You probably think that today was President’s Day. But you are wrong: according to the federal government, it was Washington’s Birthday. And in keeping with my tradition of ruining holidays, this makes my task much easier. Although note: there is no reason to destroy good holidays like this one where nothing is expected of me. What’s more, today a lot of people were writing that I wasn’t expecting. Jonathan Chait was in fine form. And The Plum Line blog was working at about half capacity.

As is more or less common knowledge, George Washington was the richest president we ever had, even though he never got to see a movie and there is a lot of folklore to the effect that his access to dental care was poor. And he didn’t have very good healthcare. He got sick and his doctor bled him to death. But that’s pretty common today: doctors kill a lot more people than is normally realized. But he did have one thing that we don’t: slaves. In fact, he had 300 of them. And that and his land is the basis of his vast wealth. Interestingly, the second richest president was Jefferson. Hmm, what do they have in common? (Jefferson had more slaves: over 650!)

So maybe we should change the name of this holiday to something more appropriate like: Slave Owning Bastards We Revere Day. Or: Our Dirty Little Secret Day. Or: Ain’t Slavery Grand Day! (That last one needs the exclamation mark as part of its name.) The funny thing is that most people rate Washington very highly as president—often as number one. I’ve never really understood this. To me, the only great thing he did (and I admit, this is a big deal) is step down after two terms. Certainly, he was popular enough to have taken the country in a very bad direction. Then again, because of the bleeding, he died shortly after leaving office, so maybe it didn’t matter.

Regardless, it’s nice to have a day off. I just wish it were for a better reason. How about Typhoid Mary Day?!

Last week, Reed Richardson wrote a really good column comparing the Republican and Tea Party responses to the State of the Union address, How the Media Skews its State-of-the-Union Response Coverage. I thought about this before the event. Marco Rubio is a Tea Party darling. He wasn’t going to say anything that the Tea Party would disagree with. So what’s with the Tea Party response?

Richardson notes that the Tea Party is only supported by about 8% of the population and yet the major media treat it like an important group. Compare this to a Gallup poll that found that 36% of Americans view socialism positively. That’s 4.5 times as many people. And what do we get from the major media: a heavy diet of extreme Tea Party policy.

Let’s look at budget ideas. Paul Ryan has offered up two budgets in a row. These are harsh policy ideas that large majorities of Americans disagree with. What’s more, they aren’t really budgets at all: they are just claims that somehow (Magic!) the budget will be balanced. Ryan never explains what he will cut. (This is typical of Republicans because they know that what they want to cut is toxic to most people.) This unserious and unpopular budget gets loads of attention from everyone in the media!

Now compare that to the yearly People’s Budget from the Congressional Progressive Caucus. It is an actual budget: it says what it will cut (lots of military spending). Say what you will about it, it is a serious budget and it is far more popular than Ryan’s budget. And yet: most people don’t even know it exists because the media don’t cover it.

I think it is an outrage why truly liberal ideas that are fairly popular are considered outside of the Overton Window while extremely unpopular conservative ideas are considered just things that important people say—things that deserve blanket coverage on the the TV machine. Why is this? Journalists usually argue that it is because these liberal ideas have no chance of passing. Even ignoring the obvious self-fulfilling aspect of this: the same thing can be said about the conservative ideas that these journalists do cover.

My theory for why this happens is a little complex. It comes from the fact that regarding economic issues, journalists tend to be conservative. When it comes to social issues, they tend to be liberal. But here’s the key: they think of themselves as liberal in a general sense. Thus, they mistake their conservative opinions about economics as liberal. They push against this because they want to be seen as objective. And so their reporting on economic issues gets even more conservative.

I’ve written about this quite a lot. It frustrates me that MSNBC is seen as a liberal network. Most of the time when I watch it, I see a lot of socially progressive ideas but mostly moderate or even conservative economic discussion. This bugs me because I continue to think that social issues don’t matter all that much. If we have extreme economic inequality (which we do), then we are not going to have social justice either—regardless of what the law is.

