a bit slow on the uptake

This has been coming for months, and I only realized today that the date for the Iraqi election was driven by the need for an applause line in tomorrow's SOTU. It was pushed back as far as possible in hopes that the security situation would improve, but there was a hard deadline. The election had to go forward, and it had to be this weekend. I'm glad only 40 paid with their lives.

I wondered this morning why the story of Sunni non-participation was so hard to find, then I wandered around some of my usual haunts and discovered that they weren't talking about it either. Kleiman has nothing to say. Josh Marshall is uncharacteristically silent. Atrios has nothing to say. Kevin Drum takes note of it, but only to (unintentionally) understate the amount of Sunni marginalization likely to result when the 7% of representatives they'll get in the assembly aren't the ones they'd have choosen had they voted. The silence is eerie, if not stunning. I guess they all have more important things to talk about.

below the fold

I spent a busy day yesterday not watching the news. This morning, the Chronicle's headline read, "Big Turnout Buoys Hopes." President Bush says the vote shows his policies are paying off. Etc. "Wonder what's happening today," I think to myself and access cnn.com. "Historic," "Large turnout." Etc. Wonder what the rest of the world thinks. In an otherwise triumphant Australian article, I find this:

Polls were largely deserted all day in many cities of the Sunni Triangle north and west of the capital, particularly Fallujah, Ramadi and Beiji.

In Baghdad's mainly Sunni Arab area of Azamiyah, the neighborhood's four polling centers did not open at all, residents said.

A low Sunni turnout could undermine the new government that will emerge from the vote and worsen tensions among the country's ethnic, religious and cultural groups.

Wasn't the lack of Sunni arab cooperation the problem leading into the election? Is the fact that the Kurds and Shia went to the polls the least bit surprising? Does it tell us anything new about what's likely to happen next?

thank you, senator feinstein

Thank you for opposing the confirmation of Alberto Gonzales. I never thought I would live to see the day when the United States claimed the right to torture under national and international law. I never thought I would have to go abroad with images of Abu Ghraib following my passport around the world. I never thought my fellow citizens would legitimize torture be reelecting those who fostered and condoned it. It is scant comfort but still relief that my Senator voted against a man who played (and no doubt continues to play) a pivotal role in one of the darker chapters in nation's history.

but don't call it discrimination

I know it's not an original observation, but when cultural guardians like Mary Gallagher extol the virtues of marriage, citing evidence like

Adults, too, benefit from healthy and stable marriages. They tend to live longer, healthier lives and are more affluent. Married mothers suffer from considerably lower rates of depression than their single counterparts. Like a good education, a good marriage is a real asset. Married men earn between 10 and 40 percent more than similar single men, and married couples accumulate substantially more wealth. By the time they’re ready to retire, married couples have, on average, assets worth two and a half times as much as their single counterparts. (The figure for married couples is $410,000, compared with $167,000 for those who never married and $154,000 for divorced individuals...)

doesn't it undercut the argument that depriving gays of the right to marry isn't discriminatory? Wouldn't it do so in a just legal or political system? Isn't the undeniable message, "We don't like you, and we're quite happy to hurt you to get our way."

Again, I know there's nothing new or original here. It's just that if you asked those questions of Ms. Gallagher, she'd deny the obvious implications, go home and sleep quite comfortably, and rise the next morning refreshed, ready to fight the perverts without a second thought.

you follow the leader you have

While perusing Paul Krugman's bad novel, I was taken back to the days right after 9/11, when I watched the country fall into place behind the President and his approval ratings soar. He hadn't done anything. The attack took place on his watch. He reacted to it in the crudest possible manner, elevating those who attacked us to avatars of evil, not merely criminals but worthy adversaries in a war between good and evil. His actions made no sense to me then, they make no more sense to me now.

