2011 - %3, February

Unions and Growth

| Mon Feb. 28, 2011 6:56 PM EST

Here is Robert Barro in the Wall Street Journal today making the case for anti-union policies:


It's true that Holmes wrote this paper. You can read it here if you like, or you can read a shorter, more accessible version here. In a technical sense, it's an interesting bit of research. As Holmes says, "In state capitals throughout the country, proponents of pro-business policies routinely claim that state policies are an important determinant of business location. But this claim is open to debate. While there has been no shortage studies on the issue, there is a lack of consensus."

Well, guess what? Holmes concluded that if moving a few miles across a state border allows a manufacturing business to reside in a right-to-work state with low taxes, no unions, and lax environmental policies, lots of manufacturing businesses will jump at the chance. It's good to see some rigorous confirmation of this, I suppose, but let's face it: It's hardly a surprise, is it? It would be pretty shocking if it weren't true.

Still, does this say anything about the effect of unions on economic growth, as Barro implies? No. Not a single thing. All it says is that businesses prefer locating in states where costs are low and rules are lax — something I think we all knew already. Of course that's what businesses prefer. But it says literally nothing at all about whether the United States as a whole would have higher or lower growth if every state either did or didn't have right-to-work laws. Implying otherwise is a clever debating technique, but that's about all it is.

UPDATE: Ed Kilgore has more on this in the New Republic today:

Students of economic development will recognize [this] as the “smokestack-chasing” model of growth adopted by desperate developing countries around the world....And students of American economic history will recognize it as the “Moonlight and Magnolias” model of development, which is native to the Deep South.....This was the default model of economic growth in Southern states for decades—as the capital-starved, low-wage region concluded that the way it could compete economically with other states was to emphasize its comparative advantages: low costs, a large pool of relatively poor workers, “right to work” laws that discouraged unionization, and a small appetite for environmental or any other sort of regulation.



As they say, read the whole thing.

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GOP Floats New Version of "No Taxpayer Funding for Abortion" Bill

| Mon Feb. 28, 2011 4:10 PM EST

House Republicans have dropped some controversial provisions from a bill that would permanently bar federal funding for abortions, but still plan to extend the reach of existing bans to cover tax credits and some deductions, according to a GOP memo [PDF] obtained by Mother Jones on Monday.

The "No Taxpayer Funding for Abortion Act," sponsored by Rep. Chris Smith (R-N.J.), is designed to ensure that tax dollars do not "pay for, subsidize, encourage, or facilitate abortions," say the sponsors. But abortion rights groups have argued that the law, also known as H.R. 3, would effectively eliminate private insurance coverage for abortions by creating a strong disincentive for employers and individuals to select plans that cover those services. In turn, they argue, many insurers would likely stop offering abortion services in order to avoid losing customers.

The latest version of the Smith bill drops the attempt to redefine rape that drew considerable criticism last month. But it still makes permanent and government-wide the Hyde Amendment, a provision that has been renewed each year since 1976 that prohibits federal funding of abortions through Medicaid. It also extends that prohibition into the tax code, meaning that employers and individuals could not make use of tax credits for private insurance plans that offer abortion coverage.

H.R. 3 would also bar the use of pre-tax health accounts—like health savings accounts or medical savings accounts—for abortion services. In other words, women would not be able to make use of their own money set aside for medical purposes to obtain an abortion. And self-employed individuals, who can normally deduct medical expenses exceeding 7.5 percent of their adjusted gross income, would no longer be able to deduct the cost of health insurance that covered abortion—even if they never used that coverage.

The bill also bars the tax breaks for small businesses that were made available under last year's new health care law from being used for any health care plan that covers abortions.

The measure also codifies the so-called "conscience clause," which bars federal agencies, state or local governments, or any program funded directly or indirectly by the federal government from "discrimination on the basis that the health care entity does not provide, pay for, provide coverage of, or refer for abortions." It also includes a permanent prohibition on funding for abortion in international aid.

The new version of the bill does, at least, strike references to the "pregnant female" in favor of "woman." It's just a language shift, but the latter certainly gives more respect and agency to the woman rather than merely referring to her as a vessel for an unborn child. The new version also clarifies that federal funds can be used for services related to "any infection, injury, disease, or disorder that has been caused by or exacerbated by the performance of an abortion," after criticism of the previous version raised concerns that it could bar health care providers from covering any and all conditions possibly related to an abortion.

