This Country Needs to Stop Beating around the Bush on Abortion

You’ve all heard the brouhaha surrounding Obama’s commencement speech at Notre Dame, and you’ve also probably heard the somewhat emerging consensus that he handled the controversy well, mostly by doing that “Obama” thing that he does, which, according to this John Dickerson piece in Slate, is this:

“Here’s how he explained this approach as it applies to his decision-making: “[Opponents] might not, at the end of it, agree with me, but having seen how I’m thinking about a problem, having a sense of how I’m making decisions, that I understand their point of view, that I can actually make their argument for them, and that that’s part of the decision-making process, it gives them a sense, at least, that they’ve been heard, and … it pushes us away from the dogmas and caricatures that I think get in the way of good policymaking and a more civil tone in our politics.””

This is all well and good, except it does not address the underlying normative question: whether the coercive powers of the state should be used to either allow or prohibit abortions.

Having a fair interpretation of your political/philosophical opponents’ arguments might be necessary to resolve political/philosophical questions, but it surely cannot be sufficient. Let me give an example. In any undergraduate philosophy course on applied ethics, abortion is usually taught. And in such a typical course, the student usually reads two papers, considered paradigmatic, by Don Marquis (PDF version here) and Judith Thompson (regular HTML version here), arguing against and for abortion, respectively. And in this typical undergraduate philosophy course on applied ethics, you can expect a typical essay assignment to be defending either Marquis’ or Thompson’s position regarding abortion. Now, at the very least, a competent paper at the undergraduate level will provide a fair reading of the two papers, examine their various premises, and then critique one or the other to support the student’s own position. If the student does well, the paper usually gets a decent to good grade.

If this were the case, the student would be acting exactly the same as Obama says: he has taken his opponent’s arguments, gave them a fair reading, critically examined them in depth, critiqued them cogently, and made a normative argument. But would anyone consider this, by itself, sufficient to resolve the underlying philosophical difference?

Hardly.

So really, Obama is dodging the issue big time here. One can easily demonstrate one’s good faith in taking one’s opponents’ arguments seriously, but what does this have to do, ultimately, with taking a stand one way or another? How does this really resolve the question at hand?

But here, one must give at least a crude account of what it means to “resolve” the questions. My own crude account is that there are at broadly two ways of conceiving a resolution to the question. First, there is the realist conception: namely, one can resolve the question by arguing that either one side or the other is TRUE in a normative sense. That is, either abortion is right, or it is wrong. The history of the debate shows that this question isn’t likely going to be resolved soon on this realist account, but nothing in the question itself suggests that an answer is conceptually impossible. One thing is for sure: knowing the other side’s arguments, giving them a fair reading, and showing the other side that you have given their arguments a fair reading, aren’t enough to resolve the question.

Which leads me to the second broad conception of resolving the abortion question: the political resolution. In this conception, the question of whether abortion IS right or wrong is bracketed aside. The appeal to one’s opponents is no longer based on the truth of the normative claim, but on consensus. Take, for example, the right to free speech. A citizen who happens to be a Christian, an utilitarian of the Millian persuasion, or a dyed-in-the-wools Kantian might all agree that free speech should be protected, but their reasons for their conclusions are probably very much different from one another’s. But nevertheless, the question of “should the state protect free speech” is resolved politically because the resolution does not depend on harmony between the differing and conflicted normative schemes these citizens hold.

Is such a political resolution possible for abortion? Again, Obama simply evades the issue, by talking about how both pro- and anti-abortion folks can agree on the fact that we should institute policies that decrease unwanted pregnancies. Sure, there might factually be a consensus, but what does this have to do with the question at hand?

In this case, the history of the intractability of the abortion debate does constitute very strong evidence that perhaps a political resolution is not possible for abortion, because the history and the content of the debate both show that inevitably, debates about abortion could not bracket aside these differing, conflicted, and fundamental normative schemes that each side holds.

So where does this leave us? It leaves us in a stalemate, both philosophically and politically. At least philosophically, we have not closed the door on the possibility of resolving the questions, but for all intents and purposes, politically, abortion is at a stand still. Obama can do all he wants to make the debate itself not acrimonious in how it is carried on, but he can’t do anything about the intractability of it. We can all be very civil, but civility ultimately does nothing to answer the question.

What will ultimately answer the question, at least on a political level, is coercion: coercion in the form of a fair vote with the majority, whichever side that might be, “winning.” But this result isn’t going to satisfy anyone, because the losing side will feel alienated from the decision and feel that it is illegitimate. And political winds change over time, so the majority will also change. But this isn’t going to be something that the losing side, whichever it might be, can reasonably accept. No matter who “wins” politically, the losing side will feel the “win” to be illegitimate and arbitrary.