This is why when we have a Democratic president, we get two conservative responses to the SOTU address. And what’s more, both are fundamentally the same because there really is no difference between extreme and moderate Republicans: they are just Republicans. But when we have a Republican president, the media would never stand for a Democratic and Socialist responses. This even though the Socialist response would better represent the views of a large section of Americans than the Democratic response (much less the Tea Party response).

Afterword

I am not against social liberal policy. It is important and at times it is the most important thing. Voting rights can often take precedence. My point is that social issues are not a substitute for economic issues. If someone is a social liberal and an economic conservative, then he is a conservative. Or let me be perfectly blunt: social conservatives are bigots. So most American journalists are not bigots. Hooray for them! But that doesn’t make them liberal.

I often wonder why people have such a low opinion of bloggers. In my experience, there are a lot of good bloggers out there. It is downright scary just how talented a lot of people are. And then there are the bloggers who never really try. It is surprising how many blogs have one post. But mostly, people do it for a few months and then stop. But that’s like anything: a lot of people buy guitars that just sit in their closets. Why do people think bloggers are idiots?

Ladies and gentlemen: Kathleen O’Brien Wilhelm! I discovered her this morning from Jonathan Chait, a man who knows comedy when he sees it, even if it is unintended. Wilhelm is kind of a Tea Party idiot, but not as smart. She blogs over at the Avon-Avon Lake Patch. And man does she care about wasteful spending! For example, last week she had an idea for how the government can save money by not posting signs for animals, Animals Can’t Talk:

As Chait notes, “What else could the signs be for, if not for the animals themselves?” I wonder! Isn’t it just like the stupid government to go posting signs for animals? I mean, I know it’s in picture form, but really! I mean, it doesn’t even make sense. Deer near another part of the road won’t even see those signs! I can see maybe putting up “no deer crossing” signs so the deer would know that the government (Which wants to limit the liberty of deer!) doesn’t want them to cross there. But what’s the point of telling deer, “Here is where we want you to cross?” This is madness!

Wilhelm ends her article in such a way that you can’t think she’s just kidding: “Yes, signs are important—to humans; ‘Stop’ signs, and others are more than just costly decorations scattered along the roadways. However, depending on the school district, most humans can read them, but animals not so much.” Oh, how charming! Depending on the school district! Get it? Because our schools are so bad, people can’t read the word stop. And animals can’t read at all. But she’s very clever there with that, “Not so much”!

You may be asking yourself, “Sure, she’s an idiot and that often does mean she’s a conservative. But how do you know?” Well, in the text I’ve quoted, I think it is pretty clear. There’s the assumption that the government just wastes money on stuff. (Interestingly: she looks old enough to be on Social Security, which I bet she doesn’t think is wasteful.) Regardless of that, she has written a lot of other things. Consider this golden oldie from right before last year’s election, Obama’s Going to Take Your Stuff!

Yes my friends, Kathleen O’Brien Wilhelm is one of those people. She’s dangerous. You may have thought that Joe Scarborough was ignorant. But there are legions of people like Wilhelm out there who are willfully ignorant, believing in things that are patently false. (Death panels! Czars! Free cell phones!) And I’ll bet she has a lot of people who hang on her every word—people who right now are writing letters complaining about those wasteful deer crossing signs because, damn it, deer can’t read!

Mike Konczal recently interviewed economist Arindrajit Dube about the minimum wage. In a blog post after the interview, Konczal explained something that Dube had talked about and it is really interesting. You see, there are people like Matt Yglesias who argue that the best way to help the poor is to give them money directly. Enacting things like the minimum wage just messes with the economy. So instead, we should raise their incomes directly through mechanisms like the Earned Income Tax Credit (EITC). Except that it isn’t that simple.

As Konczal notes, many economists complain that taxes do not necessarily fall on the people who are directly taxed. For example, they claim that corporate taxes just get passed onto consumers in the form of higher prices. (As I noted yesterday, this is nowhere near the whole story.) But when it works the other way, most economists are blind to it.

