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Yglesias

Good Enough

Kevin Carey on UC Berkeley Law School Dean Christopher Edley’s drive to use information technology to educate many more students:

Unsurprisingly, Edley’s bold plan to reach students “from Kentucky to Kuala Lumpur” has garnered opposition. The thoughtful critique is that the Internet can’t replicate the intellectual and personal experience of going to college in person. That’s true (if overstated, and becoming more so as technology improves). But it’s also the wrong way to think about the issue.

The challenge isn’t to perfectly replicate the current UC experience, not all of which is ideal. The challenge is to create an educational experience that’s of high enough quality to be associated with the globally recognized academic tradition of the University of California. It can be different, as long as it’s good.

I would go stronger. It’s not just okay if it’s different, it’s okay if it’s actually worse. Historically, a lot of important improvements involve downgrades in technology. Ready to wear shirts are not as good as tailored or handmade ones. Nonetheless, developing the technology of mass produced ready to wear shirts was a huge advance in improving the world’s stock of apparel. Frozen vegetables aren’t as good as fresh ones, but again the advantages in convenience still make them an important advance. One very important reason we’ve seen such disappointing productivity in the health and education sectors over the past few decades is precisely that we’ve tended to lack these kind of quality-degrading innovations. But if you could find a means of educating students that’s 80% as good as what Berkeley currently does at 10% of the per capita cost, then you’d be opening up vast new frontiers of potential learning.

Yglesias

The Future of Growth

The long-term actuarial balance of Social Security is heavily dependent on assumptions about long-term economic growth. Thus, the actuaries report is an annual exercise in basically making things up about future population growth and productivity growth. Consequently, if you’re Jagadeesh Gokhale and your job is to be a professional complainer about how Social Security is doomed, you can always offer this kind of critique:

The trustees are discounting the possibility that the unemployment rate may remain higher than was assumed last year and that, therefore, earnings may not rebound any faster compared to last year’s assumptions. It appears that that incoming data on unemployment and GDP growth played little if any role in informing assumptions about future earnings growth rates.

Totally true. Conversely, the trustees are discounting basically all possibilities. Their projections about future productivity, future population growth, future disability rate, etc. are all extremely crude extrapolations that have no real basis. Which is why I think it’s perverse to spend a lot of time worrying about these things.

But one thing that I do think is worth keeping an eye on is people’s consistency about these kind of projections. I normally associate right-of-center people and institutions, like Gokhale’s Cato Institute, with an extremely sunny optimism about the future growth prospects of market democracies like the United States of America. But insofar as you’re sunny and optimistic about US long-term growth prospects, you should be quite sanguine about this Social Security situation. Conversely, if you think the Trustees are too sanguine you ought to be a pessimist about US growth prospects in general. And if you think the long-term growth outlook is bad, then that’s a huge problem for reasons that are much larger than Social Security.

Politics

Dodd: It’s Not Worth A Fight To Get Elizabeth Warren Confirmed As CFPB Director

When it first looked like Harvard Law professor Elizabeth Warren might stand a serious chance of getting appointed at the first director of the newly-created Consumer Financial Protection Bureau — a regulatory agency which she was the first to suggest — Senate Banking Committee Chairman Chris Dodd (D-CT) poo-pooed the notion, saying there’s a “serious question” about whether Warren is “confirmable.”

The New Republic’s Noam Scheiber wrote that “after surveying a dozen insiders over the last few days — congressional aides, industry officials, progressive activists, and a few administration officials — I’ve concluded that the odds are good that Warren would be confirmed if nominated by the White House.” And Dodd now seems to have shifted his rhetoric, saying that even if Warren is confirmable, it’s not worth a potential fight to get her the job:

What you don’t need to have is an eight-month battle for who the director or the head or chairperson of this new consumer financial protection bureau will be.

Watch it:

Dodd pretty clearly would prefer that current Federal Deposit Insurance Corp. Chair Shelia Bair receive the nod, but Bair has said that she’s not interested in the job. “I did some checking on Sheila Bair and I was going to have very little difficulty getting Sheila Bair confirmed,” said Dodd. “I’d probably confirm her in a couple of days. That’s how strongly people felt, Democrats and Republicans.”

