FLOODING THE ZONE?....I guess the New York Times deserves the abuse it's been getting, but at the same time some of the criticism is just starting to get childish: today they got the name of the ambassador to Romania wrong.

Come on, folks, this is just a routine error, and the Times publishes a dozen corrections of this kind of stuff daily. You really need to find something a little more substantive if you want to keep complaining.

O'REILLY VS. FRANKEN....Thanks to a comment from Linkmeister below, I just caught some CSPAN-2 coverage of a luncheon at the LA BookExpo featuring Bill O'Reilly, Al Franken, and Molly Ivins. Ivins and O'Reilly gave a presentation on their upcoming books, and then Franken got up and just tore into O'Reilly, telling a long story about how O'Reilly misrepresented an award he won and never corrected himself. O'Reilly just sat there fuming, and when Franken was done they started snarling at each other like a pair of wolves. Well worth the price of admission!

Franken sure is pissed these days. He's still funny, of course, but he sounded dead serious most of the time, and he's really, really tired of right wing demonizing of liberals. Plus he's one of the few people who can hold his own against O'Reilly.

The comments to this post have sort of a real time commentary on the show if you want to read more. And if CSPAN repeats it (and they usually do), it's well worth tuning into. Plenty of fireworks.

UPDATE: Right now (2 pm Pacific) they're doing an interview and phone-in with Franken and Ivins. Tune in if you're interested.

INCOME INEQUALITY....David Adesnik pulls this quote out of a Business Week article:

From the ages of 18 to 65, the average male college grad earns $2.5 million over his lifetime, 90% more than his high school counterpart. That's up from 40% more in 1979, the peak year for U.S. manufacturing.

This goes to the heart of whether you think increasing income inequality is a problem. I think it's quite true that as our economy has become increasingly reliant on brainpower it has naturally rewarded smart college graduates far more than any other group. There are two basic reactions to this:

• This is just the free market at work. People are paid what they're worth, and smart people are worth a lot these days. That's the way it goes.

• This trend is likely to continue, and since not everyone can go to college we will eventually end up with an enormous class of ill-paid (or unemployed) workers who are going to be pretty pissed off about things.
  

The free market does indeed reward certain classes of people far more than others, and it's not just the risk-taking entrepreneurs. The question is, do you think this trend toward increasing inequality should be allowed to play itself out naturally? Or do you think it's going to lead to some pretty serious problems?

UPDATE: Dan Drezner's take on income inequality is here. He gets the "income mobility" argument right, I think, but is much too sanguine about the health of the middle class. Sure, more kids are going to college, but that's never going to be more than a minority of the population. And while resentment toward the rich may indeed be muted in America, will it stay that way if current trends continue? I have my doubts.

A STATISTICAL ANALYSIS OF BILL O'REILLY....Here's a peculiar coincidence: last night I happened to be thinking about Bill O'Reilly (yeah, yeah), and what I was thinking was that he was a fraud and a bully who barely lets his guests get a word in edgewise.

Now, this morning, via Virginia Postrel, I find that The Progressive Review has mathematical proof of this! Check it out.

PAUL WOLFOWITZ AND VANITY FAIR....Compare and contrast. Here is how Deutsche Welle reported Paul Wolfowitz's interview with Vanity Fair:

US Deputy Defence Secretary Paul Wolfowitz has admitted that the decision to wage war on Iraq was not based on the regime's alleged possession of weapons of mass destruction. Wolfowitz, an outspoken hawk in the Bush administration and a key architect of the Iraq campaign, said in a magazine interview that the weapons issue was agreed on simply for "bureaucratic reasons". He told "Vanity Fair" that it was something everyone in the administration could agree upon. Wolfowitz indicated that the real reason was that a toppled Iraqi regime would allow the withdrawal of US troops from Saudi Arabia thus removing them as terrorist targets. Seven weeks after the war, no weapons of mass destruction have yet been found in Iraq.

Is that what he really said? Yes and no. Here's the relevant part of the interview:

Wolfowitz: There are a lot of things that are different now, and one that has gone by almost unnoticed--but it's huge--is that by complete mutual agreement between the U.S. and the Saudi government we can now remove almost all of our forces from Saudi Arabia. Their presence there over the last 12 years has been a source of enormous difficulty for a friendly government. It's been a huge recruiting device for al Qaeda. In fact if you look at bin Laden, one of his principle grievances was the presence of so-called crusader forces on the holy land, Mecca and Medina. I think just lifting that burden from the Saudis is itself going to open the door to other positive things.

I don't want to speak in messianic terms. It's not going to change things overnight, but it's a huge improvement.

Q: Was that one of the arguments that was raised early on by you and others that Iraq actually does connect, not to connect the dots too much, but the relationship between Saudi Arabia, our troops being there, and bin Laden's rage about that, which he's built on so many years, also connects the World Trade Center attacks, that there's a logic of motive or something like that? Or does that read too much into --

Wolfowitz: No, I think it happens to be correct. The truth is that for reasons that have a lot to do with the U.S. government bureaucracy we settled on the one issue that everyone could agree on which was weapons of mass destruction as the core reason, but....

There have always been three fundamental concerns. One is weapons of mass destruction, the second is support for terrorism, the third is the criminal treatment of the Iraqi people. Actually I guess you could say there's a fourth overriding one which is the connection between the first two.

....The third one by itself, as I think I said earlier, is a reason to help the Iraqis but it's not a reason to put American kids' lives at risk, certainly not on the scale we did it. That second issue about links to terrorism is the one about which there's the most disagreement within the bureaucracy, even though I think everyone agrees that we killed 100 or so of an al Qaeda group in northern Iraq in this recent go-around, that we've arrested that al Qaeda guy in Baghdad who was connected to this guy Zarqawi whom Powell spoke about in his UN presentation.

Obviously, the German spin is pretty misleading. Wolfowitz didn't say that the "real reason" for the invasion was removing troops from Saudi Arabia, nor did he say that WMD was just a pretext.

In fact, just the opposite. Wolfowitz did say that reason #3 was insufficient and reason #2 was too unsubstantiated to hang the case for invasion on. So for purposes of selling the war, they chose to emphasize WMD.

