Friday, July 25, 2008

White House approval ratings versus Congressional approval ratings

A comment from Noah got me thinking about those abysmal Congressional approval ratings. Dems generally ignore that data, while the GOP hacks crow that this shows the Dems are even more unpopular than the GOP. The logic here is that whereas Congress (approval rating: 9%) is controlled by the Dems, the White House (approval rating: 27%) is controlled by the GOP.

Except, of course, it's not that simple. The White House is and has been 100% controlled by the head of the GOP for seven and a half years. To some extent the disapproval of Bush is personal to him and not to his party, but these are clearly very closely aligned entities. Congress is a different story. First of all, it's only about 55% controlled by the Dems, and 45% by the GOP. Second, the Dems have only been in control for the last year and a half. Clearly people are angry (or maybe scared) about the direction of the country, and clearly they blame that direction on Washington, including partly (maybe largely) Congress. But it's not clear to me that they're blaming the Democrats in Congress. It may be that they're pissed about something more complicated, that might run something like this: for the last decade Congress has become hugely corrupt, not only doing nothing to restrain pork barrel spending, but also failing to address the most pressing issues facing the country [name your pet issue: education, health care, social security]. I tend to think that people think of that characterization as being a nonpartisan truth. In sum, there's no equivalence to the approval rating of "the White House" (which is always controlled by one party and really identified with one person) and the approval rating of "Congress" (a collective body that people have highly various feelings about).

What makes things even more complicated is that even though Congress's overall approval rating is in the single digits, gerrymandering means that most people give their own Congressperson a relatively high approval rating. There's no reason at all to think that the incumbent reelection rate will fall below its usual 95-96 percent rate. Where things may get sticky, however, is for Senators, who can't gerrymander away the voters who hate Congress's general performance. This is why things are looking so disastrous for the GOP in the Senate this year. The GOP is defending twice as many seats as the Democrats, since it's been six years since Bush cleaned up in the 2002 midterms after using 9/11 to hammer the Democrats (c.f. Max Cleland). The Dems have only twelve seats at play. The GOP has already had five announced retirements, and eighteen more GOP Senators are up for reelection. As many as four of those could go Dem in the Fall (Stevens's seat in Alaska, Coleman in Minnesota, Smith in Oregon, and Sununu in New Hampshire).

Bottom line: both the Bush approval ratings and the congressional approval rating augur ill for the GOP.

Thursday, July 24, 2008

The "Bush Curve"?

Many a successful book and career has been made out of finding a way to make a clever generalization about some regular curve: Moore's Law, The Bell Curve, The Long Tail.

Here I'll modestly propose a new one, which I'll call the Bush Curve. The first example of the Bush curve is of the CO2 count in the atmosphere, which according to the Bush regime doesn't cause global warming:And here's a second example, this time depicting the number of foreclosures in California:


Hat tip: RM

Wednesday, July 23, 2008

The New Gilded Age

Tim Rutten provides yet more data on the way in which America in the Age of Reagan (1981-) has involved the enrichment of already-wealthy, and the stagnation or worse of the middle classes and the poor:
All but unnoticed, America has slipped into a new Gilded Age, with all the inequalities that historical appellation implies. From the late 1940s through 1978, the U.S. economy excelled at distributing opportunities. According to Census Bureau figures, median family income increased by more than 100% during that period. But it has grown by less than 25% in the 30 years since. It's doubtful that even that anemic increase would have occurred if millions of women had not entered the workforce during those decades.

The census' inflation-adjusted numbers show that a median American family made $61,000 in 2000 and, despite the economic expansion through most of the Bush administration, just $60,500 in 2007. That was the first time in history that the U.S. economy expanded without increasing ordinary families' standard of living.

What did increase was the share of household wealth in the meticulously manicured hands of people like Spelling. Recent data suggest that the richest 1% of U.S. households -- those with annual incomes of $348,000 or better -- now control 34.3% of the nation's net worth, while the bottom 40% of households dispose of just 0.2% of America's wealth.
The only thing I would add to this is that this rising disparity of income and wealth is not just a moral issue of economic fairness, it also fundamentally impacts the substantive nature of political equality, given that money buys political access and power. As such, the growing disparity in wealth fundamentally undermines democratic principles of political equality, and threaten to undermine the political integrity of the Republic as such.

Monday, July 21, 2008

"The future isn't what it used to be"

That famous quote is often misattributed to Yogi Berra, but in fact comes from the French poet Paul Valery, who was describing the sentiment among European intellectuals, in the 1920s, who looked out over the physically and morally devastated landscape of post-WWI Europe and encountered nothing but pessimism, of which Oswald Spengler's morbid ruminations were to become the most renowned.

Joel Garreau has an interesting piece in today's Washington Post about the decline of Americans' willingness to think hard about the future. He proposes that the reason for this decline is that the pace of technological change is so dizzying that people feel overwhelmed. He quotes Danny Hillis as saying, "We are future overwhelmed. I don't think people try to imagine the year 2050 the way we imagined 2001 in 1960. Because they can't imagine it. Because technology is happening so fast, we can't extrapolate."

The article is worth reading, but I wonder about the thesis. It seems to me, rather, that Americans' optimism/pessimism about the future (and about their ability to prognosticate the future) is a tightly correlated dependent variable of how Americans feel about the current state of domestic affairs in the United States. Thus, for most of the post-Depression era, Americans have been optimistic about both the content of the future and about our ability to predict things about it. The two exceptional periods have been "the long 1970s" (1968-1983) and the current post-9/11 era. During both of these latter periods, the dire state of affairs at home produced a (melodramatically, dare I say) generalized pessimism about the future as a whole.

What remains constant in both the optimistic and pessimistic phases, however, is Americans' willingness to extrapolate wildly and globally from our own current mood.