Bair certainly has the credentials to do the job, as she was one of the first federal officials warning about the proliferation of subprime loans during the buildup of the housing bubble. But she’s doing very important work at the FDIC, and as The Wonk Room explains, there’s simply no reason for passing over Warren.

Leaving aside Warren’s qualifications, it makes little sense that Dodd feels a political fight here isn’t worth it. Warren is an unabashed, articulate consumer advocate, and her nomination would set up a clear choice: consumers or the banks. After having overwhelmingly voted against the Dodd-Frank Wall Street reform bill, Republicans standing against her nomination would once again be siding with the financial services industry. It’s worth the fight to show that dynamic at work.

Cross-posted on The Wonk Room.

Yglesias

Paul Ryan is a Fraud

3-10-10bud-f1

Paul Ryan says he has a plan to balance the budget. He’s been saying this for months, and his proposals have been scrutinized by experts. So I see two possibilities. One is that Paul Ryan’s plan would balance the budget. The other is that Paul Ryan is dishonest. And yet while it’s uncontroversial among wonky center and center-left types in Washington DC that Ryan’s would not balance the budget, it remains bizarrely controversial whether he deserves a reputation for honesty.

Paul Krugman, standing up for common sense and citing a Tax Policy Center analysis of Ryan’s proposals says he is not honest. The Tax Policy Center, however, is standing up for Ryan before conceding the substance of his point:

TPC did analyze Ryan’s tax-specific proposals and found they would fall short of this revenue goal. For example, Ryan’s proposal would lead to federal tax revenue of approximately 16 percent of GDP, which amounts to a $4 trillion revenue shortfall over ten years compared to the alternative fiscal scenario. But that doesn’t mean that Ryan’s plan is a fraud. Instead, it shows that Ryan’s vision of broad-based tax reform, which essentially would shift us toward a consumption tax, needs to be adjusted in order to meet his stated goal of matching historical levels of revenue as a proportion of GDP. This indeed poses a challenge to Congressman Ryan to make specific changes to his tax reform plan in order to meet his revenue goal.

For Ryan’s plan to work, he needs 19 percent of GDP, which is what he claims to have. The Tax Policy Center pointed out months ago that he has 16, not 19. And Ryan hasn’t offered any new ideas. Instead, he’s still walking around DC dining out on his reputation for honesty and bold thinking. But to offer an honest plan to balance the budget your plan needs to balance the budget. I don’t really understand why this has become the subject of dispute. It seems to me that the 90 percent of members of congress who don’t claim to have a 70-year budget plan are the honest ones. For one thing, they’re not lying! For another thing, why do we even care about Paul Ryan’s plan to balance the budget in 2080? Ryan will almost certainly be dead in 2080. But of course maybe by 2080 we’ll all be disembodied immortals, with our consciousnesses downloaded into computers. It’s bizarre to make (pretending to) tackle this pseudo-issue the prime criterion for serious policy thinking.

Economy

Dodd: It’s Not Worth A Fight To Get Elizabeth Warren Confirmed As CFPB Director

When it first looked like Harvard Law professor Elizabeth Warren might stand a serious chance of getting appointed at the first director of the newly-created Consumer Financial Protection Bureau — a regulatory agency which she was the first to suggest — Senate Banking Committee Chairman Chris Dodd (D-CT) poo-pooed the notion, saying there’s a “serious question” about whether Warren is “confirmable.”

The New Republic’s Noam Scheiber wrote that “after surveying a dozen insiders over the last few days — congressional aides, industry officials, progressive activists, and a few administration officials — I’ve concluded that the odds are good that Warren would be confirmed if nominated by the White House.” And Dodd now seems to have shifted his rhetoric, saying that even if Warren is confirmable, it’s not worth a potential fight to get her the job:

What you don’t need to have is an eight-month battle for who the director or the head or chairperson of this new consumer financial protection bureau will be.