Here’s how it works. When the government gives poor people money through the EITC, it allows employers to pay them less. It is estimated that for every dollar given in EITC, employers siphon off 27 cents in lower wages. That’s a lot. That means that 27% of the EITC program goes to often very big companies. But wait…

Minimum wage to the rescue! By keeping the minimum wage at a reasonable level, it prevents companies from siphoning off money from the EITC, because they can’t reduce wages very much or at all. Thus, the minimum wage and EITC work in tandem to better help the working poor.

Unlike a lot of people who push the non-minimum wage line, Matt Yglesias is very open to new evidence. I’ll be very interested to see if he takes note of this.

Update (18 February 2013 3:35 pm)

Matt Yglesias has spoken. I think he’s being a little deceptive. As I recall, he came down on the EITC side of this discussion. But now, he is calling for Guaranteed Basic Income (GBI). This would be a government program that makes sure that everyone has some basic amount of money with which to live. He notes that this amount would effectively set a minimum wage because no one would work for less given that they get paid for doing nothing. I agree with him: a modern economy ought to be able to provide people with their essentials. And it is important to remember that this would help people take risks and try to build new products and services. As a man who has started a lot of companies, I can tell you that you think much more about the consequences of failure than you think of all the piles of money you will make if you are successful. Knowing you have a fallback is critical. But I still think that Yglesias is hedging.

Sarah Kliff reported yesterday on research that shows, Drunk Eyewitnesses Are Just as Good as Sober Ones. The research was performed by researchers at the University of Gothenberg. They specifically looked at whether people who watch a video of a crime could identify the perpetrator in a line-up a week later. Half the subjects were drunk when they watched the video. And what a surprise! The drunk viewers were as good as the sober ones.

The reason this is the case is that people are really bad eyewitnesses—whether sober or drunk. But strangely, this does not seem to be the take away that the researchers get from the results. They note that many crimes happen where people are drunk. So now, in court we can use drunk witnesses without the fear of (mostly) defense attorneys arguing that the eyewitness testimony ought to be discarded.

I take the opposite from this research: sober people are no better eyewitnesses than drunks! Juries find eyewitness testimony extremely powerful. The last thing our justice system needs is more unreliable, often racist, eyewitness testimony.

It boggles my mind that criminal justice researchers would pitch their results in such an evil direction. Look, I’m all for convicting the guilty—at least when it comes to real crime, as opposed to moralistic “crime.” But our criminal justice system is too often more like a random conviction generator than anything else. But not completely random. If you’re white in the suburbs, you’re probably safe. If you’re black in a city: good luck! Because if you have bad luck, you’ll likely be picked out of a lineup by some drunk the police grabbed off the street.

Dean Baker wrote a very short blog post the other day that gets at an important economic point that most people seem to miss, If Drug Companies Could Charge Higher Prices, Why Aren’t They? It refers to a Katie Thomas and Robert Pear New York Times article that claims that the government plans to pay drug companies less for medications as part of Medicare. “Some have speculated that other consumers could end up paying for the cost savings if drug makers raise their prices to account for the lost revenue.”

What journalists just flunked Econ 101?

Yet, this is an incredibly common fallacy. The idea is that the price of a product is some function of how much it costs to make it. Wrong! In fact, this is what drug patents are all about. They create an artificial monopoly so that drug companies can charge far more than they would cost in a free market (much less what they would cost based only on production expenses).

Think of it in terms of a new piece of electronics. The cost of producing flat screen televisions have gone down over the last ten years, but that isn’t the main reason the prices have gone down. When a product is new, its profit margin is high. Because it’s new. Because people will pay more to be the first. Because they’re idiots. (I think so, anyway; I am most definitely not an “early adopter.”)

So here’s the ultimate rule of business: products are priced so as to maximize profits. As Dean Baker’s headline indicates: drug companies would charge more if they could. The very fact that the government is able to pay less for the drugs proves the point. Why don’t the drug companies just refusing the sell the drugs at that price? Because they are still making money! That reminds me of a joke.

