Wonkbook: The economics of gay marriage
Don't think of gay marriage as a cultural issue. Don't think of it even as an equality issue. Don't even think of it as a political issue. Think of it, just for a moment, as an economic issue.
In the traditional view of marriage, write economists Betsey Stevenson and Justin Wolfers, "the joining of husband and wife yields a more productive firm, because it allows one spouse to specialize in earning income from working in the market, while the other specializes in the domestic sphere. The division of labor allows for greater productivity, just as it does in the workplace. The different skills required for these separate roles provide an economic rationale for the advice your grandmother may have offered, that 'opposites attract.'" Romantic, right?
But in recent decades, the marriage-as-firm view has crumbled -- and not just because social mores have changed. "Washing machines, dishwashers and microwave ovens have reduced the value to the family 'firm' of employing a domestic specialist," say Stevenson and Wolfers, who are, themselves, married. "Cheap clothes can be imported from China, rather than sewn at home. Healthy meals can be purchased from the freezer at Trader Joe’s. What’s more, legal and social changes have broken down many of the barriers keeping women out of the labor market...All these developments have increased the opportunity cost of having a spouse stay home, because that spouse now has greater value in the marketplace."
One possibility was that, as the traditional economic case for marriage fell apart, marriage itself would decline as an institution. But that didn't happen. Rather, we developed a new kind of marriage. "Modern partnerships are based upon 'consumption complementarities' -- the joy of sharing things and experiences -- rather than the production-based gains that motivated traditional marriage," continue Stevenson and Wolfers. "Consistent with this, co- parenting has replaced the separate roles of nurturer and disciplinarian. We have called this new model of sharing lives 'hedonic marriage.' These are marriages of equality in which the rule “opposites attract” no longer applies in the same way, because couples with more similar interests and values can derive greater benefits. So likes are now more likely to marry each other."
And it's into this institution that gay couples are being admitted, because the nature of this institution doesn't provide a good argument for their exclusion.
Gay couples couldn't credibly promise to provide each other with the separate and specialized skills -- separate for reasons of legal discrimination, and social beliefs about what men and women could do -- that were the basis of the older conception of marriage. But gay couples can certainly share the joy of things and experiences, they can certainly improve each other's lives, they can certainly co-parent, they can certainly bring increased economic stability to a household by combining two incomes -- they can do all the things that form the basis of what Stevenson and Wolfers call "hedonic marriages."
In other words, one story here is that our attitudes have changed towards homosexuality, and that's certainly true. But another is that our attitudes have changed towards marriage -- even heterosexual marriage -- in ways that opened the institution for gays. And that's true, too.
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1) Greece's coalition talks remain deadlocked. "Greece’s president is set to resume coalition talks on Tuesday with the country’s political leaders in another attempt to avoid a fresh general election after a meeting on Monday evening ended without agreement. Antonis Samaras and Evangelos Venizelos, the conservative and socialist leaders, and Fotis Kouvelis, head of a leftwing splinter group, held a fruitless one-hour discussion on how to escape the crisis but agreed to meet again, along with other party heads. President Karolos Papoulias has another 48 hours to persuade politicians to join a national unity government according to the constitution or face having to call another election...Alexis Tsipras, the leader of Syriza, the radical leftwing coalition that rejects the terms of Greece’s international bailout, refused to participate in Monday’s talks. 'We’re not going to join in selective meetings of political leaders ... The circle of contacts provided for by the constitution has been completed,' he said." Kerin Hope and Peter Spiegel in The Financial Times.
The standoff is raising worries of a European economic crisis. "Political deadlock in Greece rattled world markets Monday, reviving fears that the fractious Mediterranean country could spurn an international bailout, abandon the common European currency and risk a fresh round of world economic turmoil. European stock indexes fell, with Greece’s market now at a 20-year low, while the euro currency continued a recent decline against the dollar. U.S. stocks also fell. Coming only days before the leaders of the world’s Group of Eight industrialized nations meet at Camp David, the standoff in Greece over its political direction has thrust Europe’s troubles to the top of the agenda. A downturn in Europe could stagger a fragile recovery in the United States and undermine growth around the world. Fighting a new downturn would be a challenge for the major economies, many of which have not fully stabilized since the last big economic crisis." Howard Schneider and Anthony Faiola in The Washington Post.
@ezraklein: "Syriza" is a rather evil-sounding name for a political party. Pretty sure it means Hydra in Greek.
2) Senate leaders reached a deal to move the Export-Import Bank bill forward. "Legislation to extend the Export-Import Bank’s charter advanced in the Senate Monday evening after agreement was reached on addressing tea party demands to reopen a bipartisan deal approved only days ago by the House. Five GOP amendments will be permitted Tuesday -- some re-litigating specific agreements reached by House leaders. But in each case, a supermajority of 60 votes would be required, leaving Senate Majority Leader Harry Reid (D-Nev.) hopeful that the House package will survive intact and go quickly to President Barack Obama for his signature this week...Monday’s agreement, as announced by Reid, came only minutes before a scheduled procedural vote in which he would have needed 60 votes himself to move on to the bill. By coming to terms on the amendments, Reid avoided that challenge, but as part of the same deal, he will need 60 votes for passage of the bill." David Rogers in Politico.