This is roughly how the U.S. media has portrayed it, so I don't think Wolfowitz has been done any major disservice. In fact, if anything, I think it confirms the importance of WMD as a justification for war: Wolfowitz himself says the humanitarian argument is insufficient, and there are dozens of countries with terrorist ties as extensive as Iraq's. It's WMD and the willingness to use it that set Iraq apart.

BLAIR COOK ON WMD....This is from Fred Kaplan's article in Slate today about the missing WMD:

Like most public events, wars, even premeditated wars, rarely have a single rationale. But a powerful rejoinder comes from Tony Blair, the British prime minister. "I have absolutely no doubt at all about the existence of weapons of mass destruction," Blair told reporters on Thursday. Asked if it matters whether they exist, Blair replied, "It matters immensely because the basis on which the war was sold to the British House of Commons, to the British people, was that Saddam represented a serious threat."

Good for Tony, I thought, at least he's sticking to his guns that the existence of WMD was vitally important as a justification for war.

Nope. Kaplan screwed up. That quote actually comes from Robin Cook, who opposed the war all along.

Blair, it turns out, was in Warsaw at the time, obviously getting a little bit sweaty and overtalkative about the whole situation....

WMD AGAIN....YES, AGAIN....I guess the Bush administration has already pretty much admitted that their pre-war WMD evidence was about as honest as a byline from Jayson Blair, but even so this story is discouraging as hell:

Jack Straw and his US counterpart, Colin Powell, privately expressed serious doubts about the quality of intelligence on Iraq's banned weapons programme at the very time they were publicly trumpeting it to get UN support for a war on Iraq, the Guardian has learned.

....The meeting took place at the Waldorf hotel in New York, where they discussed the growing diplomatic crisis. The exchange about the validity of their respective governments' intelligence reports on Iraq lasted less than 10 minutes, according to a diplomatic source who has read a transcript of the conversation.

The foreign secretary reportedly expressed concern that claims being made by Mr Blair and President Bush could not be proved. The problem, explained Mr Straw, was the lack of corroborative evidence to back up the claims.

....Mr Powell shared the concern about intelligence assessments, especially those being presented by the Pentagon's office of special plans set up by the US deputy defence secretary, Paul Wolfowitz.

....But he told Mr Straw he had come away from the meetings "apprehensive" about what he called, at best, circumstantial evidence highly tilted in favour of assessments drawn from them, rather than any actual raw intelligence.

Mr Powell told the foreign secretary he hoped the facts, when they came out, would not "explode in their faces".

I don't know, I really don't. At this point I'd say that these guys have about the same scruples as used car salesmen, but I'm afraid that might be unfair to used car salesmen.

What I don't understand is why people on the right aren't more upset about this. A lot of liberals felt deeply betrayed by Clinton when the truth about Monica Lewinsky came out — and said so repeatedly. Most of us didn't think it rose to the level of an impeachable offense, but we were seriously pissed off that we had supported a guy who lied so baldly about this.

Shouldn't war supporters be feeling the same way? George Bush is your guy, and even if we do eventually find some small amount of WMD it's getting more and more obvious that he fabricated the entire public justification for the war. Aren't you at all angry about that?

TAX PROTESTERS....From the letters to the editor over at WorldNet Daily:

I wish these income-tax activists would quit saying they are going on hunger strikes just to wimp out later on. I know that sounds mean, but they are making a laughing stock out of the movement.

Every time someone promises to go on a hunger strike, they wimp out and the politicians know it. Why should they care anymore? I used to follow these stories, but I'm not going to bother anymore. It's getting old. Just another dead movement that's going nowhere fast.

Yeah, dammit, they're making a laughingstock out of the tax protest movement. If a few of them would shrivel up and die like they're supposed to — well, that might give them some real credibility.

UPDATE: And as long as you're over there, check out Kevin McCullough's anguish over the fact that too many of his fellow conservatives are going soft on gays. It's shocking!

WE'RE #2!....Everybody knows the biggest, the longest, and the first, but how about the second biggest, second longest, and just plain second? See how you do on this 10-question quiz about second place finishers.

(And if it's too easy for you, give it to your kids. It's a good exercise in learning how to use the internet to look stuff up!)

—Kevin Drum 5:16 PM Permalink | Trackbacks | Comments (0)

$44 TRILLION?....Yesterday I wrote a post about a Financial Times article claiming that a Treasury estimate of long-term deficits had been suppressed by the Bush administration. Today, via Instapundit, Lynxx Pherrett looks at the transcripts of the interviews that FT did and says their story was wrong.

Lynxx's post combined with the FT interviews turns out to be pretty long and complex, but here's my best attempt at a summary:

• Social Security and Medicare deficits are normally calculated over a 75-year period.

• The Treasury study in question was related to private accounts for Social Security and Medicare and the authors were concerned that the traditional 75-year horizon made proposals for private accounts look worse than they are. Basically, they say that the costs of private accounts are all within the 75-year period but some of the benefits fall beyond this period. So traditional accounting makes private accounts look more expensive than they are.

• To fix this, they recalculated the deficits over a very long time horizon. When they did this, the total deficits naturally went up a lot. That's where the $44 trillion number comes from.

• This new analysis was indeed left out of the 2004 budget. The authors are circumspect about why, suggesting that the new Treasury team confirmed earlier this year (after Paul O'Neill was fired last November) wasn't comfortable with the new approach and needed more time to digest it. On the other hand, it's also likely that the new team's decision was partly political since Bush was in the middle of trying to get his tax cut passed.

So what to think? The FT piece pretty clearly implied that the report was suppressed for political reasons, and while this is a reasonable guess it's not really backed up by the interviews. They seem to have overreached on this one.

But what about that longer time horizon? Is it legit? I doubt it. The longer horizon seems to have been set up for an overtly political purpose (justifying private accounts), which makes me pretty cautious about accepting it. What's more, I'm generally skeptical about even the 75-year horizon that the Social Security trustees use. In fact, when I blogged about this yesterday I restricted myself to a 30-year horizon.

Why? First, because too many things can happen in 75 years. Policies change, tax law changes, medicine advances, etc. There's just not much point in projecting current policies over such long periods.

Second, because the longer the horizon the more sensitive you become to very small changes in assumptions. If you assume economic growth of, say, 2.75% instead of 3%, it makes a moderate difference over ten years, a bigger difference over 30 years, and an enormous difference over 75 years. Compound interest, you know. (The trustees are well aware of this, by the way, and provide multiple estimates based on different assumptions. The "middle" estimate is the one that gets all the attention.)

