Things to Read on the Evening of December 15, 2013

Must-Reads:

1. Phil Swagel: A Modest Volcker Rule: “It is hard to know the full impact on markets until the Volcker Rule is fully in place in 2015, but my sense is that the regulations put out on Tuesday will allow banks to continue in their roles as facilitators of trading…. Regulators stated that they would collect and analyze data relating to firms’ trading activities, and make adjustments in response. This data-driven approach… is heartening for the regulators to put in writing…. Banks might wish that the Volcker Rule did not exist, but that discussion is long moot. It turns out that the rule as promulgated could add some useful risk-management processes by ensuring that firms understand their own hedging strategies while doing only modest harm to the economy through the impacts of reduced liquidity in financial markets. An irony is that Volcker Rule proponents see the final result as “tougher than expected,” pointing to symbolic measures such as requiring chief executives to attest that the required processes are in place. This might be an instance in which both banks and their critics are satisfied with a regulation—though perhaps only until the banks’ critics realize the situation…”

2. Laura Tyson: Raising the Minimum Wage: Old Shibboleths, New Evidence: “For a good overview, look to a paper by Arindrajit Dube of the University of Massachusetts, Amherst; T. William Lester of the University of North Carolina, Chapel Hill; and Michael Reich of the University of California, Berkeley. Using two decades of data and side-by-side comparisons of bordering counties in the United States, they find that higher minimum wages raise the earnings of low-wage workers and have negligible effects on employment levels…. In 1996, the prevailing view among economists was that an increase in the minimum wage would reduce employment. But opinions have changed in response to the evidence…”

3. Bruce Greenwald: Interest Rates and Monetary Policy: “All the empirical evidence we have is that interest rates within the range of variation we see do not affect investment. Investment is driven by perceptions of risk and accelerators in demand that drive the demand for investment. So it’s not a surprise I think that the zero interest rates have not stimulated investment. Because nobody has ever been able to find a significant interest rate effect on investment…” http://www.youtube.com/watch?v=M3quayhKZ0M#t=32m31s

Should-Reads:

1. Kenneth Thomas: America’s Most Wanted: Boeing: “Now that the Machinists’ union in Washington state has refused the company’s contract demands, it is shopping production (h/t Pacific Northwest Inlander) of the 777x aircraft nationwide and lots of states are making offers for it. Second, it is emblematic of everything the 1% is doing to destroy the middle class: despite being highly profitable, it pays virtually no taxes; it accepts billions of dollars in government subsidies; it is trying to eliminate pensions and cut salaries for its highly skilled workforce; and it is trying to move production away from its unionized workforce, something it has already accomplished in part…”

2. Pope Francis: On *Evangelii Gaudium: “Marxist ideology is wrong. But I have met many Marxists in my life who are good people, so I don’t feel offended. There is nothing in the exhortation that cannot be found in the social doctrine of the church…. The promise was that when the glass was full, it would overflow, benefitting the poor. But what happens instead, is that when the glass is full, it magically gets bigger nothing ever comes out for the poor…”

3. Hilary W. Hoynes, Diane Whitmore Schanzenbach, and Douglas Almond: Long Run Impacts of Childhood Access to the Safety Net: “A growing economics literature establishes a causal link between in utero shocks and health and human capital in adulthood. Most studies rely on extreme negative shocks such as famine and pandemics. We are the first to examine the impact of a positive and policy-driven change in economic resources available in utero and during childhood. In particular, we focus on the introduction of a key element of the U.S. safety net, the Food Stamp Program, which was rolled out across counties in the U.S. between 1961 and 1975. We use the Panel Study of Income Dynamics to assemble unique data linking family background and county of residence in early childhood to adult health and economic outcomes. The identification comes from variation across counties and over birth cohorts in availability of the food stamp program. Our findings indicate that the food stamp program has effects decades after initial exposure. Specifically, access to food stamps in childhood leads to a significant reduction in the incidence of “metabolic syndrome” (obesity, high blood pressure, and diabetes) and, for women, an increase in economic self-sufficiency. Overall, our results suggest substantial internal and external benefits of the safety net that have not previously been quantified.”

