Thursday, October 23, 2014

Matt's live journal

A stream of thoughts. Like a blog, you know. Remember blogs?

On September 22nd, the Treasury Department announced some new measures to crack down on corporate tax inversions. Inversions have languished for years as an arcane sub-element of the already arcane world of corporate income taxation, but over the past couple of months, they've surged toward the top of the public agenda in the United States. Burger King is buying Canadian coffee and doughnuts chain Tim Horton's, in large part in order to perform an inversion so it can start paying corporate income tax at the lower Canadian rate. President Obama dedicated his July 26 radio address to the need to stop them, Treasury Secretary Jack Lew did an op-ed, and Democrats across the board are stepping up their rhetoric against "corporate deserters" and calling for "economic patriotism."

But what the heck is everyone talking about? And why is this suddenly on the agenda? We have answers.

1) What is a tax inversion?


Walgreens in Meridien, CT (Mike Mozart)

To an extent, a tax inversion is in the eye of the beholder. But the basic idea of a tax inversion is this..Different countries tax corporate profits in different ways and at different rates. So a company whose business is subject to relatively heavy taxation in one country (say, the United States) can buy a smaller company located in a country where its business is taxed at a lower rate (say, Ireland) and then declare the merged entity to be domiciled in the low-tax country for the purposes of taxation. Walgreens, for example, is in the process of buying a Swiss company called Alliance Boots and is considered relabeling itself as a subsidiary of the Swiss company to pay lower Swiss tax rates until forced to abandon the idea after political backlash.

You can think of there as being two levels of tax inversion.

In a modest tax inversion, Company A decides to acquire Company B for some standard set of business reasons. It then turns out to be the case that domiciling the merged entity in Company B's homeland is more advantageous for tax purposes. Companies, like people, normally seek to exploit legal means of reducing their tax burden. So the merged company will probably domicile itself for tax purposes in Company B's country.

In a pure tax inversion, Company A decides to acquire Company B specifically in order to execute a tax inversion. In other words, Company A would be acquiring Company B not so much to obtain its technology or its brand or its supply chain but its tax status.

2) How is this different from a normal cross-border merger?

Currently there is no bright-line legal distinction between a tax inversion and any other kind of international corporate merger. But in a broad qualitative sense, the difference is that in a pure tax inversion almost nothing changes on the ground.

Contrast this with, say, the takeover of Anheuser-Busch (makers of Budweiser) by the Belgian company Inbev in 2008. The United States is obviously a much larger country than Belgium, so the new merged company AB Inbev sells more beer in the USA than in Belgium. But the company is Belgian, not just as a tax matter but in terms of the physical location of its corporate headquarters in Leuven. And in terms of personnel, the CEO of AB Inbev is the guy who was CEO of Inbev before the merger.

A tax inversion would be something like a large American brewery buying a small Belgian one, keeping its old American CEO and Midwestern corporate headquarters, but declaring that it's now a Belgian company.

3) How common are tax inversions?


Since there's no formal definition of a tax inversion, it's difficult to count them exactly. But Goldman Sachs' analysis put together a chart showing their count of inversion volume — scaled to the pretax revenue of the companies involved rather than the total number of companies — showing that it's been rising for the past few years and positively exploded in 2014. Note that the majority of the 2014 bar represents proposed deals that were eventually withdrawn, but that even if we don't count proposed deals, 2014 is still a record year.

The most important inversions of 2014 have been a proposed (but ultimately canceled) effort by Pfizer to acquire Astra-Zeneca, Medtronic's acquisition of Covidien, AbbView's acquisition of Shire, and now perhaps Burger King becoming Canadian.

4) Why are inversions surging now?

There are two main reasons. One is that low interest rates in the United States and Europe are making it cheaper for companies to buy each other than has normally been the case. That's leading to a lot of merger activities of all kinds. Since some tax inversions are side-effects of mergers undertaken for other reasons, anything that boosts merger activity will tend to boost inversions. And anything that makes it cheaper to pull off a merger encourages companies to look for more inversion opportunities.

The other, more important reason is political gridlock. As you can see in the Goldman Sachs' chart in question four, inversion surges have happened in the past. But previous waves of inversions have been halted by new anti-inversion legislation. Not only have those crackdowns halted inversions, but fear of crackdowns tends to halt inversions. Companies are reluctant to push the envelop in ways that are likely to prompt regulatory or legislative backlash. But as inversions began to make a comeback in the Obama years, no crackdown was forthcoming. And it doesn't take a multi-millionaire investment banker to tell you that these days congressional Republicans are in no mood to pass Obama-friendly legislation, especially legislation that would raise taxes. So companies are getting bolder and bolder with their inversion proposals. Now the White House finally is proposing anti-inversion legislation, but its odds of passage look dim for the same basic reason the odds of anything else passing look dim.

5) This is literally the most boring thing ever. Music break?

Listen, many billions of dollars are at stake. It's not that boring.

Here's Eric Clapton and George Harrison playing "The Taxman":

6) What is the Obama administration proposing to do about inversions?



The White House actually wrote an inversion proposal into the budget it released in March, though it only became a substantial focus of presidential messaging this summer. The original proposal would have made inversions more or less impossible, and also would have retroactively penalized inversions completed earlier in the year. But those proposals would have required legislation to pass congress, which of course was very unlikely to happen.

On September 22, Treasury instead released a broad suite of new rules and interpretations of rules that make inversions more difficult. These rules generally would make it much more difficult for an inverting entity to shift funds around varioussubsidiaries for tax purposes, and would also strengthen enforcement of the last round of anti-inversion rules.

7) Is corporate income tax reform the real answer here?

The United States has more or less the highest official corporate income tax rate in the world, but it's so shot full of loopholes that very few companies pay anything close to the official rate. This is widely regarded as a lamentable situation, and there is overwhelming political consensus around the idea that the corporate income tax code should be reformed. The broad idea is that the rate should be brought down, but loopholes should be closed. The resulting system would treat companies more fairly, and also should help US-based firms compete in global markets.

Corporate tax reform keeps not happening, however, for two reasons.

One is that there's big picture ideological disagreement between Republicans and Democrats as to whether the goal of reform should be to raise more tax revenue or less. Everyone agrees that the current structure of the code is bad, but absent consensus about revenue targets it's hard to build a coalition for reform. The other is that while it's easy for everyone to agree on the idea of "closing loopholes," it's very difficult to agree on exactly which loopholes should be closed.

Were broad corporate tax reform to pass, it would likely reduce the incentive for inversions somewhat. On the other hand, depending on exactly which loopholes were closed it might create more incentive for inversions in certain sectors. Either way, inversions themselves are a huge loophole that companies will almost certainly continue to seek to exploit unless they are specifically restrained from doing them.

8) Are high taxes driving companies out of the USA?


(Cord Rodefeld)

If they are, then tax inversions certainly aren't the proof. A tax inversion incurs when a company doesn't actually relocate its management or operations into another country, it just moves on paper to avoid taxes.

Non-corporations generally don't have this option. Income taxes are considerably higher for highly paid individuals living in California than for highly paid individuals living in Florida or Texas. Some rich Californians probably decamp to Florida or Texas for this reason. But most rich Californians stay in California, where they enjoy both California lifestyle amenities and the ability to work in the California-based entertainment and software industries. But suppose California changed its law so that anyone who bought a random house in Texas could declare himself a resident of Texas for tax purposes, regardless of where he actually works or spends his time. In that case, a huge share of rich Californians would buy Texas houses and register as tax Texans.

Characterizing that as people "fleeing California's high taxes" would be very misleading — nobody is actually leaving California.

By the same token, Burger King is not proposing to actually move to Canada. The proposal is simply to reshuffle the paperwork so that a large American burger chain will be considered a subsidiary of a smaller Canadian doughnut one. The business will still be managed in the USA.

9) What are the objections to Obama's plan?

The short version is Obama is proposing higher taxes and Republicans don't like higher taxes.

The longer version raises a few points. One is the idea that trying to address specific individual issues in the corporate tax code outside the context of broader corporate income tax reform would be a mistake. Another is that Utah Senator Orrin Hatch, seemingly speaking for most of his Republican colleagues, objects to the idea of retroactive penalties. A third objection is that penalizing firms who switch tax domicile without moving their headquarters abroad might encourage companies to move their headquarters abroad rather than discouraging them from changing their tax domicile.

Underlying much of this is a broader skepticism in many circles about the whole idea of taxing corporate income. When Mitt Romney somewhat infamously said that "corporations are people" this is what he meant — not the legal concept of corporate personhood — but the idea that a tax on corporate income is ultimately a tax on the people who own the company. Conservatives, supported by some-but-not-all academic economists of diverse political views, generally believe that taxes on investment income and capital accumulation are harmful to long-term economic growth. In this view, even if inversions are egregious loophole-exploitation they are a symptom of a bad tax system rather than of bad behavior.

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Edward Baptist's new book The Half Has Never Been Told: Slavery and the Making of American Capitalism received some no-doubt welcome attention last week as a consequence of a bizarre (and since retracted) Economist review that accused the book of being "advocacy" rather than "history" on the grounds of the author's anti-slaveholder bias.

Baptist's book is rather partisan in the sense that it holds that chattel slavery as practiced in the United States was cruel, that the victims were overwhelmingly black, and that the perpetrators were overwhelming white. It also engages in a number of unorthodox narrative methods that will disquiet some (see Jonathan Wilson's review for a critique). But the point he's making is more interesting than the argument that slavery was morally wrong — he offers the thesis that it was also crucially important not just to the history of black people in America or the society of the South, but to the development of industrial capitalism.

This puts Baptist against a tradition which views slavery as a kind of archaic institution. On this view, slavery was a New World form of feudalism that was doomed by the growing tide of industrialization. Thus capitalist industrialists are cast as heroes in the world-historical drama, and also carries the implication that slavery was a "tragedy," a regrettable outburst of violence that could have been resolved through political means.

Baptist counters this argument in two ways.

First, he shows that the slave economy was as modern as any other aspect of the mid-19th Century. There were, for example, slave-backed mortgages and other sophisticated financial products. So the genre of social history which pits old-timey southern agrarianism against modernizing northern industrialism is simply mistaken — major proprietors on both sides of the Mason-Dixon line participated in the rise of modern financial institutions.

Ta-Nehisi Coates lays out the inescapable math of American racism.

Second, he argues that the slave economy's success was critical to the larger success of what we call the Industrial Revolution. This is commonly portrayed as a question of technology — spinning jenny, mechanical loom, etc. — but developing the modern textile industry also required an enormous amount of fiber as inputs. All that technology would have run into fundamental ecological limits if you'd tried to fuel the factories with British wool. There isn't nearly enough space for all the sheep.

Riding to the rescue was American cotton. In the 70 years between the adoption of the Constitution and the outbreak of the Civil War, US production rose 2,000-fold from 1.2 million pounds to 2.1 billion pounds.

You can chalk that up to a technology-induced increase in demand if you like, but that elides the fact that someone had to grow the cotton and they had to grow it somewhere. Specifically, white Americans conquered a vast new empire (Alabama, Mississippi, Florida, Arkansas, Louisiana, Missouri, and Texas), populated it with millions of slaves forcibly transported from the Atlantic coast, and developed innovative new torture-based management techniques to enhance the productivity of this coerced labor.


(Thomas Piketty)

On the eve of the civil war, property rights in stolen labor were more valuable than all the industrial capital in the United States put together. Per capita wealth among the white population was highest in the most slave-intensive states. And slavery-fueled politicians were eying further expansion of slave agriculture both into the American southwest and into Cuba and other portions of Latin America.

His point is that this system was not an aberration pitted against the rising world of Victorian capitalism. Instead, it was an integral element of the emerging order. Follow the free market thread from the customer to the shop to the factory to the textile supplier and you'd find forced labor on land confiscated violently from its indigenous inhabitants.

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The latest polling shows that there is a good chance that the population of Scotland will vote to secede from the United Kingdom, repeal the 1707 Act of Union, and become an independent state when the matter is put to a referendum on September 18. Of all the questions surrounding this referendum, perhaps none is so vexing as that of currency. Will or should an independent Scotland revert to its 17th Century practice of issuing Scottish Pounds that are separate from England's Pounds Sterling? Should it join the eurozone? Or should it attempt to continue in a currency union with England, Wales, and Northern Ireland even as it becomes sovereign in other aspects?

There are serious pros and cons to each option.

1) Establish a Scottish pound

Scotland Penny

14th Century Scottish penny (Classical Numismatic Group)

In purely economic terms, the most sensible option might well be for independent Scotland to have its own central bank and its own currency that would trade freely on global markets. Other small developed countries (Norway, Iceland, New Zealand, Sweden) do this successfully, and it appeared to work well enough for Denmark and Finland in the past. Small countries are inevitably very exposed to developments in the global economy that are outside their control, and currency flexibility can help cope with that. If new discoveries or global market trends lead to a surge in Scottish oil export revenue, the Scottish pound would become more valuable, naturally "spreading the wealth around" to Scotland's schoolteachers and pensioners and cashiers and everyone else with a salary denominated in Scottish pounds.

Conversely, if Scotland's oil exports hit a bad run, the falling pound would turn Scotland into a cheap tourist destination and attract spending flows from summer holidayers south of the border (it would also boost whisky exports). This is obviously not as happy an outcome as one in which fossil fuel exports surge, but it's better than an outcome in which problems for the oil industry produce mass unemployment.

The downside of creating a new currency is that it would have no track record, and might be catastrophically mismanaged and destroy the value of everyone's savings. Independence campaigners appear to feel that these fears are widespread, and have not made the creation of a new currency part of their proposal for Scottish independence.

2) Join the euro

euro notes

Euro coins and notes (Avij)

The big advantage of Scotland joining the eurozone is that the Scottish Government has firmly declared its intention to apply for membership in the European Union. Indeed, the notion that EU membership eliminates many of the potential disadvantages of being a small country is integral to the case for Scottish independence. And current EU rules state that new EU member states must join the Eurozone. The United Kingdom has negotiated an exemption from this rule for itself, and the EU has long tolerated de facto non-compliance from Sweden (Denmark has not formally joined the eurozone, but does peg the value of its currency to the euro and thus effectively latched itself to the project) but since Scotland would be a new member with little leverage, it's far from clear that they could do the same.

That's a problem, as the eurozone has been a huge economic calamity. The example of nearby Ireland should be a cautionary tale here. Before the financial crisis struck, the Irish and UK unemployment rates were similar. But since the crisis, the UK has managed to use flexible monetary policy to keep unemployment in check despite a poor growth record while Irish unemployment has soared far above the UK level. For the Irish, eurozone membership is a potent symbol of their hard-won independence from London — but in concrete economic terms it's a costly one, and could prove the same for Scotland. Currently the euro is very unpopular in the United Kingdom, and consequently the independence movement has not campaigned on eurozone membership. Instead, they are arguing that creating a new country won't require Scottish people to start using new money.

3) Keep the pound sterling

Pound Sterling

Bank of England notes (Matthew Yglesias)

Scotland's First Minister Alex Salmond and his fellow pro-independence campaigners have an easy answer to the currency question — Scotland will keep using the pound sterling. The UK's main political parties have all tried to argue that they will somehow stop this from happening, but it's difficult to see how they could. Panama, Ecuador, and El Salvador have unilaterally adopted the US dollar as their currency. If an independent Scotland wishes to collect taxes and pay civil servants and government benefits in pounds sterling, then nobody is realistically going to stop them.

Yet while Scottish voters appear to find the idea of sterling continuity reassuring, many foreign observers do not. As Paul Krugman writes, this arrangement would have the same substantive problems as the eurozone. It might even be worse, as the eurozone is at least working (slowly, painfully) on building institutions around banking regulations and fiscal policy that could make it work better. A rump United Kingdom couldn't stop Scotland from using sterling, but it would have no particular reason to make institutional changes that would make a sterling union more workable for the Scots. On the contrary, if independent Scotland's lack of a credible central bank destroyed Edinburgh's viability as a financial services hub, that would arguably be in London's interest.

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This is a photograph of an AN-27 Russian military transport aircraft. Which wouldn't be so extraordinary, except that the air force of Finland says they took the photo while the Russian plane was in Finnish airspace. Even that wouldn't necessarily be so extraordinary, except the Finns say it was "the third event of its kind within a one-week period." And even that you might write off as just one of these things, except that Russia also invaded Ukraine this week so it's kind of hard to see it all as a big coincidence.

It's difficult to guess why exactly Russia is doing this, but it's making Finland nervous and elevating a longstanding disagreement in Finnish politics about the country's relationship to Russia. Finland, you see, is an unusual case — it shares a long border with Russia and is part of the European Union but not NATO, and while many prominent Finnish politicians including the current prime minister want it to join NATO, that's a controversial view and it doesn't have majority support in the parliament.

A tangled history

Russo-Finnish history is complicated by the fact that, for many years, Finland was part of the Russian Empire. When the Russian Empire collapsed in the wake of World War I and the Bolshevik Revolution, Finland emerged as an independent country. Then, in late-1939, the Soviet Union attacked Finland, seeking to readjust the border.

Finland fought surprisingly effectively during the Winter War, inflicting heavy losses on Soviet forces, but ultimately had to make concessions in order to sue for peace. Then in 1941, Nazi Germany attacked the USSR. With the Soviets distracted, Finland made a strategic blunder and chose to attack the Soviets, hoping to recapture its lost territory. This put democratic Finland into a problematic de facto alliance with Nazi Germany, which of course lost the war.

That left Finland as a bit of an orphan of Cold War politics. The country was democratic, capitalist, and armed to the teeth against possible Soviet aggression, but was not a part of the anti-Soviet alliance system. On the contrary, Finnish foreign policy was oriented toward appeasing the USSR in as many ways as possible — all while preserving the country's independence. After the USSR fell in 1991, Finland moved clearly into the Western sphere by joining the European Union and the Eurozone. But it never made it into NATO.

The NATO debate

Finland's prime minister, Alexander Stubb, favors NATO membership. So does Sauli Niinistö, the country's president. Both Stubb and Niinistö are members of the National Coalition Party. The NCP is currently the main right-of-center party in Finland and the largest party in parliament. It is also the main party that opposed Finland's conciliatory attitude toward the Soviet Union during the Cold War days. Given that the NCP is running the show and its leaders favor NATO membership, you might think NATO membership is in the cards.

But Finland, like many European countries, has seen a surge in electoral support for somewhat fringy euroskeptical parties in recent elections. Consequently, the current coalition government is a broad tent that incorporates Social Democrats, Christian Democrats, and a party representing the country's Swedish-speaking minority. Social Democrats firmly oppose NATO membership, and the terms of the coalition agreement bar Stubb from seeking it. Instead, Finland (and its neighbor Sweden) are both signing deals to enhance cooperation with NATO without joining the alliance outright.

Pros and cons

The upside to NATO membership — security against Russian threats — might seem obvious. But opponents within Finland counter that joining an anti-Russian military alliance would anger Moscow without fundamentally altering the balance of power. Finland has proven in the past that it can deter formal invasion.

Finnish trade

(MIT Atlas of Economic Complexity)

At the same time, no military alliance is going to alter Finland's extreme dependence on economic ties to Russia. About 9 percent of Finnish exports head for Russian markets, and over 15 percent of Finnish imports — largely key production inputs such as oil — come from Russia. In this view, Finnish foreign policy needs to emphasize good relations with Russia regardless of the military situation, which would make NATO membership counterproductive.

Finland is scheduled to hold a parliamentary election next spring. In theory, that could lead to the formation of a new coalition that might open the door to NATO membership. In practice, with neither the leading opposition party nor the NCP's main coalition partner supporting NATO, it is difficult to envision a majority for NATO membership being assembled. Unless, that is, aggressive Russian behavior prompts a massive change in Finnish opinion — a small but telling example of how Putin's reckless conduct can backfire against Russia's interests.

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A team working at the new Cornell Tech campus in New York City has put together an impressive project built on a massive dataset of yellow cab pickups around the city. One output of the project is this somewhat mesmerizing GIF animating all the pickups:

Taxi GIF


These are not amazingly counterintuitive findings, though the prominence of the Lower East Side around 2-3 AM is striking, but they are cool to look at. More practical applications of the project include tools for riders and drivers looking to optimize their taxi strategy.

A new spotlight on statistics from the Audrey Watson at the Bureau of Labor Statistics underscores that if you don't have elite credentials and you're considering a career, you might want to take a good hard look at nursing.

These are the most common jobs in America:

Common Jobs

(Bureau of Labor Statistics)

And here's what they pay:

common pay

(Bureau of Labor Statistics)

Although registered nurses are the largest occupation with above-average earnings, the larger health care sector is full of opportunities. The "health care practitioners and technical" occupational category contains a total of 7.8 million workers at an average wage of $74,740 — well above the national average.

And one great virtue of health care occupations is that there is demand for nurses and dentists and such basically everywhere that people live. You don't need to be part of a handful of specific geographical clusters to take advantage of your skills the way that you do for many other relatively high paid jobs.

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Robert Gebelhoff and David Leonhardt have a fascinating piece in the Upshot about what they call the growing Blue State Diaspora — the large net flow of Americans out of blue states and into red ones. The two key facts are that between 2000 and 2012, the blue-born population living in red states grew over 20 percent to 11.5 million while the red-born population living in blue states shrank to 7.3 million from 8.4 million.

Gebelhoff and Leonhardt mostly go on to discuss the implications of these flows for partisan politics, but I think what's most important is the causes. Liberals, in particular, might want to do some reflecting about the fact that Americans are voting with their feet against blue states.

All about the housing

Conservatives, of course, tend to think they know the answer — Americans are fleeing the high taxes and malgovernment of blue America. The city of Detroit often comes up in this context, and it is certainly true that malgovernment (among other things) has made that city and several others into an increasingly undesirable place to live.

On the other hand, if Detroit were the typical blue American city then houses in the Mission and Park Slope would be cheaper than houses in the suburbs of Atlanta and Dallas. The truth is that while there are pockets of economic pain all around the country, in general Blue America seems like a pretty nice place where wages, incomes, health outcomes, and education levels are generally higher.

So why does everyone leave? Well precisely because houses in Blue America generally aren't cheap like Detroit. They're more often expensive like San Francisco. As Dylan Matthews wrote last week, coastal states are generally more expensive.


Alan Cole, Lyman Stone, and Richard Borean, Tax Foundation

And as the Squarely Rooted blog has shown, these disparities are all about housing.

Whatever else Blue America has going for it, it's done a terrible job of generating enough housing supply to accommodate all the people who might like to live there. So in addition to the traditional southward migration of retirees you now see a substantial net population flow away from richer areas in the Northeast and the California coast to the relatively low-wage economies of Texas, North Carolina, and Georgia. For many working- and middle-class Americans, the lower cost of living makes a decisive difference.