But he was (and is) the President. If he's not up to the task, where are we? Is it really surprising that people would find it harder to distrust a leader in a crisis than to trust one? Is it really surprising that after the price we've paid to follow this path, people would be loathe to change course, to admit that this path is the wrong one, that we have paid this price in vain?

Iokiyar. The alternative might be too much to bear.

torture and partisanship

Andrew Sullivanwonders whether Kerry thought

the consequences of seeming to criticize the conduct of troops would be more of an electoral liability than holding a president accountable for enabling the torture of innocents

and fears he may have been right. If his review is any gauge, those fears are justified. Two paragraphs before, he characterizes those who "made the most fuss" this way:

dedicated opponents of the war in the first place...eager to use this scandal to promote their agendas.

If Sullivan can't avoid characterizations like this in an article critical of the administration and its torture record, can there be any doubt how Kerry criticism on this subject would have been judged?

Sarbanes-Oxley and business practices

Mark Kleiman asks why the WSJ would complain about Sarbanes-Oxley, which he characterizes as making "it just a little harder for corporate managers to steal from their stockholders." Sarbanes-Oxley is much more than that. It (and similar measures) have created entire new categories of computer products to meet record-keeping requirements. Companies are starting to store several years of e-mail in write-only devices, with near instantaneous recall. Many functions that used to be distributed are being centralized to increase control and ensure that business practices are uniform and compliant. People are making the kinds of defensive decisions blamed for increasing medical costs. Compliance costs small companies more (it's expensive just to maintain the expertise necessary to comply).

Are these changes rational reactions to SOA? I don't know. The number of actual prosecutions is small, and I don't know whether the actions being taken in the name of compliance are either necessary or sufficient. The overhead may indeed be justified, given the costs of a business system without integrity. The reactions are real, however. It's a bit glib to say that it's only effect is to make it a little harder for a few greedy rich managers to steal.

it's easy to say no when you're never asked

Jeffrey invites and how can I refuse?

I swear that I have never taken money -- neither directly nor indirectly -- from any political campaign or government agency -- whether federal, state, or local -- in exchange for any service performed in my job as a journalist (or commentator, or blogger, or whatever you think I should be called).

I feel pretty safe taking this oath, and in saying that the likelihood of temptation is remote. This would be a much harder oath for most to take:

I swear that I have never chosen my public positions or based my judgments of the world around on expectations of future gain or position.

I don't think I've done that, but the mind is a powerful engine for rationalization.

dishonest government

Dishonest government can't be good, but apparently once you know how things work, it becomes a little hard to see why, beyond kindergarten-level morality. It never seemed that hard to me. An informed populace is the foundation of democracy, and officials who lie to the public show a corrosive contempt for democracy itself. Being more of an insider, Matt digs deeper and finds a more serious problem: that officials who've lost credibility will have a harder time acting in the future, when action might be critically necessary.

This is an odd argument in any number of ways.

The Bush administration had demonstrated its belief that policy was more important than truth long before Iraq, indeed long before Bush took office. When the administration laid out its case for Iraq, many people (including myself) concluded it was deceptive. Generally speaking, such judgments were written off precisely because they were informed by judgments of Bush and his people, because they were based partly on a well-founded distrust of the administration, a distrust the administration had already earned. Is there any reason to believe the next time will be any different? One can argue whether 51% is a mandate, but one cannot deny that support for Bush is greater now than it was four years ago or that his institutional base is stronger now than it was two years ago.

In any case, if dishonesty were to curb the ability of dishonest leaders to act, wouldn't that be a good thing? Isn't dishonest
leadership itself so grave that it could only be trumped by the most profound external crisis, and wouldn't such a crisis generate its own political base? The public reaction after 9/11 certainly suggests that it would. The frightening thing today isn't that the prevarications of the Bush administration have weakened its support, but that they have not. If Bush is limited today, it's due to an overextended military, not a weakened political base.