So there you have it. Fascinating, eh?

UPDATE: Max says the infinite horizons ("generational accounting") are hooey. His reasons are roughly the same as mine except far more learned.

He also makes the point that Medicare is not a generational problem, it's a problem with the healthcare system in general. I quite agree, and treating Medicare like some kind of future annuity is silly. Healthcare is an ongoing expense, and all that really matters is (a) how much will it cost each year and (b) how will we pay for it each year?

FRIDAY CAT BLOGGING....Since yesterday was my mother's birthday, today we have pictures of her cats. (Hey, where do you think my love of cats came from, anyway?)

On the left is Cadbury, who is convinced she is the most beautiful cat in the world. And maybe she's right! On the right is....um, Lucy. She's the little black blob in the very back. Do you see her? Lucy is a shy cat and I haven't succeeded yet in taking a picture of her.

Bonus cats: John Scalzi has a cute new kitten here, and Henry Farrell has a pair of them here.

"Mental Magpie" Elisabeth Riba has a pair of cats who, like mine, enjoy reading the newspaper. Also like mine, they appear to simply absorb the news by osmosis, as opposed to the inefficient "reading" technique that we humans use.

Finally, Ben Longman points us to yet more dressed up Japanese cats. Yikes.

PRIVACY....Kenneth Adelman is a millionaire environmental activist who takes pictures of the California coast from a helicopter. His pictures are frequently used to document illegal activity, and a few years ago he embarked on a mission to photograph the entire coast in order to have a permanent record of what the shoreline looks like today in case it's needed in a court case later.

Of the 12,000 pictures he has taken, one is of Barbra Streisand's house, which is on the coast in Malibu. So she's suing him for invasion of privacy.

Result: the picture of her house is printed in the LA Times and seen by about a million people. I'm sure it will be on the local news tonight as well. And it's making life more difficult for a guy dedicated to environmental goodness.

Smart strategy, Barbra, smart....

LIBERTARIANISM....A couple of days ago Eugene Volokh wrote a long post about the "Harm Principle." This is the principle that's roughly summed up by the famous libertarian aphorism, "Your right to swing your fist stops where my face begins."

This is fine, as long as you can define "swing," "fist," "stops," "face," and "begins." But that's a lot of definitions, isn't it? Eugene uses his post to argue that libertarian principles don't necessarily mandate sexual liberty because, after all, sex can sometimes cause harm to other third parties.

This is a good example of why I've never been able to take libertarianism seriously: it simply doesn't provide any meaningful real-world guidance for what governments should and shouldn't do. Once you agree that "harm" also means "potential harm" or "harm done to third parties down the road" or "unintentional harm" or — well, or anything, really, then you no longer have a principle at all. Virtually every human action there is can plausibly be supposed to cause harm of some kind, which in turn means that we are left to judge policies by balancing their effects on personal liberty with the protections they provide us against harmful behavior by others. Which is exactly what Eugene proposes.

But that's just what everyone does, liberals and conservatives alike. So exactly how does libertarianism help us make these decisions?

POLITICAL LYING....When is it OK for a president to tell a lie? A big lie?

Let's take the canonical case in recent history: FDR and World War II. Did Roosevelt know that the Japanese were planning an attack on Pearl Harbor? This is still a matter of intense speculation, but let's suppose he did. Was he right to let it happen anyway?

In hindsight, most of us would say yes. The dual threats of Imperial Japan and Nazi Germany were so great that he was justified in getting America into the war regardless of whether he gave honest reasons. History has proven that his judgment was wise, and if it took a lie to convince America to go to war, then that lie was warranted.

This brings us to the great divide between left and right regarding the Iraq war. It's becoming clearer and clearer, as this Guardian article summarizes, that the Bush administration flatly lied about the reasons for going to war. There was no WMD in significant quantities, there was no link to al-Qaeda, and there was no threat to the United States.

So were those lies OK? The evidence of the polls is that no one really cares. If you trust George Bush's judgment and believe that Gulf War II was the domino that will eventually bring peace and stability to the Middle East, then the lie was justified and it causes you no lost sleep.

In a broader sense, though, it's just another sign that nobody on either side of the aisle even pretends to care about political lying anymore. Or worse: the current mood of the country is so partisan, and the country so evenly divided, that I think a lot of people feel that loud and public lying is the only way to get anything done. The other side won't listen to reason, so there's really no choice, is there?

It's not just that we don't care about political lying anymore, it's that we actively approve of it. From our own guys, anyway.

This strikes me as a devil's bargain that eventually does no one any good. Maybe once in a century a big lie turns out to be a last resort that history eventually endorses, but used routinely they provide no lasting victory. Policies built on lies can't last, and those who use them may win their battles but will eventually lose their wars.

Or so I would like to believe. Am I just an incurable optimist?

UPDATE: Paul Krugman is puzzled too. Maybe war supporters are just trying to avoid cognitive dissonance over Iraq, he says.

Maybe. I think I'm closer to the truth.

BAGHDAD BLOG....This is interesting. Last week the Guardian caught up with Salam Pax, the Iraqi blogger and author of Where is Raed? who became famous during the buildup to Gulf War II. Today, they report that Salam will be writing a biweekly column for them starting next Wednesday. Looks like he's starting to hit the big time.

THE RIEMANN HYPOTHESIS....A few weeks ago I blogged about a book I had just finished that told the story of a mathematical problem called the Riemann Hypothesis. Why, you might wonder, was I reading this book? Today I'll tell you.

It goes back to this post from April, where I wrote offhandedly that "I imagine that lunch with John Derbyshire would be quite enjoyable if we stuck to discussions of mathematical puzzles and prime numbers." This reminded me that Derb was writing a pop math book of some kind, so I searched for it and found out that it was a book about....the Riemann Hypothesis.

I was curious to see what kind of book he might write, so I went off to my local bookstore to buy a copy. It turned out that it hadn't been released, but I did notice another book on the shelf about the Riemann Hypothesis by a guy named Karl Sabbagh. That seemed like a remarkable coincidence, so I bought that book instead.