4. Martin Longman: Enough Already: “Here’s what I don’t understand. Does anyone seriously think that people are saving enough for retirement?… So, why would anyone talk about cutting people’s Social Security benefits when it is as clear as day that the current benefits are going to be completely inadequate for a whole lot of people? Jim Kessler, senior vice president for policy and a co-founder of Third Way, said Friday morning that Sen. Elizabeth Warren’s (D-Mass.) backing of a plan to expand Social Security compelled him and the president of the group to hit back with a Wall Street Journal op-ed lambasting the plan and economic populism…. ‘That Social Security plan had been out there but really languishing–because Senator Warren has such a powerful compelling voice, she started talking about it, and it suddenly it became much more talked about and viable alternative.’ These Third Way folks have been flogging this horse for decades at this point. It is a dead horse.”

And:

Should Be Aware of:

1. Rick Perlstein: Thinking Like a Conservative (Part One): Mass Shootings and Gun Control: “Our side keeps on… denying… how conservative politics works…. I keep seeing predictions that this, that or the other… will ‘finally’ ‘break the spell’…. We can’t keep on going this way, my friend. You have to finally come to terms with how conservatism works. Now, that guy in the White House, Obama—I’ve given up hope that he’ll ever get it. I still have faith in you, though…. Here’s one example….

   “Consider the tragedy at Sandy Hook… and the subsequent call for ‘common-sense’ gun legislation that might ban assault weapons and extended magazine clips and strengthen background checks to keep guns out of the hands of criminals and the insane. Common sense for us, but for them?… The host got it…. ‘The bad guy with the gun needs the good guy with the gun. And so every act of violence actually makes [more guns] more necessary.’ Yes: more mass shootings make right-wingers more attached to arming themselves yet further, yet more impassioned about defeating gun control, yet more paranoid about those who would ‘disarm’ them and render them more vulnerable to the scary scary scary everywhere around them…”

2. Rick Perlstein: Thinking Like a Conservative (Part Two): Biding Time on Voting Rights: “When the Supreme Court decided the case of Shelby County v. Holder last November, severely limiting the sweep of the Voting Rights Act in Southern states with a history of racial discrimination, here’s what you heard from all the reasonable folks: soon, very soon, Congress would draft legislation restoring said sweep… in rare bipartisan fashion…. Well, that redrafting hasn’t happened yet. Instead, it’s been what Josh Marshall has called ‘Open Season On Non-White Voting’…. But what about that 98-0 Senate tally, and Fannie Lou Hamer and Rosa Parks and Coretta Scott King and moonbeams and unicorns and sunshine in 2006? Were conservatives crossing their fingers when they cast that vote?… Conservatives are time-biders… understand… that the direction of human history is not on their side…. When conservatives talk to one another, pay attention: they say what they want to do, and mean it. And will do just about anything to get there—even, or especially, claiming that they don’t want to do the thing they want to do, until the time is ripe, and they can do it…. Now, on voting rights, the personnel are in place. The time has been bided. The Fannie Lou Hamer, Rosa Parks and Coretta Scott King masks fall away off, and reveal Theodore Bilbo, Lester Maddox and Leander Perez underneath…”

3. Rick Perlstein: Thinking Like a Conservative (Part Three): On Shutting Down Government: “What the hell is going on? What could House Republicans possibly be thinking?… Come back with me to 1964. Barry Goldwater has won enough delegates for a first-ballot nomination victory at the Republican National Convention. But according to the Gallup Poll, by a margin of 55 to 34 percent, Republican voters—Republican voters; the percentage of all voters would have been much, much higher—preferred his opponent for the nomination, William Warren Scranton. What the hell was going on? What were the people who thought Goldwater could beat Lyndon Johnson thinking? Well, as I wrote in Before the Storm: Barry Goldwater and the Unmaking of the American Consensus, Phyllis Schlafly was thinking this: that Gallup just asked ‘a lot of questions of a very few people’ in order to ‘come up with answers that pleased the New York kingmakers’. Delegates for Goldwater, meanwhile, pressed to see reason and nominate a candidate who could actually win, wrote telegrams of reassurance to Goldwater….

   “And then, two months later, in September, when all the polls predicted exactly what ended up happening—Goldwater losing in a landslide—William F. Buckley addressed a convention of Young Americans for Freedom, and shocked them. He spoke, in his bizarrely orotund way, of the Goldwater campaign: ‘A great rainfall has deluged a thirsty earth, but before we had time to properly prepare for it. I speak, of course, about the impending defeat of Barry Goldwater.’ As I wrote in Before the Storm, ‘His heresy sucked the air out of the room. The silence was broken by the sound of a single woman sobbing.’…