Zoned out

This comes about primarily because coastal areas have adopted excessively strict zoning rules. There is not enough semi-dense mid-rise construction in the affluent suburbs of San Francisco, Seattle, Boston, New York, Philadelphia, Washington DC, etc. Secondarily, there are too many restrictions on the creation of new big apartment towers in the very most expensive parts of coastal cities.

Incidentally, the widespread nature of the high coastal housing cost problem should give pause to the people who insist that it has nothing to do with zoning and is all about absentee foreign billionaires.

Most foreign buyers are Canadians looking for vacation homes someplace sunny. And while the Russian billionaire seeking a Manhattan pied-à-terre is a real phenomenon, it's a stretch to imagine that foreign playboys are the ones bidding up the price of houses in Bergen County or Bethesda. The fact that overregulation of the land use sector is driving people out of blue states (and costing the national economy billions in the process) doesn't mean that red states' aversion to regulation is right across the board. But it is a real — and really big — failure of the political economy of American liberalism, and it's something liberals ought to take more seriously.

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The internet loves a good map (see some of our favorite collections), and maps of the different US states are particularly appealing from a content standpoint. Americans like reading about America, and with the exception of a handful of tiny northeastern states they have a kind of pleasing reader-friendly size and shape. But of course for maps to be interesting, they need to show difference. And that means that at times the quest to devise appealing maps obscures one of the fundamental facts of American life — for a great big country, we actually don't have that much regional variation.

Slate's Ben Blatt laid out how this works pretty clearly in a post about a map of his that went viral. What he realized is that while mapping the most common language in every state would be boring (English) and so would the second most common language (Spanish) but if you went for the most common language other than English or Spanish you'd get something fun.


(Ben Blatt/Slate)

This map is super-fun. But here's the genuinely important fact about language in America: every single state has the same most common language (not true of Canada or Switzerland or even Italy which has a German-speaking province) and immigration from Latin America is so widespread that Spanish is number two almost everywhere. Not to be holier-than-thou about it, Vox's own Dylan Matthews did a similar map charting not the most common ethnic group in each state, but the number two ethnicity. That map is much more fun to scan than a map showing how predominant white people are. But the White People Everywhere map arguably would tell you more about America.

I myself did a map earlier this month about the location quotient of bartenders in every state. Location quotient data is a great source of internet maps, because the Bureau of Labor Statistics has a tool that lets any old schlub generate the maps.

It's also cool because by definition what location quotient does is tell you how states are different from one another. Bartending is a rare job everywhere, but my map shows it's relatively common in Nevada and relatively rare in Arkansas.

I got the idea of using location quotients from Andy Kiersz at Business Insider who used them to make this awesome map of the "the most popular job in every state":


(Andy Kiersz/Business Insider)

Location quotients was an inspired idea here because, as he wrote, the actual most common job in each state map "would be very boring, since the most common job in 42 states is 'retail salesperson,' the most common job in the country." By contrast, there's something delightful about knowing that upholsterers are disproportionately common in Mississippi.

Boring maps are bad for Facebook shares, but if you want to understand the economic geography of the United States it's worth knowing that not only is the economy similar from place to place, it's increasingly similar. An important paper from Greg Kaplan and Sam Schulhofer-Wohl argues that the growing homogeneity of jobs in the US explains a big share of the decline in people's propensity to move from state to state. Sometimes these efforts to generate exaggerated differences can become incredibly sophisticated. David Leonhardt, for example, recently teamed up with Google's Hal Varian to explore the differential web-searching behavior of people in thriving and struggling parts of the United States.

"In the hardest places to live in the United States," he wrote, "people spend a lot of time thinking about diets and religion. In the easiest places to live, people spend a lot of thinking about cameras."

It's an amazing set of factoids. Yet here, again, we find lurking several grafs into the piece the disclaimer that "these aren't the most common searches in our list of hardest places" because "searches on some topics, like Oprah Winfrey or the Super Bowl, are popular almost everywhere."

To generate the fascinating discussion, you need to see which terms are disproportionately searched for in different counties. If you simply look at raw searches, you end up with the banal reality that Oprah and the NFL are both very popular. But this is the real story of America — it's a country full of English-speaking people with retail jobs, looking to chill out and read about Oprah and/or football who probably aren't going to move someplace else in search of a better life because they figure it's just more Anglophone Oprah fans working retail jobs wherever they might go.

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Most residents of the District of Columbia think of the Silver Line Metro project as being about bringing rail service to Dulles airport — something that's not going to happen for years to come. But in reality, airport connections are generally overrated as a mass transit priority. The most exciting thing about the Silver Line is something it's already accomplished — connecting the Tysons Corner business cluster to transit.

Tysons Corner is the original American "edge city." A kind of central business district without a downtown. An agglomeration of office towers and two huge shopping malls built around the convergence of several highways on the periphery of the Washington, DC metropolitan area. Even though it's far from the center of the region, Tysons Corner has become the #2 concentration of employment.

And the exciting idea that officials in Fairfax County had regarding the Silver Line was that they didn't just want to add park-and-ride Metro stations to an exurban sprawl are. They are trying to use the stations as levers to undertake a comprehensive urban retrofitting of the area — complete with new zoning for denser, less car-dependent development — in which an already built-up area will get even denser and become a brand new city.

Most observers' early impressions were that Tysons still has a long way to go as a haven of walkable urbanism. And based on my visit in late August, that's absolutely correct. Head out to the street exit from the Metro station and here's the view:

Tyson's street

Outside the Tysons Corner Metro exit (Matthew Yglesias)

There's a branch of Firehook Bakery only about a block and a half from the Metro, but it's a long block and crossing the street is perilous — you're talking six lane roads full of drivers who don't think to look for pedestrians before making right turns on red. I nearly got run down twice:

Tyson's street

Crossing the street in Tysons Corner (Matthew Yglesias)

The most pedestrian-friendly environment you'll find in the area is a skybridge connecting the Metro station to one of the malls:

Tyson's Corner skybridge

Tysons Corner skybridge (Matthew Yglesias)

And of course the two malls themselves, once you get inside, are great places to walk. Here's where Tysons gets interesting. In the United States, urban places are almost always old places — places where the built environment predates the automobile and the streetscape is oriented old mass transit lines, often ones that no longer exist. And when people think of new urban places, they often have in mind the idea of nostalgically recreating those old kind of places. But the parts of Tysons that work as a city aren't throwbacks at all. They more closely resemble an urban form you might see in Asia where urban density and newness aren't necessarily seen as enemies.

Hong Kong Island, for example, is a warren of shopping malls and towers and walkways over wide, divided roads.

pedestrian bridge

Pedestrian bridge over Queensway, Hong Kong (Matthew Yglesias)

If you cross the skybridge from the Tysons Corner Metro into the Tyson's I mall, you can then emerge from the mall into a little island of urbanism. They call it "The Plaza" and it's kind of like a public park, except it's privately owned and there's a mall cop watching out for miscreants.

The Plaza

The Plaza at Tysons Corner (Matthew Yglesias)

Right now, the mall is the only entry point into the Plaza. But there's also a hotel right there that's scheduled to open soon and that will have its own separate connection to the Metro skybridge. Also under construction is an apartment tower that will be opening up a bit later and presumably have its own connections to the growing skybridge network. And there's much more development in the pipeline:

Tyson's plan

Tyson's Corner development pipeline (Matthew Yglesias)

Whether the Tysons redevelopment ultimately succeeds or not will depend on those new projects and it may take a decade or two to fully assess. But it's already clear that if the urban retrofit does succeed, it's not going to generate the kind of low-rise boutique retro urbanism that's currently in style in gentrifying neighborhoods of many older American cities.

An urban Tysons, if it happens, will be not just a new city sitting at the intersection of the Beltway and the Metro. It will be a new kind of city — new to the United States, at least — that incorporates urbanism as a necessary workaround to expensive land and traffic congestion, rather than incorporating cars as a concession to modern technology.

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Something that I've had the opportunity to reflect on since Michael Brown was shot and killed is the time that I had an "encounter" with the police when I was eighteen and getting ready to head off to college. It seems relevant in light of John Eligon's revelation in the New York Times that Brown "was no angel":

Michael Brown, 18, due to be buried on Monday, was no angel, with public records and interviews with friends and family revealing both problems and promise in his young life. Shortly before his encounter with Officer Wilson, the police say he was caught on a security camera stealing a box of cigars, pushing the clerk of a convenience store into a display case. He lived in a community that had rough patches, and he dabbled in drugs and alcohol. He had taken to rapping in recent months, producing lyrics that were by turns contemplative and vulgar. He got into at least one scuffle with a neighbor.

When I was Brown's age I also dabbled in drugs and alcohol. Even used Swisher Sweets to roll blunts from time to time. For that matter, I also did some shoplifting. Got caught one time by a security guard at the K-Mart on Astor Place who confiscated the stuff I'd stolen and yelled at me a bunch. So I suppose that, when an undercover officer came upon me and two friends smoking cigarettes and drinking beer on a park bench that night, he could have shot us dead and then the Times could have reported that we were no angels. We weren't.

But he didn't shoot us. He wrote us citations for drinking alcohol in a New York City park. Some days later we showed up at some kind of express court full of people charged with things like street urination, running down the up escalator at Penn Station, and selling pretzels without a proper street vending license. When our turn came, we huddled for about five minutes with a DA and what I guess was a public defender who told us that we could plea to the lesser charge of having an open container on the sidewalk and pay a small fine. We agreed, paid the fine, and went on with our lives. After college, one friend joined the Marines and the other joined a PhD program. Today they're both in financial services. But fifteen years ago we were no angels.

We were teenagers. But since the officer who apprehended us managed to handle the situation without killing us, the NYPD and the New York Times never felt the need to air our dirty laundry in public. And, indeed, though I know plenty of white kids from fancy prep schools who did illegal stuff in high school — who even got caught doing it by the police — I don't think I've ever heard a story where someone like me was killed and then proclaimed to the world to have been no angel. Angels, it turns out, are pretty rare. But if you look the right way, you don't need to be one to survive into adulthood.

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Paul Ryan (R-Wisconsin) has been an immigration reform supporter in the past, but he's joined the GOP push again the Obama administration's Deferred Action for Childhood Arrivals policy. Watch what happens when a few of the immigration who DACA is protecting from deportation ask the congressman to explain to them why or whether he thinks they should be kicked out of the country:

Even Representative Steve King (R-Iowa) has had trouble telling DREAMers to their face that they should be deported. Ryan, by contrast, has been an immigration reform supporter in the past, though he's now gotten on board with the party line.

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Will automation take your job away? No, argues economist David Autor in a new paper presented at the Federal Reserve conference in Jackson Hole, Wyoming on Friday. Instead, it'll just push you into a menial low-wage job.

That, at least, has been the recent past of technology's impact on the labor market, Autor suggests. We've seen what he calls "job polarization" where automation has increased the demand for highly skilled managers and creative types, plus the demand for low-paid food prep workers and such. He offers these two charts as evidence:

wage polarization

(David Autor)

This chart shows that across a whole bunch of different European countries, we've seen high-wage jobs grow and low-wage jobs grow while middle-wage jobs shrink. Here's another chart:


(David Autor)

This one shows that across various recent time periods, we've seen job growth at the low end. At times we've also seen job growth at the high end. But at all times, the middle tends to be crowded out.

Autor says this more or less shows the importance of improving education. Someone who might once have been qualified for a pretty good secretarial job is nowadays only going to be qualified for a job at Chipotle, since modern technology reduces the need for secretaries. To save her from the dismal future of a burrito stomping on a human face forever, she needs to be trained up to the level where she can get a job as an app developer or devising burrito marketing campaigns.

The other view, which Autor doesn't really mention, is that perhaps a strong labor movement could turn burrito-rolling into a highly paid job. The most likely answer, I think, is that to the extent you try to transform low-wage work into middle-wage work you simply encourage those newly middle class jobs to be automated.

The way Autor puts it is that "if the nineteenth century U.S. labor force were suddenly restored in the twentieth century, a large fraction of workers would be surely unemployable due to their exceedingly low levels of education — averaging approximately nine years of completed schooling."

It's not that American workers from 1864 were inherently useless or unemployable. It's just that many of them didn't have the skills to do anything that someone would want to pay someone to do in 2014 — the vast staple commodity crop fields of the American midwest only need so many workers in a world of highly efficient agricultural machinery.

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"Blacks represent 13% of the population but commit 50% of the murders; 90% of black victims are murdered by other blacks," writes Time's Joe Klein, calling for "provocative" thinking on race in America. "The facts suggest that history is not enough to explain this social disaster."

Yet the disturbing truth, according to the FBI's most recent homicide statistics, is that the United States is in the wake of an epidemic of white-on-white crime. Back in 2011, the most recent year for which data is available, a staggering 83 percent of white murder victims were killed by fellow Caucasians.

This is not to say that white people are inherently prone to violence. Most whites, obviously, manage to get through life without murdering anyone. And there are many countries full of white people — Norway, Iceland, France, Denmark, New Zealand, and the United Kingdom — where white people murder each other at a much lower rate than you see here in the United States. On the other hand, although people often see criminal behavior as a symptom of poverty, the quantity of murder committed by white people specifically in the United States casts some doubt on this. Per capita GDP is considerably higher here than in France — and the white population in America is considerably richer than the national average — and yet we have more white murderers.

To understand the level of cultural pathology at work here, it's important to understand that 36 percent of those killed by whites are women — a far higher share than you see with black murderers.

Clearly, the social disaster of white violence has complicated roots. But the beginning of an answer is to admit that we have a problem. It's striking that President Obama, who's frequently found time to comment on the height of black men's waistlines, seems oblivious to this torrent of white killing. To be fair to the White House, however, it would be uniquely difficult for Obama to address this delicate issue. The real tragedy is that none of Obama's 43 white predecessors have addressed it either. Indeed, looking back on America's political iconography, there are disturbing trends toward the glorification of white violence. Peer inside the US Capitol building, and you'll find a monument to Confederate President Jefferson Davis — the leader of an insurgency that caused an unprecedented quantity of violent white deaths.

But whatever the causes or past mistakes, the important thing is to confront this important subject in the future. As we look ahead to a 2016 matchup that should give us two Euro-American major party nominees for the first time in a decade, perhaps America can finally get the debate about white violence it deserves.

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I previously profiled the efforts of Senator Mike Lee (R-Utah) and some high-profile intellectual allies to change the goals of conservative tax policy. For decades, the key GOP idea on taxes has been the supply-side notion that we need to slash marginal tax rates on the highest-income individuals, thus unleashing a torrent of economic growth that makes everyone better off. Lee's idea is to instead simply cut taxes on middle-class families, even if that means the rich have to pay more.

This is a crucially important fight that, were Lee to win it, would alter the political and ideological landscape in key ways.

But (via Jonathan Chait) a recent Paul Ryan interview with the Weekly Standard's John McCormack shows that the congressional GOP's intellectual leader is still firmly on Team Supply Side:

"I'm a classic growth conservative. I believe that the best way to help families, the best way to help the economy is to reduce rates across the board," Ryan said when asked about Utah senator Mike Lee's plan to increase the child tax credit and create two income tax brackets of 15 percent and 35 percent. "Growth occurs on the margin, which is a wonky way of saying, if you want faster economic growth, more upward mobility, and faster job creation, lower tax rates across the board is the key-it's the secret sauce.

"Some conservatives have argued that reducing the top rate is less urgent now than it was during the Reagan administration, when the top rate was cut from 70 percent to 50 percent and then cut again from 50 percent to 28 percent. But Ryan says that cutting the top rate is "even more pressing now" than it was back then "because the American economy was so dominant in the global economy and capital was not nearly as mobile as it is today."

The idea that globalization, which tends to increase the overall size of the economy while also increasing inequality, makes tax cuts for the rich even more urgent strikes me as a little bit hard to defend intellectually. But it's good to see conservative journalists asking these questions of conservative politicians, since even though it's off the headlines this is probably the most important policy debate happening today.

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On Monday, Alex Seitz-Wald wrote an article for MSNBC with the thesis that pressure is building on Hillary Clinton to address the situation in Ferguson. The truth, however, is that while Clinton is certainly taking some criticism for ducking the issue she's not, objectively speaking, under any real pressure. Her position as the presumptive 2016 Democratic Party nominee is simply so strong that there is no incentive for her to wade into politically treacherous waters and every reason for her to try instead to lay low.

And that's the problem.

It's clear that Barack Obama, for a variety of fairly sound reasons, is not going to take this opportunity to address the question of systematic racial injustice in the American criminal justice system. But somebody ought to. And the next Democratic Party presidential nominee would be a fairly logical choice.

It's no secret that the demographics of the country are changing. The youngest cohort of voters is much less white than the national average — and even its white members are more liberal on economic issues. The normal course of things would be for those demographic trends to push the party to tackle new issues that were too hot for Bill Clinton or Barack Obama to touch. That's especially true because the demographics of the Democratic Party are changing along with the rest of the country. In 2012, almost 90 percent of Mitt Romney's votes came from non-Hispanic whites while racial and ethnic minorities provided about 45 percent of Obama's. And a primary campaign, the moment when activists and other policy-demanders have the most leverage over politicians, would be the ideal time for it to happen.

But Democrats aren't likely to get much of a primary campaign this cycle. And that's a shame. Not because there's anything wrong with Hillary, but because it's a lost opportunity to put new issues on the table. So far it's been left to idiosyncratic Republican Rand Paul to make the boldest statement of any prominent national politician. And good for him. But the Democratic Party, with its more multiracial coalition, is going to continue to be the political vehicle for the interests of people of color for years to come. The problem is the lack of a contested primary is denying the country the circumstances in which high-profile Democrats are forced to address the issues that Ferguson has placed squarely on the national agenda.

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America's most bartended state is … Montana, followed by Nevada, according to data from the Bureau of Labor Statistics' Occupational Employment Statistics database.

Here's a map showing the prevalence of bartending as a job in every state:

Bartender Location quotient

Source: Bureau of Labor Statistics

Of course if you do a raw count, the largest number of bartenders is in California, which has the largest number of people. But this map looks at location quotients, which measures the prevalence of a given occupation relative to the national average. It's no surprise that Utah, with its large Mormon population, doesn't have a lot of bartenders, but its 0.52 location quotient isn't the lowest in the country. That honor belongs to Arkansas, a state that's unusually bartender-averse even for the generally bartender-hostile South.

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According to a report released Friday by the Ferguson Police Department, Michael Brownrobbed a nearby convenience store just minutes before he was shot and killed by officer Darren Wilson.

The report notes that Wilson shot and killed Brown in the course of trying to apprehend him on suspicion of that robbery.

Also named in the police report is Dorian Johnson, said to have been Brown's accomplice in the robbery. Johnson is also a witness to Brown's shooting and his account of events has been one of the primary pieces of evidence for police misconduct. In Johnson's version of events, needless to say, he and Brown were not perpetrators of a crime.

All of which gives rise to a mystery — why haven't the police arrested Dorian Johnson?

Regardless of whether the use of deadly force was justified as a means of apprehending a robbery suspect, on the police's account of events one of the suspects — Johnson — was very much not dead. Why not arrest him? He isn't missing. He's been doing interviews with TV stations.

Watch this video for background and context on the situation in Ferguson:

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Could the US Postal Service improve its financial position by becoming a bank? And could it change the financial sector for the better in the process?

This idea, known as postal banking, has become increasingly mainstream over the course of 2014. And while there's no indication such a change is imminent, it could be achieved without congressional action or any new tax revenue — exactly the sort of idea activists are looking for in a time of gridlock. But why are people interested in this idea? Would it really work? Is it really legal?

We have you covered.

1) What is postal banking?


(Justin Sullivan/Getty)

Broadly speaking, postal banking is government provision of banking services — typically relatively small-scale checking and savings accounts along with associated payment services. Historically and internationally, government-run banks have typically been paired with government-run mail services — hence postal banking.

A postal service requires a nationwide series of retail establishments, which is exactly the physical infrastructure that a basic banking operation requires. Postal services also dabble, via the sale of stamps, in a kind of quasi-financial business as part of their day-to-day business. Meanwhile, governments have often undertaken various policy initiatives to encourage thrift among their citizens and ensure a stable and credible payment system. Consequently, it's been common at various times and places for governments to permit or direct their postal services to get into the banking industry.

The US Postal Service (USPS) does not currently offer financial services, though it has in the past, and some people feel that it should again in the near future.

2) Why are people talking about postal banking now?

The current upsurge of interest in the subject of postal banking results from three separate policy conversations. One is the continued debate, post-2008, about the financial services industry and its role in society. Private sector banks do not welcome competition from a government agency, but for the exact same reason people who are inclined to take a dim view of the banking industry tend to be enthusiastic about it. Second, the private sector banking industry as currently constituted leaves millions of Americans "unbanked," which causes a number of problems in a society where possession of a bank account is necessary to participate in many mainstream economic activities.

The other issue motivating postal banking advocates is the poor financial state of the USPS.

The grand bargain on which the Postal Service is founded is the idea that holding a monopoly on the right to deliver daily mail should be very lucrative. That lucrative monopoly is supposed to allow the USPS to provide some loss-making services, such as extending daily mail coverage to low-income rural areas and maintaining a truly comprehensive network of post offices. A lucrative monopoly should also allow the Postal Service to compensate its workforce relatively generously. Yet given the rise of digital communications, the USPS monopoly is becoming less lucrative over time — forcing the agency to seek a mixture of cost-cutting measures and new lines of business. Financial services could generate revenue to help USPS sustain its mission.

These different threads of interest became more intense after the January 2014 release of a white paper from the USPS Inspector General making the case for postal banking, and arguing that many financial services could be introduced without new congressional action. Senator Elizabeth Warren (D-MA) has taken up the cause of postal banking, and there's polling that indicates it's popular.

3) What forms of banking did the Inspector General propose?

Screen_shot_2014-08-11_at_10.34.07_am (USPSOIG)

The IG report suggested three different levels of involvement with financial services that the Postal Service should consider.

Most basically, USPS could offer a low-fee no-interest checking account featuring a debit card. Checks could be deposited at post offices or via a smartphone app, and the postal account would allow you to pay bills or set up direct deposit. A more elaborate proposal is that "the Postal Service could partner with a bank to offer an interest-bearing savings feature on the Postal Card." A savings account, in other words.

Last, the IG suggested that the Postal Bank might make small-scale personal loans — in effect competing with payday loan operators and pawn shops.

The report estimates that $89 billion a year is spent by consumers on non-bank financial services — check cashing fees, prepaid debit card fees, payday loans, etc. — and that it's plausible to imagine the USPS capturing perhaps 10 percent of that market.

4) Which countries currently have postal banking?

2014-07-24_zentrale_deutsche_postbank_ag__friedrich-ebert-allee_114-126__bonn-gronau_img_2178 Deutsche Postbank headquarters, Bonn (Eckard Henkel)

Postal banking is reasonably common globally, though looks can be deceiving here. Germany's Deutsche Postbank, for example, though originally a postal bank is currently a private retail bank. Similarly, in Japan the postal service runs a major bank but the entire operation is supposed to be privatized by 2017. But France, Switzerland, Israel, Korea, India, New Zealand, and others continue to run postal banks.