And in a sense, it is arbitrary, because we have simply not answered the question. But the existence of this arbitrary conclusion, for a question of this magnitude, both normatively and politically, presents a challenge to our notions of political legitimacy.

And this is the possible conclusion that this country, Obama included, has been trying so hard to push to the bottom. This country simply refuses to acknowledge even the possibility of this conclusion, but given all the history, all the evidence, I don’t see how anyone can simply brush the possibility of this conclusion aside.

No matter how much Obama talks about the need to find common ground, to make the debate civil and not acrimonious, this possibility exists. And it is time that we, as citizens, start to think seriously about its implications.

Jigga Should be Rapping about Public-Private Investment Funds

…after all, it would be fitting for someone who once said, quite cleverly I might add, “I’m not a businessman, I’m a business man.”

I believe it’s time for hip hop to engage the financial and economic meltdown of our time, because it has done so brilliantly in the past (see Grandmaster Flash – “The Message,” all of Public Enemey’s It Takes A Nation of Millions to Hold Us Back, both of which cannot be fully understood without understanding the socio-political consequences of the Reagan years). So why not now, when the nation is facing its greatest economic crisis since the Big One?

You can easily construct a narrative around this: say an enterprising street hustler deals on the corner, amasses a small fortune, a crew, women, and cars. Now what? Instead of dying an early, if glorious, death, said street enterpreneuer could invest the money in one of many Public-Private Investment Funds (PPIFs) created by Treasury’s plan. And why would this street hustler invest? It’s a perfect opportunity: the FDIC is willing to go as high as 6-to-1 debt-to-equity ratio, while Treasury is willing to put up half of the equity. So at the most, an investor would only have to be 25% of the value of the asset, or at the least, an investor would only have to put up 7% of the value. If the asset makes money, the investor will win big, and even if it loses, the government is subsidizing the majority of the losses. Best of all, it is completely legal.

So for a rapper and a businessman of Jay-Z’s skill and acumen would be retarded NOT to invest in PPIFs. And maybe we can even get a semi-decent to great rap song out of this as well.

The US Financial System is a Series of Tubes

So Treasury finally(!) reveals the details of bank rescue plan (the NYT story here and the official white paper here). As I was reading through the white paper, one thing caught my eye:

A variety of troubled legacy assets are currently congesting the U.S. financial system.”

The first thing that comes to mind when I saw the word “congestion” is Ted Stevens! A series of tubes! It’s hilarious to me that Ted Steven’s most likely legacy among people my generation is that one particularly unfortunately metaphor. Nevertheless, I will continue to exploit it on every possible occasion.

But on a somewhat more serious note, I have my doubts about this plan. I wish that it succeeds spectacularly, but that wish is undermined by one fundamental objection. That is this: you can’t really “price” the market value of these bad assets if investors are getting money from the federal government to purchase them. Sure, the auction system gives the appearance of a true pricing mechanism, but since most of the money to purchase comes from the government, private investors probably won’t behave as they would in a true market. It’s more likely that the value of these assets, determined by the mechanism set out in the Treasury plan, would be higher than it actually is.

Or, the worse scenario is that even with this somewhat boosted value, these assets still might not be valuable enough to attract enough private capital to really revive the financial institution. Either way, Treasury is on the books for a ton of money, and if these assets do end up turning a profit, it’s the private investors that get the vast majority of it. And if these assets don’t make money, well, you know the rest.

Oh Yes, Stimulate Me, Please

So, the Senate voted to invoke cloture on the Collins-Nelson Amendment (No. 570 to H.R.1) for the stimulus, by a margin of 61 to 36. Not surprisingly, the only GOP Senators to voted for invoking cloture are Senators Collins, Snowe, and Specter. Having cleared this procedural obstacle, the Senate will vote on the passage of the bill tomorrow, which will most likely have the same margin.

From an aggregative point of view, the House and Senate versions of the bill do not differ by much. According to the CBO, the Senate version will cost about $838.2 billion, while the House version will cost about $820 billion. So if the total amount does not differ, why all the heated rhetoric? The answer is in how the monies are to be distributed:

“As it stands now, the Senate bill focuses more on tax cuts, while the House bill provides more aid to state and local governments. The Senate bill does not include $19 billion for school construction included in the House bill, reduces health insurance subsidies for the unemployed, and scales back Mr. Obama’s proposed middle class tax cut.”

