Monday, April 21, 2014

The Fundamental Theorem of American Politics

Here's the sad truth, folks: our politicians don't really give a damn what you think (unless you happen to be a billionaire who's out slumming in the blogosphere).

How do I know this? Here's how: A recent paper (pdf) by Martin Gilens and Benjamin Page at Princeton. 

They analyzed polling data and policy outcomes over the last 30+ years, and found that when the policy preferences of average citizens were different from those of the elites and of organized interest groups, guess who wins?

Maybe this explains why large majorities of the public want a higher minimum wage and background checks for gun purchases, but we still don't have them.

In any event, thinking about this has led me to a breathtaking insight, which I have immodestly christened The Fundamental Theorem of American Politics. Here it is:

To be successful, a politician must serve the interests of the elites while convincingly appearing to care about the interests of the common people. 

OK, maybe you already basically thought this, but looking at it in black & white helps explain a lot. For instance, Mitt Romney failed simply because he wasn't convincing in his attempts to claim he cared about non-rich people. Had he been a better actor (see: Ronald Reagan), he'd probably be sitting in the White House today.

And I don't say this just to dump on politicians; actually, it's quite a skill to be able to simulate caring about popular issues while actually doing nothing concrete to support them, and in many cases doing the opposite.

But it might help if we held their feet to the fire more often.

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Wednesday, December 04, 2013

Matt Miller on Republican dishonesty about Obamacare

Proving yet again that Republicans have retired the concept of hypocrisy:


As I have noted before, Miller has basically built his career on coming up with creative, pragmatic solutions that both liberals and conservatives can support. But it seems he has finally thrown in the towel when it comes to working with today's Republicans. Here's his conclusion: 

I've spent a lot of time over the years arguing that we can solve big problems such as providing insurance coverage in ways that honor both liberal and conservative values. It's entirely doable — John Rawls and Milton Friedman can be reconciled, trust me. Apart from being sound policy, I've assumed such approaches would also be necessary, because with power closely divided in the United States, we'd need to strike big cross-party deals to make progress. The breathtaking intellectual and moral dishonesty of those driving the Obamacare debate in the GOP today makes me feel foolish for having tried.

Amazing. 

Tuesday, October 15, 2013

More on Cloud Storage: Insync

As a follow-up to my last post on cloud storage, I've been testing a new service called Insync. If you use Google Drive--and there are some very good reasons to--Insync definitely deserves a look.

Like many of these services, it comes in several versions: "Plus", "Pro", and "Business". The Plus version will set you back $10 (once only), and includes these features:

  • Multiple account support and syncing. If you have more than one Google account, you can handle them all with Insync. No logging out of one account to log in with a different one. (You'll have to pay another $10 for each Google account you add.) 
  • Simple sharing. Just right-click on any file in your Insync folder and you can immediately email a link, or create a public link, to the file. 
  • Convert Google docs to Microsoft Office format with offline access. No need to be online to work with your documents. And any changes you make get synced back to your Google drive. 
  • Watch and sync any folder. Unlike Dropbox and standard Google Drive, you aren't limited to syncing a single folder. You can add any folder or file to the list of things to sync to the cloud, including items on external disk drives. 
  • Multi-platform support. Insync is available for Windows, Mac, and Linux, plus Android and Windows Phone. An iOS app for iPhone/iPad is under development but no release date has been given (iOS users can access Google Drive files with Google's own iOS app, or third-party apps like FileExplorer.) 

The "Pro" option costs $10 per year for up to three Google accounts, and includes free software upgrades. It adds a "dashboard" for easy account management and storage statistics. The "Business" version is $10 per year per Google account, and adds a package of features designed for organizations with multiple users.

Insync adds a number of useful and convenient features to your Google account. A 15-day free trial is available so you can take it for a spin.

Monday, July 29, 2013

What's all this fuss about Cloud Storage?

Do you use Dropbox? (If not, why not? It's great, and free.) 