The United States, once upon a time, had a postal bank of its own called the United States Postal Savings System, signed into law by President Taft in 1911.

In its initial form, the main purpose of the USPSS was to provide ordinary citizens with limited insurance against bank failure, as funds stashed with the USPSS were guaranteed by the full faith and credit of the US government. Following the creation of the Federal Deposit Insurance Company in the 1930s, this advantage went away and the system began to slowly decline after 1947. What really did it in, however, was the rising inflation rate of the 1960s — with interest rates capped at 2 percent, it became a very unattractive savings vehicle and was essentially shuttered in 1967.

5) Is there any postal-themed music I can listen to?

Indeed! In 2003, Ben Gibbard, Jimmy Tamborello, and Jenny Lewis recorded an album under the name The Postal Service. Here's "The District Sleeps Alone Tonight"
The United States Postal Service did not take too kindly to this appropriation of their name and sued the band, though the matter was eventually settled.

6) How many unbanked people could postal banking help?

Right now, about ten percent of US households don't have so much as a checking account. Jessica Silver-Greenberg and Stephanie Clifford reported in 2013 for the New York Times that many employers now pay such people through high-fee prepaid debit cards that leave some low-wage workers earning less than the minimum wage in take home pay. Others have to rely on high-fee check cashing shops. And for many Americans of modest means, lack of access to bank credit means depending on very expensive payday loan shops.

According to the Pew Charitable Trusts, ten percent of American Census tracts have zero bank branches within 5 miles of their center of population. Among those tracts, 76 percent have a Post Office that's closer than the nearest bank. So a postal bank could easily improve the convenience of banking for people who live in areas where it's not profitable to open a branch.

Lowerprice_470_final (Source: Pew Charitable Trusts)

Pew also found, unsurprisingly, that the unbanked say they would be interested in using USPS-provided financial services if provided at a lower price than is currently offered by payday lenders and check cashers.

Postal banking enthusiasts believe the USPS should be able to undercut those prices, since they'd be essentially piggybacking on existing real estate assets rather than needing revenues sufficient to cover those real estate costs and provide a profit for investors.

7) What are some arguments against postal banking?

The most general argument is that just because the government could potentially enter some business with success doesn't mean that it should. Having government agencies compete with private firms could be unfair to the companies and distort the larger economy.

Concerns grow more serious the more deeply involved with financial services the postal bank would become. The most aggressive proposal — in which the postal bank competes with payday lenders to offer personal loans — carries particular dangers. Private banks have been known to badly mishandle the risks of their loan portfolio. These problems could be even more severe in a government-run enterprise where there'd be no market discipline at all around reckless lending. But once the government commits to running a public utility bank, it can't very well let it collapse in bankruptcy. You could end up with the kind of bailout situation that affected mortgage lending giants Fannie Mae and Freddie Mac.

A step in the direction of postal banking would also to a large extent be swimming against the global tide.

Postal banking systems are reasonably common today, but they were more common in the past. The recent trend has been toward the privatization of postal services, and the deregulation of postal markets — moves that reflect daily mail delivery's diminished significance in the modern world.

8) Would postal banking fix USPS' financial problems?


It would certainly help, in the sense that any injection of new revenue would inherently be useful. But the underlying source of the USPS' problems is not mysterious — the organization is built on the assumption that it possesses a lucrative monopoly over the delivery of a large and growing volume of daily mail. Now that mail volume has gone into decline, the Postal Service is bound to have trouble covering its costs.

Thus far, the agency has relied mainly on cutting staffing levels, seeking compensation givebacks from unions, and efforts to grow its parcel delivery business in which it competes with Fedex, UPS, DHL, and others.

These efforts have paid dividends, but don't change the basic reality that the simplest response to the declining value of the First Class Mail franchise would be to reduce the scope of the operations that the monopoly is expected to finance. Yet thus far Congress has refused to allow USPS to cease Saturday mail deliveries or close low-value rural Post Offices. Extra money from banking or other non-postal businesses would, of course, help close the gap. But in a sense, nothing will really resolve the underlying issue unless the agency is allowed to realign its required level of service provision with its core funding base.

9) Is postal banking legal?

Superficially, it is not. The Postal Accountability and Enhancement Act of 2006, among other things, bars the USPS from entering new non-postal businesses. (This is also the law that's saddled USPS with unusually onerous pension funding obligations). But the Inspector General's report argues that the kind of financial services it's advocating don't really constitute new businesses. The Postal Savings System may be shuttered, but remnants of the postal role in finance remain in the form of money orders and a present-day arrangement to sell American Express prepaid debit cards at Post Offices.

Of course, if the postal bank got too aggressive there would likely be a congressional move to shut it down. But as with so much else in life these days, in the real world a Postal Service that wanted to get into financial services could probably count on congressional gridlock to let it happen.

In practice, the decision would likely be in the hands of the USPS Board of Governors, which is supposed to have nine members in addition to the Postmaster General and the Deputy Postmaster General. Yet currently five of those seats are unoccupied, and the Obama administration has not managed to seat a single person on the board since his inauguration in January 2009. The result is a board dominated by Republican appointees who are unlikely to give the thumbs up to anything other than cutbacks at the postal service. A determined president, however, likely does have the legal authority to make at least some form of a postal bank happen.

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I caught this chyron from CNN this morning at my local gym. Following reporters on the ground and local accounts of last night's events, that's certainly not what I saw. We had cops pointing guns at unarmed civiliansreporters arrested without chargestear gas, and clueless leadership in a community suffering from longstanding tensions between police and African-American residents.

The official press briefing:

From Principal Deputy Press Secretary Eric Schultz:

Tonight, the President and First Lady attended the birthday celebration for Mrs. Ann Jordan at an event at the Farm Neck Golf Club. There were approximately 150 guests in attendance.

Among the attendees seated with the Jordans and the President and First Lady were former President Bill Clinton and former Secretary of State Hillary Clinton, Valerie Jarrett and her mother Mrs. Barbara Bowman, Ursula Burns, Kenneth Chenault and his wife Kathy, along with other friends and family of Mrs. Jordan. President Obama honored Mrs. Jordan with a toast before dinner, as did Mr. Jordan and Secretary Clinton and others. The President and First Lady have known the Jordans for over twenty years, and were grateful to have been able to share this special evening with them.

The President and First Lady also were happy to have the chance to spend time with Secretary Clinton and former President Clinton.

A little color: in his toast for Mrs. Jordan, President quipped that he met Vernon and first, but liked Ann more. The menu consisted of surf and turf and pasta. The Obamas danced nearly every song. A good time was had by all.

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Maryam Mirzakhani became the first woman to win the Fields Medal, mathematics' highest prize, earlier today. In this video she speaks briefly about her life and her work, saying she initially got excited about mathematics "just as a challenge" before coming to appreciate its value for its own sake only later. She says that growing up in wartime Iran was difficult, but recounts that "right after the war I had a lot of opportunities" and benefitted from fortuitous timing in that she "was a teenager when things became more stable."

Her work itself relates to "understanding structures you can put on a surface" and if you can fully understand what it's about you are a lot smarter than I am. But watch Mirzakhani try to explain it for herself:

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The Obama administration is likely to propose some form of executive action to protect certain classes of unauthorized migrants to the United States from deportation. Such an action would build on the existing Deferred Action for Childhood Arrivals initiative for DREAM Act-eligible immigrants who were brought into the country as children. These executive actions have been the subject of considerable preemptive criticism, with conservatives — but also liberal columnist Jonathan Chait — expressing concern for the erosion of norms that such action would represent.

useful 2013 Congressional Research Service document establishes that legally speaking, the president has fairly wide latitude here. Specific historical precedents in this area are quite varied as well. The Clinton administration, for example, seems to have quietly but drastically scaled back INS raids on employers in the late-1990s after members of Congress — including quite conservative ones — complained about difficulties immigration enforcement was creating for business. But here are three occasions in which presidents formally suspended aspects of immigration enforcement in pursuit of foreign policy or economic goals.  They are all pretty different from what Obama appears to be contemplating, but also pretty different from each other — illustrating that administrations have always used their discretionary authority in a range of ways.

1) Eisenhower, Kennedy, and the Cubans


(Keystone France)

Fidel Castro's Cuban Revolution and his growing embrace of Communism produced a mass outflow of anti-Castro unauthorized migration to nearby Florida. For various foreign policy reasons, neither President Eisenhower nor his successor John F. Kennedy wanted to forcibly repatriate Cubans. Eventually, the Cuban Adjustment Act of 1966 was passed by Congress to legislatively establish Cubans' present-day right to immigrate in unlimited quantities to the United States.

But as this contemporaneous news bulletin from the Social Security Administration explains, the earliest iteration of this principle was established not by Congress but by Presidential fiat:

Under the basic immigration law, when a person becomes technically deportable — after his temporary permit expires — he is ordinarily given a short period of time in which to leave the country. This is "voluntary departure." If the person overstays that time, a warrant of arrest and deportation proceedings is served. For the Cuban refugees "indefinite voluntary departure" is authorized with no time limitation, and consequently no deportation proceedings are initiated.

In other words, amnesty for unauthorized migrants from Cuba.

2) Reagan and Poland

Ostrowiec_solidarnosc_20100815 (Krugerr)

A series of anti-government strikes led by the labor union Solidarity in Poland led to a 1981 declaration of martial law in that country and a renewed era of political repression. The Reagan administration declared a program of extended voluntary departure for Poles who made it to the United States that was repeatedly extended throughout the decade.

This became a subject of some controversy over the years, as the Reagan administration generally declined to extend similar privileges to refugees from El Salvador and other Central American nations facing civil conflict. Reagan also ended an extended voluntary departure program that had been created for Ethiopians after civil war broke out in 1974 — underscoring that what prosecutorial discretion giveth, prosecutorial discretion may also taketh away.

3) Bush and Katrina


(Timothy Clary/AFP)

Hurricane Katrina struck the Gulf Coast in 2005, at a time when immigration reform was still a major priority for the George W. Bush administration. The destruction of the hurricane disrupted many area residents' access to legal papers, and also led to a vast surge in post-hurricane construction activity. The Bush Department of Homeland Security issued a memo suspending employer-verification rules in the area, prompting a backlash from some of the more conservative members of congress.

Notionally, the idea was to protect the interests of legal residents of the United States whose immigration status could not be verified in the wake of the hurricane. In practice, many undocumented people went to work in the area. Years later, with the hurricane a distant memory and the politics of immigration shifting the Obama administration stepped-up enforcement, creating problems for many undocumented workers in New Orleans.

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Vox's Sarah Kliff offered six reasons for the fall in teen pregnancy rates earlier this year, but new research by Jessica Wolpow Reyes from Amherst suggests a seventh: fewer children having their brains poisoned by exposure to lead. The suggestion that lead contamination is an important driver of crime rates has gained currency over the past several years (Kevin Drum is a particularly dogged and persuasive advocate of this view), and the point of Reyes' research is to look at a broader range of social problems among youth.

What she does is take advantage of the fact that leaded gasoline was phased out unevenly across states in the late-1970s and early-1980s to generate some not-quite-experimental data. You can see the results here:

Screen_shot_2014-08-11_at_4.35.03_pm (Source: Jessica Wolpow Reyes)

Similar results are found for related "risky" behaviors such as the odds of having sex and drinking at an early age.

It's worth reflecting on the ways in which the political system is rigged to congenitally under-regulate these kind of health hazards. If you, as a politician, take a stand that goes against the financial interests of some group of incumbent industries your reward is that significant social ills are alleviated … 15 to 20 years after your proposal is phased into place. No governor or president — and very few senior legislators — sticks around long enough to claim credit for these things.

Nowadays the leaded gasoline problem is behind us, but there's still a lot more that could be done in terms of public efforts to clean up lead-contaminated soil, replace old lead pipes, and eliminate lead-based paint from old houses. But that would take money up front for a long-term payoff.

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This chart from the World Bank's latest International Comparison Project document depicts each country's economy as a rectangle — GDP per capita on the vertical access and population on the horizontal axis.


(Source: World Bank)

We can see that while China has overtaken Germany and Japan to become the world's second-largest economy (i.e., total area of the rectangle) its citizens are nowhere near being as rich as those of those countries or even Mexico.

AOL — publishers of the Huffington Post, Engadget, TechCrunch, and others — announced its second quarter earnings this week, and the news was good. The company made a bunch of money! But the way they made it was kind of weird.

Notwithstanding the company's emphasis over the past decade or so on building content brands and selling advertisements, the actual business continues to be selling subscriptions to about 2.3 million suckers paying $20 a month for God-knows-what. This has been noted in a variety of news outlets, but few people are paying attention to the fact the subscription business accounts for over 100% of the company's profits.

AOL likes to report a non-standard accounting measure it calls Adjusted OIBDA, which basically excludes a few costs they regard as not reflecting the ongoing structure of the business. Here's how it looks:


By separating out $30 million worth of losses and attributing them to "Corporate & Other" functions, they are able to create the appearance here of a slightly profitable Brand Group alongside their mega-profitable Membership Group. But the reality is that selling subscriptions to people who forget to check their credit card bills isn't most of AOL's profits, it's more than all of their profits. If everyone canceled their AOL subscriptions, the company would start bleeding cash.

Of course maybe you'd like to become an AOL subscriber? If so, check out their totally unappealing offers here.

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Minimum wages are a perennially controversial topic in the politics of countries all around the world. And yet despite the debate, virtually all developed countries have a minimum wage either set by law or set quasi-legally through an industry collective bargaining process.

Yet, as British economist Simon Wren-Lewis noted in July, discussion of the minimum wage's natural complement — the maximum wage — is taboo in most circles. But the case for a maximum wage or something very much like it — say, a confiscatory marginal tax rate far too high to raise meaningful revenue — is surprisingly strong.

Paying LeBron


LeBron James in Guangzhou (China Foto)

One place to look to understand the implications of the maximum wage is an industry that actually has a maximum wage: professional basketball.

The rules governing the NBA salary structure are extremely complicated, but one feature of them is a limit ("the max") on how big a contract any given player can receive. This is why things like LeBron James' bouts of free agency become such unpredictable events. The market for James' services is not an auction in which he ends up playing for the highest bidder. Instead, all bids are capped at the maximum wage, and every owner with half a brain would gladly pay James (or Kevin Durant or Chris Paul or a handful of other megastars) the maximum salary, so the ultimate decision comes down to non-monetary factors like teammates and title chances.

But basketball is still a business, and the maximum wage has economic ripple effects.

In particular, it serves to significantly advantage the league's middle class of talent. Since the Cleveland Cavaliers didn't need to spend all their available financial resources on James, they had spare cash to bid for the services of lesser (but still skilled!) players. As a result, even though winning in the NBA is typically driven by a handful of dominant stars, even average players are extremely well-compensated. Rookies aside, the league features a ratio of about 20:1 between the highest-paid and worst-paid players, with undistinguished athletes frequently reaping multi-million dollar deals.

The most important lesson, however, is what the maximum salary doesn't do — lead the stars to Go Galt and take their talents to the retirement community.

For starters, the top stars get paid a lot of money! But more than that, it turns out that to be successful at high-level professional basketball requires a certain level of passion for the sport and competitive instinct. Players want to win games and outshine their rivals on the biggest stages. Stars not only play for sub-market wages professionally, but they often play for free for their national team in the Olympics. Top performers like money, but they also take pride in a job well done.

America once had a maximum wage, kind of


Top US marginal tax rates over time (guest2626)

The idea of a maximum wage sounds outlandish today. But though no such maximum wage level has ever been embedded in America law, it's worth noting that until relatively recently we had a de facto maximum wage policy in place.

The Second World War pushed the top marginal tax rate up to 90 percent. The Kennedy administration adjusted that down to 70 percent and there it stood until Ronald Reagan's election.

Neither of those was a formal maximum. But they acted as a maximum wage. During the 90 percent top income tax rate, for a firm to put an extra $100 in the pocket of a top executive required them to pay onother $1,000 in salary. Rather than send $900 to Uncle Sam to pay a CFO an extra $100, it makes more sense to give modest raises to five separate middle managers — putting more money in the pockets of your workforce and less in the pockets of the federal government.

And the thing about this high tax policy regime is that it worked pretty well!

The pre-Reagan trend of productivity growth in the American economy was faster than the post-Reagan trend. At the same time, the distribution of the gains from economic growth was more equal pre-Reagan than post-Reagan.

Of course, by the late-1970s the economy had run into trouble. Oil shocks from the Middle East were battering the economy, and their negative impact was exacerbated by poor monetary policy. The resulting "stagflation" quite naturally led to a push for substantial policy change, and substantial policy change is what we got.

Those changes included, among other things, a shift to a new tax policy regime that no longer sought to deter high salaries and promote an egalitarian distribution of market income. The thinking was that more inequality would create better financial incentives and more rapid economic growth. A rising tide would lift all boats, and nobody would miss equality in the midst of broad-based prosperity.

Bad incentives


Maybe this guy could teach math instead (John Moore/Getty)

Over the past 35 years we have gotten the inequality that Reagan promised. What hasn't been forthcoming is the more rapid economic growth.

A maximum wage would definitely help solve inequality: firms would spend less on bidding up the pay for the richest workers and that would free up more resources for middle-class salaries. And it is now a commonplace of progressive discourse to argue that executive compensation growth largely reflects rent-seeking that could be rolled back without impairing managerial talent. But there is actually some reason to believe that a maximum wage could improve growth outcomes and help up bring back some of the higher growth rates experienced before the late 1970s.

The key reason for believing this might be possible comes to us from a paper by economists Benjamin Lockwood, Charles Nathanson, and Glen Weyl. They observe that not all jobs are created equal.

What Lockwood, Nathanson, and Weyl find is that by increasing the financial incentive for top talent to pursue careers in finance and law rather than teaching and research, the Reagan tax reforms reduced overall economic output while increasing the pre-tax share of income earned by top earners. In other words, rather than giving the middle class a smaller slice of a bigger pie and making everyone better off, these reforms gave the rich a larger slice of a smaller pie and made only them better off.

Bringing back the notion of a cap or near-cap on wages, in other words, could make the country more prosperous and make prosperity more broadly shared. A related issue is raised by Facundo Alvaredo, Anthony Atikinson, Thomas Piketty, and Emmanuel Saez who find that lower tax rates have shifted incentives for executives at big companies such that effort is now "diverted to increasing their remuneration at the expense of enterprise growth and employment." In other words, in a high-tax regime executives compete to run the biggest, best company for pride and glory whereas in a low-tax regime they compete to take home the biggest paycheck.

How to do it?


Redistribution party! (Cartsen Koall/Getty)

Of course, it's one thing to say that the country should try to cap top-earners' wages and another thing entire to say exactly what a maximum wage policy should look like. The basic reality is that as with a minimum wage, the correct answer needs to be determined empirically. At the moment, there is very little research available on the subject to guide our thinking, and so little has been done in policy terms that there isn't even much empirical information to research.

Another issue is that the precise terms of the maximum wage policy need to be ironed out.

Though it will rankle some, capital gains income will almost certainly have to be excluded from the policy. To do otherwise would create a massive disincentive for wealthy people to ever sell the things they own — preventing the reallocation of capital to more productive uses. But the differential treatment will create a large loophole that people will seek to exploit. Already hedge fund managers have found ways to characterize what is clearly a form of management fees as a form of investment income in order to enjoy a lower tax rate. Closing that loophole and similar ones should be a priority.

One good starting point toward a maximum wage policy would be revisit a 1993 law intended to curb CEO pay. The rule in question said that executive salaries of over $1,000,000 a year could not be deducted from companies' corporate income tax bill. That would be a powerful reason to pay less and redistribute resources inside the firm. But the rule had a gigantic loophole: performance-based pay is exempted.

It's trivial to classify CEO pay as performance-based pay. So these days CEOs are paid more than ever before and whatever they happen to do is deemed excellent performance. Rewriting section 162(m) of the law to have a higher threshold ($10 million?) with no performance loophole would put a dent in the problem, and also generate some potentially relevant data.

But eventually the goal is to impose a new super-high top marginal income tax rate — something like the old 90 percent top rate — at a very high income threshold.

Goals for a super-tax


Happy German factory worker (Ute Grabowsky/Photothek)

Only time and research will tell us exactly what the right numbers are. But here are two guiding principles. The super-tax should attempt to bend the Laffer Curve and modestly reduce the amount of federal tax revenue, and the super-tax should try to avoid seriously reducing the number of hours people work.

What you want to do is levy a tax rate that's high enough that almost nobody pays it. But you also want the tax threshold to be high enough that it doesn't induce doctors to see fewer patients and spend more time on vacation. The idea is to nudge corporate executives and big-time finance guys to pay themselves less. For executives, that will leave more money in corporate treasuries to spend on other workers or new investments. For finance, it will leave talented individuals with less-lucrative but more socially-useful careers to pursue.

This is counterintuitive to policymakers who mostly think of taxes as ways to raise revenue. But if you're trying to create a maximum wage then a tax rate that people are paying is a tax rate that's too low. At the same time, a tax rate that's convincing extremely productive workers to simply stop working as hard is hurting the country rather than helping. You want to get in that NBA sweet spot where top CEOs, like top athletes, will still work hard for the sake of money and glory and competition but a larger share of the enterprise's financial rewards flow to the middle class.

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When I heard the NRA had made a video about why blind people need guns too, I was prepared to be outraged. And Dom Raso does go off at one point on a tangent about how the vision-impaired "have an increased awareness of their hearing and spacial surroundings" that seems to be raising the specter of Daredevil-esque heroics. But by the end, he actually persuaded me!

Obviously to the extent that you're skeptical of firearms ownership in general, nothing in here will change your mind. But the idea that blind people will, if allowed, start running around the street spraying ammunition at random is pretty condescending and offensive. They know that they can't see! The scenario he raises in which a vision-impaired individual uses a gun for close-quarters self-defense strikes me as far-fetched, but it's mostly far-fetched in the sense that the general idea you should be walking around packing heat prepared to shoot assailants is far-fetched.

I'm for stricter gun regulation in general, but this video has me convinced that there's no need for special rules barring the blind from owning otherwise-legal weapons.

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John Overholt is the Curator of Early Modern Books & Manuscripts at Harvard's Houghton Library, and today he brings us the original Venn diagram:

Today's Google Doodle is also honoring Venn in a pretty cool way.

Exoskeletons bestowing super-strength on their wearer are a staple of science fiction battle scenes (see Pacific Rim, the Edge of Tomorrow, one of the horrible Matrix sequels etc.), but in the real world killing people from far away with missiles works just fine. A more likely real world use of such technology is this suit being developed by Daewoo for use in its shipyards. The New Scientist reports that they've tested a suit capable of running for three hours and, in prototype form, lets you lift 65-pound objects without straining.

