Let’s Not Drill Now

Somehow, the “Drill, Baby, Drill” crowd, which also includes Democratic Senator Mary Landrieu, has responded to the disastrous oil spill in the Gulf by reiterating its stance that we must drill everywhere, starting yesterday. My stance on offshore drilling has basically been that the benefit to U.S. consumers is negligible, but if done safely, it’s a good bargaining chip to extract other concessions on carbon reducing energy policy. Of course, the Obama administration already preemptively conceded the point, but even that fact notwithstanding, is offshore drilling even a net positive at all? Annie Lowery quotes David Kotok of Cumberland Investors on the potential cost of the spill.

In the best case, he thinks:

Containment chambers are put in place and they catch the outflow from the three ruptures that are currently pouring 200,000 gallons of oil into the Gulf every day. If this works, it will take until June to complete. The chambers are 30-foot-high steel configurations that must be placed on the ocean floor at a depth of one mile. This has never been done before. If early containment is successful, the damages from this accident will be in the tens of billions. The cleanup will take years. The economic impact will be in the five states that have frontal coastline on the Gulf of Mexico: Texas, Louisiana, Mississippi, Alabama, and Florida.

And in the worst, he thinks:

This spew stoppage takes longer to reach a full closure; the subsequent cleanup may take a decade. The Gulf becomes a damaged sea for a generation. The oil slick leaks beyond the western Florida coast, enters the Gulfstream and reaches the eastern coast of the United States and beyond. Use your imagination for the rest of the damage. Monetary cost is now measured in the many hundreds of billions of dollars.

Holy shit — and that’s just the economic impact. There’s also environmental impact to consider. Now let’s look at the benefit, shall we? This graph from the EIA always makes the point nicely:

Basically, offshore drilling has almost no ability to reduce the cost of oil for U.S. consumers. What it does have the ability to do though is to continue the criminal (metaphor) growth of oil company profits, and by extension, replenish campaign coffers of politicians in states with offshore oil reserves.

Failed Times Square Plot Shows Folly of Security Theater

One thing the recent failed Times Square car bomb incident reveals is just how absurd the level of security theater in the United States is. That is, it’s true that we may succeed in making air travel extremely unpleasant, but the fact of the matter is that there are innumerable crowded locations spread throughout the United States that given a certain level of tactical sophistication (which it seems al Qaeda seems to lack at the moment) could be exploited by motivated individuals to cause massive destruction.

Anyway, consider that an introduction to a James Fallows post that makes a few points I was making to my family over the weekend. This, in particular is the key point for understanding why our government has taken airport security to such a ludicrous level.

The restrictions would never be lifted and the TsSA would have permanent life, because the political incentives here work only one way. A politician who supports more open-ended, more thorough, more intrusive, more expensive inspections can never be proven “wrong.” The absence of attacks shows that his measures have “worked”; and a new attack shows that inspections must go  further still. A politician who wants to limit the inspections can never be proven “right.” An absence of attacks means that nothing has gone wrong — yet. Any future attack would always and forever be that politician’s “fault.” Given that asymmetry of risks, what public figure will ever be able to talk about paring back the TSA?

It’s worth noting this dynamic has been exacerbated by opportunistic politicians (most recently conservatives) who are eager to paint their political opponents as ineffectual against terrorism. Consider the hysterical Republican response to the “Underpants Bomber” followed by President Obama’s institution of quasi-profiling measures and you’ll have your answer for why flying is such a pain in the ass.

Happy Tax Day

First, let me apologize for the unusually long hiatus from the blog. I’m hoping to get back in to the swing of things here, so I’ll start off a little slow with a gentle reminder on the subject of taxes. Namely, people tend to be generally confused — sometimes willfully — by the term “income tax.” Consider this garbage from Scott Hodge, President of the Tax Foundation:

But that is no longer the case for a growing class of Americans for whom the price of civilized society has been reduced to zero because the tax code’s generous credits and deductions completely erase their income tax liability.

And for many of these nonpayers, civilized society actually pays them a hefty refund, which is not much different from a welfare check except that it’s run through the tax code instead of through the Department of Health and Human Services.

It’s true that a segment of the population pays no federal income tax, which is the federal tax applied to working income. Of course, this ignores completely the contributions to civil society made by people in lower income brackets through other payroll taxes like those for Medicare, Social Security, State, City and excise and sales taxes — all of which are broadly regressive since they are applied at a more or less fixed rate. When you look at all the full taxation spectrum, things are hardly so dire for those who pay income taxes.