For the uninitiated, Dropbox creates a special folder on your computer (or mobile device). Anything you put in this folder is automatically copied to a big server in the sky (AKA "cloud"), where it provides a safety backup. Also, your information is accessible securely from any computer or device with a web browser, and if you install Dropbox on multiple machines, all local copies of your information will automatically be kept in sync, so you always have the latest version of a document no matter which device you're using. Plus, you can share information with other people (for example, a folder of photos that's too big to email).

Dropbox wasn't the first "cloud" service, but it was the first really successful one, because they smartly made it dead simple to use. And your first 5GB of storage are free (beyond that you pay a monthly fee).

Of course, success breeds imitators, and there are now numerous companies offering cloud storage—the most famous probably being Google, with their Google Drive, who recently upped their free storage allotment to 15GB—three times what Dropbox gives you.

Right now there's a market share war going on, with the various companies competing three ways:
  1. How much free storage you get for signing up
  2. How much you have to pay for extra storage
  3. "Bonus" free storage for getting other people to sign up

I've tried several of the services, in fact I have too many now and I'm going to start paring back. It's nice to get free storage from multiple companies, but (unless you're more organized than I am), it's just too hard to keep track of which file is parked on which service. I'd rather pay a little bit and have everything consolidated. Also, each service you have installed eats a chunk of your computer's RAM memory.

A worry I have is that the startup companies trying to get a toehold in this business may not make it, and if they go belly-up, what happens to my data?

Dropbox may be the easiest service to use, but it's not the most flexible, or the cheapest (they have a little trick where, if you share a file, everybody it's shared with gets charged for the storage it uses, even though only one copy exists on their server). Google Drive is, well, Google—with all that implies (their "Don't be Evil" mantra notwithstanding). I could totally see them searching through your files to look for clues on what ads to show you (like Gmail already does with your emails). Amazon also offers Cloud Drive, with 5GB free and some other features. And Apple users have the privilege(?) of using iCloud, which in theory streamlines automatic syncing between Apple devices (bookmarks, contacts, photos, reminders, etc.), but has drawn lots of complaints for being unreliable (It's weird that a company that does so many things right has never managed to produce a fully satisfactory remote data service. iCloud is their third or fourth try, and it's still not there—although in fairness to Apple, the technology they're trying to implement is considerably more sophisticated than Dropbox and the others.)

Dropbox does have one other advantage: as the earliest successful company in the business, they've garnered support from lots of other software companies. For example, a password manager keeps its encrypted files in your Dropbox so they're automatically available on all your devices (and backed up to the cloud in case disaster strikes).

So where does that leave the user? IMO, everyone should have Dropbox, simply because it's become a de facto standard that almost everybody uses and supports. But if their free 5GB aren't enough for you, you don't have to pay their prices for more: sign up for one of the other services that offer more free space and lower prices.

Personally, I'm liking Copy.com. Here's why:
  1. You get 15GB free, matching Google Drive. 
  2. If you share files, you can "split the tab": everybody doesn't have the entire block of shared storage charged against their account (like Dropbox does). 
  3. It runs on Windows, Mac, Linux, iOS and Android. 
  4. Storage over 15GB is cheap. In fact it might even be free (see below). 
  5. They're not some thinly capitalized startup; they're owned by Barracuda which is a large, successful networking company. 
  6. They also offer service plans with features that appeal to businesses. 
They're offering an incentive to get others to sign up (yep, here's the plug). For each person who joins on your recommendation, both you and they get an extra 5GB free beyond the initial 15GB. It's a pretty sweet deal.

So if you're interested, do us both a favor and go here to sign up:
https://copy.com?r=NORLhC

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Wednesday, July 17, 2013

Why conservatives hate Obamacare, Reason #752

I can't help but think that at least part of the reason conservatives are so apoplectic about the Affordable Care Act is that the derisive name they came up with for it*—the better to mock it—now seems to be lodged in the public consciousness, but not in they way they intended.

Early reports are indicating that the hated "Obamacare" is in danger of actually accomplishing its goal of providing affordable health care for millions of people who currently lack it. This is, of course, a disaster for conservatives: don't forget that it was leading neocon Bill Kristol who famously warned his fellow right-wingers in 1993 that "Hillarycare" had to be defeated because people might like it too much.