The current suit isn't quite powerful enough to be practical technology but Gilwhoan Chu, who leads Daewoo's R&D efforts, says they're trying to get up to a 100 kilogram lifting capacity as their research target.

This is a useful reminder of how some big economic trends work. Over the weekend, I posted this map showing how manufacturing had gone from the dominant source of jobs in almost every state to a niche occupation.

(Source: Bureau of Labor Statistics)

But it's important to note that despite the decline in manufacturing employment, America's industrial output is higher than it's ever been. The reason employment has fallen isn't that we don't make things here anymore, it's that we make slightly more things and we make them a lot more efficiently.

Sometimes when we get more efficient at making a product, demand for units surges and you get more jobs than ever. That's what's happened over the past ten years in the mobile phone industry. But it seems unlikely that more efficient shipbuilding methods are going to lead to a huge increase in the total number of giant ships the world demands. What will happen instead is that shipyards will be able to get by with smaller, machine-enhanced workforces and jobs will transition into other sectors that are less amenable to mechanization.

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Back in 1914 before the internet ruined journalism, you could misreport an invasion of Switzerland and there was no way to fix it:


A writer named Yochanan Gordan briefly had an article up on the website of The Times of Israel calling for genocide of the Palestinian population of the Gaza Strip.

Screen_shot_2014-08-01_at_12.05.09_pm The site's editors seem to have come around to the view that this kind of content is wildly inappropriate and took it down.

The incident naturally raises curiosity about the nature of the Times, which turns out to be a fairly small audience English-language digital-only project. What's interesting, however, is that though it's formally organized as a for-profit, it's pretty clearly a money-losing endeavor undertaken by somewhat idiosyncratic Boston-area hedge funder and philanthropist Seth KlarmanKlarman is mostly a Republican, but he backs marriage equality for gay and lesbian couples. He's also one of the major sources of funding for the Ending Spending Action Fund.

More relevantly, according to Forward he's very active in a number of US-based pro-Israel groups of various stripes:

But the foundation also has a focus on Israel advocacy. Klarman has been a board member of, and a major donor to, The Israel Project, a fast-growing pro-Israel advocacy group that seeks to provide information useful to working journalists. He gave the group nearly $4 million between 2008 and 2010.

The foundation has also given smaller amounts to the Middle East Media Research Group, an anti-Islamist research group whose board members include Elliott Abrams, a senior aide in several Republican administrations, and Steve Emerson, a researcher devoted to exposing ties, as he perceives them, between American Muslims and extremist Muslim movements. Klarman has also contributed to the Committee for Accuracy in Middle East Reporting, a group devoted to combating what it sees as anti-Israel bias in the media.

Klarman has also been the longtime chairman of The David Project, a Boston-based group mostly concerned with pro-Israel advocacy on campus. The group is also known for its long-running, and ultimately failed, effort to oppose the construction of a Boston mosque. Klarman said in an interview with the Forward that his interest in The David Project was in its campus work. The group has recently adopted a more moderate approach to campus activism.

Obviously the folks running the show at the Times of Israel have the good sense to recognize after the fact that open calls for genocide are not in keeping with an institutional mission to try to make Israel look good in the world.

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Congress is heading out of town for a five-week recess after a session in which it fixed neither the structural insolvency of the highway trust fund, nor addressed the looming expiration of the Export-Import Bank, nor the logjam of child migrants at the border. All thought of larger  comprehensive immigration reform is but a faint memory now. They did manage to reach an agreement on reforms to the VA but only thanks to the convenient bipartisan fiction that spending doesn't need to be paid for if it's for the sake of the troops. And the culprit is familiar — polarization — the parties are simply too far apart to reach meaningful agreement on anything and it leaves the country bouncing from crisis to crisis with longer-term issues unaddressed.

Yet recently, political scientist Jonathan Bernstein said it's time to stop talking about polarization. After all, he says, polarization is "not some sort of freakish un-American phenomenon." The real anomaly was the un-polarized mid-twentieth century. Today's levels of polarization, while high, largely just return us to where we were 100 years ago and more. And somehow those pre-World War One politicians found a way to make it work.


It's true that congressional politics have been sharply polarized before. But Hans Noel's important book Political Ideologies and Political Parties in America has convinced me that Gilded Age polarization tells us less about the present day experience of polarization than one might think. What Noel does is research political ideology as distinct from mere partisanship. The methodological details are interesting, but broadly speaking he looks at the views expressed by writers and other pundits — people who engage with public affairs but aren't subject to electoral or other forms of discipline.

What he finds is that in the Gilded Age parties were polarized but the ideologues were not. Writers had strong views on issues, but there was no coherent alignment between them. Over time, liberal and conservative ideologies began to form.

The writers who favored high taxes were also more dovish in foreign affairs and more friendly to the civil rights movement, while conservatives stood for traditional sexual values and racial hierarchies and for hawkish foreign policy and for free markets. For decades, the effect of this rising tide of ideology was to reduce partisan polarization in congress. Many members found themselves cross-pressured between identities as conservatives and identities as Democrats. Other were cross-pressured between liberal or moderate identities and Republican identities. Then over the past few decades, the parties re-polarized again along ideological lines.

Which is to say that Gilded Age polarization was very different from 21st Century polarization. Gilded Age parties were networks of patronage-oriented bosses, modern-day parties are networks of issue-oriented ideological activists.

In most respects, one would have to judge the motives of modern activities to be more high-toned and admirable than those of a 19th Century ward heeler. But polarization and non-majoritarian institutions intersect in a different way when you're talking about ideological politics than when you're talking about transactional politics. Precisely because today's parties are dominated by high-minded individuals and groups with high-minded concerns, they are reluctant to cut deals. A dispute about patronage lends itself to a pragmatic agreement in a way that a dispute about principle simply does not.

That said, it's not entirely unprecedented for America's Madisonian political institutions to be occupied by ideological political parties.

Another thread of Noel's research shows that the "free labor" ideology of the early Republican Party (see Eric Foner's masterful book Free Soil, Free Men, Free Labor for what that ideology looked like) emerged among the pundit class before any such party coalition existed in congress. The Republicans who swept into Northern offices in the 1858 midterms and into control of the White House in 1860 were a coalition of like-minded ideologues, not just a random network of operators.

The not-so-encouraging aspect of this is that the result of America's previous experiment with fusing ideological and partisan politics was a civil war in which hundreds of thousands of people died, not exactly an encouraging precedent for the ability of American institutions to handle conflict between ideological parties. The good news is that looking back on it, it seems clear that the Republican leaders were right to be inflexible in their insistence that slavery be excluded from new territories and put on a path to extinction. But of course the ideological activists on the other side of that issue were dead wrong, and ultimately brought nothing but ruin and suffering to the country.

No doubt today's ideologues all think they're Abraham Lincoln. Common sense says otherwise. But either way, it's genuinely not a situation our institutions have much experience with.

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For weeks now, my inbox and various social feeds have been full of stories of people outraged about the New York City building featuring an alleged "poor door."

I get that people like this story because the idea of a single building with two different doors — one for the super-rich and one for the normals — works as a potent metaphor. But the building is not a metaphor. It is, in fact, a building. A building in which people live. A building whose construction employs people, and whose existence expands the New York City tax base. Even better, it's a building that created subsidized dwellings in a desirable location for 55 lucky families. The serious problems with housing policy in America have nothing to do with poor doors and everything to do with the literally millions of people in the New York area who aren't lucky enough to get a subsidized unit on the Upper West Side.

Origins of the poor door

The first thing to note about the poor door is that the typical building in Manhattan has no need of separate entrances for rich and poor because the main entrance is only for rich people. The poor door issue arises because of inclusionary zoning policies that reward developers for building subsidized units, or penalize them for failing to do so.

The project in question, 40 Riverside, located at 76th Street and Riverside Drive, consists of over 200 market rate (which is to say very expensive) new condominiums and also features 55 rental units that are available at something like a 75 percent discount relative to market rates.

Had the developer simply built two different buildings — one a profitable condo sold at market rates to rich people, the other a money-losing rental leased at discount rates to poor people — nobody would be complaining that the two buildings have separate doors. Instead for some kind of architectural or engineering reason, they chose to make it a single structure with two separate entrance points. Either way, the 55 families getting a steeply discounted Manhattan rental are getting a great deal.

A mixed-up policy

The real problem with the New York City Inclusionary Housing law isn't that the 55 units it's created here don't have the same door as the luxury units. It's that adding subsidized housing in dribs and drabs isn't going to address the city's severe housing prices.

Inclusionary policies of this kind blend together two policy ideas and do neither of them very well. One is redistribution. In effect, the buyers of the market rate condos are being taxed to finance a subsidy to the renters of the affordable apartments. Soak the rich to subsidize the poor. It's a reasonable idea. But the only rich people being taxed are the tiny minority of rich people who happen to be buying into a brand-new luxury tower. Rich brownstone owners in Brooklyn are unscathed. So are residents of fancy prewar buildings on 5th Avenue. And early adopters of the loft conversion trend in Soho. With such a narrow tax base, you don't raise much revenue and thus can't help very many poor people.

The other policy aim here is housing supply. Ultimately, the number of people who can afford to live in New York City is a function of the number of housing units that exist in the city. For more people to afford NYC, there needs to be more housing in NYC for people to live in. The most straightforward way to do this is to change the zoning codeto allow for the construction of more and denser buildings. Despite Michael Bloomberg's reputation as a pro-developer mayor, he actually presided over massive downzonings in many outlying areas of the city that have made it harder than ever to add new supply. Even new luxury units in Manhattan do something to increase affordability, and reversing Bloomberg-era policies in the Outer Boroughs could unleash substantial new accessible development all around the city.

Then if you feel low-income people still need more help, you can tax all rich people and subsidize all poor people.

Pity the doorless

The real victims of this policy dynamic are not the 55 families who'll enjoy discount rent on the Upper West Side. The real victims are every economically struggling New Yorker who doesn't get the discount. Currently, access to subsidized "inclusionary" units in New York isn't just limited by income. Even families who are poor enough to quality need to enter lotteries to try to get a place to live. There simply isn't enough housing to go around.

This is a problem in New York City, but also in the city's suburbs. In San Francisco and in Silicon Valley. In Boston and its suburbs and in Washington, DC and Seattle. It causes hardship for individual families, and economists estimate it costs the overall national economy billions of dollars in lost economic growth by forcing people out of highly-productive dense metropolitan areas and into ones where their labor is less valuable.

It's a national scandal. And if talk about a door spurs meaningful change, that will be great. But the fury over something as superficial as a building entrance is a waste of time. The real issue is the systematic underprovision of housing in the country's most desirable cities and suburbs.

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Perhaps the strangest thing about John Boehner's lawsuit trying to rein in Barack Obama's use of unilateral executive authority is how plainly welcome the White House finds it.

"You're going to sue me for doing my job?" Obama himself mocked when the plan was first announced, speaking to supporters at a rally. The White House pushed reporters to write stories about the lawsuit, and rapidly had Democrats even buzzing about impeachment. It's easy enough to understand why the White House doesn't fear this lawsuit. As Andrew Prokop has explained, the odds of the House GOP prevailing in court are miniscule. But it's more than that. Obama is thrilled he's getting sued, because public attention on the lawsuit actually solves the administration's biggest problem.

We can't wait


(White House photo)

Since Republicans took the House in 2010, Obama's basic political challenge has been that average American voters have a pretty poor grasp of the fundamental operation of the US constitutional order. People expect the government to do things to make their lives better, and when that doesn't happen, they grow angry at the person in the White House. When the president's agenda gets stymied in congress, people don't want to hear about filibusters or the Speaker's ability to keep bills from getting to the floor. They ask why the president isn't leading and getting things done.

That's why, in recent years, Obama hasn't just relied on unilateral executive action to advance his policy aims — he's tried really hard to highlight his executive actions. Every president has always used this kind of authority. But Obama has tried to brand it, tying this agenda together under the banner We Can't Wait. The problem is that, objectively, it's been difficult to attract substantial public attention to these We Can't Wait initiatives because they tend to be rather small-bore.

Do nothing Congress


(Chip Somodevilla/Getty)

Under the circumstances, the specter of a United States Congress literally picking a high-profile political fight over the idea that the president has been doing too much stuff is manna from heaven. Now there's no more argument over why the president won't lead. He is leading! Leading as far as he can possibly go! Leading so far that the Speaker of the House is complaining that he's engaged in an illegal level of leadership!

In a statement to reporters, White House Press Secretary Josh Earnest scolded that "at a time when Washington should be working to expand economic opportunities for the middle class, Republican leaders in Congress are playing Washington politics rather than working with the President on behalf of hardworking Americans."


Ezra Klein explains Boehner's lawsuit may be in order to avoid an impeachment battle

The implication that were Republicans not pushing this lawsuit they'd be reaching constructive compromises with the White House is absurd. The real world alternative to litigation is simply doing nothing — the parties don't agree and nothing Obama or Boehner does or says is going to change that. But that's not what the American people want to hear. Voters instinctively like the idea of compromise, collaboration, and action.

The current partisan debate is often described as a stalemate, but it's actually better captured by a more obscure chess term. Zugzwang is a situation in which the optimal move would simply be to pass and force the other player to make a move — except that passing is against the rules of chess. The best thing for House Republicans to do this summer and fall is nothing — Obama's approval rating is underwater, the GOP is poised to pick up seats in the midterms, and there's no need to rock the boat.

But conservative activists won't tolerate a pass strategy. They hate Obama and want Boehner to do something that expresses that hatred. Lawsuits are a milder move than impeachment, so given the realities of the situation the litigation is arguably a savvy move by Boehner rather than a blunder. But the impatience of the activist right is still a gift to the White House. Rather than leaving Obama to struggle impotently from the White House, it allows him to underscore the basic reality of the situation — there's stuff he would like to do that Republicans are furiously fighting to keep from happening.

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National Review writer Charles C.W. Cooke is the kind of dim bulb who likes to write "the Left" with a capital L, and he also has a rambling and incoherent essay about Neil deGrasse Tyson and contemporary liberalism out that levels a very scurrilous allegation at me and some other media figures (emphasis added):

One part insecure hipsterism, one part unwarranted condescension, the two defining characteristics of self-professed nerds are (a) the belief that one can discover all of the secrets of human experience through differential equations and (b) the unlovely tendency to presume themselves to be smarter than everybody else in the world. Prominent examples include MSNBC's Melissa Harris-Perry, Rachel Maddow, Steve Kornacki, and Chris Hayes; Vox's Ezra Klein, Dylan Matthews, and Matt Yglesias; the sabermetrician Nate Silver; the economist Paul Krugman; the atheist Richard Dawkins; former vice president Al Gore; celebrity scientist Bill Nye; and, really, anybody who conforms to the Left's social and moral precepts while wearing glasses and babbling about statistics.

The pose is, of course, little more than a ruse - our professional "nerds" being, like Mrs. Doubtfire, stereotypical facsimiles of the real thing. They have the patois but not the passion; the clothes but not the style; the posture but not the imprimatur. Theirs is the nerd-dom of Star Wars, not Star Trek; of Mario Kart and not World of Warcraft; of the latest X-Men movie rather than the comics themselves.

I don't want to speak for everyone on this list, but I'd like to be very clear about the fact that I am a totally genuine Star Trek fan. I have watched every episode of every series of Star Trek, and all twelve feature films. I wrote a 3,300 word essay about it for Slate. I ranked Captain Ransom from the Voyager Season 5 episode "Equinox" as the sixth best Star Trek villain. I can explain the difference between the Memory Alpha Star Trek wiki (canon series and films) and the Memory Beta Star Trek wiki (non-canon material — novels, games, etc).

I am not screwing around here.

Star Wars is nice, too, I guess.

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The most important thing to know about GDP statistics is that counting all economic activity in the country is really hard, so these numbers get revised a lot. Today we not only got an initial estimate of the second quarter of 2014 and a revision of the Q1 estimate, we got the "annual revisions" of the GDP back catalogue. These are important to look at, because they sometimes alter narratives that were established years ago and have lodged in the public mind.

The big takeaways from the revisions are this — American households' incomes were somewhat better off in 2011, 2012, and 2013 than we thought. They were also saving more than we thought. Conversely, American corporations were somewhat less profitable than we thought.

Corporate profits

The big news here was a that 2011 corporate profits were revised down $61.1 billion. Profits for 2012 were revised up by $13.3 billion and for 2012 by $4.8 billion but the overall impression is of a less-profitable corporate sector.

Personal income

Personal income was revised up $10.7 billion for 2011, $143.9 billion for 2012, and $32.2 billion for 2013. American households have been doing better than we thought.

Household savings

So where did that extra income go? Savings. The savings rate (the share of disposable personal income that was saved) was revised up 0.3 percentage points in 2011, 1.6 percentage points in 2012, and 0.4 percentage points in 2013. Those aren't enormous changes, but they show that Americans have continued to be cautious with their money after the collapse of the credit bubble.

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President Obama noted today that there are currently no women represented on United States currency.

This really does seem like something that we ought to fix. Historically the big problem is that when women have been honored on American currency, it's come in the form of dollar coins. There was the Susan B Anthony dollar and then more recently the Sacagawea dollar. Both have been discontinued, and no dollar coin is going to be popular as long as paper dollar bills remain in circulation.

Rather than trying to pry paper dollars out of the American people's cold, dead hands, a better idea would be to take Andrew Jackson off the $20, as Jillian Keenan argued a few months back. Many presidents oversaw mistreatment of American Indians, but Jackson's policies in this regard were especially egregious. He was also a proponent of slavery, and his crank monetary policies — including an opposition to paper money — make him almost uniquely unsuited for a role on currency.

We could replace him with Sacagawea or Anthony, but there are lots of other strong choices out there. Popular suggestions from the Vox staff included Harriet Tubman, Rosa Parks, Eleanor Roosevelt, and Ida Wells, and I'm sure if the US Congress put its collective minds together they could come up with more great options.

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A new study from the Russell Sage Foundation reveals that while wealth levels for all classes of Americans declined between 2007 and 2013, Americans in the bottom half of the distribution are poorer than they were way back in 1984. Meanwhile, elites have amassed considerable wealth since then:


(Fabian Pfeffer, Sheldon Danziger, and Robert Schoeni / Russel Sage)

Data for 2014 is not yet available, but when it is done it will almost certainly show robust growth in high-end wealth and meager increases for the middle class. The key difference is that while both rich and middle class families own housing, rich people also own lots of shares of stock. This year has seen stock markets soar above their pre-recession peaks, while house price have increased a bit and remain well above where they were.

If you do manage to put some money aside for savings, note that stocks are on average a much better long-term investment than houses.

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With Detroit suffering from massive population loss and an inability to keep up its basic infrastructure (see the water crisis, or the city's many non-functioning traffic lights) it certainly seems odd to be spending tens of millions of dollars on a short new streetcar line. But while Jim Epstein's Reason article asking "Is Detroit's New Light Rail Line America's Greatest Boondoggle?" raises many good points about the project, the sad reality is that it's not even close to being the most egregious boondoggle going. The current fad for streetcar construction is actually bequeathing quite a large number of terrible projects to the country. And the very worst of these — like Washington, DC's maybe-opening-soon streetcar line — aren't just expensive, they actually make mass transit worse. And bad transit helps trap poor people in poverty.

The original sin of every bad streetcar program is this: it doesn't have a dedicated lane.

Without a dedicated lane, a streetcar can't really run much faster than a bus under ideal conditions. And since unlike a bus, a streetcar can't shift out of its lane to avoid an obstacle, in real-world circumstances it's likely to move slower than a bus. There are some objectives related to real estate development and tourism that this kind of project can serve, but they're nearly useless in terms of transportation.

But wait — it gets worse


The DC Streetcar plan (DDOT)

The thing about adding a slower-than-a-bus new vehicle to the curb lane of a street is that not only is it expensive it slows the buses down. In a case like Detroit where the city doesn't have serious traffic congestion this isn't necessarily an issue.

But in Washington and other cities where buses struggle with rush hour traffic, slowing them down is a problem. Of course, slower buses aren't a problem in cases where a new streetcar fully replaces an existing bus line. But, again, consider the case of the DC Streetcar. Along its very limited route it replicates the path of the existing X2 bus line, slowing it down. But rather than following the X2 deep into the Central Business District, the streetcar line will simply stop near Union Station. Consequently, for a person seeking to commute from the H Street area to downtown or for a downtown worker trying to head to H Street's bars and restaurants after work, the existence of the Streetcar will make mass transit slower and less convenient. That's a hard trick to pull off, but they've managed it.

To improve transit, smash the car lobby


Dedicated bus lane in Barcelona, Spain (Andrew Nash)

Mass transit advocates don't like it when people harp on the failings of high-profile transit projects. But the very worst of these projects are so bad that they actually make transit worse. More broadly, nobody is worse-served by wasting resources on bad projects than transit riders themselves. The problem is that securing funding for a boondoggle often seems more politically realistic than the harder problem of tackling the entrenched interests of (heavily subsidized) frequent car drivers.

The only way to make a new surface rail project work is for it to have its own dedicated lane over significant portions of its route. To achieve that requires seizing road space from drivers and allocating it to transit instead.

And of course the same trick — dedicated lanes — works to greatly improve bus service. Given a dedicated lane, the question of whether the additional benefits of streetcar are worth the price tag is an interesting debate. But absent dedicated space for transit, filling the road with mixed-traffic streetcars is at best a waste and at worst a disaster that will actually slow existing transit down.

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Summer is wedding season: a time of joy and celebration, but also a time when people spend huge amounts of money in a way that makes them go insane with stress and worry. Fortunately, a few basic principles of economics can help you get not just a cheaper wedding but as more cost-effective one  at all different price points.

1) Set a budget

This is the hardest piece of advice to follow, but also the most important. One reason weddings get expensive is that people end up paying high prices for the components of the wedding. But another reason is that there is simply no natural ceiling to what a wedding might be or how expensive it could become. No amount of bargain hunting could possibly change the fact that Kim Kardashian's Versailles wedding was expensive. To keep costs contained you need to decide — in advance — how much you are willing to spend and then commit to staying within that ceiling.

Because the point of the budget is to cap total expenditures, it's important to make this number a true maximum. Your budget shouldn't be a guess about how much you will probably spend — a number that you are as likely to exceed as to undershoot. It's a maximum amount that you absolutely cannot and will not go over.

2) Avoid costly signaling with a fun & romantic plan

Economist Diane Coyle observes that in many cases "having a fun day is not the point of spending the money" on a wedding. Instead an expensive wedding is about what's known as signaling: you're spending the money to make a point. Rolex watches aren't expensive because they are so much better at telling time than Timex watches. They're expensive, in part, because part of the point of owning one is to show off that you own an expensive watch. With a wedding, brides and grooms often increase spending as a way of demonstrating their commitment to each other, and to their relationship: they want to make each other happy so they don't want to say no to anything.