It's not hard to understand why dishonest leadership is bad for the nation. It is hard to understand why insiders struggle to explain it. It is hard to understand why those who watch officials lie every day remain easy to deceive, why they struggle to find realpolitik reasons to explain why such dishonesty is, in fact, bad, and why they characterize the obvious answer--that dishonesty leadership corrupts our society--as kindergarten-level morality.

I know I'm being harsh on Matt. He has chronicled many of the known deceptions. He knows they're important. It bothers me, however, that he sees a possible weakening of Bush as the most compelling basis for criticizing his past actions.

feudal religions

Religion and I parted ways before I was ten. The reasons aren't that
important. I think there were too many contradictions, too many
inconsistencies, but whatever the reason, once I stopped believing,
nothing about the creeds I know inspired new belief.

My wife is Catholic, and I accompany her to mass when asked. Every
so often, something strikes me in ways it hasn't before. Christmas
Eve it was "Dominum." I've heard "Lord" my entire life, but it was
just a word, just how people talked in prayers. When I heard
Dominum, I had visions of lords, serfs, and vassals, and realized
that's what everyone heard for hundreds of years and maybe what everyone
who wasn't born in a democracy hears today.

God as King, as King of Kings, is a profoundly different vision
than God as Love. When I hear, "What would Jesus Do?" I think of
turning the other cheek. A king is first and foremost a leader of
war, embodying authority, demanding obedience. A king is responsible
only for his subjects and punishes disloyalty with death. From
someone with such a conception of Christianity, "What would Jesus
do?" would sound different. At least to me.

And when I look at today's evangelical movement, at the people
following the Rose Parade saturday morning with bullhorns, at Brother
Jed in the Quad warning of the "Lake of Fie-uh!!" at President Bush
with his Crusade, I can't help thinking that they worship a king,
not a man of peace.

The odd thing (to me) is that I see Protestantism, particularly
as seen in the sects that migrated here, as a reaction against
such attitudes, away from a feudal notion of religion and toward
more personal relationships and the American Revolution as a
continuation of the same process. When today's evangelicals strive to
put God back in government, they may be installing the God our
forefathers moved here to escape.

tsunami

I often find myself at a loss for words at times like this. The gap between what I want to say and what I can say is simply too large, and everything I try comes out trite and empty. I try to find perspective, but I can't.

The most destructive part of a hurricane is the storm surge, but it's effects are concentrated in the eye. The tsunami was vast. If a typical storm surge is 30 miles wide, this was like the storm surge of 30-60 cat 4-5 hurricanes hitting at once, without warning.

Three years ago, 3000 people died and it changed everything. As I write this, 155,000 are known dead. Some are taking the time to write about the benefits the tragedy will have for the local economy. I hope this will change something, that the world will build something better from this.

This is harder, though. There's no enemy to attack. There's no clear defense (warning systems are nice, but hurricane evacuations take hours and all the isolated communities would still be isolated). I haven't heard anyone stand up and say, "Today, we are all Indonesians. We are Sumatrans." Is that because the horror wasn't on live TV, because it happened someplace we care less about, or because it lacked the evil of human agency?

Could we build a Coast Guard Disaster Relief service with global reach, to respond to disasters of global scale? Could we support one, even though it might only be needed once a century? We spend trillions on defense, even though we've only been attacked twice in the last hundred years and those attacks were of much smaller scale. Could we invest in tsunami/flood/storm shelters in limited-access coastal areas? Would such shelters be an extravagance in poor communities where people struggle to feed themselves from day-to-day?

God Bless Us Everyone

Except those that aren't like us. It's not surprising, but it's still shocking. I'll never match Gibson's pithy quote, but some of the civil liberties details in the report itself are striking. Only half of Republicans believe Americans should have the right to protest or criticize the government in a time of war. Half think the media should not report such activities. In general, the gap between Republicans and Democrats on the questions asked was about 20%. When they say, "Freedom isn't free," they must mean something else.

labels, labels, labels

Mark Kleiman says that we need a label, but Social Insecurity seems much too dry.