   “And the Republican ‘establishment’, the folks who are supposed to be holding these forces in check, the guys like Tennessee Senator Bob Corker, calling the proposal to defund Obamacare a “silly effort”? Thank of them like shabby gentility. You know the concept: the folks depicted in Chekhov’s plays and many of his short stories; in Visconiti’s filmic masterpiece The Leopard; or, more recently, in the narrative arc of ‘Downton Abbey’. The class whose vestments of power are now merely formal, their actually command of events nugatory, trying to hold on to scraps of dignity and self-respect as they negotiate their uneasy peace with the bourgeois louts who don’t just misunderstand the old rules of civility but actively flout them…”

4. Rick Perlstein: Thinking Like a Conservative (Part Four): Goalpost-Moving: “I’ll close today with another quick gripe: the one about Democrats’ ‘winning’ this hostage-taking horror show because the Republicans now have a 28 percent approval rating, lower than during the shutdowns in the mid-1990s. Well, in 1975, only 18 percent of Americans were willing to call themselves ‘Republicans’. Internally, the talk was whether the party should change its name. George Will said visiting Republican National Committee headquarters was like visiting ‘the set for a political disaster flick, a political Poseidon Adventure’…. They came back in 1978—too late for the political scientist Everett Carll Ladd to save face…. They did pretty good in 1980, too. Don’t gloat.”

5. Rick Perlstein: Thinking Like a Conservative (Part Five): Epistemology and Empathy: “Have you ever noticed how conservatives who say the most controversial things imaginable think no one actually disagrees with them? They will admit that, yes, people might claim to disagree. But they will explain, if pressed, that those who do so are lying, or nuts, or utter the non-truths they utter out of a totalitarian will to power, or are poor benighted folks cowed or confused by those aforementioned totalitarians…. How characteristic is this of the right-wing mind? Consider… a 1956 circular for Human Events: it read, ‘conservatives are already in the majority—in your state, in almost every state’. The third-party candidate Human Events backed that year, T. Coleman Andrews, who was campaigning to ban the federal income tax, got only 6.1 percent in his best state. But that must have been because the liberals were just that perfidious…. I witnessed the radicalism of conservatives’ lack of cognitive empathy firsthand…. The dialogue honestly went like this: ‘So—you’ve read Barry Goldwater’s Conscience of a Conservative?’ ‘Yes. I have a whole chapter about it in my book.’ He looked at me searchingly. The sincerity, really, was aching. ‘And it didn’t make you a conservative?’ He honestly couldn’t believe it could be so. It was beyond his poor powers of epistemological empathy to comprehend…”

6. Rick Perlstein: Thinking Like a Conservative (Part Six): ‘Government Dependency’: “Does, for example, Rick Santorum really mean it when he says about Nelson Mandela, as he did today in an interview with Bill O’Reilly on Fox News, ‘He was fighting against some great injustice, and I would make the argument that we have a great injustice going on right now in this country with an ever-increasing size of government that is taking over and increasing people’s lives—and Obamacare is front and center in that.’ And I have to answer that largely, as astonishing as it may seem, they do. Never mind that the size of government is not ‘ever-increasing’…. Empirical debunking cannot reach the deepest fear of the reactionary mind, which is that that devouring leviathan the state will soon swallow up all traces of human volition and dignity…. Relying on government is slavery: it’s a consistent trope within modern conservatism…. Then there’s the old saw that the deal the Democrats supposedly offer African-Americans—you vote for us; we give you free stuff—returns them to ‘slavery’. The first use of that metaphor I’ve identified was by Ronald Reagan in 1968. A black reporter asked him why there were so few blacks at Republican events. The California governor politely but forcefully replied that wasn’t Republicans who were racist but the supposedly liberal Democrats ‘had betrayed them…. The Negro has has delivered himself to those who have no other intention than to create a federal plantation and ignore him.’… And given the rank anti-empirical irrationalism that undergirds such convictions, it’s not like the White House now can avoid brickbrats by somehow ‘submerging’ progressive action…. It’s not like their overabundance of caution earned [the ACA] a single Republican vote in Congress, or kept Republican attorney generals from suing to end its implementation, or four conservative Supreme Court justices from seeking to strike down the entire act…. Genuine conservatives are in the American minority, as I wrote here last month. Isn’t it better to simply sin boldly, and let our conservative devils have the hindmost? Use the state, use it well, to make people’s lives better. Do it without apology. That’s our moral imperative that should be beyond compromise.”

And:

• Arkadi Gerney and Chelsea Parsons: The Gun Debate 1 Year After Newtown
• Mike Konczal: “Corporatism” is the Latest Hysterical Right-Wing Accusation: The secret history of a smear

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