Kevin Drum - February 2012

Chart of the Day: Interstate Highways as a Subway Map

| Wed Feb. 22, 2012 9:13 PM EST


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Mitt Romney Releases Exciting Smoke and Mirrors Tax Plan

| Wed Feb. 22, 2012 7:17 PM EST







Rick Santorum Shining a Much-Needed Light On Movement Conservatism

| Wed Feb. 22, 2012 4:38 PM EST






People Have Surprisingly Strong Opinions About South Dakota

| Wed Feb. 22, 2012 3:36 PM EST

Ed Kilgore points me today to a quirky new PPP poll that asks people if they have favorable or unfavorable views of the various states. Hawaii gets the highest number of favorables and Illinois gets the lowest. However, if you look at the delta between favorable and unfavorable, my poor home state ranks last (27% favorable vs. 44% unfavorable). It turns out that a lot of this is driven by partisan animus:


Black voters dislike 10 of the 14 Southern states.

Frankly, I'm surprised so many people even have opinions at all. I mean, Hawaii, sure. Everyone loves Hawaii. But 51% of the respondents expressed an opinion about South Dakota. Who the hell has an opinion about South Dakota? Beats me. In any case, the chart below shows all 50 states ranked by the number of people who feel favorably toward it. How did your state do?

Does Money Corrupt the Political Process?

| Wed Feb. 22, 2012 3:07 PM EST

In Citizens United, the Supreme Court ruled that the only justification for limiting campaign expenditures was "corruption or the appearance of corruption." And since independent expenditures, including those from corporations and unions, don't have any kind of corrupting influence, there's no justification for limiting them.

Many of you will have two responses to this:

  • Really? That's what Citizens United said? I never heard about that.
  • Really? That's ridiculous. How can the court just unilaterally declare that unlimited money doesn't lead to corruption?

Both of these are legitimate reactions. The first because the court's handwaving on corruption got a lot less attention than all the fuss over Citizens United granting corporations free speech rights on a par with individuals. And the second because the court didn't really bother justifying its belief that independent expenditures don't corrupt the political process. It just said there wasn't enough evidence of corruption to survive strict scrutiny and left it at that. However, Rick Hasen notes that a recent case involving a Montana law that limits campaign expenditures prompted a statement from Justice Ruth Bader Ginsburg suggesting that she wants to use the case to expose this for the specious reasoning that it is:

The Montana court [] upheld a state ban on corporate campaign spending, finding that Montana's history of corruption justified the ban…Everyone expects the Supreme Court to reverse the Montana case, likely on a 5-4 vote. But the big question is how the court will do so.

…Justice Ginsburg agreed that staying the Montana ruling was the right course, because lower courts are bound to apply Supreme Court precedent even if it is wrong; it is for the Supreme Court to fix its own wrong precedents. But then she added these words in a statement for herself and Justice Stephen Breyer with respect to the stay: "Montana's experience, and experience elsewhere since this Court's decision in Citizens United…make it exceedingly difficult to maintain that independent expenditures by corporations 'do not give rise to corruption or the appearance of corruption.' A petition [to hear the case] will give the Court an opportunity to consider whether, in light of the huge sums currently deployed to buy candidates’ allegiance, Citizens United should continue to hold sway."


It's probably unlikely that the Montana case will lead to a reversal of Citizens United. But at least it will force the court to tackle the least defensible part of its reasoning head on.

Industrial Production in Europe is Either in Freefall or It's Not

| Wed Feb. 22, 2012 1:06 PM EST

I just happened to see these two charts back-to-back this morning, so here they are in one spot. The first shows that industrial production in Europe is continuing a steep decline. The second shows that industrial orders have picked up a bit after a big fall in September. So which is more important? More informative? More predictive? Is Europe crashing or is Europe stabilizing a bit after a scary spell last year? Is the difference an artifact of a decline in exports? Exchange rate woes? Something else? As usual, it would be great if we just had another few months of data. It always is. 

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No, American Corporations are Not Being Crushed Under the IRS Jackboot

| Wed Feb. 22, 2012 11:59 AM EST

James Pethokoukis is the latest conservative to demand that Treasury Secretary Tim Geithner resign. Finally, something left and right can agree about! Lefties all hate Geithner too.

