Kevin Drum

The US Economy Imploded Last Quarter

| Wed Jun. 25, 2014 11:55 AM EDT

Yikes. In the first quarter GDP didn't grow by an anemic 0.1 percent. Nor did it shrink by 1 percent. According to the Commerce Department's final tally, it shrunk by 2.9 percent.


I have my doubts about that. I just don't buy the tired excuse that the Q1 number was weather related. Something happened.

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TV Strike Against Dodgers May be the Straw That Breaks the Sports Bubble

| Wed Jun. 25, 2014 11:34 AM EDT

LA Times columnist Steve Lopez thinks it's long past time for everyone to figure out a way to end the Dodgers TV blackout in Southern California:

This all began in 2012 when the Guggenheim Group, or whatever they call themselves, paid too much money — about $2 billion — to buy the Dodgers from the hated Frank McCourt....The new owners then managed to dupe Time Warner Cable into spending an even more obscene amount — $8.4 billion — for the rights to broadcast the games on SportsNet LA.

....They figure they'll get all of it back from you and me by raising the price of tickets and hot dogs and the fees for getting the games on TV....But in the case of the Dodgers, there was a snag along the way. DirecTV and other companies didn't like Time Warner's asking price for the right to carry the games, and they told the cable giant to stuff it. So the standoff continues, with half the season gone and no relief in sight.

Actually, I don't think this is quite right. It's not the asking price per se that cable companies don't like, it's the fact that Time-Warner is demanding that their spiffy new all-Dodgers channel be added to the basic cable menu. Other broadcasters aren't willing to do this. If Time-Warner wants to set a carriage fee of $5 or $10 or whatever, that's OK as long as it's only being paid by people who actually want to watch the Dodgers. It's not OK if every single subscriber has to pay for it whether they like it or not. At that point, it basically becomes a baseball tax on every TV viewer in Southern California.

Of course, this is just another way of saying what Lopez said: Everyone involved in this fiasco has overpaid. Time-Warner is demanding that their Dodgers channel be added to basic cable because they know they can never justify their purchase price if they can only get subscription revenue from the one-half or one-third of all households who actually care about the Dodgers. So they're holding out for the tax.

I'd like to see the Dodgers on TV, but I hope everyone holds out forever anyway. It's time for a revolt against the absurd spiral in prices for sports teams, and maybe historians will eventually point to this as the straw that finally broke the sports bubble. But that all depends on how long everyone can hold out.

Supreme Court Unanimously Supports Common Sense in Cell Phone Search Case

| Wed Jun. 25, 2014 10:54 AM EDT

The latest from the Supreme Court:

Police may not search the smartphones of people who are put under arrest unless they have a warrant, the Supreme Court has ruled, a unanimous and surprising victory for privacy advocates.

The justices, ruling in cases from California and Massachusetts, said the 4th Amendment's ban on "unreasonable searches and seizures" prevents a police officer from examining a cellphone found on or near a person who is arrested.

See? I told you the Supreme Court was a remarkably agreeable place. And in this case, they were remarkably agreeable even though lower courts had split on this issue and it could easily have broken down along normal left (yay civil liberties!) and right (yay law enforcement!) lines. Instead, all nine of the justices did the right thing. For a brief moment, we can all celebrate.

The Tea Party Is Now on the Road to Oblivion

| Wed Jun. 25, 2014 12:15 AM EDT

Now that incumbent Thad Cochran has beaten Chris McDaniel in Mississippi's Republican Senate primary, does that mean the tea party is officially a spent force? After all, when Eric Cantor lost in Virginia, it was a sign of the ultimate and permanent victory of the tea party over the Republican mainstream, forever and ever, world without end. American politics would never be the same! But that was two weeks ago, and we're all bored with that meme, right? It's only fair that we now spend a couple of weeks hyperventilating over a new meme.

Long live the Republican mainstream!

UPDATE: Bah. I see that Dave Weigel beat me to this joke. Plus he has a lot more detail about tonight's actual election results.

What's a Liberal to Think About the Great Import-Export Bank Foofaraw?

| Tue Jun. 24, 2014 7:51 PM EDT

Suddenly, as if out of nowhere, everybody's talking about the Export-Import Bank today. Isn't that exciting? I have some thoughts about this myself, if you'll hold on for just a minute.

Tick, tick, tick.....