The bill is scheduled for mark-up in the House Committee on the Judiciary at 10:15 a.m. on Wednesday, March 2. (UPDATE: It was moved to 10:00 a.m. on Thursday, March 3.)

This post has been edited since it was first posted.

Quote of the Day: White Collar Crime

| Mon Feb. 28, 2011 3:22 PM EST

From Felix Salmon, on white-collar crime:


True! And true of lots of white collar not-quite-but-probably-ought-to-be criminals too.

Today in GOP Climate Denial ...

| Mon Feb. 28, 2011 3:07 PM EST

Denying climate change is de rigueur among members of the House Republican caucus. Rarely, though, do you see elected officials engaging in public debates on the science with a scientific organization. But that was exactly what has transpired as Rep. Dana Rohrabacher (R-Calif.) has taken on the Union of Concerned Scientists in a Twitter war over climate change.

Not that it's particularly surprising. This is a guy who has argued in a congressional hearing that global warming might have been caused by dinosaur farts.

Here's the full exchange:

.@danarohrabacher calls #climate change "natural." There are multiple lines of evidence human activity drives it http://goo.gl/WZsdq #hcsst
@UCSUSA Guess ancient climate cycles, like current one on Mars,which mirrors changes on earth, not product of sun but of human activity
.@danarohrabacher Human warming=fact http://goo.gl/TEAhMMars warming=myth http://goo.gl/jvBD3 Sun outputs don't=warminghttp://goo.gl/LC0TY
@UCSUSA your answer deceptive: talks Mars warming. Issue is Earth and Mars icecaps shrinking at same time. Coincidence or Solar impact?
@danarohrabacher That's a red herring about the Red Planethttp://goo.gl/GSq6g Burying your head in the Martian sands puts us all at risk
@UCSUSA U ignore issue: incredible coincidence or solar? Whose head in sand? Read e-mails, U trust your source. Warming has become change
@danarohrabacher You don't want to understand. Denier talking points aren't science. Skepticalscience.com covers all this.
@danarohrabacher CA-46 is preparing for climate change. Long Beach sees water supply impact.http://goo.gl/rQQE1 Denial doesn't help.

Here's a quick run down of why his arguments—that global warming is caused by the sun, the climate's changed before, and that Mars is also warming—are all bunk.

Looking Glass Economics

| Mon Feb. 28, 2011 1:51 PM EST

So far austerity isn't working out too well for Britain and Germany. But how about America? How will it work out here? Well, as you'll recall, Goldman Sachs thinks the Republican budget cutting plan would reduce economic growth by two percentage points. Mark Zandi of Moody's Analytics figures the loss at 0.5 percentage points this year and another 0.2 next year. Economists at the Center for American Progress estimate the cuts would lead to nearly a million jobs lost. Steve Benen is nonplussed:

How is it this isn't at the heart of the debate over the budget? How far off track is the public discourse when an entire chamber of Congress, in the midst of a jobs crisis, approves a plan to make the crisis much worse, and this is considered only tangentially relevant?

I just spent the past hour on a call-in show out of New Orleans, and it was pretty clear that the callers didn't think too highly of my claim that income distribution depends not just on the economy, but also on deliberate political decisions. And I admit that it's a hard point to get across in a concrete way. But how much more concrete could our current situation be? Republicans — and, unfortunately, some Democrats too — are pushing for an economic austerity plan that will keep unemployment high and the job market loose. The result is downward pressure on wages, which keeps middle-class incomes stagnant and corporate profits high. This benefits the executive and investor class, and while it's a shortsighted benefit, it's a benefit nonetheless. And it's not thanks to globalization or returns to education or anything like that. It's due to a deliberate political decision that favors the rich at the expense of everyone else. That's as concrete as Hoover Dam.

Obama Calls the Republican Healthcare Bluff

| Mon Feb. 28, 2011 12:58 PM EST



....The legislation would allow states to opt out earlier from various requirements if they could demonstrate that other methods would allow them to cover as many people, with insurance that is as comprehensive and affordable, as provided by the new law....If states can meet those standards, they can ask to circumvent minimum benefit levels, structural requirements for insurance exchanges and the mandates that most individuals obtain coverage and that employers provide it.