If you really want to do a deep dive on the differences, GovTrack has provided this handy side-by-side comparison of the House and Senate versions of the bill.

The distribution of the monies is important because not all spending produces the same effect. Therefore, it is kind of disappointing to see the changes made in the Senate version, because they do not maximize value of taxpayer money. Take a look at CBO’s own data (pdf) on the multiplier effect of the various policy options in the stimulus:

cbo-multiplier

The data shows that tax cuts, on average, have less of a multiplier effect than transfer to states. Second, the data shows that direct transfer to individuals (of which health insurance subsidy for the unemployed is an example) is also more effective than tax cuts. Finally, even within the broad category of tax cuts, the data shows that tax cuts to lower- and middle-class people have a much bigger bang for the buck. Yet these policy options, which add more value to taxpayer dollars, are being cut back in the Senate version of the bill.

And this raises a question: if the GOP argues that the stimulus is wasteful, why would they propose policy alternatives that would decrease the value of taxpayer money? This makes no sense.

OR, does this make perfect sense, given the institutional structure of the Senate? Basically, anything that can’t get 60 votes in the Senate, on any policy of significance, is essentially dead in the water. So this is why “centrists” (gag) like Collins, Snowe, and Specter have so much power. But the need to sell this package politically trumped the empirical evidence, as it often does. So you could say that three senators basically held the American economy hostage for a weekend.

Why Cutting Aids to States in the Stimulus is a Terrible, Shitty Idea

So the Bureau of Labor Statistics released its January employment report today, and the news is grim:

“Nonfarm payroll employment fell sharply in January (-598,000) and the unem-
ployment rate rose from 7.2 to 7.6 percent, the Bureau of Labor Statistics of
the U.S. Department of Labor reported today.  Payroll employment has declined
by 3.6 million since the start of the recession in December 2007; about one-
half of this decline occurred in the past 3 months.  In January, job losses
were large and widespread across nearly all major industry sectors.”

What jumps out is the the accelerated pace of job loss in the recent past. More importantly, people should pay attention to the data on persons who are unemployed on a long-term basis, meaning those who are jobless for 27 weeks or more (so in essence, a year of unemployment). Although the increase in the long-term employed is not that high, the total is still pretty fucking high (about 2.65 million). That number WILL (it’s not a question of if but when and by how much) go up if nothing is done to staunch the bleeding.

This is why cutting aids to state in the stimulus is a terrible idea: the states have to shoulder the fiscal burden because they are the ones that have to dole out unemployment benefits, basic healthcare coverage, and other needed services that make up the safety net. Yet the Senate is thinking about cutting $40 billion worth of aids to state in the stimulus bill: this is just not a good idea. And this is already at a time when states are facing huge budget deficits due to revenue loss.

So yeah, cutting aids to states = TEH FAIL

UPDATE: This was hastily written (like everything on this blog) this morning when I first caught the BLS news release. But now even the Wall Street Journal is reporting on the implications:

“A growing number of states are running out of cash to pay unemployment benefits, a sign of how far social-welfare systems are being stretched by the swelling ranks of the jobless in the deteriorating U.S. economy.

Unemployment filings have soared so high in recent months that seven states have already emptied their unemployment-insurance trust funds, which were supposed to see them through recessionary periods. Another 11 states are in jeopardy of depleting reserves by year’s end, according to the National Conference of State Legislatures, which published a January report entitled “The Crisis in State Unemployment Trust Funds.” So far, states have borrowed more than $2.3 billion in emergency funds from the federal government, money they are required to pay back.”

More on the Isakson Amendment to the Senate Stimulus

Last night I wrote a somewhat (cough cough) incendiary post on why Johnny Isakson can’t tell his head from his ass.

Well, looks like I’m not the only one, and these people are experts!

1) Tyler Cowen:

“I’m not sure I understand the proposal, but here is what the NYT says:

The Senate on Wednesday voted to expand the economic stimulus package with a tax credit for homebuyers of up to $15,000, a provision championed by Republicans as addressing a root cause of the recession.

Like Arnold Kling, I wish to shift the economy out of housing, not into it again. I also believe that the supply of homes is relatively elastic right now.  The tax credit will subsidize the new buyers without propping up the price of homes.  Demand will go up, supply will go up, price will stay more or less on the same trajectory, and banks won’t be any healthier.  The subsidy goes to new home buyers and why should we be helping them above all others?  Aren’t they relatively wealthy on average?  (Not that there’s anything wrong with that.)  Aren’t some of them the dreaded “flippers” and speculators for that matter?  (Can we really enforce the primary residence requirement?)  Do we really want to push people into being less diversified and less geographically mobile in the labor market?  And here’s Alex’s post from earlier today.