This myth that a large swathe of Americans pay no taxes is absurd, but is also a byproduct of our needlessly complicated patchwork tax system.

Self-Loathing Centrists

Matt Yglesias makes a smart point about the bleating of centrist Democrats who argue that voters abandoned the party because of liberal overreach, even though liberal ideas always take a back seat to accommodate centrist demands.

You can easily imagine an alternate universe in which the Senate Democratic Caucus took an oath of party loyalty, that all 60 Democrats would vote for cloture on all leadership-supported bills, allowing measures to pass with just 51 votes. Had that happened, we would have gotten a bigger, more liberal-friendly stimulus. And the Senate would have finished up with a more liberal version of health reform some time ago. And the Senate probably would have passed some other liberal stuff in the meantime. Had that happened, and had the voters been displeased with it, then it might make perfect sense for Landrieu to complain about some non-Landrieu “wing” of the Democratic Party.

But in the world that exists, the only “wing” that matters is the Mary Landrieu wing. They decide how much stimulus we get. They decide their can’t be a public option. They decide their needs to be a months-long quest to get Chuck Grassley to offer “Republican cover” for a health care vote. Either the strategy is working better than the alternatives, or else it’s the Landrieu wing that needs to change things up. But defeats can’t be the fault of the people who haven’t been in the driver’s seat since the seventies.

Right, and to build on this a little, it’s a bit surprising these centrists don’t realize how tied their electoral fortunes are to that of the party as a whole. If there’s a mass voter rebellion against Democrats, you can safely bet that “centrist” Senators in more conservative states are going to catch the worst of it. So when Evan Bayh and Mary Landrieu and Ben Nelson go off criticizing their party or trashing the health reform bill for months, they’re actually making the political situation for themselves much worse than it needs to be.

Reconciliation and “the Political Climate”

I’ve been so upset about the Democratic response to the Massachusetts special election, I don’t really know where to begin. Plus, it seems most other people have already written what I would argue anyway, so I’ll just start fresh by reacting to Chuck Schumer’s comments on using reconciliation to clear negotiations with the House.

Reconciliation is one of a few options under discussion, Schumer said. But he said that “concerns about the political climate” make that plan less than appealing to some Democrats. “It’s one of the considerations,” he said when asked if Democrats worry voters will react badly to a health care bill passed with through reconciliation.

It actually seems to me this method has the benefit of being both politically necessary and the most attractive. Using reconciliation — which only requires a majority vote in the Senate — House and Senate Democrats can work out their differences without forcing vulnerable members to vote for health care reform again. That is, when you only need 50 votes (plus Joe Biden), all the wishy-washy moderates get to take their principled stand, and the Democrats who need votes from liberals won’t alienate their base. Everybody wins.*

More to the point, I’m not sure what the attractive alternative is. Conservative groups are already encouraging challenges to vulnerable Democrats, explicitly targeting them for their votes in favor of health care reform. Since both chambers of Congress have already passed bills, their members are already prone to this attack. Failing to pass final legislation won’t change their vulnerability on this score. What it will do is alienate the Democratic base, turning what could be merely a bad 2010 cycle into total electoral anathema.

Finally, what on earth makes Democrats think fumbling here will improve “the political climate”? Barack Obama is regularly compared to Hitler already. Republicans already obstruct everything they possibly can. It’s almost impossible to make this situation worse.

The House passing the Senate bill and fixing differences through reconciliation is simply the only way to pass the bill. Failing to pass the bill will lead to many more elections like Massachusetts where liberals don’t come out to vote. It’s the only available political option, and it’s the only available procedural option. It’s time to pass the damn bill.

*By the way, I don’t think this is a winning strategy for centrists, who are bound to be attacked from the right for supporting the bill in the first place and then being flip-floppers. They’re socialist flip-flopping weak-kneed liberals! They’re going to get creamed! The only chance they have is to support the bill and sell it.

Higher Taxes Better than Forced Charity

Kevin Drum points to a report in the New York Times that Goldman Sachs is weighing an increase in charitable giving requirements for its senior staff. Kevin poo-poos it:

I think it’s great if corporations support charities or set up charitable foundations of their own. It’s also great if corporations urge their employees to give to charity. But that’s as far as it goes. Charitable giving isn’t a smokescreen for indefensible behavior, and in any case it’s not charity if you’re forced to do it at the point of a gun. Bankers who make millions ought to feel obligated to give some back to the community, but if they don’t, that’s their business, not Goldman’s.