Demonstrations of commitment are great, but since the signal only means something if it's genuinely costly to the signaler, the tendency is for signaling motives to push couples into overspending relative to their financial resources. In other words, if you're not spending more than would be prudent you're not really making the point. That's a great dynamic for wedding vendors, but it's a poor use of your hard-earned money.

So once you have a budget, consider making a fun and romantic plan for what to do with any money you save by coming in under budget. Make it a bonus that lets you do something extravagant on your honeymoon that would otherwise be impossible. Treat yourselves to some fancy dinners out. Add it to a new car fund. Of course in an ideal world you might do something boring like use the money to bolster your retirement savings. But a boring alternative to wedding spending will leave you prey to the signaling trap. A great plan should ensure that whether you spend the cash on the wedding or not, you'll be spending on yourselves as a loving couple. That way you can consider the value propositions offered by various vendors in a cold and rational way without feeling like you're evaluating your relationship in a cold and rational way.

3) Don't buy a wedding dress


Don't buy this (Richard Bord/Getty)

Caitlin Kenney did a brilliant investigation several years ago for NPR and found that there's about $2,500 worth of fabric in a super-high-end wedding dress that sells for $8,000. Markups are everywhere in life but wedding dresses are particularly egregious. As Kenney writes, "a lot of that extra cost comes down to the word 'wedding.'"

Because of all the signaling involved in weddings, dress-makers deploy a pricing tactic known as price discrimination. If you're selling a dress to a woman who's looking to buy a dress, you know you're probably looking at a price-sensitive shopper. Even if the woman has the funds and inclination to spend a lot on clothing, she'll prefer a great deal to a bad one. A woman looking to buy a wedding dress is likely much less price-sensitive. There's signaling involved. And limited time. And the feeling that this day is special.

The way out of this is simple — skip the wedding dress. Just buy a dress that you like at a price that seems reasonable. Even if you, personally, really are less price-sensitive when it comes to the dress you'll get married in, the designer and retailer don't know that. The dresses you're looking at aren't "wedding dresses" so they're priced to be competitive.

4) Don't buy a "wedding" anything


Don't buy this (Lester Cohen/Getty)

What goes for dresses goes for everything else. Anytime a product is segmented into "wedding" and "not a wedding" categories, price discrimination is almost certainly at work and almost certainly not in your favor. Cake is cheaper than wedding cake. Event planning is cheaper than wedding planning. Renting some space is cheaper than renting a wedding venue.

People sometimes misunderstand this advice and believe that avoiding the wedding price premium requires you to actually trick the vendor into not realizing that you're planning a wedding. But that isn't really how price discrimination works. Airlines typically charge less for round trip flights that extend over a weekend because they believe leisure travelers are more price-sensitive than business travelers. To take advantage of this fact you don't need to actually persuade anyone that you're not a business traveler, you just need to buy a ticket that extends the trip across a weekend.

Pricing strategy just isn't made at the individual customer level. Across the board, products that are intended to be sold as "wedding" products are targeted at customers who are believed to be ripe for the gouging whereas normal products are priced more competitively. To whatever extent you can avoid "wedding" products, you'll get a better deal.

5) Remember the mediocrity principle

The biologist PZ Myers nominated this as the scientific principle that would improve everyone's cognitive toolkit, and it's very useful for wedding economics. "The mediocrity principle simply states that you aren't special," he writes, "the universe does not revolve around you, this planet isn't privileged in any unique way, your country is not the perfect product of divine destiny, your existence isn't the product of directed, intentional fate, and that tuna sandwich you had for lunch was not plotting to give you indigestion."

In other words, while your wedding is a really big deal for you (and for your parents, and maybe a few very dear friends and family members), to most of your guests it is, sadly, just another wedding. Which isn't to say they don't love you and aren't thrilled for you and won't have a great time. They will! Just like you have at the various weddings you've attended. But for them it will be just like that and nothing you do is going to change that.

Read in the wrong spirit, that can be depressing. But in terms of the bottom line, it should be liberating. Vendors will try to prey on your sense of specialness to convince you that every little detail matters and relentlessly upsell you. Don't buy it. Barring a giant obvious fiasco (food poisoning, roof collapse), everyone's going to have fun regardless and no amount of sweating the small stuff is going to make the day as special for everyone else as it is for you. The cheaper dishes or centerpieces or more restricted booze selection or slightly less-tasty food or whatever isn't going to ruin anyone's good time and they probably won't even remember. And what makes it special for you, presumably, is that you're making a lifelong commitment to a person you love, not that the centerpieces are particularly ornate.

6) Repeat business is your friend


This is weird (Timothy Clary/AFP)

Even if your wedding is really really great, odds are you're not going to want to stage a second one that's just like it. This is a problem in economic terms. An idealized perfect market features perfect information between buyers and sellers so nobody gets ripped off. No real world market is like that, but we can get the same approximate effect through repeated interactions and branding. The knowledge that the customer might come back to the same store is a powerful incentive to provide good service.

Thus, while of course your wedding should be special you probably don't want to make it too special if you're looking for a good deal.

Ideally you want to work with people you'll plausibly buy stuff from again in the future. People whose business interest is in making you feel happy about the transaction so you come back again, rather than people whose business interest is in bleeding you dry in the short-term.

7) Consider an integrated vendor

If instead of a wedding you were just planning on hanging out with some friends, it's unlikely that you would be looking separately at locations, decorations, and catering. You'd head out to a restaurant or a bar where location, refreshment, decor, and even music are all sold together in a single bundle.

This is how things come together because it's a way of usefully exploiting the division of labor. The bundles are created by full-time professionals — owners and managers of bars and restaurants — who have nothing better to do all day than focus on optimizing the various price/quality tradeoffs available. They are much better at this than you are.

One reason people tend to deviate from this program for their wedding is for the sake of ultra-customization. You may have a favorite restaurant, but it's unlikely that it's your favorite down to every single detail. By putting things together à la carte, you get to make everything as special as possible. And fair enough! But remember the mediocrity principle — your extra effort isn't going to impress anybody. To your guests, it's just another wedding. And unless all the staff you're working with are people you're plausibly going to provide repeat business to, the odds of you personally coming away as a fully satisfied customer are low anyway.

So ideally, you want to use an integrated provider who knows they might receive business from you (and your guests) in the future.

8) Rent out a restaurant you like

The upshot of all of these principles, really, is that you should find a restaurant that you like and that does events and look into renting it out. Restaurants are great integrated service providers — a location, food, beverages, staff, and decor all in one nice package. And the great thing about restaurants is that people eat in them all the time.

Of course the restaurant wants to pluck your wallet for as much cash as possible. But they'd also like you to come back for dinner. And they'd like your friends to come back for dinner. Compared to most weddings, it's a much more natural, normal business arrangement in which the incentives are aligned correctly. Money is made by providing good service at a reasonable cost. And the great thing about restaurants is that they exist at all kinds of different price points. Set your budget. Find a place you like that fits it. Take the savings with you on honeymoon. Live happily ever after.

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I'm no lawyer, but from the first time I heard it the theory advanced by the plaintiffs in the Halbig case has struck me as laughably far-fetched and as best I can tell most objective legal observers agree that they are unlikely to prevail. But liberals should check themselves before falling back on the assumption that this is how the judicial system works, or even that we are capable of ascertaining what it is objective legal observers think or do. For a reality check, it's worth looking at yesterday's Halbig coverage on the National Review website:

Halbig The coverage was extensive, unanimous, and included the participation of Ramesh Ponnuru, probably the magazine's most broadly respected writer. A Washington Examiner editorial hailed the ruling. The libertarian magazine Reason disagrees with the conservative mainstream about many issues including foreign policy and immigration, but their Affordable Care Act coverage is relentlessly hostile and their most-read article yesterday was a Halbig piece sympathetic to the the ruling.

The point is that, for better or for worse, as conservatives see it this case is not a close call and there are no doubts expressed that affirmation by the Supreme Court would be the right call.

Parallel realities

The deep nature of the division is illustrated by the suspicious way in which legal opinions and policy preferences are lining up on this issue. Essentially everyone who believes the Affordable Care Act was an important step toward securing social justice also agrees that it would be absurd to construe the statute in a manner that's plainly inconsistent with congress' goals. And essentially everyone who believes it's crucially important to give the crucial sentence the most straightforward possible reading rather than defer to the IRS' efforts to make sense of the law as a whole, also believes that the law is a scandalous boondoggle.

In a less polarized political climate, the stakes of the legal decision would be much lower. You would expect members of congress to respond to the Halbig ruling by passing an amendment to bring the text into clearer alignment with its goals. And even if congress failed to do so, you would expect the vast majority of states currently using the federal exchange to simply switch to a state exchange in order to make their citizens eligible for subsidies.

In that kind of climate, opinions about Halbig would be driven by feelings about the best approach to statutory interpretation — a question about which almost nobody has strong feelings. But in our actual climate, upholding Halbig will render Obamacare non-operational in a great many states. And most people — especially politically aware people — have much stronger views about Obamacare than about edge cases in the world of statutory interpretation. Our tribal instincts are activated.

Polarized judges


The judicial branch is supposed to operate separately from the contours of partisan politics. But judges are human beings, subject to the same cognitive failings as everyone else — and the cognitive failings associated with polarized political disputes are large. And the judiciary is becoming more polarized along with everything else in America. David Paul Kuhn, for example, has shown that 5-4 decisions have become drastically more common over time.

The Supreme Court gets to choose which cases it hears, and this shows a Court that is increasingly inclined to hear cases that sharply divide the justices — and therefore the legal community — rather than to rule on questions where there is broad consensus. The justices also seem increasingly inclined to write maximalist rulings that can secure minimum winning coalitions, rather than to enter into compromises to secure broader agreement.

Another sign of polarization is in the selection of clerks. In recent years, Justices appointed by Democrats have come to almost exclusively select clerks who worked for Circuit Court judges appointed by Democrats and Republican justices behave the same way. Rather than seeking to surround themselves with intelligent young aides of varying views who will challenge their knee-jerk opinions, Justices seek assistants who share their outlook. Institutions like the Federalist Society and the American Constitution Society operate to ensure that politically-active lawyers operate in separate intellectual and professional networks from an early age.

Overturning Halbig would be a betrayal

Vox's Ezra Klein mounted an argument that it's very unlikely the Supreme Court will affirm Halbig, citing the pragmatic reality that taking away health insurance from millions of people who already have it could be a political disaster. This makes a ton of sense to me. But as a forecast it would carry more credibility if we were seeing it on Fox News or The Wall Street Journal editorial page. Justice Scalia has gone so far as to say he doesn't read the New York Times or the Washington Post because they're too liberal, so it's not obvious that ideas circulating in the non-conservative press tell us much about the thinking of conservative judges.

After all, John Boehner and Republican governors could be spending this week working to avert this potential political fiasco by amending the law or switching off the federal exchange. But they aren't. So the idea that Halbig would be bad politics does not seem any more persuasive to most conservatives than the idea that it's bad law or bad policy.

All of which is to say that a decision by the Supreme Court to overturn Halbig would entail a substantial act of ideological apostasy by one or more justices. Apostasy isn't impossible. Justices Roberts committed a major betrayal by voting to uphold the Affordable Care Act's individual mandate, and Justices Kagan and Breyer committed one in the opposite direction (perhaps as part of a deal) to strike down some of its Medicaid clauses.

But acts of apostasy are psychologically, socially, and professionally difficult. It would be a mistake to simply assume Roberts will commit another one. And it would be an even bigger mistake for liberals to draw excessively broad conclusions from their own media diet. On the right, Halbig is broadly considered good law and five of the nine Justices side with the right most of the time.

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The rise of soulless big box retail chains has often been lamented, but there's persuasive evidence that big stores and big chains are good for workers. The data comes from Brianna Cardiff-Hicks, Francine Lafontaine, and Kathryn Shaw in an NBER working paper titled "Do Large Modern Retailers Pay Premium Wages?"

The short answer is yes. The long answer is below.

Big companies pay higher wages

They find that in the retail sector, working for a big company rather than a small one leads to higher wages. High school graduates who work for companies with over 1,000 employees earn 15 percent more than similarly educated workers who are employed by smaller firms. Workers with at least a little college education see a bigger pay boost and earn 25 percent more when employed by big companies.

Big stores pay higher wages

Sometimes a large company operates small stores (many Starbucks shops are small) and in principle a small company can operate a very large store. The researchers find that not only do big companies pay higher wages, but big stores pay higher wages. High school graduates working at retail establishments with over 500 workers earn 26 percent more than similarly educated workers at smaller shops. Those with at least some college education, again, earn an even larger premium — 36 percent more at big stores than small ones.

It's not all selection effect

Those findings involve basic demographic controls, but there's more to life than demographics. When the authors do more math, they find that a lot of this premium is due to "unobserved worker quality." In other words, big companies are good at recruiting the best workers from all demographic cohorts and that's part of the reason they pay more. But a lot of the wage increases remain. The exact same worker can earn an approximately 10 percent raise (11 percent for high school graduates, 9 percent for those with at least some college) by moving from a small company to a large one.

Moving from a small store to a big store has an even bigger effect — 19 percent for high school graduates and 28 percent for those with some college.

This should not be a huge surprise

Given widespread skepticism of big box versus mom and pop retailers, these findings will be surprising to some. But the general conclusion that larger companies pay higher wages than smaller ones is fairly well-established in the literature. What is new here is the demonstration that this stylized fact holds true inside the retail sector, and also that it is robust to sophisticated statistical controls.

Big companies create the chance for upward mobility

Another finding from the paper is that 28 percent of retail workers are eventually promoted into a managerial role offering higher wages. Small firms, by contrast, typically have less need of managers and managerial jobs are often occupied directly by the people who own the company and their family members. Big companies are more likely to be owned impersonally by shareholders who aren't involved with the management of the company, allowing more opportunities for outsiders to move up.

A debate whose time has passed?

The authors frame the policy implications of their findings in terms of the tendency to lament the loss of "good manufacturing jobs" and the rise of Walmart-style chains. They write that there is an alternative to manufacturing-promotion as a strategy for increasing worker earnings and "that alternative is to prepare workers to be managers in modern retail firms."

In many ways, however, the debate over the merits of the big box store seems like a debate for the previous decade. Borders and Circuit City are out of business, while their competitors are on their last legs. The big question in retail is the race between Walmart's efforts to move into e-commerce and Amazon's efforts to move into grocery delivery. Whoever succeeds (or both of them) won't really be running big box stores anymore. And the debate and analysis over wages and promotional activities will have to be done all over again for the new cohort of retailers.

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Rewatching Sex and the City with my wife over the weekend, I queried twitter as to whether Carrie Bradshaw was the last non-villainous character to be a regular smoker on TV. A rather irate Sonny Bunch counters with Roger Sterling, Don Draper, Rust Cohle, Skyler White, Lafayette from True Blood, and Laurie from The Leftovers.

I haven't seen the Leftovers, but mostly I think these exceptions serve to sharpen the point.

Sterling and Draper are, obviously, being set in the past. Cohle isn't a villain, but he is a dissolute alcoholic. Lafayette is a drug dealer. Most of all, Skyler White the suburban mom most certainly is not a regular smoker. The smoker is Skyler White the morally-complicit-but-also-semi-captive wife of a major drug baron.

Bunch is correct that villainous versus non-villainous isn't quite the right demarcation line here. But it's that in recent shows, depicting a character as a smoker is a way of signaling that something is wrong. The difference with Carrie is that she's just a normal person who happens to be a pretty heavy smoker. Just like I was until about 2007 and like many people continue to be today. Part of this is simply because television portrayals of smoking have become much more rare. But clearly beyond that there's been an effort to really define smoking as either something that happened in the past or something that's socially deviant.

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If you want to understand the state of Democratic Party factional politics — or, rather, the lack thereof — in 2014, you could do worse than to look at Elizabeth Warren's 11 commandments for progressives as reported by Emma Roller from the Netroots Nation conference:

  1. "We believe that Wall Street needs stronger rules and tougher enforcement, and we're willing to fight for it."
  2. "We believe in science, and that means that we have a responsibility to protect this Earth."
  3. "We believe that the Internet shouldn't be rigged to benefit big corporations, and that means real net neutrality."
  4. "We believe that no one should work full-time and still live in poverty, and that means raising the minimum wage."
  5. "We believe that fast-food workers deserve a livable wage, and that means that when they take to the picket line, we are proud to fight alongside them."
  6. "We believe that students are entitled to get an education without being crushed by debt."
  7. "We believe that after a lifetime of work, people are entitled to retire with dignity, and that means protecting Social Security, Medicare, and pensions."
  8. "We believe—I can't believe I have to say this in 2014—we believe in equal pay for equal work."
  9. "We believe that equal means equal, and that's true in marriage, it's true in the workplace, it's true in all of America."
  10. "We believe that immigration has made this country strong and vibrant, and that means reform."
  11. "And we believe that corporations are not people, that women have a right to their bodies. We will overturn Hobby Lobby and we will fight for it. We will fight for it!"

As I've said before, the striking thing about this progressive factional agenda is there's really nothing on it that Barack Obama or Hillary Clinton would disagree with. It is true that if you read this list with your progressive populist decoder ring on, you will know that items (1) and (7) are sort of intended as shots at the White House. But while Warren certainly could have bored down into those issues to make commitments that Obama and Clinton won't match, she didn't in this statement of principles.

She also didn't pick at a number of other possible scabs. State and local Democrats fight quite a bit about K-12 education policy — testing, teacher pay, charter schools, and all that.

National Democrats can typically avoid open warfare over these issues because the federal government doesn't do much K-12 policy, and here's Warren avoiding them. By the same token, Warren doesn't pick up the left-wing banner on NSA surveillance or drone strikes or aid to Israel or any of the other national security issues where liberal intellectuals often differ from mainstream Democratic Party politicians. Nor does Warren attempt to put new issues like patent reform or copyrights on the table.

Not that there's anything wrong with any of that. The point is simply that taking a moment to explicitly write down a progressive catechism at an activist gathering, Warren chose to restate the Democratic Party consensus rather than challenge it. It's a very unified party that's going to run on this agenda whether the nominee is Hillary Clinton or Elizabeth Warren or Martin O'Malley or Deval Patrick or anyone else you like.

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There are a lot of odd rules around car dealerships in the United States, often in the news lately because of various fights about Tesla, and one of them is that in many states you can't sell a car on Sunday.

Here, courtesy of Briana Bierschbach, is a map illustrating which states adhere to this timeless Biblical precept:


The regional distribution here looks pretty random, but the economics of these kind of arrangements are interesting. Obviously any given auto dealer who refused to open on Sunday would be putting himself at a competitive disadvantage. But since cars aren't exactly impulse purchases, if you prevent all dealers from selling on Sunday you don't depress overall auto sales. Instead, car-buyers are mildly inconvenienced while dealership owners save money because they don't need to stay open as long.

Convenient for them.

Of course in theory the dealers could push that idea even further and go for a law saying you can only sell cars on a Wednesday. But presumably state legislatures wouldn't go for that. A little Christian observance works, though.

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The latest round of inflation hysteria (which you should be ignoring for these eight reasons) is especially focused on the rising price of certain foods. The interesting thing about food is that the general category contains many many many different commodities. So at any given time it's almost certainly going to be the case that the price of something or other — pork or milk or wheat or what have you — is skyrocketing.

But here's a chart of expenditures on food as a share of all disposable income:

Food_is_cheap The big story is a huge multi-generational increase in food affordability. It's true that the pace of progress has slowed down with the bad economy over the past decade. But zoom in and you'll see that affordability is pretty steady, not deteriorating:


In the short-term, this is a noisy data series. Food prices swing a lot more than personal incomes do. But if anything, since the recession started food has become slightly more affordable for the typical family.

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Take a gander at this amazing chart Louise Sheiner and Brendan Mochoruk made for the Brookings Institution based on CBO data:

15_cbo_budget_outlook_fig1-1 It highlights an amazing and under-covered change in federal budget policy, something that is a much bigger deal than recent declines in the short-term budget deficit. For years now, budget wonks have been warning that the real deficit problem is in the long-run, and it's driven by the cost of federal health care programs. What you're seeing on this chart is that those programs now look like they're going to be much cheaper than was previously believed.

Good deficit news ignored

Matt Yglesias explains in 90 seconds why you shouldn't worry about the national debt right now.

And yet to the extent that attention has been paid to these developments, it's been through a narrow partisan lens dedicating to asking whether or not the Affordable Care Act deserves the credit.

The big bipartisan debate about the future of the federal budget has been scarcely touched by this. Indeed, it's noteworthy that, while this chart was made with CBO data, nothing like it appears in the latest edition of the CBO's Long Term Budget Outlook. The new version of the CBO's annual report is updated with new numbers, but the text and the doommongering rhetoric are essentially unchanged. If there's any difference, it's that they've added a forth bullet point to what used to be a three-point list of bad consequences of high deficits and debt loads. Fix The Debt put out a blog post saying that "just as we were getting good news about falling deficits, a new report demonstrates that looking further out tells a much different story."

This is a classic pathology of the policy advocacy world: fear that any admission of good news is going to undermine the case for action.

So let's be clear about this — the declining projections in federal spending make the long-term budget situation look a lot better than it looked in 2009, but they don't make it look perfect. It's still true that the elderly share of the population is rising, and that health care spending is likely to grow faster than the overall economy. Those two trends will inevitably either squeeze out other forms of government spending, or else squeeze out private sector economic activity via higher taxes or more borrowing. That was true in 2009 and it's true in 2014.

Optimism is contagious

But fundamentally, the worldview which says that, until the problem is solved, all discourse must be gloom and doom, is misguided. In a variety of contexts, optimism is a more powerful force for action than pessimism. Heart attack victims who are optimistic, for example, have a much higher survival rate than pessimists. One key reason, according to researchers, is that "optimists try, while pessimists lapse into passive helplessness."

Albert Hirschman's classic book The Rhetoric of Reaction: Perversity, Futility, Jeopardy likewise identifies pessimism as a key driver of counterproductive politics.

Budget scolds appear to believe that only by frightening people into a state of maximum alarm can they spur action. But inspiring action requires a judicious mix of hope and fear. If people think there's nothing that can be done to solve the problem, they'll suspect the worst about any proposed change and look to safeguard the narrowest possible definition of their self-interest. The fact that the structural sources of health care cost growth can improve and that improving them does make a difference, is a powerful reason to try for more improvements.

The end of the "grand bargain"

Ezra Klein talks with Frances Lee, Professor of American Politics at University of Maryland, about polarization and Congressional gridlock.

One reason the deficit panic industry has resisted acknowledging the good news is that it undermines one of their main political conceits, a dedication to bipartisanship and to the pursuit of a "grand bargain" in which Democrats and Republicans will come together to solve the deficit problem once and for all.

The fiscal outlook is improving for a mixture of reasons that are outside politics, and ones that relate to Democratic Party victories. Democrats have pushed tax revenues up higher than the old CBO's Alternative Fiscal Scenario said was likely, and Democrats have probably contributed to the health spending slowdown through some of the measures in the Affordable Care Act. And given the realities of partisan polarization, if further progress is to be made this is what it will probably look like. Both parties have some ideas that would improve the fiscal outlook, and both parties will probably have some opportunity to implement some of those ideas.