Hmmm. The Wikipedia entry was too long to read so I just skimmed it. Still, that should get me up to speed about as much as everyone else who's become an instant expert today. In a nutshell, the Ex-Im Bank provides subsidies for American exporters. If, say, Malaysian Airlines wants to buy a few Boeing 777s, Ex-Im will provide them with a low-interest loan for that purpose. This is basically just a way of making the purchase price lower, and the benefit of this subsidy is divided between Boeing and Malaysian Airlines. As with all subsidies, the precise division of the split between the buyer and the seller presumably depends on the elasticity of something or other, yada yada yada. Ask an economist for details.

But what should you, as a good liberal, think about all this? Killing Ex-Im is basically a conservative hobbyhorse, but plenty of lefties have weighed in too. Dean Baker points out that an interest rate subsidy is basically the same as a tariff, so if you're in favor of free trade you should be opposed to Ex-Im. Paul Krugman admits that Ex-Im is mercantilist and therefore a bad idea—except when the economy is weak and monetary policy is up against the zero lower bound. Which it is, so Ex-Im acts as an economic stimulus, more or less, and we should probably keep it around for now. On a political note, Greg Sargent points out that deep-sixing Ex-Im may become the scalp tea partiers claim for their defeat of Eric Cantor, who was a big supporter.

Elsewhere, Matt Yglesias tells us that opposition to Ex-Im was largely driven by Delta Airlines, which was tired of seeing its foreign competitors get subsidies to buy their airplanes. The Wall Street Journal reports that four Ex-Im officials have been suspended or removed recently "amid investigations into allegations of gifts and kickbacks," and Danny Vinik says these charges should be a warning for liberals. "If they prove true, then officials are choosing winners and losers based on kickbacks. And that should make the decision easy for liberals: Join with conservatives and oppose the reauthorization of the Export-Import bank."

Meanwhile, a friend emails "Feel the schadenfreude!" after reading a Politico piece about how the Texas business community is feeling glum because Rep. Jeb Hensarling, normally one of their darlings, is dead set on killing Ex-Im. "The bank supported exports worth around $3.68 billion in fiscal year 2013," says the story, "ranking the Lone Star State third among states in amount financed." I guess them's the breaks when you get into bed with a true believer.

This is probably already a lot more than you ever wanted to know about the Export-Import Bank, so I'll stop. As for whether we keep it or kill it, it's hard to make much of a case for keeping it except (a) as Krugman points out, it doesn't cost us anything at the moment, and (b) every other country does it too. You may decide for yourself whether you find those reasons persuasive.

Oh, and the tea party hates it, for the usual obscure reasons that the tea party hates things you've never heard of. Perhaps that will sway you too.

Yes, You Can Now Call Your Crock Pot on Your iPhone

| Tue Jun. 24, 2014 3:10 PM EDT

From the annals of stories I'm afraid to read:


But I'm a professional, so I clicked the link:

For my first test, I made chili....But instead of reaching for any knobs or buttons on the front of the device, I launched an app on my phone to set temperature and time.


I am happy to report that the $130 Smart Crock-Pot works as billed....The chili came out great. It was at that point that the greater existential questions surrounding a Smart Crock-Pot began surfacing: When would I really need this? Is it worth the extra $50? And is it smart enough?

Indeed. Is it smart enough? I'd say no, because it still forces me to cut up all the meat and vegetables and then manually toss them in the crock pot. That doesn't sound nearly smart enough to me. Call me back when a robot version of Wolfgang Puck is available for $130.

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Is ISIS a Monster of Our Allies' Creation?

| Tue Jun. 24, 2014 1:36 PM EDT

On her show last night, Rachel Maddow highlighted a piece by Steve Clemons claiming that the rise of ISIS in Syria—and, more recently, in Iraq—has been largely due to financial and arms assistance from Saudi Arabia:

The Free Syrian Army (FSA), the “moderate” armed opposition in the country, receives a lot of attention. But two of the most successful factions fighting Assad’s forces are Islamist extremist groups: Jabhat al-Nusra and the Islamic State of Iraq and Syria (ISIS)....Qatar’s military and economic largesse has made its way to Jabhat al-Nusra....But ISIS is another matter. As one senior Qatari official stated, “ISIS has been a Saudi project.”

....The United States, France, and Turkey have long sought to support the weak and disorganized FSA, and to secure commitments from Qatar and Saudi Arabia to do the same....In February, the Saudi government appeared to finally be endorsing this strategy.