Italics mine. I suspect this is not as big a deal as it seems. Basically, Obama is calling the bluff of Republicans who insist that they can build a healthcare system that's as extensive and affordable as PPACA using some combination of tea party-approved "free market" principles. He's telling them to put their money (or, rather, money from the feds) where their mouths are, which will probably demonstrate fairly conclusively that they can't do it. It's possible that a state like Oregon might enact a more liberal plan that meets PPACA standards, but I doubt that Alabama or Tennessee can do it just with HSAs and high-deductible health plans.

Still, we'll see. This is a chance for conservatives to show that they have a better healthcare answer in the real world, not just as talking points at a tea party rally. Obama is betting they'll fail, and he's also betting they'll tear each other apart arguing over details while they do it. Life is easy when all you have to do is yell "Repeal Obamacare!" but it gets a lot harder when you have to produce an actual plan.

UPDATE: Ezra Klein suggests that Republicans have no intention of supporting this legislation: "Now that Obama has admitted it's not a threat to the Affordable Care Act, a lot of the appeal for Republicans dissipates." But it does become a way for Obama to demonstrate how reasonable he is. See, we gave them a chance to implement their own policies, but they turned us down. Maybe so.

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Ron Paul and Herman Cain: Tea Party 2012 Dream Team

| Mon Feb. 28, 2011 12:42 PM EST

Over the weekend, the Tea Party Patriots held its first national "policy summit" in Phoenix, Arizona. The nation's largest tea party umbrella organization managed to get about 1,600 activists to show up at the Phoenix convention center to hear from a line up of B-list pundits (Dick Morris), no-name right wing pseudo-academics, and a handful of Congress's most out-there members (Rep. Louie "terror babies" Gohmert (R-Texas)). At the last minute, TPP managed to snag presidential contender and former Minnesota governor Tim Pawlenty, who, according to Politico, gave a firey speech calling on tea partiers to "rise up" against the union-coddling Obama administration.

But Pawlenty's speech wasn't enough to put him over the top in the event's two straw polls, one held in person and the other online. As with so many of these conservative straw polls, the winner of the online vote was Rep. Ron Paul (R-Texas), who also spoke at the event. But winning the in-person balloting was former Godfather pizza founder Herman Cain, who has become a regular on the tea party circuit. Tea partiers have long insisted that they aren't, as some in the media have suggested, a bunch of racists, so perhaps Cain offered them a chance to prove that there is a black man in politics they could vote for. (He got an enthusiastic response from the audience when he told stories of other African-Americans criticizing him for criticizing Obama: "Some black people can think for themselves," he declared.)

But more likely, Cain won their hearts with his tremendously funny political delivery, if not with his policy prescriptions. Cain, most recently working as a motivational speaker, riled up the crowd with talk of American exceptionalism and Gipper references. But his solutions for the nation's most urgent problems were vague, thin, and hardly original. They were essentially the fantasy of any corporate executive. He called for lowering the tax rate from 35 to 25 percent and for reducing capital gains taxes to zero. "These are not rocket science ideas," he noted.

Still, even with that thin gruel, Cain cleanly trounced both Pawlenty and Sarah Palin (who endorsed the summit but didn't attend), suggesting that tea partiers would prefer an outsider in the White House to any of the current contenders. But given that their leading preferences are Cain and Paul (a candidate whose prospects were roundly dissed by none other than Donald Trump last month), you do have to wonder how much impact the tea party may ultimately have on the 2012 election. A Cain/Paul ticket has about as much chance of winning the election as a Democratic one headed by Michael Moore and Alan Grayson. Anyway, check out Cain's speech to see the man for yourself:


Obama Wants to Relax Medicaid Rules—But Not Too Much

| Mon Feb. 28, 2011 12:21 PM EST







Chart of the Day: The Real Pension Story

| Mon Feb. 28, 2011 11:10 AM EST





An Orchestra of Elephants

| Mon Feb. 28, 2011 6:45 AM EST
Prateedah the elephant plays the drum.

Imagine building a xylophone for a 6,000-pound mammal. Columbia University neuroscientist slash experimental musician David Soldier (aka David Sulzer) teamed up with elephant expert Richard Lair, and did just that. At the Thai Elephant Conservation Center (TECC), in Lampang, Thailand, the two men taught elephants to play oversized xylophones, drums, chimes, and even harmonicas. An American expat, Lair knew about Ruby, an elephant that had famously learned how to paint pictures. He also understood that elephants loved music. After meeting Soldier, he asked him to join the Thai Elephant Orchestra project, an endeavor that, beyond science and art, was intended to draw attention to the elephants' plight.