There's nothing wrong, per se, with the idea of a grand bargain. But in a world where legislators see little incentive to cooperate with the other party, it's not particularly realistic. So framing solutions in terms of huge bipartisan compromises rather than multiple small steps is counterproductive. There's been no grand bargain over the past five years, but enormous progress has been made and more progress can be made in the future.

Next steps on the budget deficit

The 90 second case for empowering nurse practitioners.

The good news is that there continue to be lots of good ideas about how to further reduce health care costs. In the past I've recommended more immigrant doctors, wide scope of practice for nurse-practitioners, action against pharmaceutical monopolies, and all-payer rate-setting as promising options.

And of course one can delve into the guts of things like the Simpson-Bowles plan and find literally dozens of ideas that together made up a proposed grand bargain. Individual items from this agenda can — and should — be taken up by politicians who like them.

Moving on from the grand bargain framework also opens up the terrain for ideas that are two "extreme" to be considered part of a bipartisan compromise. Adding a public option to the Affordable Care Act, for example, is a left-wing spending cutter. Meanwhile, the GOP could easily trim ACA costs by reducing how much insurance plans are required to cover. This sort of back-and-forth is a much more plausible path forward than a new big deal.

But to keep people — both legislators and ordinary citizens — motivated, it's necessary to remind that them that it's not an all or nothing battle. A ton of progress has been made in recent years and more could come in the future.

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As best as anyone can tell, the child migrant crisis is playing perfectly into the hands of conservatives in congress — it's making Obama look bad while pushing Democrats off their immigration reform message. Then along comes Ted Cruz to ruin it all with a plan reported by Manu Raju and Burgess Everett to link any new funding to deal with the situation to deporting DREAMers — kids who came to the US years ago, grew up here, and are now being protected from deportation by Obama administration executive action.

Catherine Frazier, a spokesperson for Cruz, describes ending the deferred action plan as his "top priority."

Of course one senator taking an eccentric stand needn't have major political implications. But this is essentially how last fall's government shutdown got started. Cruz floated the idea that Republicans should refuse to fund the government unless the White House agreed to repeal Obamacare. Most Republican members of congress thought that was unworkable and politically unwise. But once the idea gained traction in the conservative media, nobody wanted to take the RINO stand of breaking with Cruz out of political timidity. Next thing you know the whole caucus was stampeding off the cliff.

Obama's deferred action (and its legislative predecessor, the DREAM Act) has always polled well. There's likely nothing Democrats would rather do than shift the conversation onto that terrain, while simultaneously allowing them to argue that it's Republicans who are distracting attention from the crisis of the moment.

But Cruz isn't necessarily interested in what's best for his caucus. He's interested in what's best for driving Cruz's influence inside the caucus. And that means finding new fights to pick beyond the ones the party leadership is interested in.

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Rupert Murdoch's media conglomerate 21st Century Fox has made an attempt to buy rival media conglomerate Time Warner for $80 billion; the Time Warner board considered and then rejected the offer. But nobody thinks this is a done deal. Murdoch will continue to press his case to Time Warner shareholders, and Time Warner may press Murdoch to sweeten the deal. It's premature to say that a merger is likely, but the fact that these talks are in the news means that even though Time Warner rejected the offer, the possibility is hardly off the table.

Why is this happening? And what does it mean for an ordinary television viewer? You've got questions and we've got answers.

1) What do these companies do and why would they merge?

21st Century Fox and Time Warner are both media conglomerates. They own television and movie production studios that make shows and movies, and they own cable television networks. CNN, Cartoon Network, TNT, and HBO are all Time Warner networks. 21st Century Fox's networks are mostly identifiable by their Fox branding — Fox News, Fox Sports, and FX are all 21st Century Fox Networks — though they also own a majority stake in National Geographic.

Companies like Fox and Time Warner make a lot of money from what are called carriage fees that cable infrastructure owners pay for the right to carry a channel. Cable TV providers don't face much competition, but nobody is going to pay for a cable package that doesn't feature the networks they want to watch. Recently, the cable industry has seen significant consolidation. One major aim of this consolidation is to gain more leverage over the networks, so that cable providers can pay lower fees for the right to carry channels like Cartoon Network and Fox News. One major aim of consolidating 21st Century Fox and Time Warner would be to accomplish the opposite and allow the network owners to have more leverage vis-à-vis the people who own cable infrastructure.

2) Why doesn't Time Warner want to merge?

The merger makes business sense, and the price Murdoch is offering — about a 22 percent premium over the current market price of Time Warner shares — is fair. Nonetheless, Time Warner executives and board members are raising one big objection to the merger. Murdoch is offering some cash to Time Warner shareholders, but most of the purchase would be financed with shares of 21st Century Fox stock.

That's a fairly standard practice, except 21st Century Fox stock is a bit unusual — it doesn't carry any voting rights. Like many family firms, Murdoch's company has a two-tier share structure with the bulk of the voting shares in the hands of the Murdoch family. Time Warner's board says it would be a mistake for Time Warner shareholders to swap their voting rights in the company for non-voting shares of questionable value.

At any rate, that's their story. They also might just be bargaining for a higher price.

3) Didn't Time Warner just get bought by Comcast?

No. The proposed takeover is that Comcast is buying Time Warner Cable, which is a different company. Comcast owns both cable providers and television networks, and Time Warner used to be the same way. But in March 2009, the conglomerate's cable assets were spun off as a separate company, Time Warner Cable.

That's what Comcast is buying. More recently, Time Warner also spun off Time Inc, its magazine division. Rupert Murdoch also separated his newspaper interests from his television and film production interests. That leaves the present-day incarnation of 21st Century Fox and the present-day incarnation of Time Warner as very similar businesses, and logical candidates for a merger.

4) Does this mean Fox would be running CNN?

Almost certainly not. That would be an obvious anti-trust red flag. It's fairly common for two companies that are merging to sell off a handful of assets to avert anti-trust concerns, and this is almost certainly what would happen in the case of CNN.

In the past both CBS (a division of Viacom) and ABC (a division of Disney) have expressed interest in owning the network. Both of those companies run fairly costly news divisions as part of the legacy of traditional broadcast television, but like all general interest networks they don't actually air very much news. Combining their news infrastructure with the distribution capabilities and strong brand of CNN is a compelling proposition, so offloading the news channel shouldn't be a problem.

5) How about a music break?

There's no genuinely on-point songs to offer, but one guy on YouTube did rather amusingly recast a They Might Be Giants song as a very mean tune about Murdoch:

6) Am I gonna get screwed if this happens?

Probably not. The reason that you are screwed, as a cable customer, is that there is very little competition in the cable industry. That, in turn, is not so much a failure of anti-trust policy as a reflection of the fundamental economics of infrastructure. There are better and worse ways to regulate (or not regulate) industries like cable television, but there's no clearly correct solution. It's simply a hard problem. Tim Lee reported on how you can counter-exploit the economics of low competition to get a better deal on your cable bill, but that's about the best we can offer.

With that context as background, diminished competition among cable networks is unlikely to harm consumers. What's happening is that cable companies are extracting monopoly rents from consumers, and if Murdoch gets his way he'll be able to ensure that more of those rents flow into his pockets rather than Comcast's pockets. You're in the same boat regardless.

7) Why do people own non-voting stock shares?

It's a little bit mysterious. In theory, the value of a share of stock stems from the fact that owning it entitles you to a small slice of control over the enterprise. Firms with dual-class share structures — a group that's grown lately to include Google and Facebook — break that link between ownership of the stock and control of the enterprise.

Buying a share of stock like that is arguably a form of pure gambling. You don't really own anything of value other than the right to sell the share later if it becomes more valuable.

On the other hand, in practice almost nobody owns enough shares of stock for the voting rights to matter. Ordinary shareholders in Time Warner do not influence the governance of the company in any practical sense any more than ordinary shareholders of 21st Century Fox do. Indeed, since so much stock is owned through mutual funds or index funds, it's quite common for people to own shares of both companies. So the Time Warner board's objections to the deal make sense in theory, but violates ordinary practice.

8) Isn't the whole cable television industry dying?

Maaaaaybe. Certainly among young tech-savvy urbanites there is a distinct trend toward "cord-cutting" and relying on streaming internet video services for one's entertainment. If that trend continues, the whole way Time Warner and 21st Century Fox have structured their businesses will collapse.

That said, since both companies have very similar businesses, it's not clear that the existence of some chance the industry will collapse necessarily militates against a merger. They're in the same boat. And in the short-term, at least, a merged company could have more clout in working out deals with Google, Apple, Amazon and other firms involved in the streaming video industry. Meanwhile, both firms have their feet somewhat in the live sports realm, which has only increased in monetary value as time-shifting and streaming video have devalued advertising on things that aren't live.

9) So what about sports?

ESPN, owned by Disney, is the 800-pound gorilla of the live sports world. But Time Warner is also an important secondary player in this industry. They run the MLB Network in a partnership with Major League Baseball, and run NBA TV and the NBA League Pass service and apps in partnership with the National Basketball Association. Fox is a major broadcaster of professional football, and also airs many baseball games. Time Warner's TNT subsidiary broadcasts NBA and NCAA basketball games and its TBS subsidiary shows baseball games. Fox also owns a network of regional sports cable networks that carry local live sports coverage, and has interests in college football.

If you were to somehow add it all up, and then redivide it in a more coherently branded way — presumably with games transitioning off TNT and TBS onto the flagship Fox Sports Network — you'd have what's potentially a credible competitor to ESPN.

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The employment statistics you normally see cited in the media are seasonally adjusted, meaning run through an algorithm to flatten out regular surges in employment around Christmastime and the summer season. Seasonally adjusted data is more useful for most purposes, but the BLS made this chart showing the raw data for a few industries that have large summer peaks and it helps us understand something else — where are the summer jobs?

Screen_shot_2014-07-15_at_4.30.58_pm Note that this is a logarithmic scale, so the modest undulations of the hotels and motels line actually represents a quantity of jobs swinging up and down that's larger than the summer camp swing. Using the log scale captures the fact that the vast majority of hotel jobs are non-seasonal, but it obscures the fact that the raw quantity of seasonal hotel jobs is quite large.

But the biggest raw swing looks to be in the country club industry, where over 200,000 jobs are created and then lost again every summer. Meanwhile, as Danielle Kurtzleben has documented, teenagers are growing less likely to seek and obtain seasonal summer employment even as the seasonal trend in labor demand looks to be robust.

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You can tell it's the dog days of summer because some of Washington's finest minds are spending their time debating the inherently unknowable question of whether today's teenagers will grow up to be Republicans. Jon Chait says no way, but Harry Enten and John Sides and David Leonhardt say maybe.

I've been reading a lot about the politics of the 1850s lately, so I'll just say that one thing you learn from history is that partisan and ideological configurations can change a lot — and in surprising ways — over time.

More interesting than asking whether people born in the 1990s will be voting GOP in the 2020s, I think, is asking what kind of a GOP it would have to be for them to vote for it. As an older member of the left-leaning youth cohort, I was really struck by something John Boehner said four summers ago. He complained that the Democratic majority that existed that summer, paired with Barack Obama, was "snuffing out the America that I grew up in."


(Chart by Delphi234 using Tax Foundation data)

Boehner was born in 1949 and presumably isn't nostalgic for the sky-high income tax rates (or strong labor unions) of his youth. So what was so great about it? The racial and gender discrimination? In practice, he probably didn't have anything at all in mind — he's just mixing up disagreement with aspects of the Democratic agenda (the specific issue under discussion was the Dodd-Frank financial regulation bill) with a generalized nostalgia for his youth. That probably resonates with a lot of older Americans, but while today's teenagers might well turn against some of the failings of Obama-era liberalism, they're unlikely to be pining for a return to Mad Men social norms.

There's just no way.

Which isn't just to say that the younger generation is socially liberal and the GOP is socially conservative. For one thing, on some key issues like abortion and gun control, younger voters don't seem to have particularly left-wing views. For another thing, there's really a broader issue with the GOP than it's specific views on, say, marriage equality for gay and lesbian couples.

There's something very oldsterish about contemporary conservative politics. The constant bickering about Ronald Reagan is very odd to anyone too young to have any particular recollection of the Reagan years. Calling a group of people "Beyoncé Voters" as an insult is weird. Some of this oldsterism is just tics, but some of it has policy implications. The sort of budgetary priorities that call for huge cuts in all domestic spending, except no cuts at all for anyone born before 1959 is kind of weird. The huge freakout over New York City starting a bicycle program last summer was bizarre. It's easy to imagine a political party that's broadly favorable to low taxes and light regulation without sharing this particular set of tics. And then there was the time George Will wrote a column-length rant against blue jeans.


There have always been cranky old people asserting that things were better when they were kids and whatever is happening now is terrible (my late grandmother once told me things were better in the 1930s "because at least we had hope") and presumably there always will be cranky old people. But a confluence of circumstances has created a situation in which conservative politics has gotten bound up with cranky oldersterism in a somewhat weird way.

And I think it's fairly predictable that today's young people aren't going to vote for that. Maybe because they're all Democrats, maybe because Republicans change positions (small government ideology and, say, marijuana legalization would seem to be a great match), or maybe because some of both. What's really important is that as the population changes, the country's politics are sure to change too.

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Because the Green Bay Packers are publicly owned, they make financial information available to the public in a more detailed way than most other American sports teams. And their data makes it clear that owning an NFL team is a really good business to be in. The Packers received $187.7 million as their automatic share of the league's national television revenue, while spending $171 million on player compensation.

Of course a team has expenses beyond the cost of players.

But many of those expenses directly related to the raising of local revenue. The Packers reaped a further $136.4 million from their local fan base through ticket sales, stadium advertising, merch sales, etc. Teams located in larger markets almost certainly sustain more local revenue than this, and that larger local revenue base sustains a larger and better-paid workforce. If you're in New York City, than the commissions you end up paying out to the guys who sell the luxury suites or the corporate sponsorships are going to be giant compared to what the Packers pay.

But fielding a full team of NFL players does not require any more money than what every team receives by default. That gigantic pool of national television revenue is what makes the NFL such an economic juggernaut, and it's also what makes it possible for the league to sustain a team in Green Bay or really anyplace else it likes.

Other major sports leagues are lucrative, too, but none of them have that firehose of national revenue. The NBA brings in a bit less than $1 billion a yearMajor League Baseball gets $1.55 billion,  and the NHL gets a paltry $200 million. The NFL has just over $6 billion a year.

And because life isn't fair, the firehose makes it possible for the rich NFL owners to get even richer. The fact that teams can be profitably located in arbitrary cities means that threats to relocate elsewhere are always credible — meaning you can extract more subsidies. The NFL manages to rake in this financial bonanza even while snubbing the gigantic Los Angeles media market, simply because LA hasn't been willing to pony up the subsidies the league wants. Basically no other league could pull that off.

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Getting ahead in the workplace is something that's very important to most people. And yet it's not something that very many of us receive explicit instruction in. Katie Liljenquist recently highlighted a couple of findings from her research that shows one potent but underexploited method for getting ahead — ask for advice.

Her 2010 paper "Resolving the impression management dilemma: The strategic benefits of soliciting others for advice" shows that asking for advice accomplishes the key goal of signaling warmth and likability without compromising your reputation for competence.

Advice-seekers are seen as warm and humble

People really like people who ask them for advice, perceiving advice-seekers to be warmer, more humble, and more cooperative than non-seekers.


After all, everyone likes flattery but nobody likes flatterers. Asking for advice is a nice implicit way of complementing a more senior colleague — you wouldn't be asking unless you respected that person's skills and judgment — but it doesn't require you to say or do anything obsequious. It demonstrates humility, but in a way it also demonstrates competence since it will seem awfully clever of you to have had the good sense to ask this particular person for advice since he will naturally think he's a great person to ask.

Advice-seekers are more likely to be promoted

But this isn't just a question of getting the boss to say nice things about you. In Liljenquist's simulated job performance reviews, advice-seekers were significantly more likely to be recommended for promotion than non-seekers.


Of course, this is just a simulation and not a randomized study of real-world workplaces so it doesn't quite meet a gold standard of research rigor. On the other hand, asking some senior colleagues for advice is a pretty low-cost strategy so why not give it a shot?

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Companies doing business globally need to consider the local cost of living when designing compensation schemes and assignments for their workers. So the consulting firm Mercer produces and annual list of the most expensive cities globally for expat professionals. I mapped the top ten below:

Screen_shot_2014-07-13_at_8.18.05_am Three interesting facts. One is that none of the most expensive cities are in the Western Hemisphere. Obviously, New York City isn't exactly a cheap place to live, but in the grand scheme of things we do okay.

The other is that two of the most expensive cities are in Africa — Luanda and N'Djamena. Given the poverty of Angola and Chad, these aren't "high cost of living" cities per se. What the report is capturing is that they're expensive places for an international businessperson to live in. That means housing in a secure community is expensive, and imported global goods are very expensive. These cities are unattractive locations for global firms to do business.

A third is that of Europe's most expensive cities, three — Geneva, Zurich, and Berne — are all in Switzerland. That's in part a consequence of exchange rate dynamics. But it also shows that despite Switzerland's very aggressive efforts to shape itself as a business friendly European destination, they're still falling down on some basic attributes, most notably affordable rental housing.

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Rich Sandomir of the New York Times is upset that Sports Illustrated let LeBron James pen a James-bylined first-person account of his return to Cleveland rather than insisting on a more traditional reported scoop.

I don't really see a problem with what SI did. But what I think is really missing from Sandomir's story is any sense of what's the counterfactual here. Suppose SI did refuse to run a first-person story from James. Suppose ESPN and other legacy outlets also played by the same rules. What happens then? Well, James publishes the first-person story on Medium or he does a Fanpost for Fear The Sword or he posts the story on his website or his Facebook page or he does it as a tweetstorm.

I'm not someone who thinks media brands are irrelevant.

Editors and publishers have enormous value we can add to 95 percent of the work that 95 percent of the people who'd like to write stuff would be interested in doing. But we can't add anything to LeBron James announcing he's returning to Cleveland. He doesn't need Sports Illustrated's help getting that story distributed. It is guaranteed universal, instantaneous pickup wherever it's published. Now LeBron probably does need help with the composition and editing of his account. But the guy is worth hundreds of millions of dollars. If he didn't work with a Sports Illustrated writer, he could have hired any number of freelancers to work with him to publish on any platform.

Under the circumstances, SI made the only reasonable choice.

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A new analysis from Gallup shows that opinions of President Obama are heavily correlated with religion — Muslims and Jews love him, Mormons and Protestants do not:


Of course, common sense reminds us that these sectarian divisions are heavily mediated by race and ethnicity. Catholic views of Obama more or less track those of the American public overall. But if you looked deeper, you'd doubtless find that Obama is well-liked by Latino Catholics and disliked by non-Hispanic Catholics. Similarly, a large share of the pro-Obama Protestants in America will be African-American while the views of white Protestants may not be so different from those of white Mormons.

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The trust fund that pays for federal transportation spending in the United States is running out of money in August, prompting a big congressional debate over how to refill its coffers. But the the main proposals offered by the Senate Finance Committee and the House Ways and Means Committee both miss a crucial fact: Americans are driving less than they used to.


The decline in driving is relevant to the debate for two reasons.

One is that it directly impacts the revenue situation. Federal transportation spending has historically been financed by federal gasoline tax revenue. The idea was that money for highways should come from people who use highways. That worked until the mid-aughts when gasoline tax revenue started to fall.


What happened? American cars have gotten more fuel efficient over time. Once the actual amount of driving started to plateau those improvement in fuel economy began driving nominal gas tax revenue downward. Meanwhile, each and every year inflation slightly eats away at the value of the gasoline tax. But congress kept on spending money on highways, rapidly depleting the trust fund until it was patched in 2012 with general revenue. The proposals on the table in congress right now are all proposals to find new kinds of patches.


Right now, fees on drivers account for only 72 percent of federal transportation spending, and even less than that at the state and local level. This is offset partially by the fact that a share of transportation spending goes to mass transit rather than highways, but at all levels of government the highway share of total spending is larger than the user fee share.

Transportation policy was supposed to avoid this outcome for good reason — there's no point in building more roads than people want to use.

If the amount of driving happening in America is in decline, stepping up the level of financial subsidies offered to encourage driving is an absurd result. Either spending on roads should fall, or else road users themselves should be charged more money for their activity. Any other approach constitutes a deeply unwise ratcheting up of public subsidies to a polluting and dangerous activity, feeding a dynamic of overbuilding.

Highways and other roads are great. But they are also expensive to build. The traditional formula of trying to build a quantity of highways that's roughly proportionate to what highway-users are willing to pay to use them makes a lot of sense. The new paradigm in Congress where highway spending is unrelated to driving-related tax revenue is a bad idea, and its bipartisan embrace is one of the public policy disasters of the past few years.

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LeBron James startled the sports world today by announcing in Sports Illustrated that he'll be taking his talents to Cleveland, Ohio rather than resigning with the Miami Heat.

When James initially opted-out of the final year of his contract with the Heat, it was generally interpreted as a power play to restructure the team's contracts and attract some fresh talent. But as days went by without Miami succeeding in securing any firm commitments to add major new help, rumors grew that James was considering a return to his original team. Now it's happening. Here are five reasons why.

1) The Cavaliers are about as good as the Heat

Last season, the Miami Heat made their way to the NBA Finals for the fourth straight season. The Cleveland Cavaliers, by contrast, missed the playoffs for the fourth straight season. But despite those divergent fortunes, the currently constructed rosters of the two teams are about equal in quality.

NBA player evaluation is a controversial subject, but different metrics reach a pretty broad consensus that LeBron James is personally worth about 20 wins in the NBA (here's Nate Silver's preferred metric, here's one I like developed by economist Dave Berri) which is slightly larger than the gap in wins between Cleveland and Miami last season.

In other words, the Heat were a lot better than the Cavs solely because the Heat had LeBron James and the Cavs didn't. Add LeBron to the Cleveland roster, and the team is just as good. Except Cleveland, unlike Miami, has some young talent on the roster.

2) LeBron has extremely deep ties to Ohio


Personally, I like Cleveland. So much that I once proposed relocating Silicon Valley to the North Coast. But most people, given the choice, would rather live in Miami than in Cleveland. So to understand the move, you need to understand that James has deep personal ties to Ohio.

He grew up in Akron, not far from Cleveland. And he went directly from playing high school ball in Ohio to playing professionally for the Cavaliers. His wife is also from Ohio. He has no real personal or family connections in South Florida or anywhere else other than the Cleveland area.

3) The Eastern Conference is really bad

One major factor for James in deciding what to do this offseason is maximizing his chances of winning future championships. This decision is complicated by the fact that currently the teams located in the Western Conference are much much stronger than the teams located in the Eastern Conference. Last season, six of the top eight teams by point differential were in the West — including three of the top three.