There’s a whole other debate you could have on whether we should be encouraging people to buy outputs which are already produced.”

2) Dean Baker:

“Somehow, Isakson has this thing costing just $19 billion. Let’s break the Washington rules and try a little arithmetic. Even with weakness in the housing market, it is still virtually certain that we will sell close to 5 million homes in 2009. The overwhelming majority would qualify for the full credit. So, we get 5 million times $15,000. That sounds a
lot like $75 billion.

And this is before we get to any gaming. It’s hard to see why tens of millions of people wouldn’t figure out a way to buy a house from a friend or relative and get their $15k. If we can get one-third of the country’s homes to change hands (lots of jobs for realtors) that would be good for $375 billion. “

Well, glad to see that I wasn’t insane. I obviously don’t have the technical expertise of these guys, since they are, you know, REAL economists, whereas I’m just a guy who went to a four-year college and took some econ courses (even if Christian Romer, head of the Council of Economic Advisors). But even from a non-technical perspective, one should still be able to see that prima facie, the Isakson amendment doesn’t really do what it says it’s going to do.

Johnny Isakson Needs to Pull His Head out of His Ass

So it looks like the Senate passed Senate Amendment #106 of the the stimulus bill (H.R. 1). The amendment was sponsored by Senator Johnny Isakson (R-GA):

“WASHINGTON —The Senate on Wednesday voted to expand the economic stimulus package with a tax credit for homebuyers of up to $15,000, a provision championed by Republicans as addressing a root cause of the recession.”

Okay, let’s see what is wrong with this approach, or why, as the title of this post states, Johnny Isakson needs to pull his head ouf of his ass.

1) Yes, it is true that our current economic recession started with the collapse of the housing bubble, but its collapse was brought about by the fact that too many home buyers were unable to repay their mortgages, which led to a wave of foreclosures that seriously destabilized home prices. So if the original problem is the massive wave of foreclosures, how is a tax credit going to help remedy that?

Now an argument could be made that a tax credit like this will give incentive for people to purchase homes and clear out existing inventory, thus driving up housing prices and stabilizing the market. But in order for this argument to be valid, one must assume that the tax credit will spur enough home purchases to keep up with foreclosures. But if there is no remedy for home owners on the verge of foreclosure, I don’t see how this balancing act is likely.

If the Senate really wants to address the crisis in the housing market, it should combine this tax credit with relief for home owners on the verge of facing foreclosure by allowing judges to rewrite their mortgages. But this is unlikely because it’s a hard sell politically, as it would be seen as a violation of contract.

2) Even if the tax credit spurs enough home purchases, there is still the matter of obtaining credit for mortgages on these newly-purchased homes. Now in case you forgot, we also have a goddamn credit crisis! The Isakson amendment gives home buyers a tax credit of 10% of the price of the house, with an upper limit of $15,000. So that still leaves a lot of remaining debt that these new buyers must pay off. And since they will have trouble obtaining credit, I don’t see how this tax credit really helps you in the long run.

3) This tax credit does not help the people who are really in need of help. Think about it, people who will most likely buy houses in this environment are those with enough income to a) purchase a house and b) pay back their mortgages on time. This is a demographic that does not really need taxpayer money to weather this storm. If we are going to spend public money on this tax credit (which reportedly costs $18.5 billion), we should be spending it to help those who need it the most.

4) This tax credit is not likely going to help the construction industry retain or generate new jobs. Why? Because the problem, once again, is with the massive number of foreclosures. There is a lot of inventory right now in the housing market, but the key here is that it is EXISTING inventory, which means houses that were already built, not new houses that need building, which means keeping people in the construction industry employed. New jobs in the construction industry will only be generated once existing inventory is bought up and there is still demand for more, but this is not likely to happen in this economic environment.

5) So let’s see here: the problem started because people were encouraged, through policy, to purchase homes that they are not likely to be able to keep. So in order to solve the problem, the policy response is to…encourage more of the same? Someone explain to me how this makes any sense?

In other words, Johnny Isakson doesn’t know his head from his ass.

But here is something ironic: when the stimulus passed the House, Senate GOP complained that the cost was too much and vowed to cut the cost down. Guess what? The Senate version of the stimulus now costs more than $900 billion, compared to the $820 billion of the House version.