The Clinton health care plan was defeated (thanks to the standard conservative tactic of millions of dollars in misleading TV commercials). But now it appears the Beast was only sleeping, not dead, because now it has reared its head with a new name: Obamacare.

What keeps the Right awake at night is that not only will a new government program succeed in improving the lives of many Americans, but it will—thanks to them—carry the name of the president who is anathema to everything they stand for (please draw your own conclusions about any possible racial implications).

Lyndon Johnson's Medicare program was never labeled "Johnsoncare"—back in those Cold War days, Republicans preferred the scary term "socialized medicine" (you have to wonder, when did "care" become a dirty word?). But in attempting to hang the Affordable Care Act around Obama's neck as the millstone that would surely sink him, they appear to have made a major miscalculation. Obamacare it is. And as Obamacare, it will carry the President to a secure spot in the history books. Whether the Right likes it or not.



*Historical note: the first person to have used the term "Obamacare" appears to have been … Mitt Romney, in 2007.

Tuesday, November 20, 2012

To hell with fairness

Listen to just about any liberal speak about the budget and taxes these days, and it won't be long before you hear the phrase "The rich need to pay their fair share." This is one of those standard lines in politics that has become so universal and commonplace in the progressive world that it's barely noticed any more. It's a mental checkbox that everyone on the Left ticks without thinking about it. Of course the rich should pay their fair share: only a sociopath would disagree with a statement like that, in the abstract anyway.

But there's the rub: the statement is only widely acceptable because everyone gets to define it however they like. "What's fair is fair," we sometimes say. Well, not really…

Frankly, for a while now, the call for "fair share" taxation has been making me vaguely uncomfortable every time I hear it. Whenever some liberal icon like Paul Krugman or Bernie Sanders would repeat it, I'd give the obligatory mental nod, but somewhere in the back of my mind I'd feel a tiny tug of rebellion—and then I'd dismiss it and move on with whatever I was reading or listening to. To the extent that this feeling received conscious articulation, it was along the lines of "They need to come up with a better argument than 'fair share'."

And they do. Because—it should be obvious, really—it's going to be a frosty day in Miami before Americans achieve anything approaching a consensus about what constitutes an appropriate tax level for the top echelons of society. And while a majority of Americans agree that the rich should pay more, the devil is in the details of just how much more would be "fair."

We all believe that we care about fairness. But it's such an inherently squishy concept that it can be used to justify virtually anything. I suspect Hitler sold his ideology on the grounds that it wasn't "fair" that Jews should have power or influence in Germany. Closer to home, we hear that it isn't fair to make employers who have a religious objection to contraception pay for its coverage in their employee health plans. The basic formula seems to be: it's fair if you support it; it's unfair if you don't. And good luck ever getting the rich (with a few honorable exceptions) to support higher taxes on themselves. Why, that would be unfair!

So, basically, we're stuck. We might be able to enact the President's goal of bumping up taxes a bit on the wealthy, but we'll never get them to agree that this is anything but a totally unwarranted and unfair confiscation of their property. Which means, of course, that the "fair share" argument will only work on the people who are already convinced. And the 1% will continue to wield their daunting and ever-growing influence to subvert any further attempts to augment government revenue at their expense (as Krugman has noted, this has become practically the entire reason for the existence of the Republican party). Thus my sense that the Left needs to come up with a better argument for anything more than token tax increases. When all is said and done, the fairness argument is a loser (Have you ever heard a conservative use it when advocating lower taxes? I don't think I have; they're too savvy to get caught in an endless and ultimately fruitless wrangle about what's fair. No, conservatives tell us that lowering taxes will boost the economy, that a rising tide lifts all boats, and that ultimately we'll all be better off. "Fairness" doesn't even enter into it. If you accept their framing, it's all about enlightened self-interest.)