While I think Kevin is definitely right about the limited PR upside here, I think he’s wrong that “it’s not charity if you’re forced to do it at the point of a gun.” That is, I don’t think anyone in need really cares whether or not the food, shelter, or research money or whatever it is that benefits them comes from the end of a gun or not.

Anyway, anyone who hasn’t been lobotomized knows that’s not really Goldman’s objective here, so the debate as to whether Goldman’s charity is valuable irrespective of it’s intent is sort of moot. Rather, Goldman’s play here is much more of an attempt to “self-regulate” before the government, bowing to common sense and popular outrage, does something about an unsustainable situation. To wit, the issue isn’t just that bankers pay themselves obscene amounts of money, it’s that the pay and incentive structure of the banking industry encourages recklessness behavior that endangers the wider economy while providing dubious societal good.

While greater charitable giving requirements would provide some marginal good on the charitable perspective,  they wouldn’t do anything to address the incentive problem. Luckily for us — but not as much for banking executive —  we already have in a place a system called the “tax code” that can helps push income distribution in a socially beneficial way while also shaping incentive structures.

The situation that Goldman fears are regulations on payment structures that reduce incentives for reckless investment and changes to the tax code that significantly increase the marginal tax rates on the upper extremes of the income spectrum to something closer to our historical norm.

Taken together, these would policies would both limit behavior that endangers the economy and help ensure that at least some of banking profits are funneled into a socially beneficial direction.

(By the way, the most likely outcome of this policy is that Goldman just pays  even more to account for the difference of the charity requirement. After all, the banking industry has notoriously argued it must maintain absurd bonuses to preserve its talent. If Goldman starts lowering its real compensation levels, how can it retain talent?)

What the Reid Incident Shows about the GOP’s Racial Outlook

The conservative high dudgeon about Harry Reid’s 2006 comments on Obama’s electoral prospects is flatly ridiculous (though if you want to read more, check out Mark Kleiman here or read George Will denouncing it here). Still, these paragraphs from Dave Weigel’s write-up are pretty revealing about the GOP’s views on race.

The White House immediately leaped to Reid’s defense, but for Republicans, this was manna from heaven. The National Republican Senatorial Committee blasted out three press releases on Reid’s “embarrassing” secondhand quotes. “For those who hope to one day live in a color-blind nation,” said NRSC spokesman Brian Walsh, “it appears Harry Reid is more than a few steps behind them.” On Sunday, after no Democrats had stepped out to criticize Reid, Republican National Committee Chairman Michael Steele rebounded from a tough week of attacks on his extracurricular book tour by demanding that Reid resign as Senate majority leader.

This is a curious straw man. I’m pretty sure most liberals explicitly don’t want to see a “color-blind” nation. Rather, it’s conservatives that generally prefer “color-blindness” because it ends racism in one fell rhetorical flourish. This, of course, frees conservative politicians from grappling from the fact that many of their policies are grossly disadvantageous to racial minorities.

Still, Republican strategists told TWI that the party was ill-positioned to do much more damage to Reid. The senator had defended himself with political cover from the president, the Congressional Black Caucus, and Rev. Al Sharpton. And the details of the Lott scandal might not bear scrutiny in a way that hurts Reid. In 2002, as the incoming Lieutenant Governor of Maryland, Steele called Lott a “compassionate and tolerant statesman” whose apologies were enough to save his job.

Right — and that’s probably been the most laughable and revealing aspect to this kerfuffle. When GOP strategists say the party is “ill-positioned to do much more damage to Reid,” what they mean is that Republicans don’t stand to gain politically from denouncing racism because people who tend to vote for Republicans care much less about racial inequality than they do the interests of wealthy white people.

Bad Examples for Racial Profiling

Amid the fallout of the Crotch Bomber, there’s been a renewed clamoring for profiling, and indeed, President Obama has instituted enhanced security measures for travelers from 14 countries. Spencer Ackerman makes the case for why this is likely to actually enhance radicalization and make intelligence gathering more difficult. Much of the argument against appears to have a veneer of theory to it, but I think David Frum accidentally highlights a good working example in his defense of a more tolerable form of profiling.