That means that to maximize his odds of playing for the very best team in the league, LeBron would likely have to go West. But to maximize his odds of reaching the NBA Finals again, it makes the most sense to stay in the East. Speaking strictly in terms of probabilities, that makes the Eastern Conference attractive. And since the Eastern Conference is lacking in high quality teams, Cleveland looks about as good as any other destination. Stacked up against some potential Western suitors, the roster is unimpressive. But as we've seen, it's just fine compared to Miami's.

4) Nobody likes the Atlanta Hawks

Based purely on logical considerations, the best destination might well have been the Atlanta Hawks. Their record last season was slightly better than Clevelands, and their team also suffered a number of serious injuries that are unlikely to recur. They had the cap space to sign LeBron, and also play in a bigger media market that's still in the Eastern Conference.

And yet the Atlanta option never appears to have garnered substantial consideration from James or from any other high-profile free agents in recent years. It's not entirely clear why this is, but the city of Atlanta has gained a reputation for possessing indifferent sports fans who don't like to turn out for even reasonably successful teams.

5) If LeBron wins in Cleveland he'll be a hero

This is probably the most important consideration. When James decamped for Miami, he had aspirations of building a historic dynasty that would rival the Chicago Bulls teams that Michael Jordan led in the 90s or the Boston Celtics teams that dominated the NBA in the 1960s. It's clear by this offseason that it isn't going to happen. The James-led Heat mini-dynasty had an impressive four-year run, but not a historic one. Even if he won another ring there over the next three years, it wouldn't substantially change his legacy.

By contrast, winning even a single championship in Cleveland would be a huge deal. The Cavaliers have never won an NBA championship. The Cleveland Indians last won the World Series in 1948. The Cleveland Browns won a championship in 1964, two years before the inauguration of the Super Bowl. Any star player who leads any of these three teams to a championship, will be a sports hero to several generations of people in Northern Ohio. For a native son of the region to do it, would be especially special.

James has reached a point in his life and career where doing things that are truly special is what matters most to him and that means trying to win in Cleveland.

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Understanding the pile-up of unaccompanied minors crossing the US-Mexico border is hard. Facile political analogies are easy. So suddenly the political world is ablaze with speculation and debate as to whether or not the crisis under way is "Obama's Katrina."

The truth, however, is that not only is the border crisis no Katrina, Katrina itself was no Katrina, at least not in the super-politicized sense in which Katrina analogies are intended. Consider the history of George W. Bush's approval ratings.

Cvfspjk4hesmzts2bc0brg See the Katrina Effect here? Me neither. Indeed, staring at this chart you may realize that you don't even remember when Hurricane Katrina happened. Specifically, an August 22-25 Gallup poll found Bush with a 40 percent approval rating. That number rose to 45 percent in the August 28-30 poll that coincided with the storm (the levees in New Orleans broke on August 29). In the September 8-11 Gallup poll, Bush's approval had ticked up to 46 percent. By the September 16-18 poll it was back down to 40 percent, then by the September 26-28 poll it was at 45 percent.

What's true — and clearly visible from the chart — is that the general Bush trend was steadily downward throughout 2005. But Katrina does not appear to have played any particularly noteworthy role.

If you want to pin Bush's post-reelection change of fortune on anything, the right candidate is Social Security reform. Bush was moderately popular when he won reelection in November of 2004, and retained strong ratings through the lame-duck winter. As his second term began, he pushed for large changes to Social Security. In his post-inaugural State of the Union address he opined that the program "was created decades ago, for a very different era." He noted that a range of Democratic Party officeholders had, over the years, proposed various kinds of benefit cuts. And without endorsing a specific plan, he called for bipartisan action on some form of privatization scheme, arguing that under such a plan "your money will grow, over time, at a greater rate than anything the current system can deliver."

Given Bush's success in his first term in securing substantial Democratic Party votes for a large regressive tax cut, for an invasion of Iraq, and for a bipartisan education overhaul (and his ability to squeak a second large tax cut and a major change to Medicare through congress with the backing of a few Democrats) it wasn't a crazy calculation on his part that this would work.

But it was the wrong calculation.

Democrats adopted a posture of unanimously rejecting full or partial privatization. Bush barnstormed the country in support of privatization, but to no avail. Social Security is incredibly popular, and root-and-branch Democratic opposition solidified partisan hostility to Bush. With no clear legislative path forward available, Republicans fell into bickering over the merits of various different versions of the Social Security reform plan which further eroded Bush's standing. It would be a huge oversimplification to lay responsibility for all of Bush's second term political problems on this, but Social Security privatization was the first big thing Bush tried to do and its failure certainly set the tone for a second term of political impotence.

If Social Security was Bush's real Katrina, we might say the Manchin-Toomey gun control bill was Obama's: an early post-reelection legislative initiative that looked promising at one point, but failed in a way that clarified there was no "mandate" and no real prospect for ambitious further legislating.

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Last week, Derek Thompson at the Atlantic unveiled a potentially devastating critique of the endless wave of trend pieces about the surge in young people living at home with their parents. The key is a single sentence lurking in the Census Bureau's reports on housing in America:

It is important to note that the Current Population Survey counts students living in dormitories as living in their parents' home.

Yikes. So is everyone wrong about everything? Fortunately, no. Housing economist Jed Kolko rides to the rescue with a definitive analysis proving that all your pre-existing biases are correct. There really are a lot more young people living with their parents today than there were ten years ago.

Two charts make it clear. First, the Census actually does let us separately track full-time college students from people who aren't full-time college students:

Shareof1824livingwithparents This shows pretty clearly that while it is true that many of the people counted as living with their parents are full-time college students (some of whom live in dorms, some of whom commute to a local school) the increase in living in home is being driven by people who aren't full-time students.

Still, is it possible that the surge is composed of a huge increase in the number of part-time college students? Maybe people are working a little, getting an associate's degree part-time, and living at home to save on expenses? Well, maybe. But here's a chart of what you might call older young people — it shows the exact same surge:

Shareof2534livingwithparents The best evidence, in other words, is that the conventional wisdom is correct. Due to high unemployment and sluggish wage growth, lots of young people who aren't in school don't have very much money in their pockets. And yet even though young people have less money today, rents are higher and mortgage lending standards are tighter. Higher costs plus lower incomes = growing need to economize, so more people are living with their parents.

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Foreign homebuyers are widely discussed these days — particularly in the New York-based media where the specter of Russians scooping up Park Avenue real estate looms large. A new report from the National Association of Realtors confirms that there's been a surge in international real estate purchases, but also undermines many of the common claims made about the buyers.

First, the surge. In the period from April 2013 to March 2014, foreigners bought $92.2 billion worth of American real estate — up 35 percent from the previous year.


The largest source of foreign buyers by far is the not-very-exotic land of Canada. Another big one is our other neighbor, Mexico, and the rather banal United Kingdom (the Canada of Europe). And the increase in the number of foreign buyers over the past few years is entirely attributable to a surge of Chinese buyers of American real estate. Russians are a small and shrinking share of the market.


The buyers, meanwhile, are largely headed to Florida. Florida's a nice place for a vacation and lots of Americans of means buy second homes there, so why should foreigners be any different? The warm climes of California, Texas, and Arizona also attract a lot of interest. The Manhattan pied à terre concept is much less popular.


Last but by no means least, the homes these foreigners are buying aren't necessarily extravagant. The $268,000 median price paid by a foreigner is more than what the typical American spends, but it's not crazy high either. There are clearly foreigners participating in the super-luxury real estate segment, but just as with Americans that segment is a minority of the market.

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New information released Monday by the Bureau of Labor Statistics shows massive improvement as of May in one crucial labor market indicator — the total number of job openings. Openings skyrocketed this past spring, with April and May seeing a surge in overall employment:


In absolute terms, the largest number of openings is available in the somewhat amorphous industry the BLS describes as Professional and Business Services. That's everything from lawyers to temps to consultants.:


But a particularly sharp surge happened in the Accommodation and Food Services sector:

Food_service_openingsThis is also the sector that registered the highest vacancy rate at 4.9 percent. That's not a historical high or anything, but it's in the neighborhood. That means employers in the legendarily low-wage food service sector are either going to need to start raising wages soon, or else start taking risks on the long-term jobless or people who've left the labor force. An example of why a little complacency about inflation could be very much in the public interest.

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The bankrupt City of Detroit's Water and Sewage Department cut off service to about 7,500 residents for unpaid bills in April and May and says the pace of cutoff notices has only accelerated in June. The situation is a tragedy for thousands of families, who worry both about the practical problems and social humiliation resulting from lack of water but also that they might lose their children to social services if they are deemed unable to bathe them properly. The problem has spurred bubbling outrage for the past several weeks, and even an intervention from a UN Special Rapporteur who deems the shutoffs "an affront to human rights."

How has it come to this?

1) The turnoffs are not a conspiracy


(Joe Guldi/Flickr)

A Canadian organization called the Blue Planet Project has done a great deal to publicize the situation, and cites the Michigan Welfare Rights Organization for the view that the crackdown is "a ploy to drive poor people of color out of the city to facilitate gentrification."

The reality, however, is that the ploy is much simpler than that: DWSD would like more people to pay their water bills. The utility estimates that almost half of DWSD's customers are at least two months behind on their bill, with an average arrears of $560. They also say that about sixty percent of households served with notice of an imminent shutdown pay up. In other words, DWSD is turning people's water off because the threat of doing so works as a tactic to get people to pay their bills.

2) Detroit's water bills are super-high


(Anna Fox/Flickr)

Part of the context for the massive number of people facing shutoff is simply that DWSD has been terrible about enforcement in the past. Another part of the context is that with the city filing for bankruptcy, getting cash now is a priority. Another part of the context is that Detroit is a very poor city, with a large number of residents who have trouble paying the bills.

But another big part of the context is that water is expensive in Detroit. As Anna Clark writes, Detroiters pay about double the national average for water — with rates scheduled to rise 8.7 percent — despite living in a region where freshwater is plentiful.

3) Detroit's water infrastructure is a disaster


(Bryan Debus/Flickr)

A December 2013 Associated Press article by Corey Williams can help you understand one reason why Detroit water bills are so high — the underlying infrastructure is a disaster with leaky pipes and vacant buildings causing the utility to spew water out wastefully. In fact it's such a disaster that Williams reported "city officials say they have no idea how much is being lost" to spills and broken pipes.

The city could drastically reduce its operating costs by incurring the one-time expenses necessary to upgrade its infrastructure, but that would require money Detroit doesn't have. Credit markets are supposed to finance useful investments for entities that lack current funding, but the DWSD is already almost $6 billion in debt and the city has filed for bankruptcy protection. Only by becoming more solvent first can the city possibly secure the funds necessary to improve the infrastructure. Hence the priority on securing cash now.

4) DWSD is also owed a lot of money by commercial customers


(Kevin Ward/Flickr)

The biggest unpaid bills come from commercial sources, not individual households. Clark's op-ed focused attention on the idea that Joe Louis Arena and Ford Field are major debtors, but an April investigation by the local Channel 4 news team showed that the biggest unpaid bills actually derive from the City of Detroit itself. A random apartment building and some now-vacant structures are also way up there. The hockey arena and football stadium aren't facing immediate cutoff because they're paying their current bills while simultaneously disputing some older charges.

5) Detroit is trapped in a downward spiral


(Jeff O'Brien/Flickr)

The problems of the water utility are, in a sense, a microcosm of the broader problems of Detroit. The city's water infrastructure was built to serve a much larger population than currently resides in the city (1.85 million in 1950 versus about 700,000 today). But all those pipes still need to be maintained, and pension and health benefits for retired workers still need to be paid.

Servicing all those legacy costs is expensive relative to the size of the city's current, diminished tax base. That means the basic value proposition — services received relative to taxes and fees paid — in Detroit is unattractive compared to what other cities (or even many nearby suburbs) can offer. This, in turn, tends to drive further population flight. Worse, the people left behind tend to be those lacking financial resources or useful social capital — further worsening the basic fiscal dynamic.

6) Other cities manage to deal with this


(Hampton Roads Planning District)

For all that Detroit is unique, the basic problem of water bills is common. Every city faces the same basic tradeoff — if you don't shut down water when people don't pay, then nobody will pay. But depriving indigent households who genuinely can't pay of water is inhumane and accomplishes nothing. Normal practice is to establish programs to assist needy households. In DC, for example, low income households are entitled to 400 cubic feet of free water while New York City has a range of programs targeting senior citizens and the disabled.

Many jurisdictions also run charitable or quasi-charitable initiatives where bill-payers can check a box on their bill to contribute to a local assistance fund. Clearly, a city whose poorest residents lack access to clean, healthy water is going to suffer serious public health risks and impaired economic opportunity on top of a humanitarian emergency. In other words, the basic problem is not unsolvable. But few cities have Detroit's level of outstanding unpaid bills, low-income population share, and legacy of mismanagement and poor oversight.

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As long as I've been writing about politics in Washington, income inequality has been something that left-of-center intellectuals like to talk about and professional political operatives regard as a non-starter in practical politics. That changed briefly in 2013 as the Obama administration began talking about inequality and the president gave speeches in which he warned about "a dangerous and growing inequality and lack of upward mobility that has jeopardized middle-class America's basic bargain — that if you work hard, you have a chance to get ahead."

He called that "the defining challenge of our time."

More recently, though, the old conventional wisdom has reasserted itself and, as Zachary Goldfarb writes for the Washington Post, leading Democrats are no longer talking about inequality in their political messaging. He connects this to an "ongoing dispute between the Democratic Party's liberal and moderate wings" but the striking thing about it is the extent to which the dispute is a dispute about speechwriting tactics and not public policy.

As it happens, I was at that "defining challenge" speech and immediately after the president finished speaking I got to talking to a wonk who was in the audience and whose views I knew to be well to the left of the key economic policy gurus in the White House. We agreed that what was odd about the speech was that while it unveiled a bold new framing of Obama's economic agenda, there was no new policy departure. What Obama stood for before inequality became the defining challenge of our time was exactly what he stood for after it became the defining challenge of our time.

In the speech, Obama touted the Affordable Care Act and food stamps, called for a higher minimum wage, said it's important to improve education, called for federally-subsidized preschool, called for corporate tax reform, and called for infrastructure spending. He reiterated his support for a budget deal that would rescind the sequester and reduce the long-term deficit. He defended Social Security and Medicare but also said "progressives should be open to reforms that actually strengthen these programs and make them more responsive to a 21st century economy."

In other words, he restated consensus Democratic Party ideas on the shape and purpose of the welfare state in America.

And the next Democratic Party presidential nominee — whether it's Hillary Clinton or Elizabeth Warren or whoever else — will run on those same ideas, whether or not they explicitly link them to income inequality (as Obama did in 2013) or not (as Obama did in 2008 and 2012). The simple fact of the matter is that today's Democrats don't disagree about very much. Every single Democrat in congress — and certainly any plausible national leader  — regularly backs proposals to make rich people pay more taxes in order to finance more generous benefits for people in the bottom half of the income distribution. Depending on your tastes, you may see this as a sign that the party has a strong agenda or a sign that the party has become intellectually stagnant but either way it's not much of a debate.

Indeed, the extent to which questions about whether speeches use the phrase "inequality" and/or strike a populist tone are under scrutiny these days are mostly an indicator of how little is dividing Democrats.

For a sense of what a real policy disagreement looks like, consider the brewing intra-conservative argument about taxes. The mainstream Republican view has been that the party should reduce tax rates on the highest-income Americans, even if doing so requires the middle class to pay higher taxes. But a dissident viewpoint embraced by Senator Mike Lee and others says the GOP should reduce tax rates on middle class parents even if doing so requires higher taxes on some wealthy people. Those are two different ideas. What you have on the Democratic side is really just two different ways of talking about the same idea.

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This map shows Amtrak stations by ridership; the bigger the circles, the more riders the station serves. Rail usage is dominated by the New York to DC route, which connects the two highest-ridership stations and has #3 Philadelphia in between them. Those three cities accounted for over 18 million boardings and alightings in 2013 (about 30 percent of total boardings). The eighth (Baltimore), 11th (Wilmington), 12th (BWI), and 15th (Newark) most popular stations are also on this corridor, adding another 3 million passengers or so.

Of course some of the ridership from the NYC-Philly-DC stations is bound for New Haven, Providence, Boston and other cities on the northern leg of the Northeast Corridor. But outside of the Boston-Washington Megalopolis, there's very little ridership happening, and even within it the bulk of the riders are in the southern half.

The vast majority of the stations and routes have very few riders, and you can see these absurd strings of little-used stations dotting the southeast and midwest. Providing that geographically expansive service is smart politics for a federally-run agency that needs to maximize its base of support, but it makes very little business or transportation sense.

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After a bit over five years of catastrophic unemployment and inflation below the Federal Reserve's 2 percent annual target, America's inflation hawks are having a moment. In the first half of the year, the unemployment rate has fallen by 0.6 percentage points to 6.1 percent — if that pace continues, by Christmastime it'll be downright low. Meanwhile, over the past twelve months consumer prices have risen by 2.1 percent — at long last slightly above the Fed's target.

So is it time for Janet Yellen to start curbing inflation? Here are eight reasons to doubt it.

1) Inflation hawks want lower wages


(Scott Olson/Getty)

Clamping down on inflation sounds good to most people since everyone would like to see a lower cost of living. But reducing the money supply so that workers in industries that are sensitive to interest rates and currency fluctuations (construction, manufacturing, auto retailing, etc.) lose their jobs isn't a reasonable way to reduce the price of gasoline or milk. The kind of inflation it makes sense to fight with tighter money is wage inflation, and that's exactly what the tight money crowd is worried about.

On June 20, Justin Lahart wrote a Wall Street Journal article headlined "America, Inc. Wakes Up to Wage Inflation" about how companies are concerned that a healing labor market will force them to raise pay and reduce profit margins. Two days after that, E.S. Browning reported for the same paper that "Inflation Is Back on Wall Street Agenda." But if higher wages sound good to you, then ringing the alarm bells about inflation doesn't make much sense.

2) Wage pressure is actually extremely weak


It's a sign of how weird America's priorities have become that Torsten Slock of Deutsche Bank actually presented the chart above as evidence that wage demands are getting out of control.

The red line shows actual wages. It says that since 1986 the five worst years for wage growth were 2009, 2010, 2011, 2012, and 2013 and that 2014 is set to be the sixth-worst. The blue line shown an indicator of wage pressures, and it shows that pressure has risen from its weakest reading ever all the way back up to a level that we previously only saw at the low-points of business cycles. If you think that Ronald Reagan's second term, and every single year of the Bush, Clinton, and W. Bush administrations featured out-of-control wage inflation, then you should worry about wage inflation today. But not otherwise.

3) Workers have been taking it on the chin


It is totally understandable that business executives aren't thrilled about the idea of reduced profit margins. That's their job. But while it's entirely true that the share of national output going to labor compensation has risen lately, it's been rising from record lows.

It would take a fair degree of additional wage inflation just to get us back to normal.

4) We're still missing a million manufacturing workers


Inflationistas like to point out that "capacity utilization," a measure of industrial output relative to potential, is nearly back to its long-term average level.

But consider a simpler method of industrial capacity — the manufacturing workforce. Despite years of much-hyped growth, we have over on million fewer people working in manufacturing than we did at the start of the recession. Indeed, we have slightly fewer manufacturing workers employed today than we did in January 2009, a time when nobody thought the economy was running out of slack.

It may be true that we will soon be faced with a below-average amount of excess manufacturing capacity. But we just suffered through a years-long spell of an above-average amount. So what's wrong with spending a few years in the other direction? It will give businesses an incentive to invest and grow our industrial infrastructure.

5) States are poised to cut taxes and fees

Screen_shot_2014-07-05_at_7.55.47_pm The recession took an unprecedented bite out of state government tax revenue, forcing governments to not only reduce services but also to raise taxes and fees (the latter of which can often — in the form of higher bus fare, for example — play politically as a spending cut). This is a subtle but real source of inflation in American life.

With revenue rebounding strongly on the backs of economic growth, governors and state legislators will have again have the ability to pull off the political magic trick of cutting taxes without reducing services. Those tax cuts will moderate price growth naturally in a way that doesn't restrain wages or reduce employment.

6) The jobs gap is still enormous


The economy continues to be afflicted by over 5 million "missing workers" who are neither employed nor actively seeking work. Some of these workers are over the age of 55, and perhaps simply in a state of irrevocable early retirement. But as this chart from the Economic Policy Institute shows, over 3 million of them are in prime working years and another 1.5 million are below the age of 25.

Macroeconomic policy dedicated to preventing currently employed workers from ever securing a raise essentially guarantees that no employer will ever face a strong business case for taking a risk on these missing workers. Yet keeping millions of able-bodied adults out of the workforce will do permanent harm to the American economy.

7) The last jobs report wasn't that good


The 288,000 jobs the economy added in June represented a perfectly decent level of job growth which, following hot on the heels of several other perfectly good months, has people in a happy mood. And rightly so. After a prolonged span of sub-par job growth it's natural to be happy about a return to normalcy. But don't mistake the past few months' worth of job growth for some kind of crazy boom.

Months better than this have happened many times in the past, and during the robust prosperity of the 1990s they happened regularly. It is possible that we won't be able to return to that kind of job creation without inflation first reaching uncomfortably high levels. But given that we have seen much faster job creation in the past, we owe it to ourselves to at least aim for it and see if we can achieve it.

8) Supply-side reforms can reduce inflation

Critics of expansionary monetary policy tend to propose instead, as John Cochrane did last week in the Wall Steet Journal, that we focus on supply-side reforms to create jobs. But this exact same logic can be applied in reverse. Throwing people out of work to moderate pressure on consumer prices is perverse in a world where many price pressures could be alleviated by improving public policy.

Allowing nurse-practitioners to treat patients autonomously could bring down health care costs. More broadly, many states have created a wide range of price-increasing occupational licensing cartels whose reform would reduce prices. Changing zoning laws to allow for more construction would ameliorate rent increases. The regulatory landscape is littered with potentially price-reducing regulatory reforms, ranging from over-the-counter oral contraceptives to embracing Uber and other similar companies (Lyft and Sidecar in the taxi industry, AirBNB in hotels).

Supply and demand intersect throughout the economy, of course, but insisting on demand-side solutions to supply bottlenecks in the housing and medical care sectors is especially perverse. Moderating rents and doctors' bill by engineering a situation in which people have to live in their parents' basements or skip routine treatments is absurd and destructive of the sources of long-term prosperity. The Fed should commit to keeping the labor market recovery on track, and challenge legislators and regulators to improve policy in other areas.