Then, some days ago, something crossed my inbox: a piece in the American Prospect by Liam Malloy and John Case entitled "Want Less Inequality? Tax It". It recast the whole fairness issue in a new light, and pointed the way to the solution I'd been wishing for. In a word, the answer to the "fairness" problem is to ignore it. Let me explain:

I'm going to touch only lightly on the article's opening section, which recounts the career of British economist Arthur Pigou. Pigou was once considered that country's leading economist, but these days his chief claim to fame is that he was a mentor of the legendary John Maynard Keynes. He was, say the authors, "one of the earliest classical economists to notice that markets do not always produce the best possible social outcomes." In fact, markets often give rise to externalities, or unintended side effects that can impact—either positively or negatively—people who aren't involved in the original transactions (the classic example of a negative externality is pollution from a factory, which affects everyone's health but isn't accounted for in the price of the factory's products).

Pigou said, very simply, that society should deal with externalities by taxing the bad ones and subsidizing the good ones. This may seem obvious today, but was a novel idea in the early 20th century. Among the modern incarnations of the principle is the carbon tax, which is designed to make companies pay for the privilege of dumping greenhouse gases into the atmosphere we all share.

Now along come Malloy and Case, proposing to treat out-of-control income inequality as a problem of externalities. They argue that excessive wealth concentration imposes costs on all of society, and that society should therefore act to discourage it, namely by taxing the wealthy more aggressively.

What exactly are these negative externalities that concentrated wealth leads to? The authors offer three examples, which I have rephrased somewhat and augmented with a fourth:

  1. Workers are deprived of sharing in the fruits of their labor. Back in America's "Golden Age" (the post-WW II era up until about 1973), workers' pay tracked their growing productivity closely, doubling the median income and creating a broadly shared prosperity. Since then, productivity has nearly doubled again, but wages are up only 20%. Meanwhile, the average income of the top 1% has tripled. If the income distribution during the Golden Age still held, the median income today would be over $86,000 instead of $50,000. That yawning gap is a direct cost imposed on the 99% by the outsized incomes of the 1%. 
  2. Society loses the skills of many talented people to the narrow goal of getting rich. The more rich people there are, and the more wealth they have (and the lower their taxes), the more attractive the idea of getting rich becomes. It's been argued that the decline of American manufacturing is due in part to the "brain drain" that leads our most capable people to pursue the much bigger rewards of the finance industry. In 1986, only 18% of Harvard graduates planned a career in business. Last year, the figure was 41%, with 17% going into finance. And the prospect of making a ton of money—and getting to keep most of it—provides a powerful incentive to pursue high-risk deals with potentially disastrous consequences (see: the recent financial crisis).
  3. The rich gain undue power and influence. We've seen ad nauseam how politicians march to the beat of the wealthiest segment of society. Members of Congress have to spend hours every day cultivating the well-to-do. The richest banksters got a taxpayer-financed bailout—seemingly without much effort—while the rest of us were left to fend for ourselves. And there has been essentially zero accountability for the Masters of the Universe who crashed the economy in the pursuit of obscene wealth. As Joseph Stiglitz writes in his new book The Price of Inequality: "Political rules of the game have not only directly benefited those at the top, ensuring that they have a disproportionate voice, but have also created a political process that indirectly gives them more power." And every perk and government preference the rich engineer for themselves is both a threat to our democracy and a net loss to the rest of us—another negative externality. We should ask ourselves: is "too big to fail"—one of the consequences of wealth concentration—really the best way to structure our economy? 
  4. Entrenched wealth and power act to suppress innovation. Great wealth will make a conservative out of almost anyone. We've seen plenty of examples of how the rich use their influence to promote conservative causes and attack progressive ones. People and companies at the top of the economic pile, raking in huge profits, have little incentive to innovate, and large incentives to keep the gravy train rolling. Often they get laws and regulations passed to perpetuate the status quo, protect their monopolies, and suppress upstart competitors and fresh-thinking innovators. Again, the rest of society loses when they win. 

Take another look at these four points, which we might collectively refer to as costs to society of not doing anything about wealth concentration (no doubt there are others, too). Notice something? The word "fair" doesn't appear anywhere in them. And in a way, that's the whole point: when excessive wealth concentration is objectively and demonstrably detrimental to a democratic society, then society can, and should, act to reduce that harmful concentration. And the way to do that is with higher—in some cases, much higher—taxes. Fairness. Be. Damned.