Clemons' piece is vaguely sourced, and Saudi Arabia has strongly denied accusations that it has supported ISIS. Nonetheless, it's a fairly commonly held view, and it certainly demonstrates the dangers of trying to pick sides in Middle East conflicts. The US may have been doing its best to support the FSA, but that doesn't mean our allies are doing the same. Unfortunately, there are inherent limits to just how precisely you can pinpoint aid in conflicts like this, and that means the possibility of blowback is never far away. That sure seems to have been the case here.

America Unhappy Over Obama's Lack of Magic Iraq Wand

| Tue Jun. 24, 2014 11:52 AM EDT

President Obama's conduct of foreign policy continues to get bad reviews:

Dissatisfaction with President Obama’s conduct of foreign policy has shot up among both Republicans and Democrats in the past month, even though a slim majority supports his recent decision to send military advisers to Iraq to confront the growing threat from militants there, according to the latest New York Times/CBS News poll.

The survey suggests that most Americans back some of Mr. Obama’s approaches to the crisis in Iraq, including majority support for the possibility of drone strikes. But the poll documents an increasing lack of faith in the president and his leadership, and shows deep concern that further intervention by the United States in Iraq could lead to another long and costly involvement there.

....“I voted for him because he said, ‘Give me four more years and I will fix everything,’ but nothing is being fixed,” Michelle Roberts, 34, a Democrat from Salem, Mass., said in a follow-up interview. “I understand he wants to fight terrorism, but send in robots, drones. Don’t send in our troops. Our men and women are dying for what?”

This poll really demonstrates the schizophrenia of the American public. If you read through the individual questions, you'll see that substantial majorities approve of nearly everything Obama has done related to Iraq. Majorities believe the US shouldn't take the lead in world conflicts; they don't believe we should have left troops behind in Iraq; they don't think the US has a continuing responsibility to Iraq; they specifically don't think the US has a responsibility to fight ISIS; they approve of sending 300 advisors; they very much disapprove of "sending ground troops" into Iraq; and overall, a plurality thinks Obama is doing the "right amount" to address the violence in Iraq.

And yet, the public disapproves of Obama's handling of Iraq by 52-37 percent.

In other words, Iraq is like the economy: it doesn't really matter what the president is doing. If the economy is good, the public approves of his performance. It it's bad, they disapprove. Likewise, if the world is peaceful, they think the president is doing a great job. If it's not, they don't—even if he's pretty much doing everything they think he should be doing. Basically, we all want the president to wave a magic wand and make everything better. No wand, no approval.

Is it Obnoxious to Support Health Care For the Poor?

| Tue Jun. 24, 2014 10:35 AM EDT

Here is Gary Silverman in the Financial Times:

What I like about Obamacare is that it shows some respect for “those people” — as Hudson called them in Giant — who are good enough to work the fields and mow the lawns, and build the roads and sew the clothes, and diaper the babies and wash the dishes, but somehow aren’t good enough to see a doctor from time to time to make sure there is nothing wrong inside.

Along with a passage from another author about Palestinians, this makes Tyler Cowen unaccountably angry:


I'm stumped. What's obnoxious about this? There are certainly technocratic arguments to be made for and against universal health care, as well as the particular implementation details of Obamacare. But the core reason most of us have for supporting Obamacare is exactly the one Silverman makes here: we think everyone, even the poor, should have access to decent health care. A great many conservatives prefer to simply turn their heads away from this human suffering, often because they prefer to keep their taxes low. A great many liberals prefer the opposite.

This isn't a secret, or a hidden agenda, or anything like that. It's always been the primary motivation for universal health care. More generally, our values are the motivation for a large share of human activity, especially including political activity. What's wrong with that?

The Supreme Court Is a Remarkably Agreeable Place

| Mon Jun. 23, 2014 11:22 PM EDT

The diagram below comes from The Upshot, and it shows how much various Supreme Court justices agree with each other:

In general, there are no surprises. You can rank the justices on a scale from most liberal to most conservative, and there's more agreement the closer they are ideologically. But here's one thing that might surprise you: The lowest level of agreement, between Ruth Bader Ginsburg and Clarence Thomas, is 65 percent. That is, the two justices who are the most extreme polar opposites still agree with each other two-thirds of the time.

This tells you a lot about what the Supreme Court actually does most of the time: it rules on obscure tax cases and agency regulation cases that don't always break down on the usual left-right spectrum. When it comes to high-profile cases, you get a lot of 5-4 decisions. But on the majority of less celebrated cases, when the political spotlight is turned off, there's a surprising amount of consensus on what the law means.