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The Export-Import Bank has traditionally had lots of friends in congress but not much in the way of big intellectual defenses. But Larry Summers offers one this weekend in the Financial Times, essentially a foreign policy rationale:

At a time when authoritarian mercantilism has emerged as the principal alternative to democratic capitalism, the US Congress is flirting with eliminating the Export Import Bank that, at no cost to the government, enables US exporters to compete on a more level playing field with those of competitor nations, all of whom have similar vehicles. Only by maintaining a capacity to counter foreign subsidies can we hope to maintain a level global trading system and to avoid ceding ground to mercantilists. Eliminating the Export Import Bank without extracting any concessions from foreign governments would be the economic equivalent of unilateral disarmament.

This is a great example of how economics underdetermines public policy. Suppose you think the best world is one in which no major government is running a targeted program to subsidize politically favored exporters. Is the quickest route to that endpoint for the United States to unilaterally abolish its own export-subsidy program? Or is to maintain our export-subsidy program until such programs can be phased out on a multi-lateral basis?

Summers' argument has some plausibility. On the other hand, consider this. To Summers, the existence of foreign export-subsidy programs is a key reason to keep the Export-Import Bank. So if the European Union were to unilaterally abolish its export-subsidy programs, Summers would be more favorable to abolishing ours. In other words, "unilateral disarmament" by the EU might make US disarmament more likely. So maybe unilateral disarmament by the USA would make EU disarmament more likely? It's extremely hard to know which way the strategic argument cuts, but whatever you make of it this would all hinge on something well outside the bounds of normal economic thinking.

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According to Gallup, 79 percent of Americans are satisfied with the level of freedom in their lives. That's a lot, but it's not even close to the 94 percent that New Zealand scores. And yet the leaderboard is curious. It's mostly full of the kind of countries that lead all sorts of quality of life indicators, but also features a few weird ones:

Freedom In Cambodia, widespread allegations of election fraud led to a months-long protest campaign early this year which was paired with violent repression. The present rulers were installed by the Vietnamese military after an invasion that threw out the Khmer Rouge. Freedom House says the government of Uzbekistan "suppressed all political opposition" and "the few remaining civic activists and critical journalists in the country faced physical violence, prosecution, hefty fines, and arbitrary detention."

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Matthew Quirk is a former journalist for The Atlantic who spent five years reporting on crime, private military contractors, the opium trade, terrorism prosecutions, and international gangs before moving on to the more entertaining terrain of thriller writing. James Patterson described his debut novel, The 500, as "The Firm goes to Washington, only with a whole lot more action." His second novel, The Directive, is quite possibly the world's first monetary policy thriller. A bank heist caper where the objective has nothing to do with anything in any vault.

In an interview conducted in mid-June, Quirk spoke to me about insider trading, break-ins, and the real source of security vulnerabilities in the modern American workplace.

The transcript has been edited for length and clarity.

Matthew Yglesias: How did you start thinking of the idea of doing a heist around economic data?

Matthew Quirk: I was casting about for the biggest hoards of money in the world, and you get to the Federal Reserve Bank in New York fairly quickly. But that's been done. Then I learned more and more about the trading desk, and my mind was blown.

You get to have this great line where you say, "There's $300 billion worth of gold in the basement, but the real money is on the ninth floor."

Yglesias: The Federal Reserve is in the news a lot, but people would be surprised to learn what's actually going on up there, right?

Quirk: Yeah. I was a reporter in Washington for a while, and I thought, "Oh, the Fed sets interest rates," because that's always what people say. But as you dig into it, you realize that the Fed just has to induce interest rates to where they want to be. They have to trade back and forth with these 19 or 20 banks, and they have 8‑10 guys at this trading desk, trading about $5.5 billion a day. That's actually how the government prints money and expands and contracts the monetary supply.

It's this high wire act. You explain it to people and they say, "Oh, it's a conspiracy thriller." You say, "No, no. That's the real part. I haven't gotten to the conspiracy yet." But it's a miracle that it works.

Yglesias: The point is, if you know what the trading desk is going to do you could make a lot of money.

Quirk:  Yeah, you could, especially if it were a contentious time, like this year where everyone's freaked out about the taper.

Yglesias: As far as we know, there haven't been any high‑profile break‑ins at the Fed. But are there examples we know of insider trading based on government data?

Quirk: Yes. There was a study recently that looked at the pattern of trading in gold, right around the Fed statements. It found that the markets factor in the news 15 minutes before it becomes public. They did statistical controls and it was strong evidence — it went back to 1997 and found profits as high as I think $256 million — so it seems to be coming out of the press lockups.

Yglesias: Have people tried to break into the New York Fed, maybe just to get that gold? Or is it too obviously secure and nobody goes for it?

Quirk: They had a big computer security breach last year. I don't think there's actually been a physical attack on it. The funny anecdote I heard is that after September 11th they evacuated the security guards for health concerns, and that was the first time they realized there weren't locks on the doors. It had been guarded continuously since 1923, so they had to call a locksmith.

Yglesias: But the big idea of the book is that in practice, social engineering is more important than physical security, right?

Quirk: Yes, the idea is that, rather than a heist relying on brute force like blowing up the safe, or stealth like doing gymnastics through a laser field, you get in by abusing people's trust.

When I planned out the book, I actually talked to the red teams that work for government facilities to try to break into them, and most of their techniques are based on social engineering and getting people to trust them and let them in.

It could be something as simple as having two cups of coffee — like when I went into  the elevator at Vox’s office, somebody saw I was busy and they just swiped me in because I look like I belong here. Another famous one is the smokers' door. If you get to the smokers' door before the smokers come out and you seem like you belong there, they'll let you back in the building because people are very reluctant to challenge people.

To beat social engineering, you would have to challenge everyone, which just isn't in our makeup. It works at the Pentagon, they have guys with podiums everywhere whose job is to challenge people. But otherwise if you turned around and slammed the door in someone's face and said, "swipe in," you would seem so rude, and that's just so against human nature. That's the trait that these guys use to break into places.

It was fun to plot out a Fed heist that would rely on those techniques, and that would actually look like how a break‑in would occur, today.

Yglesias: Basically your security's only as good as the mindset of the people working for you.

Quirk: Yeah, and at the Fed, the outside is very intimidating. It's all limestone and sandstone, they have a turret. Once I got past security, they waved me through the man traps — which are these scary extra heavy security turnstiles — with a group of employees, and then I was on an elevator with no key control. Even your office has key control in the elevator.

I just said, "Oh, I'm on nine." Then I went up to the floor with a desk on it. Inside, it was just a culture of economists and bankers, so I was able to snoop around. I was astonished by that.

Yglesias:  Of you couldn't put together a giant break‑in, you could probably hire Ben Bernanke as a consultant, or to come give you some speeches. Isn't that the real way to get this information?

Quirk:  Absolutely. It doesn't make for a good thriller, to just have a private room with Ben Bernanke. But the really interesting thing about the former Fed officials is, if you do a full term as a governor, you're allowed to go directly into banking. Larry Meyer, who runs Macroeconomic Advisors, he will routinely describe Fed vote counts and other stuff that’s not public.

The former Fed officials keep their IDs to the Federal Reserve system, and they can go and use the gym and the barber shop and the dining hall.

After a dinner event with Ben Bernanke, the hedge fund manager David Tepper basically told The New York Times: "I didn't realize how good his information was. I would have traded on that. He totally told us about that bond rally," so besides the potential leaking from the lockups, there's this old boys' network.

Although sometimes those guys, even after they purport to have inside information, still bet wrong — like in 2010 a lot of them bet wrong, including PIMCO.

Yglesias:  So you might think you have better information than you really do, or be getting conned by someone.

Quirk:  Yeah. The Fed ... it's crazy, because the major banks own the stock of the Fed — so they technically own it — and the Fed is responsible for stability, so the last thing it wants to do is surprise these people. It somehow has to ask them about economic conditions, do everything it can to reassure them about the way it's going, and do that without tipping its hand at all.

Some people argue that it's impossible that the Fed could keep information from the major traders.

Yglesias:  The book ends on a cynical note about how the legal system works. It involves this big policy institution. Is there a message you want people to take away?

Quirk: I'm not trying to score political points. I don't really like to get on a soapbox in the book. But if you look at the financial crisis of 2008 and the number of people who have been held accountable for it, if you look at the way the recovery and stimulus has been done ... I don't know if they had any other options, but it's definitely been top‑down. Banks and investors have recovered, but Main Street jobs are lagging behind.

A little bit of cynicism is in order, and it's nice when I'm writing the books that I can be more than just an action plot, and reflect the world as it is, and gesture to some larger issues.

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The Declaration of Independence, ratified by the Continental Congress on July 4, 1776 is best known for its clickbait headline about all men being created equal. But Thomas Jefferson was also an important pioneer in the art of listicles and explainer journalism. He understood that complicated ideas are often easier to read and assimilate when they're broken down into a highly structured format that helps guide you through the thinking.

Thus he produces the following 27 reasons these United Colonies ought to become Free and Independent States:

1) He has refused his Assent to Laws, the most wholesome and necessary for the public good.


2) He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.


3) He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.


4) He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures.


5) He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.


6) He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.


7) He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.


8) He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.


9) He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.


10) He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.


11) He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures.


12) He has affected to render the Military independent of and superior to the Civil power.


13) He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation.


14) For Quartering large bodies of armed troops among us.


15) For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States.


16) For cutting off our Trade with all parts of the world.


17) For imposing Taxes on us without our Consent.


18) For depriving us in many cases, of the benefits of Trial by Jury.


19) For transporting us beyond Seas to be tried for pretended offences.


20) For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies.


21) For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments.


22) For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.


23) He has abdicated Government here, by declaring us out of his Protection and waging War against us.


24) He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.


25) He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty & perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.


26) He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.


27) He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.


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I used to talk this way myself, but my wife is a Texan and so I now know perfectly well that barbecue is slow cooked smoked meat and not just anything grilled over hot coals:

The economy added 288,000 new jobs in June, according to the latest release from the Bureau of Labor Statistics. That was well above economists' pre-release consensus forecast. The BLS also added a net of 29,000 jobs thanks to revisions to the April and May numbers.

Meanwhile, in the separate household survey the unemployment rate fell to 6.1 percent.

This isn't exactly game-changing news for the economy but it is consistent with a recovery that's not just continuing, but accelerating a bit. In other words, it's a sign that the awful first quarter GDP reading is an outlier that's not necessarily indicative of a broader economic disaster.

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What did Janet Yellen do today? Let's ask Google News:

Yellen Central banking is hard.

The Bureau of Labor Statistics normally issues its monthly Employment Situation Report on the first Friday of the month, but in honor of Independence Day it's being pushed forward to a Thursday this week.

The economic news so far in 2014 has been a bit weird. The initial estimate of GDP growth in the first quarter was bad, and after revisions it came to look downright terrible — as best we can tell, economic output shrank at a 2.9 percent annualized rate in the first three months. And yet despite that awful news, most economists are downright complacent about the state of things. One reason is that though job growth in the first five months of the year hasn't been stellar, it's been at a bit of a faster pace than what we saw in 2013 or 2012.

Meanwhile, other important indicators like auto sales and credit growth have been strong.

So broadly speaking, most people are expecting pretty good news to continue. Reuters' poll of economists found that they're expecting non-farm payrolls to grow by 212,000 which would be the fifth straight month of above-200k job increases. If that happens, people will continue to shrug off the Q1 GDP number and just wait to see what happens in the second quarter. But given the bad GDP news, if the jobs number disappoints — or if we see negative revisions to previous months' data — today's complacency could easily turn into tomorrow's panic.

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Fifty years ago today, Lyndon Johnson signed the Civil Rights Act into law. The landmark legislation barring racial discrimination in employment and public accommodations was, alongside 1965's Voting Rights Act, the culmination of a decades-long struggle to break the back of institutionalized racial segregation in the American South. At least since the 1930s, the civil rights issue had sharply divided the Democratic Party, which was torn between a northern liberal faction and a southern faction that despite some disagreement on economic policy was monolithically in favor of white supremacy.

LBJ was himself a southern politician who opposed civil rights for most of his career before embracing the cause as he emerged on a national stage. The intense pressure brought on national Democratic leaders by the civil rights movement's marches and actions combined with the political momentum generated by President Kennedy's assassination led the Johnson administration to directly confront the segregationist faction of his party and push for a bill that deeply divided his party.

Soon after signing the bill he famously remarked to an aide that the Democratic Party had "lost the South for a generation."

This managed to be both too pessimistic and too optimistic.

In 1976, Jimmy Carter was able to capture the White House mostly with southern electoral votes thanks to a strong biracial coalition in which the backing of newly empowered African-American voters was more than enough to overcome a deficit among southern whites. But we're now well over a generation removed from the Civil Rights Act and the South is, on the whole, more Republican than ever. Back in 2011, the Matt's Maps blog pulled together some charts that illustrate the surprisingly slow but remarkably steady southern march to the GOP.

Here's the US House of Representatives:

Republican_percentage_of_house_seats Here's the US Senate:

Republican_percentage_of_senate_seats And here's the state legislatures:

Republican_percentage_of_seats_state_legislatures1 One reason the realignment was so slow was that even though some segregationist politicians swiftly switched to the GOP (Strom Thurmond), quite a few conservative Democrats lingered in congress for a long time. John Stennis of Mississippi signed the 1956 Southern Manifesto, voted no on the Civil Rights Act, and stayed on as a Senate Democrat all the way until 1989.

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Here's Budweiser getting patriotic:

But of course these days, Budweiser is a subsidiary of AB Inbev, a Belgian company. Drink something else.

Chief Justice John Roberts, writing for the Supreme Court in the case of Riley v California this morning established an important precedent about the need for law enforcement officers to secure a warrant before searching someone's cell phone.

He also established a crucial cultural precedent by ruling, accurately, that iPhones and Androids and such aren't really phones at all (emphasis added):

Cell phones differ in both a quantitative and a qualitative sense from other objects that might be kept on an arrestee's person. The term "cell phone" is itself misleading shorthand; many of these devices are in fact minicomputers that also happen to have the capacity to be used as a telephone. They could just as easily be called cameras, video players, rolodexes, calendars, tape recorders, libraries, diaries, albums, televisions, maps, or newspapers.

This makes the decision not just a win for privacy, but an important victory for those of us who hate phone calls but love our iPhones. Steve Jobs did many great things, but giving that particular device that particular name was a mistake.

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Debates about "health care costs" or "health care spending" oftentimes conflate two separate issues — the prices paid for health care services and the quantity of health care services received. But these are different things. Outside the health care sector, we take it for granted that people getting more stuff is one thing (rising living standards) while rising prices for stuff is another (inflation).

So here's Jason Furman to draw the distinction:

This is super important. The only caveat is that in the health care sector there's a third wrinkle. More doctors visits is a lot better than pricier doctors visits, but what we really want out of the health care system is good health outcomes.

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Regardless of what happens tonight in the Mississippi Senate race, I'm really struck by the basic fact of Thad Cochran's age. The guy will turn 77 in December and he's running for a new six-year term. He's hardly alone in trying to hang on to a Senate seat deep into old age, but it strikes me as an unwise behavior.

But beyond unwise, I'm just surprised that politicians in their late-seventies find reelection appealing.

Charlie Rangel is even older. These veteran members of congress get nice pensions and health care benefits.

Here is a Tweet from Delta:

And here is a map made by Mysid using International Union for Conservation of Nature data of where giraffes live (the political boundaries of Sudan as shown on this map are outdated, but the point about giraffes and Ghana stands):


One piece of feedback I got about my piece on Democratic unity was whether the party's disagreement about K-12 education policy is really just a special case of a larger disagreement about labor unions.

The answer I think is: maybe in theory, but probably not in practice.

To the theory. Based on years of conversation and reporting, I'm quite convinced that there are some Barack Obama appointees who think that a large-scale revival of union membership in America would be really good for the country and there are others who think it would be either non-beneficial or perhaps actively harmful. This same division probably recurs in the congressional caucus.

But not much comes of this in practice because union advocates don't really have a plausible proposal to make that revival happen.

There's no ask that's so big that union-skeptical Democrats feel compelled to say no. And basically all Democrats, whatever they think about the big picture, are perfectly comfortable with the idea of union-friendly appointees to the NLRB and the National Mediation Board and the Labor Department and so forth.

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This is great. That is all.

This time it's war for oil:

Americans seem to think that the vast increase in domestic oil production from shale deposits has immunized the U.S. economy from Middle East instability. Not by a long shot. The International Energy Agency has warned as clearly as it can that projected low prices of oil in the future depend more on increased Iraqi oil production than on North American shale. And every postwar American recession has been preceded by an increase in oil prices, often the result of Middle East instability.

The cure involves "drone strikes, weapons, reconnaissance assets, targeting assistance, improved and expanded training for his forces, even manned airstrikes."

What could go wrong?

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D-Day according to the Financial Times — great news for French railway stocks:

The news that Bill de Blasio is considering moves to legalize the keeping of ferrets as pets reminds me naturally of this classic radio interview in which Rudy Giuliani flies off the handle at a pro-ferret activist:

Jonathan Ezer made a cool visualization of my piece on implicit bias and what America's racism problem really looks like:

With inherited wealth in the news thanks to Thomas Piketty, it's cool that Bloomberg's billionaires interactive lets you sort billionaires according to whether they're self-made or inheritors.

Except this turns out to be challenging, and Bloomberg seems to err systematically on the side of proclaiming people self-made. Take Charles and David Koch, who inherited a substantial oil company from their father and then built it into an even bigger business. They're both "self-made" according to Bloomberg. But how many of us are lucky enough to inherit an oil company?

They also consider Alwaleed al Saud to be a self-made man. But the "al Saud" here is the ruling dynasty of Saudi Arabia.

At any rate, there's no cut and dry correct answer to this. Among the class of people who inherit a lot of money, the richest will be those who go on to manage their fortunes in a skillful or lucky way.

Another thing we see from the list is the importance of family size. Had Sam Walton had two children, they would be the second-richest and third-richest people on the planet. But instead he had four children, so his heirs currently occupy slots 9, 10, 12, and 13. If the very rich were to consistently maintain above-average levels of fecundity, that would disperse intergenerational wealth accumulation pretty effectively. By contrast, if they decided to adopt primogeniture the heirs would inherit the earth quite quickly.

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Paul Krugman observed recently that if you look exclusively at prime-age workers — people between the ages of 25 and 54, in other words — the employment rate in France in actually higher than in the United States. If you delve a bit deeper into the data, this turns out to be a highly gendered phenomenon:

France If you look at men, the gap seems to have come and gone with the Great Recession and I would speculate it has to do with the fact that French labor law makes it harder to lay fire workers with seniority. But among women the gap is larger and more durable. This presumably has something to do with the fact that France has a much more robust system of publicly provided child care, so it is considerably easier for prime age women to work while raising children.

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A sort of bonkers ESPN piece features the idea that "Minnesota has been in search of a savior since KG, but shouldering the load isn't Kevin Love's thing."

In other words, we're supposed to see it as a sign of personal weakness that Love doesn't want to play for bad Minnesota teams that miss the playoffs.

One of many interesting things to note about this is that back in his peak performance years of 2003 and 2004, the Timberwolves paid Garnett $25 and $28 million a year. This season Love got $17 million. Adjusting for inflation, Garnett's 2004 salary equals $35 million in today's dollars. That's more money than any NBA player is currently paid.

And that, in turn, is no coincidence. The owners have acted over the past couple of CBAs to restrain how much money top stars get paid. One big consequence of that is that top stars are increasingly picky about where they want to play and increasingly forceful about getting there. After all, if you can't make mid-aughts Garnett money then you're going to demand some non-monetary compensation.

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Can't believe the NYT's innovation memo missed this approach to Facebook image selection.


Chris Hayes offers a take on the VA scandal that's calculated to warm the hearts of America's teachers unions:


These are arguments that should be familiar to fans of The Wire but the David Simon viewpoint has always puzzled me. Is a person who cheats in response to an incentive program the kind of person who's going to do amazing work in the absence of an incentive program, or the kind of person who's going to respond to the objective incentive to be lazy? If a data-based framework is imperfect, is going to a data-free one any better?

What is true is that you always want some kind of external check on your own metrics. The murder rate, for example, can't really be "juked" since dead bodies are easy to count. In addition to the state tests that are used for accountability purposes, students take the NAEP. And during the period that Hayes and Simon are so worried about, NAEP scores have generally risen while murder rates have generally fallen. Cheating is obviously bad, but it seems like a manageable problem occurring within the context of a successful effort to improve the quality of public services.

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Expressing some puzzlement over the decision to put Julian Castro in the cabinet, Brian Beutler refers to him as "mayor of a medium-large city."

It's worth noting that this is an area where the disjunct in America between the size of cities in the sense of political municipalities governed by a mayor and cities in the sense of metropolitan areas where people live and work is important. The San Antonio Metropolitan Area has about 2.3 million residents, making it 25th largest in the country and comparable to Portland or Orlando.

But the City of San Antonio — the place that Castro is the major of — is actually a really big city. With 1.4 million residents it's bigger than San Diego or Dallas or San Francisco or Boston or DC or lots of other cities that we think of as bigger cities than San Antonio. But there are ten states with fewer residents than the City of San Antonio. It's big.

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As The New York Times detailed in its 91-page memo on innovation strategy, there is no more frustrating experience on the contemporary social web than throwing a lot of work into a great piece of journalism only to see the traffic rewards accrue to a competitor's aggregation + superior social media packaging.

Which brings me to the case of 17 year-old Connecticut high schools senior Talia Maselli whose receipt of a corsage from Joe Biden after asking him to be her prom date is currently blowing up everywhere on social media.

Everywhere, that is, except for Maselli's own Facebook page where she hasn't even bothered to post the Hartford Courant photo that everyone is using to drive traffic. She did the legwork, but there is zero engagement with her brand as a result of all the effort. It's sad to see that many teens still don't have the nimbleness necessary to navigate the modern media landscape.

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Super interesting chart from the NYT's innovation report looks at how loyal the followings of the paper's different columnists are online:

Screen_shot_2014-05-19_at_1.29.13_pm At first glance, I thought this was just showing the relative popularity of different columnists. But these lines don't actually show that. Instead they're basically Lorenz curves that measure inequality among the columnists output.

The Bill Keller readership, according to this data, is extremely hits driven. Fewer than 10 percent of people who've read at least one Keller column have managed to read 10. By contrast, Paul Krugman (appropriately) has the most egalitarian distribution. Compared to other NYT columnists, his different columns have similar levels of performance.

That said from a broader lessons learned perspective, the takeaway here should be that even Krugman's column performance is very unequal. A handful of hit columns establish the breadth of a writer's reach, but few readers are loyalists who read every column.

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New state-level unemployment data is out and it shows the unemployment rate declining in 43 states. The striking thing continues to be very large gaps from place to place:

States Unfortunately for the country, the six very low unemployment states on the map have about 7.5 million total residents — somewhat fewer than New York City. But the moral of the story is pretty clear. If you want a job, head for Omaha or Salt Lake City or the wide open spaces of the Plains (or Vermont; there's always Vermont).

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