The Retirement Lottery seems better, but not as good as Pick-65. Without a Net captures the essence. So does Not Our Problem. Homeless.gov and Enron-401K+ go to the heart of the matter.

It's surprisingly hard to pick just one.

how I know I'm not a wonk

Matthew Yglesias recalls a preferred social security framework from shortly after dawn of the second age. It's full of progressivity, mandatory private accounts, moral hazard mitigation, and refundable tax credits.

As for as I can see, however, it boils down to welfare for indigent seniors. I don't see, for example, how forcing private savings, sequestering the funds, then granting tax credits to cover the cost does anything to eliminate the "moral hazard." But then, I don't really believe there are all that many people so happy with their lives on the dole that they wouldn't lift a finger to improve their lot. I'm sure there are some, but it doesn't cost all that much to support someone in poverty, so unless there are hordes happy to live in dirty, vertical hovels, I can't see the "moral hazard" of the arrangement ruining the republic. Did we actually spend more last year on people in poverty than we did on Iraq? Why do people who would never choose to live in poverty themselves always assume that everyone else is just looking for their chance?

It must be hard to have so many policy tools at your fingertips that you can't figure out how to use them all.

executive compensation

Kevin Drum lists a number of reasons that executive compensation keeps rising. He could add to the list the common wisdom that good executive performance requires that executives identify their companies' interests with their own. Once executives become wealthy, it requires ever more compensation to achieve this alignment of interests. In many cases, companies go back to shareholders time and again asking for increased equity compensation in order to 'retain key employees,' then spend it increasing the stake of executives who are already major shareholders. This inflates the salaries of high-profile executives and feeds back into the "everyone's above average" spiral.

Perhaps the most pernicious aspect is that the equation often ends up reversing. Having been told for years that good corporate governance requires that CEOs equate the company's prospects as their own, CEOs can be tempted to conclude that anything good for them is in fact good for the company. Even if that temptation never rises to conscious action, it can influence decisions.

we've done it before

Earlier, I asked how we could absorb the 10% drop in production implied by 2030 demographics. Can we all just accept a 10% decrease in our standard of living relative to what it would have been without retiring boomers? Do we have to? It's hard to say, but we've done it before.

Between 1970 and 2002, real per capita GDP rose 86%. Over the same period, the post tax income of the bottom 90% of taxpayers declined slightly. Our society became far more productive, but the circumstances of the vast majority of the population did not change. If the next 30 years are similar, all we need to do to absorb the retirement bubble is redirect some of the wealth headed for the richest 10% to retirees. All we have to do is get over the quaint notion that the wealthiest of us are "punished" by higher marginal tax rates. Even with higher marginal taxes, the wealthy would remain wealthy.

It's a bird, it's a plane...

Mark Kleiman points to Brad Delong's pointer to unfogged's observation and suggests that we should stop talking about social security in isolation, and talk instead about the crisis in the general fund. I think that stops a bit short.

What we have is not really a funding crisis at all, but a demographic crisis. When people talk of the "aging baby boom," they're referring to a demographic phenomenon where from 2010 to 2030 the percentage of the population between 20 and 64 will drop from 60% to 55%, a drop of 8%. For a given level of workforce productivity, this equates to an 8% drop in per capita GDP. Alternatively, in 2010, the average person of productive age will be supporting 2/3 of a person of non-productive age. In 2030, they will be supporting 4/5, a 22% increase.

All the discussion about privatization vs SS vs general fund obscures this fundamental point. A real economic investment for 2030 is one that will improve productivity of the kind we will need in 2030, and that's very difficult to do today. We have to hope the market does a good job. Perhaps we can nudge it a little by funding research in the areas we're likely to need to do well, but we can't start building a stockpile of medical equipment or supplies we can use 25 years from now. We can hope the private sector increases overall productivity, but the shift (most of which occurs between 2020 and 2030) will still eat 8% of our productivity gains. If we cover the difference by increasing taxes, productive adults will see the cost in tax increases. If we cover the difference by increasing ownership among retirees, productive adults will see the cost in mandatory private investment in the "ownership society."