On his blog yesterday, Daniel Pipes reminded us of the procedure that saved an El Al jetliner from a terrorist bomb in 1986. A Palestinian terrorist had seduced an Irish-Catholic chambermaid at a London hotel. The woman, Anne-Marie Doreen Murphy, became pregnant. The terrorist promised to marry Murphy, if she would meet him in Israel for the wedding. He then planted a bomb in her luggage. Here’s the conversation that discovered the plot…

The point here isn’t the example itself, but rather where the example comes from. Yes, it’s true that Israeli security procedures have effectively ended that sort of terrorism, but are Palestinian-Israeli relations really an ideal here? Palestinian terrorism and resistance draws not only the tangible oppressions of continued settlement expansion, but also on resentment from second-class or third-class treatment. Granted the enmity between most Muslims and the United States doesn’t close to resemble the Israeli-Palestinian conflict, but surely it’s reasonable to expect that similar policies would have similar effects.

Even if we assume that racial profiling would be effective (and there’s plenty of empirical evidence to show it isn’t), is a world where U.S. relations with Muslims more closely resembles those between Israelis and Palestinians a world we want?

Poor Service Is a Bigger Problem than Terrorism

This is a staggeringly poor use of resources:

The Metro Transit Police Department (MTPD) now has a dedicated unit devoted to deterring a terrorist attack in the Metro system. The new anti-terrorism team will increase surveillance of the Metro system, conduct more frequent security sweeps of Metro facilities and tunnels, and provide greater visibility of uniformed officers.

Using a $9.56 million Transit Security Grant from the U.S. Department of Homeland Security (DHS), MTPD formed the 20-member, anti-terror team in December. The team, whose mission is to deter terrorists from selecting Metro as a target, will use tactics such as increased surveillance and random, unpredictable patrols of Metro buses, trains, stations and facilities to keep the Metro system and its riders as secure as possible.

Is this a joke? We’re supposed to stop terrorists from targeting the Metro with a team of 20 people through “increased surveillance” and “random, unpredictable patrols”? Does Metro realize that virtually every single terrorist attack comes as a suicide attack? What on earth is a random patrol going to do to someone who is willing to kill themselves? What is increased surveillance going to accomplish? People need to understand that if someone wants to strap a bomb to themselves or bring a machine gun into a metro station or train, they’re going to be able to do it.

At a certain point, there’s just nothing you can do. For example, one way to make sure no terrorists get in a Metro station would be require a strip search. Even leaving aside the enormous inconvenience and invasion of privacy, you’d still have a bunch of people clustered somewhere in line, which as it happens, would be a fantastic target for a suicide bomber.

Don’t get me wrong, we should definitely do what we can to make transportation safer. Simple, low cost things like adding locks on the cockpit doors makes a lot of sense. Costly and irrational security theater that does little to make anyone safer while wasting time and money is one of the ways in which terrorists “win.”

Now, as it happens, this crack team of 20 Terror Hunters won’t do much to disrupt anyone’s commute, but consider for a moment the news yesterday that facing a $4 million shortage, Metro is looking to run fewer trains, less often despite the lack of commensurate demand, thus risking a Metro death spiral.

I realize this money comes from a Federal grant, but it’s indicative of the poor choices we’re making. Terrorism is not nearly as big a problem for Metro users as inadequate service.

Transparency of Closed Door Negotiations

So there’s been some debate about whether or not C-SPAN should be permitted to cover any informal negotiations that work to merge the House and Senate health care bills. It sounds obvious that we should strive for maximal transparency, but I agree with this:

Consider the Senate floor debate.[…]Senators from both party played to the cameras. Grandstanding, launching unnecessary rhetorical attacks, but barely tweaking the bill on the Senate floor. The real substantive change, if you’ll recall, came in the form of Reid’s amendment (and when he merged the two Senate bills). At times, the rhetoric on the floor sounded like cable news chatter. The real discussions and compromises — Sens. Lieberman’s and Nelsons objections, for instance — were reserved for private discussions; incidentally, the two Senators didn’t appear on the Senate floor until the 60-vote deal was struck.

One way or the other, there are going to be backroom negotiations. As Ezra Klein argues, televising these will ensure that participants eschew candor for fear of reprisal from opportunistic political opponents and result in negotiations between staffers (who are unelected). What’s more, there will unquestionably be leaks during closed door negotiations and the final bill will be released to the public before a vote, so it’s not even clear how much this increases transparency. What it will do will further delay reform and boost ratings for cable news networks who make hay out of day to day legislative grandstanding.

Finally, the argument that C-SPAN is merely attempting to hold President Obama to his campaign promise of increased transparency is clever, but doesn’t really apply. President Obama didn’t campaign to be princeps, this is an issue of the legislative branch.