Two haberdashers are talking. The first one says, “I lose a dollar on every hat I sell!” The second one says, “How do you stay in business?” The first one replies, “It’s the volume!”

So the drug companies are not going to sell at a loss to the government, regardless of how big a customer it is. A high volume of losses is a big loss, just as for the haberdasher in the joke. So don’t fall for this fallacy. It pops up a lot. You especially see it used to argue against corporate taxes. People say, “If you raise the corporate tax, the corporations will just pass it on to the customer!” No, not really. In fact, with corporate taxes, it makes even less sense, because corporate taxes are only paid on profits.

Don’t be like Katie Thomas and Robert Pear. In fact, unless it’s Paul Krugman, be skeptical of any economic information you get from the New York Times. And note: the Sunday New York Times does not cost $5 because that’s what it costs to produce. In fact, the Sunday Times has been $5 for over a decade. You’d think Thomas and Pear would have noticed that.

Have you heard about the end of the two party political system in the United States? Let me lay it on you. In 2016, Rand Paul will run for the Republican presidential nomination. He won’t win, because, you know, he’s Rand Paul. Plus, all the establishment Republicans will be funneling cash and expertise to Marco Rubio. In case you didn’t know, Marco Rubio is not only the Republican Savior™, he’s got great policy ideas like, uh, “something like the Dream Act but not as good” and “grow the economy.” And did I mention that he is a Cuban American, which technically makes him a Latino even if he is even whiter than Mitt Romney? So Rand Paul loses.

But wait! There is a cry from the Tea Party grassish rootish, “Let Rand Paul run!” And then we are off: Rand Paul runs as a third party candidate and wins because all the college kids will vote for him because just like the pretend libertarian that he is, Rand Paul is kind of sort of for maybe decriminalizing cannabis. And suddenly, we have three political parties: Democratic, Republican, and Tea.[1] This would not just be bad for the Republicans. Democrats ought to be afraid too!

Or so say a bunch of people interviewed by Ron Fournier at the National Journal in an article titled, Republican Leaders Worry Their Party Could Divide in Two. But this is what you need to know about it: it is total rubbish.

Let’s start with the Tea Party. These are people who love liberty rhetoric, but they hate the actual policy. Once Rand Paul is on the national stage, they will see that he doesn’t want to get the fags. And perhaps as important, he doesn’t want to get Iran or any other country with a similarly foreign sounding name. And don’t forget: he doesn’t think that wacky weed is the greatest threat to western civilization since Stalin invented frisbee golf. Everything that might make Paul inviting to college students will make him replant to the Tea Party. Remember: the Tea Party talks freedom but it votes illegal abortion.

But there is another reason that Rand Paul will not run as a third party candidate. Let’s call it the heroin exception. One thing that libertarians love is pointing out that they want to make heroin legal. It is a great way to say, “Look at me! I’m intellectually consistent!” (Libertarians, despite what they think, are never intellectually consistent.) But Rand Paul doesn’t do this. He is only for cannabis legalization, and even on that issue his endorsement is hardly full throated. Rand Paul is a man who makes political calculations. He will calculate that he can’t win as a third party candidate and that losing third party candidates never go on to anything better (unless you consider becoming a punchline better and in Paul’s case that may be true). So he won’t run.

This doesn’t mean that there won’t be some other crazy person who tries to break the Republican Party in two. However, I don’t see anyone who is likely to do a very good job of it. Anyone popular enough is better off staying in the party. Anyone unpopular enough to want to do it won’t cause that much damage. But let’s imagine for a moment that it somehow did happen. Imagine that Rand Paul did run as a third party candidate? What would that look like?

Hilary Clinton by 10 percentage points!

It is ridiculous to think that a Tea Party offshoot from the Republican Party would hurt the Democratic Party anywhere near as much. The fact that “thoughtful” Republicans believes this shows just how delusional they are. But they aren’t wrong that there is a split in their party. But this goes back more than 30 years. And the party has always managed to stay together. The truth is that the economic conservatives don’t care about the Neanderthal policies of the social conservatives, because when you’re rich, the law doesn’t really matter. And the social conservatives don’t care about the vile policies of the economic conservatives, because when the second coming of Jesus is going to happen any day now, who cares about money?