Then, a couple of weeks ago, Derb's book finally came out. I bought it and finished reading it a couple of days ago and it was pretty good. What was most interesting to me was that I had just finished two books on the same arcane subject, but there was almost nothing in common between them. Sabbagh's book skipped lightly over the actual math and spent a lot of time on current efforts to solve the RH. Derb's book concentrated on the history of efforts to solve the RH and went into the actual math much more deeply.

In the end, Derb's book — for me — was much better. I like history and I like math, whereas the idiosyncracies of mathematical culture hold only a small attraction for me. If you're the opposite, Sabbagh's book is for you. And if you couldn't care less about any of this stuff, then skip them both.

POSTSCRIPT: Actually, it turns out there's also a third book published recently about the Riemann Hypothesis: The Music of the Primes, by Marcus du Sautoy. Three popular books on the Riemann Hypothesis within a month! This has got to be a monumental drag for the authors, who were each writing a book with a pretty small audience to begin with and now have to split their audience three ways.

Why did this happen? A few years ago a $1 million prize was offered for solutions to seven different problems, and the Riemann Hypothesis was one of them (and certainly the most famous of them). All three of these guys must have thought this was a good hook for a book (not to mention this guy, who wrote a book about all seven problems.) I guess it wasn't quite as unique an idea as they thought.

TAXES....Taxes, taxes, taxes, how much is enough?

This post isn't about persuading anybody about anything. I just want to present a few numbers to put the whole tax/budget debate into perspective.

The chart on the right shows total federal tax receipts. As you can see, they have been relatively steady for the past 50 years, averaging about 18% of GDP (yellow line). There's also a pretty obvious dynamic at work: whenever taxes start to rise to around 20% of GDP, they get reduced. This happened most recently in 2001, and during the 2000 election there was a bipartisan consensus that taxes ought to be lowered. (Bush and Gore differed on the size and nature of the cuts, but both agreed that taxes should come down.)

But what about the future? It's remarkable, really, that even with the growth of Social Security and Medicare over the past half century tax rates have stayed pretty stable. But it can't last forever, and the best estimates of the Social Security trustees are that taxes have to increase by about 3% of GDP over the next three decades in order to fund Social Security at its present level (Figure II.D5 in this report). Medicare has similar problems, and the best estimate is that its cost will also grow by about 3% of GDP during the same period (Figure I.E2 in this report). That's a total of 6%.

(Of course, it's possible that Medicare as it currently exists will be gone by 2030 and America will have some kind of national health plan. I'm ignoring that possibility.)

So here's the deal: if tax rates have averaged 18% of GDP, and we need to raise that by 6 points over the next few decades, that's an increase of about one-third. In other words, a lot.

But — if we're running budget deficits of 3-4% of GDP into the far future, then in order to fund Social Security and Medicare and balance the budget, tax rates may need to rise by 9 or 10 points. That's an increase of over 50%.

This is why deficits and current tax cuts matter. If we want to keep Social Security and Medicare around in their current form — and I think a large majority of people do — then taxes will have to rise by about 1% a year over the next 30 years. If Republicans keep cutting taxes and we end up having to fix a chronic deficit as well, then taxes have to go up nearly 2% a year instead. That's a big difference.

Social Security and Medicare are expensive programs, and we should have a national debate about their future. The current round of tax cuts is part of that debate, but their impact is being obscured by tax cut zealots who are deliberately trying to create a crisis atmosphere in which it's "obvious" that we can't continue to fund these programs.

But we can. Repeal the Bush tax cuts and agree to a tax increase of 1% a year for the next 30 years and we can do it. If you don't think that's worth it, fine. Make your argument. But in any case, let's argue honestly and may the best argument win.

UPDATE: From comments, I see that a couple of things are unclear. First, this chart does include payroll taxes, which have gone up fairly steadily for the past few decades. Second, the final year in the series is 2003. My charting software didn't make that clear.

DAILY KOS....I know I could have just asked this a long time ago, but I've always wondered where the name "Daily KOS" came from. If you've wondered too, you'll be glad to know that its proprietor has now furnished a complete explanation.

SPELLING....The National Spelling Bee is on ESPN right now. Greg Saunders at The Talent Show says you should check it out.

WMD QUOTES....Via Atrios, Billmon has the canonical list of WMD quotes from administration sources. It's devastating.

And as a pre-emptive strike against those of you who want to claim that WMD wasn't really the main reason for war and us whiny libs are making too big a deal out of it, please re-read George Bush's State of the Union speech from January. The section dealing with Iraq starts with "Twelve years ago, Saddam Hussein faced...." and ends with the phrase "we will lead a coalition to disarm him." It consists of 18 paragraphs and 1,200 words. Out of that, 16 paragraphs and 1,100 words are dedicated to WMD.

So please don't insult our intelligence by pretending that WMD wasn't the main selling point of the war. We all know it was.

REPUBLICAN DEBT....Let's see, the current level of U.S. debt is right around $6 trillion. But according to a Treasury report from last year, it's likely to get just a wee bit higher:

The Bush administration has shelved a report commissioned by the US Treasury that shows America faces a future of chronic federal budget deficits totalling at least $44,200bn (£27,000bn) in current US dollars.

The study, the most comprehensive assessment of how the US government is threatened with being overwhelmed by the future healthcare and retirement costs of the "baby boomer" generation, was commissioned by Paul O'Neill, then Treasury secretary.

$44 trillion, eh? I guess that might explain why Paul O'Neill is out of a job, even if the report was just a "thought-piece to stimulate discussion."

Of course, this report comes from the alarmist and notoriously leftist Financial Times, so there's probably nothing to it. Go about your business.

UPDATE: Just for the record, yes, that was a joke about the Financial Times.

JESSICA LYNCH....The warhawkish side of the blogosphere continues to go nuts over the BBC's allegations that the rescue of Jessica Lynch wasn't quite what it seemed to be. The problem is that they're obsessively focusing on the Iraqi doctor who claimed that some of the rescuers' guns were firing blanks, a rather minor part of the story, and ignoring everything else.

So I'll say it again: all the Pentagon has to do is release the raw tape of the rescue and everything will be made clear. And since the BBC is clearly a tool of Saddam and it's inconceivable that the Pentagon would ever lie about anything, the blogo-hawks should be all in favor of this, right?

Right?