So what's his offense this time? Answer: a plan for cutting corporate income tax rates that's far too timid. Here are a few of the eight reasons this is a terrible idea:

The Obama-Geithner plan would lower the statutory corporate tax rate to 28 percent from 35 percent....So instead of having the second highest corporate tax rate in the world, the United States would probably be fourth behind Japan, France, and Belgium.... To pay for the lower tax rate, Obama would eliminate "dozens of tax loopholes and subsidies"....Obama and Geithner apparently still don’t understand how harmful corporate taxes are....Obama and Geithner apparently still don’t understand who bears the burden of corporate taxes. It’s workers....Obama and Geithner would take the top individual tax rate to 40 percent, leaving a 12 percentage-point gap with the corporate tax rate. This creates a huge incentive for tax sheltering.

Wow! That's quite a bill of particulars. But you know what's amazing? In this entire thousand-word blast Pethokoukis apparently doesn't have room to explain the distinction between statutory tax rates and effective rates. But it only takes a sentence or two, so here it is. The statutory rate is the top rate in the tax table. Right now it's 35% for corporations. The effective rate is what corporations actually pay after their accountants are done combing the tax code for deductions and loopholes. The former is one of the highest in the world. That latter has been falling for years and is now one of the lowest.

That's right! The actual federal income tax paid by corporations is one of the lowest in the world. Even if you think statutory rates are more important, surely this is germane to the conversation?

I say this as someone who's on record as favoring a complete abolition of the corporate income tax — primarily because tax receipts from corporations are so low that I'm not sure they're worth the bother anymore. Of course, I also acknowledge the need to make up the revenue elsewhere, since I don't believe the supply-side fairy will magically do this for us. This would indeed create tax sheltering issues that might be insurmountable. Or might not. But in any case, you need to make up the revenue. It won't happen automatically, no matter how often Arthur Laffer pretends it will.

UPDATE: Pethokoukis hauls out several strained studies that try to prove American corporations actually pay some of the highest taxes in the world. Sorry. The only way to do an apples-to-apples comparison is to look at corporate tax revenue as a percent of GDP and to let a neutral party apply a consistent methodology. The OECD does exactly that every year. Here's a chart showing the corporate tax burden from 1982 through 2005. The United States is a little below the middle of the pack.

And here's their latest chart. Our corporate tax burden has fallen dramatically since 2005, and if you read all the way to the end you'll now find the United States at the very bottom.

Chart of the Day: The Rise of the Machine

| Tue Feb. 21, 2012 9:51 PM EST

Ezra Klein directs our attention today to the chart on the right, from a mobile analytics company called Flurry. Their basic story is simple: the blue bars show how much of our media consumption time is spent on various platforms (TV gets 40% of our time, print gets 6% of our time, etc.), while the green bars show how much money advertisers spend on these platforms. The verdict is clear: mobile devices command 23% of our time but are getting only 1% of the advertising dollars.

Now, this data comes from a company that has a vested interest in hyping the mobile audience, so obviously you want to take it with a grain of salt. By way of comparison, Josh Marshall recently told us that TPM gets about 20% of its hits from mobile devices, and this is from an audience that's very tech savvy and very mobile-friendly. But if it's only 20% for TPM, the number for the population-at-large isn't likely to be more than 10%. Or maybe even 5%.

(Of course, there's a difference between hits and time spent. Maybe mobile users spend a lot more time per visit than web users or radio listeners. But I'd need to see some evidence for that.)

In any case, clicking through to various links, it appears that there are about 100 million smartphone users in the United States and they spend about an hour a day on various apps (that's not including phone, text, and email). Of that, about 80% of the time is spent on games and social networking. So even if the mobile market isn't quite as large as Flurry would like us to believe, it's a pretty big and growing market any way you slice it.

But now I'm curious: How much time do you spend with your mobile phone? And what do you spend that time doing?

Romney Set to Release New Tax Plan

| Tue Feb. 21, 2012 4:44 PM EST

Larry Kudlow has some news today:




American Political Campaigns are Really Expensive

| Tue Feb. 21, 2012 3:23 PM EST



$700! Take that, plutocrats!