So don’t expect a break-up of the Republican Party any time soon. Instead look for a lot of discussions about branding and intra-party fighting that will allow the Republicans to continue on with their failed and unpopular policies. Otherwise: see you in 2014!

[1] I imagine the Tea Party later splitting into the Earl Grey and English Breakfast parties.

Who is the man who would risk his neck for a brother man? Shaft! Who knows the evil that lurks in the heart of man? Shadow! And who shot his friend in the face with a shot gun 7 years ago today? Cheney!

Can you dig it?

The victim was Harry Whittington, who has his own Wikipedia page, mostly, it seems, because he was shot in the face by then Vice President Dick (some names are creepily fitting) Cheney. Some people get all the breaks! As Stephen Colbert said at the White House Correspondent’s Dinner that year, “To actually—to sit here at the same table with my hero, George W. Bush, to be this close to the man. I feel like I’m dreaming. Somebody pinch me. You know what? I’m a pretty sound sleeper; that may not be enough. Somebody shoot me in the face. Is [Dick Cheney] really not here tonight? Damn it! The one guy who could have helped. ”

What I find interesting is that Whittington will be 86 in a couple of weeks. Cheney is shockingly still alive at 72. In the case of these men and so many just as wealthy, America really does have the best healthcare system in the world. The problem is that if Cheney, with his bad original heart, had been just a regular guy, he would be long dead.

And that, my friends, is the paradox of life in America. It is safer to hang around a gun totting idiot like Dick Cheney than it is to live a nice quiet, normal life. Because if you are in a position to hang around the deadly Dick Cheney, then you must have access to the best healthcare in the world. It’s only prols like me who have to worry.

So congratulations Mr. Whittington! This is your seventh full year alive after being shot in the face. It sure is great to be rich in America!

Can you dig it?

Afterword

This one goes out to my brother men Harry and Dick:

Can you locate the error?! This is from Glenn Thrush this morning:

Voters overwhelmingly say they want him to do more to deal with a deficit that is set to exceed $14 trillion by the end of the fiscal year.

If you said “$14 trillion” or “deficit” you win! What Thrush means is that the total gross public debt is set to exceed $14 trillion. And note: this is gross; if you take into account public reserves (like the Social Security Trust Fund), it is less: around $9 trillion.

People make this error all the time. The deficit is how much more we spend in a given year than we take in. The debt is the total result of our over-spending for the last 200+ years.

Matt Yglesias notes that it doesn’t really matter: “The people who are very upset about the ‘$14 trillion’ deficit aren’t going to become less upset about it when they realize it’s only $845 billion, anymore than the people worried about ‘out of control’ government spending become less worried when they learn that government spending has been flat for almost three years.” (Actually, government spending has decreased every one of the past three years.)

But I would counter: just because some people are perpetually freaked out about debt and deficits, doesn’t mean we should go along with it. After all, these were the same people who voted Ronald Reagan into office. You know how that went:

Whenever I hear people complaining about our out of control debt, I wonder, “If it’s out of control now, why were you also screaming in 1980 when it was only $2 trillion?” The truth is that these people will always be screaming and they are always doing it for the same reason: they hate government programs that help the poorer classes. They are just looking for a reason to justify it. The debt or the deficit? It doesn’t matter to them because it is just too damned big and we need to cut entitlements now!

Sal Gentile over at Up with Chris Hayes found a remarkable paper from the Bank of England, Long and Short-Term Effects of the Financial Crisis on Labour Productivity, Capital and Output (pdf). They find that there is a long-term effect on an economy’s productivity of 1% per year that the crisis drags on. In other words, we all pay a hefty long-term price for the sins (and profits) of the banking industry.