3) JPMorgan Chase's loss has the banking industry scared. "A Congressional committee announced plans on Monday to hold a hearing on the financial regulatory overhaul that will look at the JPMorgan loss. Wall Street’s representatives, fearing that the entire banking industry might pay for JPMorgan’s sins, are trying to contain the fallout in Washington, people close to the matter said...JPMorgan, however, is stepping away from another public panel on the Volcker Rule. The Commodity Futures Trading Commission, one of the regulators writing the Volcker Rule, will host a public roundtable this month about the new regulation and has invited JPMorgan to speak. Last week, JPMorgan suggested that one of its top Volcker Rule experts would attend. But then the bank said that this person had a scheduling conflict. Rather than dispatch another executive to Washington, the banks recommended an employee at another bank.." Ben Protess and Ed Wyatt in The New York Times.
The fiasco claimed its first casualty. "JPMorgan Chase on Monday announced the abrupt retirement of the executive who oversaw the unit that lost $2 billion trading exotic securities, the latest twist in a story that has exposed the gulf between how Wall Street views itself and how the public sees the financial sector. To the bank, its actions -- which included appointing an executive to investigate what went wrong -- were an example of how it could take the initiative in cleaning up its own shop. But to many lawmakers and analysts, the question remains how a bank with a sterling reputation could get into such trouble two years after Congress passed laws to prevent dangerous financial gambling...On Monday, the bank announced that Chief Investment Officer Ina Drew, who oversaw the London unit, would leave the firm, which she has served for 30 years...The bank also announced that Mike Cavanagh, a top executive, would lead a team of officials to investigate the losses." Zachary Goldfarb and Steven Mufson in The Washington Post.
@lizzieohreally: Carl Levin just waved highlighted parts of Dodd-Frank at me. Which was awesome.
@SuzyKhimm: Part of Obama's problem in selling Dodd-Frank: many new regs aren't written yet, much less implemented. Similar to Obamacare conundrum.
4) Businesses are bracing for taxmageddon. "Defense contractors have slowed hiring. Tax advisers are warning firms not to count on favorite breaks. And hospitals are scouring their books for ways to cut costs. Across the U.S. economy, anxiety is rising about the potential for widespread disruptions after the November election, when a lame-duck Congress will have barely two months to resolve a grinding standoff over taxes and spending. The halls of the U.S. Capitol are already teeming with people warning of disaster if lawmakers fail to defuse a New Year’s budget bomb scheduled to raise taxes for every American taxpayer and slash spending at the Pentagon and most other federal agencies...The uncertainty is already prompting some firms to take action. Many more say they will be forced to contemplate layoffs and other cost-cutting measures long before the end of the year unless the Republican House and the Democratic Senate come up with an alternative path to tame deficits." Lori Montgomery and Rosalind Helderman in The Washington Post.
5) The House GOP may link tax cut extensions with a tax reform vote this summer. "House GOP leadership is considering linking a short-term extension of the expiring Bush-era tax cuts to an overhaul of the tax system this summer, aiming to give its party a campaign talking point and to pressure Senate Democrats to act. While the details of the plan are very much up in the air, one option being considered is passing a bill extending the 2001 and 2003 tax rates for one year along with a resolution affirming GOP principles for tax reform. The measures could also include some form of fast-track authority, much like the power granted to the Joint Committee on Deficit Reduction, to expedite floor consideration of a tax reform plan in 2013, when the Bush-era tax cuts would again expire...Boehner is expected to address this and other financial issues at a speech before the Peter G. Peterson Foundation Fiscal Summit today." Daniel Newhauser and John Stanton in Roll Call.
1) KLEIN: The filibuster may be unconstitutional. "According to Best Lawyers -- 'the oldest and most respected peer-review publication in the legal profession' -- Emmet Bondurant 'is the go-to lawyer when a business person just can’t afford to lose a lawsuit.' He was its 2010 Lawyer of the Year for Antitrust and Bet-the-Company Litigation. But now, he’s bitten off something even bigger: bet-the-country litigation. Bondurant thinks the filibuster is unconstitutional. And, alongside Common Cause, where he serves on the board of directors, he’s suing to have the Supreme Court abolish it...At the core of Bondurant’s argument is a very simple claim: This isn’t what the Founders intended. The historical record is clear on that fact. The framers debated requiring a supermajority in Congress to pass anything. But they rejected that idea." Ezra Klein in The Washington Post.
2) SALAM: The U.S. economy shouldn't follow China's model. "Americans have always looked abroad for inspiration. Alexander Hamilton drew on the experience of Britain and France to shape the economic institutions of the early republic. In the early 19th century, Henry Clay championed tariffs, a national bank, and internal improvements in an effort to match Britain’s economic might. As the 19th century gave way to the 20th, Germany emerged as an industrial colossus, and American intellectuals had a new model. During the 1950s, at least some Americans, mainly but not exclusively on the political left, saw the breakneck modernization of the Soviet Union as a clear indication that the old-fashioned market economy was on its last legs...But the belief that we had much to learn from the Soviets was both dangerous and stupid. And much the same can be said for the current enthusiasm over China’s economic model." Reihan Salam in National Review.