UPDATE: I'm really not a fan of Robert Scheer, but I have to admit that he makes a telling point in his column today about the Lynch rescue:

What is particularly sad in all of this is that a wonderfully hopeful story was available to the Pentagon to sell to the eager media: one in which besieged Iraqi doctors and nurses bravely cared for — and supplied their own blood to — a similarly brave young American woman in a time of madness and violence. Instead, eager to turn the war into a morality play between good and evil, the military used — if not abused — Lynch to put a heroic spin on an otherwise sorry tale of unjustified invasion.

Yeah, they had a perfectly good story already, but they just couldn't leave well enough alone. Remember, even the British press liaison thought the Lynch rescue was "hugely overblown," and surely he's not a mere tool of Saddam?

BIRTHDAY....Most of you may be thinking of today as Bob Hope's 100th birthday, but to me it's actually my mother's birthday. And she's nowhere near 100.

Happy birthday, Mom!

WMD HUNT UPDATE....Jeez, I almost forgot to link to the latest administration speculation from Donald Rumsfeld about the missing WMD. For the record, here are the theories so far, along with their authors:

1. Lots of people: Dammit, it wasn't about WMD, it was about liberation.
   

2. Ariel Sharon and Richard Perle (among others): Saddam surreptitiously moved the WMD to Syria before the war.
   

3. Jim Lacey: Saddam's underlings never built any WMD, but they hid this from Saddam out of fear.
   

4. Kenneth Adelman: Saddam didn't have any WMD but launched a massive disinformation campaign to convince everyone that he did.
   

5. Donald Rumsfeld: Saddam destroyed all his WMD before the war.
   

Am I missing any?

From now on I will just refer to these theories by number, OK? It ought to speed up future posts. If everyone else could standardize on this system too, that would be great. It should save us all a lot of time.

TAX CUT FUN!....We all know that Bush's tax bill is bad. Really, really bad. So bad that even conservatives mostly think it stinks. So bad that it can't get any worse, right?

Think again, you foolish liberals, you. Here's item 1 from Quaker in a Basement:

The New York Times reports the final version of the latest tax cut bill leaves out the poorest families. The portion of the bill that was supposed to provide relief to low- and middle-income families increases the Child Tax Credit. But a last minute adjustment by the conference committe reconciling the House and Senate versions of the bill dropped a provision that would allow families earning between $10,500 and $26,625 to claim some or all of the new credit. The savings? Exactly one percent of the total cost of the bill. Of course, tax relief for dividend earners was kept entirely intact.

But it turns out they made up for this elsewhere! Here's item 2 from Angry Bear:

My last post made me think about how clever the Republicans are. That 5% tax rate on dividend and capital gains income for lower income families is tactically brilliant. First, it makes a great sound byte:

Intrepid Reporter: Senator X, isn't the new tax bill you just voted for a big give away to the wealthy?

Senator X: Not at all, my young friend. In fact, while we did cut the rate for the wealthy to 15%, we cut the rate on poor and middle income families down to 5%.Thats one-third as much.

Intrepid Reporter: Isn't that essentially meaningless, given that only a handful of poor and middle income familes earn any income at all from dividends and capital gains. Virtually all of their disposable income is spent on day care, the mortgage, health care, maybe college savings. How many families with children making $41k have, outside of retirement accounts, more than $1,000 in stocks, Senator?

Intrepid Reporter: Oh, neat. I'll write that up.

Second, it's close to free: since the large majority of the people to whom the 5% rate will apply don't have any dividend or stock income, the actual cost of this 5% provision is probably quite low (the costly part is lowering the rate on the wealthy from 35% to 15%). Third, insofar as the 5% rate does in fact apply to some people, who are they? Seniors! What's so special about seniors? Well, of course we love each and every one of them. But in politics, what they are really known for is voting in large numbers. It's a trifecta!

As AB says, decreasing the dividend tax on low income families is sort of like giving them a tax break for buying a yacht. But it provides a nice little way to confuse everyone into thinking you're watching out for the little guy, doesn't it?

The cynicism of these folks never ceases to amaze me. They're a real piece of work.

CENTERLINE....In June we get to vote on whether or not we want to approve the construction of CenterLine, a light rail system. Now, I happen to think that Orange County is about the worst place you could choose to build light rail, but what really annoys me is the campaign flyer I just got from the pro-CenterLine forces. They give me two reasons to vote in favor:

• CenterLine will not pass through Woodbridge (my neighborhood).
  

• There's no cost to Irvine taxpayers. It's all paid for by the state and the feds, and if we don't use the money then it will just go somewhere else.
  

Let's give conservatives their due: this is the kind of stuff that gives liberals a bad name when it comes to projects like this. Don't worry, it will only annoy other people, not you! And it's not real money anyway!

Crikey. It's real money even if it is federal money. And arguing that if we don't use it then someone else will — well, if someone else with a genuine need for light rail gets to use it, that's fine. Let 'em.

The flyer didn't even bother to give me a single real reason to vote for CenterLine, just a couple of reasons why I shouldn't oppose it. Great use of taxpayer dough, guys.

A QUESTION....Our electrician is coming over tomorrow to do some work for us. Should I be a good liberal and pay by check, thus ensuring that he pays his taxes? Or should I be a good liberal and pay in cash, thus allowing an oppressed member of the working class to stick it to The Man?

Decisions, decisions....

TREASURERS....I know I'm not the first person to realize this, but here's a list of the Treasurers of the United States since 1949:

• Georgia Neese Clark
  

• Ivy Baker Priest
  

• Elizabeth Rudel Smith
  

• Kathryn O'Hay Granahan
  

• Dorothy Andrews Elston Kabis
  

• Romana Acosta Banuelos
  

• Francine Irving Neff
  

• Azie Taylor Morton
  

• Angela Marie Buchanan
  

• Katherine D. Ortega
  

• Catalina Vasquez Villalpando
  

• Mary Ellen Withrow
  

• Rosario Marin
  

Every single one is a woman. What's the deal with this? How did it become a tradition that the Treasurer is always a woman?

Does anyone happen to know the answer to this?

AUSTRALIAN LITERATURE....The Australian Society of Authors asked its members to list their favorite Australian books and Tim Dunlop has the list on his site. I haven't heard of a single one of them. Nor have I heard of a single one of the authors.

I'm trying to figure out if I think this is surprising or not. Is American taste in books really so provincial? After all, they are written in English, and a good book is a good book. But I have to assume that their publishers would promote them heavily over here if there was any chance of gaining a large audience.