Watch it:

Dodd pretty clearly would prefer that current Federal Deposit Insurance Corp. Chair Shelia Bair receive the nod, but Bair has said that she’s not interested in the job. “I did some checking on Sheila Bair and I was going to have very little difficulty getting Sheila Bair confirmed,” said Dodd. “I’d probably confirm her in a couple of days. That’s how strongly people felt, Democrats and Republicans.”

Bair certainly has the credentials to do the job, as she was one of the first federal officials warning about the proliferation of subprime loans during the buildup of the housing bubble. But she’s doing very important work at the FDIC, and there’s simply no reason for passing over Warren.

As Paul Krugman wrote, “Warren really is a pioneering expert on household debt and financial distress, who has also shown an ability to work effectively in an official position.” The Boston Globe called her the “clear choice” for the CFPB job:

Warren, a Harvard Law School professor, has conducted extensive research on bankruptcy, predatory lending, and other consumer-finance issues. Throughout her tenure as head of a panel appointed by Congress to provide oversight of the federal bailout funds, Warren has sought to connect the machinations of the financial system with the struggles of average families. She raised early alarms about subprime mortgages, and her work casts light on how a deliberate obscurity in the terms of credit cards and mortgages contributed to an unsustainable growth of consumer debt.

Leaving aside Warren’s qualifications, it makes no sense to me that Dodd feels a political fight here isn’t worth it. Warren is an unabashed, articulate consumer advocate, and her nomination would set up a clear choice: consumers or the banks. After having overwhelmingly voted against the Dodd-Frank Wall Street reform bill, Republicans standing against her nomination would once again be siding with the financial services industry. I can’t see why we “don’t need” to show that dynamic at work.

Yglesias

Consistency

Republicans who’ve availed themselves of lame duck sessions of congress before are now loudly objecting to the idea of Democrats holding a lame duck session. This is often described as “hypocrisy” but I actually think it isn’t.

Something I really like and respect about Republican members of congress is that on issues of political process they maintain an admirable level of consistency. Their view is something like “one should do whatever one can within the bounds of the law to ensure that the right substantive outcome happens.” So if holding a lame duck session produces more conservative policy, they hold one. But if stigmatizing a lame duck session would block progressive policy, they stigmatize. It seems to me that this is how politics ought to be done. No country has competing political coalitions organized around rival views of process issues, they’re organized around rival views of important questions of substance. One problem with the structure of American politics is that we only have one team that plays this way. But the fault for that lies with the Democrats, who it seems to me have a tendency to not take their own jobs and ideas seriously, rather than with Republicans.

Politics in a democracy isn’t a blood sport. We don’t kill members of the other side or intimidate them with violence. But it’s not a parlor game either. It’s serious stuff, and it deserves to be taken seriously. Republicans do a good job of that, and their approach to process “hypocrisy” merely reflects the fact that they have a reasonable sense of priorities.

Politics

Pawlenty’s Plan To Extend The Bush Tax Cuts For The Wealthy: Take From The Middle Class

As Republicans double down on the need to extend the Bush tax cuts for the wealthy, most have been unwilling to a offer a way to pay for the lost revenue they represent, while others have concocted a fantasy world where tax cuts pay for themselves.

In an interview with Bloomberg’s Al Hunt yesterday, Minnesota Gov. Tim Pawlenty (R) called for the extension of all the Bush tax cuts, and at least attempted to provide a way to pay for them — use unspent stimulus money to find $40 billion:

HUNT: Okay, alright. $40 billion is what those [Bush tax cuts for the wealthy] cost in one year. Where you take the $40 billion from?

PAWLENTY: That’s easy. You can start by going back and looking at the stimulus package, which is still half unspent, which is not a good package. That could be redesigned and redeployed. And number two, if you look at the growth in federal spending, whether it’s in the entitlement side or the mandatory outlay side or on the discretionary side, you could easily find $40 billion.

Watch it:

First of all, Pawlenty’s figure of $40 billion is pathetic. Renewing the Bush tax cuts for the top two percent of Americans alone would cost $830 billion over ten years, more than 20 times the amount Pawlenty thinks he can find in the stimulus.