One way to illustrate the fallacy that privatization will solve the problem is to consider the private pension crisis, where funds run by professional money managers are going bankrupt and heading for government bailout in the face of demographic failures similar to those faced by the society at large.

The choice of solution is important. Privatization, for example, will mean that some peoples' investments will perform much better than others. They'll be able to retire quite comfortably. Others will see their savings wiped out--the overly aggressive by market downturns and the overly conservative by inflation. Equitable solutions are vital, but we can't have any real solutions without facing up to the real problem. Neither viewing the problem as an impending catastrophic failure of a government program nor as a minor accounting irregularity that can be solved by a minor tax increase today or a minor benefit cut tomorrow does that.

As it happens, we've already gone through a 30 year period where productivity rose by 10% without the gains being broadly realized. Maybe we can look at the period of 1970-2000 for hints on how to proceed.

just a little slow

Kevin Drum suggests eliminating corporate income tax, but worries about people using corporate money to pay for personal expenses. The problem isn't that corporation money would go to personal expenses, but that such a change would make it even easier for corporations to amass wealth without paying taxes. Everyone wealthy enough to do so would move their assets into privately-held corporations, making all investment income tax-free until withdrawn and spent.

To understand why corporate spending on personal expenses wouldn't become a bigger problem, consider what happens today when Joe Executive has a $100 dinner on an expense account. He pays no income tax on that dinner, and the company gets to deduct the cost from its income. Since Joe's rich (and lives in California), the company would have had to pay him about $200 for him to buy the meal with his own income. Having the company pay for it reduces the tab to $100. A 35% corporate tax reduces the net bill to the company to $65. If the corporate tax were eliminated, it would still be attractive for companies to pay for personal expenses, but less attractive than it is today.

Making corporate income tax-free, on the other hand, creates a large incentive to keep assets in the corporation as long as possible. With a 35% marginal tax rate, a taxable investment of $100 with a 5% return over thirty years grows to $260. The same investment allowed to compound tax free, then taxed at 35% grows to $320.

Some people would claim that's a good thing, that letting investments like that grow will put more money in peoples' hands rather than the government's, but that's not really the question. If we assume government spending and tax revenue are connected (an assumption that seems weaker with every passing budget), then the overall tax rate will approximately match government spending, no matter the details. If we cease taxing investment income, we'll have to raise taxes on something else: wages, consumption, value-add, carbon dioxide production. Eliminating taxes on investment return favors those able to save a large portion of their earnings over those who can't or won't. A justice argument might be tenable against those who won't, but not against those who can't.

Baby eating

I ran across a pointer to this gem again. As much as I admire the glorious symmetry of the premise and solution ("The blue states are godless, immoral, and don't show us enough respect, so they aren't worthy to be in our union"), I'm afraid it would never work. The red states, after all, are fond of pointing out that they're militaristic and view abortion as a holocaust of innocents. Within a few years of our expulsion (and their loss of blue state subsidies), they'd be morally compelled to invade us to save the children.

corruption and politics

People always talk about corruption in politics as if the problem we need to solve reduces to some form of quid pro quo. Ian Ayres and Bruce Ackerman, for example, suggest an scheme to anonymize transactions to the point that quids can't be guaranteed, and suggest this will eliminate or greatly reduce quos.

Unfortunately, corruption of the political system (grand corruption, if you will) does not depend on individual corruption (petty corruption). There are no doubt dishonest politicians looking for handouts in return for favors, but there are plenty of true believers out there who would pursue the same policy goals honestly and sincerely, and as long as money speaks, the true believers who align with the interests of money will get the support of money. True believers may actually be worse representatives than corrupt opportunists. An opportunist, after all, will do anyone a favor for a price. True believers only represent those whose views match their own.