As a result of this, governments have a real interest in limiting financial crises. Unfortunately, governments are doing just the opposite. The authors of the paper look at data from 61 countries over the period 1955–2010. And they find that the number of financial crises has skyrocketed over the last 30 years. Here is the graph taken from Up with Chris Hayes:

Think about this for a moment. Here is a clear case of the unfettered market hurting productivity. I remember back when I read Ayn Rand and her constant admonitions that capitalists only worry about their enlightened self-interests. That word “enlightened” is so big, you could march a Nazi military column through it. But what I find remarkable is that as Rand has become more and more important to the market fetishists, these people act more and more in unenlightened and short-term ways.

The government needs to get back to regulating the finance industry. All we have gained from looser regulations has be a ballooning of the financial part of our economy. And that doesn’t produce anything. Goldman Sachs does not bring good things to life!

In general, I’m against artists in one field going into another. Part of it is just that we already live in a winner-take-all society. There are damned few ways for artists to make a living. Does Jeff Bridges really need the extra income from doing voice-overs for commercials? Couldn’t he leave some work for struggling voice-actors? But another problem is just that the famous don’t have to be particularly good at their new field. If Madonna wants to publish a novel, she will publish a novel. And after a team of editors and book doctors fine tune what would probably been a fairly pathetic attempt, she would end up looking like, you know, a novelist as opposed to what she is.

We see this a lot in painting. In the late 1980s, I saw a book, Doubly Gifted. It is a book filled with the visual art of writers. It sounded really interesting, but what I immediately noticed was that all the artwork was derivative. There really wasn’t anything that was original. But I will allow that most of the writers in the book were reasonably decent amateur artists.

Yesterday, I came upon an article on Hub Pages, Famous People Who Are Also Artists. It included 7 people and a sample of their artwork.

The Beatles

The first two famous people are John and Paul. Paul’s work is not wholly unworthy. He does a kind of abstract expressionism combined with primitive representational stuff. It look more like real art than I’m used to from celebrities who decide to paint.

Lennon, on the other hand, is pathetic. Or at least, the people who take his doodles seriously are. There really is nothing on offer here. He has no sense of design, his representations look like bad comics, and it is all very much the same—which wouldn’t be bad if the work were good. There is far too much mythology surrounding Lennon anyway. People care about his art because he was the coolest Beatle. But do we need anything more than Strawberry Fields Forever?[1]

Tony Bennett

Bennett’s work is entirely typical of what I hate about celebrity painting. It isn’t that he’s bad. He’s clearly worked hard at the craft of painting. But I can never look at a painting of his without thinking of someone else. Edward Hopper here. Camille Pissarro there. I know I’m going piss off a few people with this, but it doesn’t help matters that I just don’t like Bennett that much as a singer. Sorry, but I’m a Sinatra man. I even like Martin more.

Tony Curtis

Ladies and gentleman: Henri Matisse! Except without much of a clue regarding composition. The colors are nice. Lots of cats.

The Good

The work of both Dennis Hopper and Anthony Hopkins strike me as rather good. Hopper was a photographer with a keen idea. Hopkins creates some very intense portraits. (I could live without his landscapes.) Both men have an artistic vision combined with technical ability.

The Ugly

Last of the seven is everyone’s favorite Austrian painter, Adolf Hitler. Since I was a child, I’ve heard that Hitler was a failed artist. But I had never seen his work. It is uncomfortable for me to admit that the man had talent. The image above is one of his from when he was 25 year old. What I especially like about it is the great composition. He clearly has an eye. And you see this again and again in his art work. I think he might well have become a fine artist in time. There is nothing that says that artists have to be nice. Had Pablo Picasso failed as an artist, who knows what vile political philosophy he would have created.

I don’t much believe if artistic gifts. In general, people get better the more they do something. Celebrities—because they are rich—have the time to get good at whatever they want. I do, however, wish they would keep it private. Art is narcissistic enough. Going public is more so, but understandable for the talented nobody. Going public when you already can’t go out to a restaurant without being mobbed by adoring fans strikes me as uber-narcissistic, or maybe just plain pathetic.

[1] Or Happiness Is a Warm Gun. Or A Day in the Life (with assist from McCartney). Or Come Together. Or Across the Universe. I could go on.