The L word

As in: "landslide." Clive Crooks details a simple equation for predicting the outcome of U.S. Presidential races. The bottom line is that Obama is looking at as favorable a set of conditions as has any Presidential candidate since Ronald Reagan faced Jimmy Carter in 1980. And we know how that turned out.

Wednesday, July 16, 2008

Now THAT's a rant!

A great rant on the current financial imbroglio. Money:
There is a choice to be made: Either we regulate the Banks, or leave it to the vagaries of the free markets to punish those who trade with, or place their assets in the wrong institutions. But for God's sake, do not give us the worst of both worlds -- do not allow banks the freedom to make horrific but preventable mistakes (i.e., only lending money to those who can pay it back), but then expect the taxpayers to foot the trillion dollar bill.

That's not capitalism, its not socialism, its not regulation, and its sure as hell isn't what free markets are. Our language is insufficient to describe this hodge-podge system, other than to call it a random patchwork of quasi-capitalism, quadrennial-socialism, and politics as usual. Ideological idiocy is the only phrase I can muster that has any resonance with the daily insanity.
Or, to quote PJ O'Rourke, with respect to the S&L bailout (a similar financial crisis stemming from the last time the GOP was allowed to manage the economy): "What the fuck? What the fucking fuck?!"

New Nicknames

I've been thinking that we ought to commemorate the leading lights of the Bush regime with nacknames based on their best-known phrases. For example:
Feel free to make your own suggestions in the comments.

Socialism for the rich -- better known as "looting"

Four months ago I expressed surprise that the bailout of Wall Street bankers was not getting the attention it deserved, and described the Bear Stearns bailout as GOP-style socialism. Well, it seems that finally the GOP itself is coming around to that realization, and some people in the party don't like it. Here's Jim Bunning (R-KY), delivering a nasty slider:
[T]he administration is absolutely wrong in bailing out Bear Stearns and/or Freddie and Fannie. And the Secretary of the Treasury and the complicity of the Fed Chairman [Ben Bernanke] to these two things – you’re absolutely right, we have socialism in the Republican Party and this administration.... [W]hen I picked up my newspaper yesterday, I thought I woke up in France. But no, it turned out it was socialism here in the United States of America and very well, going well. The Treasury secretary is now asking for a blank check to buy as much Fannie and Freddie debt or equity as he wants. The Fed purchase of Bear Stearns assets was amateur socialism compared to this.
The comparison to France was not meant as a compliment, I gather.

In the developing world, when the government colludes in this manner to bail out rich businessmen, it's called looting. And that's what we ought to call it here.

Monday, July 14, 2008

Faces of the Day

Treasury Secretary Henry Paulson, left, and Fed Chairman Ben Bernanke at a House hearing on the ongoing financial crisis:

Friday, July 04, 2008

A nervous man

Gallows humor does seem to be the mood of the season....

Thursday, July 03, 2008

Tax policy: the biggest difference between McCain and Obama

Some people think Obama's a radical in disguise. I have my hopes, but I also have my doubts. I doubt he's going to pull us out of Iraq precipitously, or that he's going to change in any fundamental way the way intelligence operations take place, though I do believe he will do his best to avoid further needless foreign entanglements (about which I am less confident vis a vis McCain).

The one area where there is an unequivocal difference between a would-be President Obama versus a would-be President McCain is in their tax policies. The Wall Street Journal has a nice visual depicting how the tax burden would change for different earning sectors, if McCain and Obama were to implement their tax plans exactly as they have proposed them:

Frank summarizes the difference by noting that, "Under Mr. Obama’s plan, the income for the top 1% would decline by an average of 9%. The incomes of the top tenth of 1% would shrink by more than 10%. Under Mr. McCain, incomes for the top 1% would grow by 3%. The top tenth of 1% do best — with more than 4% growth in incomes."

Worth noting also in that column are the rabid claims in the comments section that tax policy should not be about promoting equality, but only about raising necessary revenues. That's all well and good ideological palaver, but the simple fact of the matter is that tax policy has always and everywhere been used for all manner of social purposes.

The deeper and more important question is whether the a democratic state has a compelling interest in trying to foster a relatively equal society. I think it does, and for this simple political reason: In a society in which money buys political power and access, as does ours, great disparities in wealth fundamentally undermine the basic democratic principle of that everyone if a political equal. Equality isn't just narrowly about everyone having one vote, it's more fundamentally about no one in the society having a disproportionate amount of political power.

Great inherited fortunes, in particular, are pernicious to democracy, as they entrench a born class of the politically powerful. This is why it's particularly important, from both a political process and a social justice perspective, that estate taxes be set at a very high level. While I buy the argument that there is some loss of economic productivity if you make the marginal income tax rate too high, especially on the wealthy, I've never seen an iota of credible evidence that economic productivity is hurt by high estate taxes. On the contrary, a high estate tax ensures that every generation is forced to succeed more or less on his or her own merits, and in that sense is likely to encourage aggregate economic productivity, rather than the reverse, since it will put a damper on the trustafarian scene.

In terms of balancing the desire for maximum economic productivity with a desire to avoid anti-democratic wealth disparities, therefore, the right solution is to keep income taxes as flat as possible, while applying a very high estate tax. My own view of the matter is that there should be a fairly high estate tax exemption--say, enough for the family to inherit one nice piece of property--and that thereafter the rate should be close to confiscatory. A simple proposal might be something like this: a $5m exemption, then a 50% rate on the next $10m, and a 90% rate on everything thereafter. If you're worth $15m when you die, your family will keep $10m of it. If you're worth $100m, your family will keep $18.5m. So it's not like anyone's going to the poorhouse. What's more, such a rate would greatly encourage charitable giving, which would also be a good thing.