Of course, I guess it's possible that these books are all pretty well known to literate Americans and I'm just a philistine. But that's an even more dismal thought, so I think I'll stick to my first explanation.

Still a bit of a puzzle, though.

PASSION....Mary Lynn F. Jones has an article in The American Prospect today that compares Nancy Pelosi's style to that of Robert Byrd in recent interviews about national security. Here's the careful and restrained Pelosi:

People have lost their lives. I would not want to leave the impression that because we have not found weapons of mass destruction, it was not a worthy sacrifice. So, I don't place a high premium on it.

And here's the call-a-spade-a-spade Byrd:

What new worlds do they want to conquer now? We went through Iraq like a dose of salts. We were told by this president that Saddam Hussein constituted an imminent threat to our security. Bunk! That man couldn't even get a plane off the ground!

I'm not quite sure what to think about this. Passion is surely a good thing, but on the other hand William Jennings Bryant had plenty of passion and he lost three presidential races in a row. Hmmm....

But in any case, it's a thought provoking (and short) article. Go read it.

STARVING THE GOVERNMENT....This is weird. Yesterday I wrote about the conservative (or neoconservative?) idea that large budget deficits are actually a good thing because they starve the government and eventually force cutbacks in social programs. I honestly didn't think of this as especially controversial, but rather as a fairly orthodox part of conservative doctrine these days. By chance, however, Paul Krugman wrote about the same thing yesterday and here's what James Taranto — in full sarcasm mode — had to say about this in the Wall Street Journal:

Well, heck. We're all in favor of cutting spending on social programs, especially popular ones (shared sacrifice and all that), but we'd have more faith that this is what Republicans plan to do if government spending weren't increasing while they control the White House and both houses of Congress. This "starve the government" stuff seems to be the latest in a series of Democratic delusions: the "stolen election," the "neocon conspiracy," "unilateral war in Iraq," "questioning John Kerry's patriotism," etc. The partisan left puts these crazy ideas forward with such regularity and intensity that it almost seems to arise from a medical condition of some sort.

A "Democratic delusion"? Let's go to the tape. Here is former Reagan staffer Bruce Bartlett in the LA Times on Sunday:

As he was thinking about what this new economic policy might be, [Irving] Kristol came in contact with Jude Wanniski, then an editorial writer for the Wall Street Journal, who was intrigued by some new ideas about tax cutting advocated by economists Arthur Laffer and Robert Mundell.

....When California's Proposition 13 came along in 1978, Kristol saw another way in which tax cutting was useful. By denying government its fuel, tax cuts forced politicians to cut spending. In this sense, supply-side economics echoed the thinking of conservative economist Milton Friedman, who wrote in a 1978 column that "the only effective way to restrain government spending is by limiting government's explicit tax revenue — just as a limited income is the only effective restraint on any individual's or family's spending."

....Starving the beast and increasing incentives for work, saving and investment are still good reasons to cut taxes today.

So let's see, in just this one article we have Bruce Bartlett, Irving Kristol, Jude Wanniski, and Milton Friedman all buying into this idea. And when they talk about "starving" the government, I'm pretty sure they aren't talking about cutting back on military spending.

I think Taranto is the one who must be suffering from a medical condition of some kind. I'll leave it up to you to figure out which one.

GAY MINISTERS....Here's some good news:

A Presbyterian Church (USA) committee approved a proposal Tuesday that calls for removing the denomination's 25-year prohibition on allowing non-celibate gays and lesbians to serve as ministers, elders and deacons.

....Many Presbyterians are weary of the debate - two other efforts to repeal the ban have failed in recent years by increasingly wider margins. In addition, the newly elected moderator of the assembly and a prominent pro-gay ordination lobby group, the Covenant Network of Presbyterians, have said it is too soon after the unsuccessful votes to try again.

Instead, the measure heads to the full assembly with momentum.

This is more evidence, I think, that the country's mood is changing on the issue of gays. More and more people are accepting the simple fact that discrimination against gays makes no sense, and are ready to send a message to the Rick Santorums of the world.

Let's hope this proposal passes the full assembly.

IRAN....I haven't been over to the NRO site for a while, so I hopped over this morning and saw that one of the featured columns today is "We must defeat Iran." Goodness, I thought, another war so soon?

But then I noticed that the author was Michael Ledeen. Since Ledeen basically thinks that the United States should quit screwing around and just invade and occupy the entire Middle East, I figured this was more of the same from him and wrote it off. But for some reason, instead of moving on I clicked on the article and read it.

And here's what's weird: Ledeen says he doesn't want a war. Here's what he wants:

• A coherent Iran policy from the Bush administration.
  

• More funding for Farsi language radio broadcasts.
  

• Support for Iraqi Shiites who oppose the Iranian mullahs.
  

• Support for the Iranians who have called for a general strike in July.
  

I can't comment on how practical any of this is — do Iraqi Shiites really have much influence in Iran? — but it sure sounds pretty unobjectionable. In fact, it sounds rather like the kinds of things that mushy liberals tend to call for, not muscular anti-terrorists like Ledeen.

Is he going soft? Or am I missing something?

INCOME INEQUALITY REDUX....Boomshock, responding to my series of posts about income inequality (specifically this one), picks up on a comment by David Adesnik suggesting that inequality isn't as bad as I make it out to be because the poor get additional income from government programs (food stamps, Medicaid, housing assistance, etc.) He cites some figures from Stephen Cohen showing that while the rich are indeed getting a larger percentage of national income than they did in 1980, the after-tax effect isn't as dramatic as I make it out to be.

Maybe, but as Boomshock notes, no matter how you spin the numbers the basic trend is still the same as I suggested: the rich are getting richer a lot faster than anyone else. However, a couple of comments:

• The poor do indeed get government benefits, but so do all of us. Remember, the government doesn't put its money under a mattress, it spends it. What's more, when you go down this road you open yourself up to wildly varying interpretations, so you have to be careful. What's the value of the court system to a rich person vs. a poor one? If the rich guy wins a settlement worth $10 million, it's worth quite a lot, isn't it?

• Although I'm in favor of government programs that help the needy, my real concern when I talk about growing income inequality is the middle class. My reading of history tells me that a growing and thriving middle class is essential to democracy and to a flourishing economy. Both suffer if the middle class stagnates for too long, and that's what's been happening for the past 20 years.
  

