons you'd need to fight such a war is also absurd. In the real world, people stand up to tyranny with nonviolent tactics of civil disobedience that let protestors fight for the loyalty of the security services' rank and file.