But more importantly, Pawlenty is suggesting taking tax cuts away from the middle class in order to give them to the rich. Contrary to conservative talking points, the stimulus package actually cut taxes for 95 percent of working Americans, and there are still $55 billion in tax benefits that have yet to be expended. So removing funds from the stimulus to pay for tax cuts amounts to raising taxes on all of those people.

The tax benefits in the stimulus include the Making Work Pay Tax Credit, which will give up to $400 to working individuals and $800 for working married couples this year; the Additional Child Tax Credit, which makes more families eligible for tax credits; and the Earned Income Tax Credit, which increases tax credits to taxpayers with three or more children. Bottom line: Pawlenty’s proposal is to take money from the middle class and give it to the rich.

Yglesias

Progressive Consumption Taxes

Something I’ve mentioned a few times is that it would be better to finance the government through a progressive tax levied on consumption rather than the combination of FICA and a progressive tax on income. You can understand the virtues of this idea in moralistic terms (John Rawls says he prefers it “since it imposes a levy according to how much a person takes out of the common store of goods and not according to how much he contributes”) or in economic ones as laid out by Karl Smith. But what does that mean in practice? Fortunately, Dylan Matthews did a post yesterday laying out some options.

The one that’s easiest to explain, and I tend to think best, is Robert Frank’s idea. This would work exactly like the current income tax, except instead of a crazy patchwork quilt of tax-subsidies for savings you’d just exempt all savings from taxation. That would leave you with a simpler, more efficient, but less progressive tax code that also doesn’t raise adequate revenue. You need to respond by adjusting the rate structure to restore adequacy and progressivity. The resulting scheme is more conducive to long-term economic growth than our current system, equally progressive, and also somewhat simpler. And, importantly, the added simplicity doesn’t come from heroic assumptions about congress wiping away all deductions and exemptions and never putting any new ones in. It’s just simpler because it does something our tax code already does—try to encourage saving—in a simpler way.

Unfortunately, the functioning of our political system makes it difficult to do any kind of tax reform unless you have consensus on the appropriate level of revenue and we’re miles away from that.

Yglesias

Zakaria Returns ADL Prize

Fareed Zakaria is a mensch:

Five years ago, the ADL honored me with its Hubert H. Humphrey First Amendment Freedoms Prize. I was thrilled to get the award from an organization that I had long admired. But I cannot in good conscience keep it anymore. I have returned both the handsome plaque and the $10,000 honorarium that came with it. I urge the ADL to reverse its decision. Admitting an error is a small price to pay to regain a reputation.

The details of the return aside, just think about the fact that the Anti-Defamation League has traditionally been in the business of doing things like handing out first amendment awards named after Hubert Humphrey to dudes with names like “Fareed Zakaria.” Point being that it was a Jewish organization, but one not a narrow Jewish nationalist outfit. Rather it was one that that believed Jews could and would prosper in a country and a world that lived up to high-minded liberal ideals. This characterizes the vast majority of the ADL’s work historically and even today, and it’s what’s garnered admirers for the organization.

Climate Progress

Global boiling fuels disasters in nuclear nations

Masters: “The Great Russian Heat Wave of 2010 continues…. Thousands of deaths, severe fires, and the threat of radioactive contamination”

Prior to this year, the hottest temperature in Moscow’s history was 37.2°C (99°F), set in August 1920. The Moscow Observatory has now matched or exceeded this 1920 all-time record five times in the past eleven days, including today….

soil moisture in some portions of European Russia has dropped to levels one would expect only once every 500 years.

That’s meteorologist Jeff Masters writing about “One of the most remarkable weather events of my lifetime.”  The impact of the decline in soil moisture, along with the epic heat and fires, has been devastating, causing Russia to ban wheat exports.  Coupled with extreme weather around the globe, it has helped nearly double wheat prices since June.

Sharp and long-lasting declines in soil moisture over much of the planet’s habited landmass are a major prediction of climate science, something I’ve called “DUST-BOWL-IFICATION” (since readers pointed out to me that many deserts really aren’t so bad).  Here’s what the recent scientific literature says we face in the second half of the century if we stay anywhere near our current emissions path:

Read more

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