The problem of the working poor and the unemployed is, I think, different from that of the middle class and requires different approaches. An increase in the minimum wage, for example, would help the poor, while reforming executive compensation to bring it more in line with average worker pay would benefit primarily the middle class.

We have deliberately followed policies for the past 20 years that have brought about these problems, and that's what I object to. For the working poor, the minimum wage has fallen dramatically in real terms. The working class has been squeezed by union contracts that barely match inflation and nonunion jobs that don't even provide that much. The higher reaches of the middle class have been punished by corporate "downsizing" that forces down average salaries and cuts benefits.

But if all those workers are being squeezed, where is their income going? The economy is still chugging along, producing ever more income every year, and if you deliberately squeeze the poor, the working class, and the middle class, there's only one place for all that income to go: the upper class. And guess what? That's exactly what's happened.

UPDATE: John Quiggin has more on this subject.

WE DON'T NEED NO STINKIN' TRUST FUNDS....I was reading through the comments on this post from yesterday and noticed that it eventually morphed into a wildly confused discussion of Social Security and whether it would eventually go bankrupt. These discussions never cease to amaze me.

Please, forget about trust funds, forget about treasury securities, forget about the fact that Social Security is now in balance but eventually it won't be. Forget about all that. It doesn't matter.

Here's the deal: The government takes in money and pays it out. That's it. The details are just fluff. Honest.

Last year, the federal government's tax receipts were about 18% of GDP and expenditures were 19.5% of GDP. In 50 years, when the baby boomers are all retired, Social Security spending will need to increase by 3% of GDP, so total spending will increase to 22.5% of GDP — roughly what it was back in the socialist hell of 1990. That's it.

Of course, if you believe the federal budget needs to be balanced in the long term, then that means that it will have to collect 22.5% of GDP in taxes. Maybe you think that's too much, maybe you don't, and we can have a rousing argument about it. But that's all it is. 18% vs. 22.5%.

So don't get tangled up in minutiae. The simple fact is that (a) of course Social Security is getting more expensive, (b) of course we're going to have to pay for it, and (c) paying for it — and getting the budget back in balance — will require increasing taxes by about 4% of GDP over the next few decades. Not a crisis, just a fairly routine problem that can be solved in a number of different ways.

There's only one real question here: is it worth it? It's a question of values, not technical financing details, and that's what we should be arguing about.

BUSINESS PROCESS PATENTS....I've never been a fan of "business process" patents, an idea that strikes me as open to laughable levels of abuse, and it looks like eBay is the latest victim of these things — to the tune of $35 million:

The victor in the case is Thomas Woolston, a 39-year-old electrical engineer in Great Falls, Va. An avid collector of baseball cards, Woolston said he got the idea to create a virtual marketplace during the Major League Baseball player strike in 1994. He envisioned an online swap meet where collectors could gather to securely buy and sell baseball cards.

....Among Woolston's patents are one for a system for selling items at a fixed price and for a technology that lets buyers compare prices from multiple online sellers.

The jury found that EBay's "Buy It Now" option, which lets people purchase items outright without having to go through the auction process, violates the first patent, and that EBay subsidiary Half.com infringes the second patent by simultaneously displaying the prices of several Web merchants, said Woolston's attorney, Scott L. Robertson of Hunton & Williams in Washington.

Patents are supposed to require some kind of "nonobvious" innovation, and it's hard for me to see how most business process patents meet this test. A "system for selling items at a fixed price"? Give me a break. And displaying several prices at once so you can see who has the lowest price? Frankly, it's hard to imagine an innovation that's more obvious.

Amazon is the most famous abuser of this kind of patent, of course. Their "one click" payment system, which amounted to nothing more than collecting all your personal data and allowing you to buy a book with one click, was declared patentable several years ago. This is a clever innovation?

I would very much like to see Congress get involved in this somehow. I don't know enough about the subject to suggest what they should do, but dotcommers — disappointed that online pet food and home grocery delivery weren't stunningly innovative business models after all — should not be allowed to turn around and get government protection to cash in on every obvious permutation of displaying data on a screen and clicking a mouse button. It's time for them to go back to working for a living.

ATM FEES....Another case of judicial activism?

The U.S. Supreme Court handed the banking industry a final victory Tuesday in its 3 1/2-year battle with the cities of Santa Monica and San Francisco over automated teller machine fees.

The court refused to hear an appeal of lower court rulings that overturned laws the two cities passed in 1999 to bar banks from charging for the use of their ATMs by customers of other institutions.

Nah, it was the right decision. But still, you have to admire the populist cred of cities like Santa Monica that are willing to go all the way to the Supreme Court to try to get banks to lower ATM fees.

So two cheers for them, even if it was a dumb idea.

CALIFORNIA DREAMING....I'm not quite sure why I did this, but I've been curious for a while about state spending patterns in California, what with that $35 billion deficit staring us in the face, so I went out and got the numbers today to find out what really happened.

The chart at the right shows spending as a percentage of GSP (the state version of GDP), and as you can see the average for the past 20 years has been 9.67% (yellow line). Basically, we went past that mark in 1998, but things didn't really get out of whack until 2000, when the budget shot way past its historical average. As it turns out, if we had stayed at 9.67% our budget would be $14 billion less than it is. Since our deficit for next year is about $27 billion, that means that roughly half the problem is due to overspending (compared to historical averages) and about half is due to the bad economy. (Oh, yeah, and greedy power companies.)

As near as I can tell, this is an almost precise rerun of what happened in 1991. That year, after a decade of good times, the budget exploded just in time for the 1991-92 recession, causing our last budget crisis. The only difference is that the budget explosion seemingly all happened in a single year last time, while this time we spread it out over three years. What's more, we had a Republican governor back then, and a Democratic one this time, so this particular failing — assuming that a good economy will last forever — appears to a bipartisan affair.

EXECUTIVE PAY....OK, you want some good news? Just a teensy little bit of good news? Here you go, courtesy of the Economist:

When the public mood changes, the realisation can take time to sink in. Behaviour that was once acceptable can overnight come to be seen as outrageous. The board of GlaxoSmithKline, a big pharmaceutical company, found itself this week at the sharp end of such a mood change: its shareholders voted to reject the company's remuneration committee report, which would have endorsed a two-year notice period for Jean-Pierre Garnier, its chief executive; paid him $35m if he lost his job; and treated him and his wife as three years older than they actually are for the purpose of boosting their pensions.