Notice another thing: this line of thinking doesn't come within a mile of the argument that the government needs more revenue and the rich should supply it. It says nothing at all about what the government should do with the money. In fact, the main goal of this policy—to reduce the concentration of wealth—would be achieved if the additional tax revenue was simply poured down a rathole. Of course that wouldn't happen, and progressives have plenty of ideas about what to do with it. My personal choice would be to mount a serious assault on the problem of global warming, a truly life-threatening emergency that the "free market" has so far failed miserably to address. But, as they say, that's another discussion.

On the surface, of course, this new regime of taxation would look very much like just about any other progressive tax, with a series of brackets and rates that increase for higher levels of marginal income (and, for perspective, we shouldn't forget that the top tax rate in the Eisenhower "Golden Years" was 91%). The difference—which has more to do with how we talk about the plan than with what the plan looks like—is to be found in its philosophical underpinnings:

  • First, as I've already alluded to, is the stated purpose of the plan. Emphatically, it is not to make everyone pay their "fair share." Its purpose is simply to reduce harmful levels of inequality. We don't have to defend it on any other basis. 
  • Second, the plan is designed to achieve its purpose by changing incentives. A series of higher and higher tax brackets would essentially put a "soft cap" on income. Multi-hundred-million-dollar compensation packages would lose some of their appeal—both for the CEOs who get them and for the companies that pay them. Talented people might consider something besides their personal bottom lines when choosing how to deploy their talents. 
But would limiting pay this way deprive us of the talents of our best people? Well, first you have to ask whether engineering ever more complex and risky financial deals is the best use of that talent for society, and secondly, past experience suggests that we would still have plenty of qualified applicants for the top jobs. There would still be no shortage of super-rich Americans, and the top earners could still enjoy a lifestyle the rest of us can only dream of. And remember, in America's heavily-taxed Golden Age, we still managed to enjoy the strongest quarter-century of growth in our history. Evidently the incentives were adequate to keep American business humming.

Economists have studied the impact of taxes on productivity, and there are actually two countervailing forces in play. One is the notion beloved of conservatives that taxes reduce the incentive to work. The other is the motivation to work more as taxes rise, in order to maintain your current level of take-home pay. According to Malloy and Case, for most workers these two effects roughly cancel out, meaning that people tend to produce the same amount, independent of changes in marginal tax rates. They concede that high earners may dial back their efforts a bit as their tax rates go up, but in many cases this doesn't have the expected effect of reducing total output of the economy. The explanation is that a lot of what the rich do consists of "zero-sum" activities, in which one person's loss is another's gain. In fact, Malloy and Case note, "some individuals in the top income group pursue quite a number of activities that others might be glad to see them spending less time on." Examples might include increasing corporate earnings by holding down wages, or lobbying Congress for protection from competition. The bottom line is likely to be a welcome increase in earnings for the middle class, with essentially no effect on overall output.

Malloy and Case acknowledge that the kind of tax reform they envision is, for the time being, off the table. Their near-term hope is that citizens may begin to see the continuing concentration of wealth at the very top as an externality with broader negative consequences—almost like, say, pollution—and to entertain the idea of fighting it the same way we might fight pollution, by means of the tax system. As they put it, "the lack of any limit to outsize economic rewards turns out to have a measurable cost, which Americans who aren't so wealthy keep getting asked to pay." Their recommended tax strategy "might start to do what has lately seemed impossible: give the best-paid Americans an interest in common again with the men and women with whom they work, and remind us that we're all in this together."

And to hell with fairness.

Wednesday, September 26, 2012

Blogging for The Century Foundation


Recently, out of the blue, I was invited by The Century Foundation to become a guest contributor to their Blog of the Century. 

I hadn't heard of TCF before, but they describe themselves as a non-partisan progressive think tank, founded in 1919, and their trustees have included people like Arthur M. Schlesinger Jr., John Kenneth Galbraith, William Ruckelshaus, and Daniel Evans (Hmm. I guess some of these people would qualify as a member of that extinct species known as moderate—or "not-insane"—Republicans). 

My first piece is up now, if you'd care to check it out.