It's about damn time. As a former highly paid executive myself, I speak from experience when I say that the compensation of corporate executives is a scandal almost beyond comprehension.

Let's put this in perspective. After I wrote this post a couple of days ago about our winner-take-all economy, David Adesnik of OxBlog responded by saying (in part) the following (scroll to "The Unknown Economist"):

I tend to accept that growth in market economies reflects the willingness of those with capital to invest it in projects that carry with them a certain degree of risk.

If this were really true, my criticisms of Reagan-era economics would be more muted. But it's not. When we talk about the "top 5%," we're mostly talking not about Bill Gates, but about run-of-the-mill corporate executives, who have seen their compensation skyrocket over the past 20 years.

This has happened despite the fact that, based on fairly normal criteria such as revenue and earnings growth, return on equity, etc., they don't run their companies any better than their predecessors in the 50s, 60s, or 70s. And the worst part, as the Economist mentions, is that their pay packages are almost completely risk free. Rewarding entrepreneurs for their risk is something that makes sense because they also drive a lot of economic growth, but rewarding the CEO of Disney the same way makes no sense at all.

If corporate executives want enormous pay packages, they should be willing to accept some genuine risk: low or nonexistent pay if they underperform compared to other comparable companies. If they don't want to accept this risk, they should simply be paid like any other salaried worker. But they shouldn't be allowed to do both.

TAX CUTS....While we're on the subject of artificially increasing deficits for the sole purpose of throttling social spending, Andrew Sullivan responds to a reader who makes this point very clearly:

Give the guy points for candor. But the result of this repetitive, partisan strategy is surely an increasing level of government debt, which doesn't only restrict future spending, but restricts future tax cuts. I hate to bring up the national interest here, as opposed to cheap partisan advantage.

Yes, Andy, we all hate to bring up the national interest when it comes to stuff like this. I'm glad to see that you're not afraid to.

(Of course, Sullivan joins the chorus of those who say that they like tax cuts, honest they do, but what they really want is to cut spending. Fine. Let's hear what you want to cut. And remember, for bonus points you have to include some programs that you yourself benefit from.)

SUPPLY SIDE ECONOMICS....One of the things that sent me over the edge on Sunday was an op-ed in the LA Times by Bruce Bartlett about the wonders of supply side economics. Here's what he said:

Even before he absorbed the substance of what came to be called supply-side economics, [Irving] Kristol quickly grasped its political potential: "I was not certain of its economic merits but quickly saw its political possibilities," he wrote. "To refocus Republican conservative thought on the economics of growth rather than simply on the economics of stability seemed to me very promising."

This is now at the center of Republican ideology: tax cuts promote growth, a rising tide lifts all boats, and when the rich benefit, we all benefit.

The problem is that this is simply untrue. Here are the per capita GDP growth rates (adjusted for inflation) for the last four decades in the U.S.:

• 1960s: 35%
  

• 1970s: 24%
  

• 1980s: 22%
  

• 1990s: 19%
  

Growth rates in the U.S. have been declining slowly but steadily for many years, and there is no evidence that tax rates affect that growth at all. It's true that different tax regimes can affect the economy by introducing or removing various distortions, but the actual amount of taxation has no apparent effect on growth at all. Historical comparisons in the U.S. demonstrate this, and international comparisons demonstrate it as well. The foundations of economic growth are still a substantial mystery.

But what really annoys me is that it's clear that conservatives don't really believe this anyway. As Bartlett notes, Kristol liked the idea of tax cuts even though he "was not certain of its economic merits." And Bartlett himself gives the reason: tax cuts drive up the deficit and therefore throttle spending on social programs:

Neoconservatives thought that attacking massively popular spending programs was both counterproductive and politically hopeless. Congress would never vote to cut such programs directly, and would not even restrain their growth unless under enormous political pressure.

So: social programs are popular and democratically elected legislatures will support them. Therefore, the only way to stop them is to invent untrue but plausible fairy tales about tax cuts that have the real goal of producing massive deficits that will force cuts in these programs.

And this is still the plan. Programs like Social Security and Medicare are growing not because liberals are forever expanding them, they're growing because of simple demographic and technological pressures. This means that the only way to keep them from growing is to cut benefits.

But they will never admit that, will they? Republican ideology is now focused on creating artificial fiscal crises that will "force" program cuts, without ever stepping up to the plate and owning up to the program cuts they want to make. Why? Because it's electoral suicide.

So I'll ask my conservative readers again: you say you want smaller government. Fine. Tell us what programs you want to cut. And if you're serious, you'd better include some swinging cuts in Medicare, Medicaid, and Social Security, because that's where the big money is.

Let's hear it.

HOUSING BUBBLE?....There's a bunch of reasons to be jumpy about the economy. Paul Krugman thinks we may be headed for a liquidity trap. Income inequality is rising to historically dangerous levels. The stock market is still overvalued. Productivity is continuing to grow so fast that rising unemployment is inevitable unless GDP growth starts to break 3% again. The entire world economy is flat at the same time, something that hasn't happened since 1929. Europe is handcuffed by their Growth and Stability Pact and a central bank that seems oddly unconcerned by increasing evidence of recession. And in the U.S., George Bush is obviously more interested in ideological tax cut games than he is in actually trying to address the problems of the economy.

Believe it or not, though, the thing that bothers me more than any of this is the housing market:

Defying predictions of a slowdown, nationwide home sales and prices surged in April as record low mortgage rates fueled a home buying boom and provided a much needed boost to a sagging economy.

....NAR President Cathy Whatle noted that mortgage rates have continued to fall since April to the lowest levels reported in more than 30 years.

Falling mortgage rates have indeed helped keep the housing market frothy, but they don't have much farther to fall. Eventually, unless the economy picks up pretty smartly this year, the bubble is going to burst. And in an economy that's fragile and already suffering from all the problems I mentioned above, another bubble burst is the last thing we need.

I sure hope I'm wrong about this.

OCCUPATION....Is this good news?

Under a torrent of criticism from his right-wing party, Prime Minister Ariel Sharon uttered words Monday that few fellow Israelis ever expected to hear from the battle-hardened political hawk: The nation must end its occupation of Palestinian lands.

"It is not possible to c