3) BERWICK: Cheaper healthcare can mean better healthcare. "Reducing costs won’t just rescue health care; it will also help rescue our schools, our roads, our museums, our wages, and the competitiveness of our corporations...The route is simple: improve care. In a study in the Journal of the American Medical Association, my colleague Andy Hackbarth and I estimated the amount of pure waste in American health care -- overtreatment that helps no patient at all (like treating viral infections with antibiotics), errors and injuries from unsafe care, failures in coordination (such as sending people home from hospitals without supports), needless administrative complexity, failures of price competition, and fraud. The lowest estimate of total waste in these six categories was 21 percent of health care costs; the highest was 47 percent; and the midpoint was 34 percent. When we are wasting $1 in of every $3, it makes no sense to say we cannot afford to make health care a human right without rationing. Don’t cut care. Cut waste." Donald Berwick in The Boston Globe.
4) SCHMITT: Link worker pay to corporate taxes to fight inequality. "The tax code can be part of the solution. The first step is to end the preferential treatment of income from capital gains, which economists like Princeton’s Alan Blinder have shown to have no lasting effect on total investment or the economy. But we can and should go further, actively using the corporate tax code to create a real incentive to pay CEOs less, and workers more, by linking the head honcho’s compensation to both employee salaries and tax rates. Here’s how the idea could work. The current corporate tax rate is a flat 35 percent. In an equity-based corporate tax system, companies with a pay ratio at the historic norm of 40:1, or even up to 60:1, would pay the existing rate and be able to deduct executive pay. But companies that pay their top executives more than 60 times the average worker (including employees in overseas subsidiaries) would pay a higher rate, 40 percent, and those with extreme pay differentials, 80:1 or higher, would pay 45 percent." Mark Schmitt in GOOD.
5) STEVENSON AND WOLFERS: An economic mode of marriage equality. For our grandparents’ generation, marriage was about separate roles, separate spheres and specialization. Gary Becker, an economist at the University of Chicago, won the Nobel Prize partly for describing the family as an economic institution -- a bit like a small firm that employs people with different skills to produce both income and a well-run household. In Becker’s view, the joining of husband and wife yields a more productive firm, because it allows one spouse to specialize in earning income from working in the market, while the other specializes in the domestic sphere. The division of labor allows for greater productivity, just as it does in the workplace...Modern marriage offers different benefits. Today, we search for a soul mate rather than a good homemaker or provider. We are more likely to regard marriage as a forum for shared experiences and passions. Viewed through an economic frame, modern partnerships are based upon 'consumption complementarities' -- the joy of sharing things and experiences -- rather than the production-based gains that motivated traditional marriage. Consistent with this, co- parenting has replaced the separate roles of nurturer and disciplinarian." Betsey Stevenson and Justin Wolfers at Bloomberg View.
Anti-folk interlude: Kimya Dawson plays "I like Giants" live.
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Still to come: A fall in commodities prices sparks worries of deflation; a turf war over primary care; colleges begin to confront costs; regulators worry about solar flares; and a harbor seal pup explores the water for the first time.
New data suggests the eurozone has returned to recession. "Industrial production in the 17 countries that use the euro fell unexpectedly in March, leaving little doubt the region contracted for a second straight quarter in the first three months of the year and returned to recession, data by Eurostat showed Monday. The European Union's statistical agency will publish the first estimate of first-quarter gross domestic product Tuesday. Economists are forecasting a 0.2% quarterly decline, according to a Dow Jones Newswires poll. Industrial production fell 0.3% on the month in March and by 2.2% on the year. The latter was the steepest drop since a 3.7% decline in December 2009, while the monthly decline was because of a sharp 8.5% decrease in energy production as the weather in March was warmer than usual for the time of year, a Eurostat statistician said...The data were weaker than expected. Economists had forecast a 0.5% monthly increase and a 1.2% year-on-year fall." Ilona Billington in The Wall Street Journal.
Commodities prices fell to a new yearly low. "The prices of key commodities fell to their lowest level of the year on Monday, dragged down by worries about Europe’s debt crisis and the possibility of a slowdown in China, the world’s second-largest economy. An emerging concern among some economists and investors is that the declining prices of materials such as gold and crude oil could be an early signal of deflation -- a decline of prices that is economically corrosive because it makes it more difficult for businesses to make a profit. The downturn in prices is reflected in broad measures of commodity prices. The Standard & Poor’s GSCI, an index tracking prices for crude oil, gold, copper and several other commodities, has dropped more than 6 percent this month so far. Even the price of gold, which usually rises when investors have concerns about the economy, has fallen." Jia Lynn Yang in The Washington Post.
Smile for the camera interlude: Videos of people who think they are posing for a picture.
Romney and Obama differ sharply on Medicare. "President Obama and Mitt Romney agree on one thing about Medicare: the differences between them are huge...Mr. Romney, who would limit the government’s current open-ended financial commitment to Medicare, contends that Mr. Obama has no workable plan to prevent Medicare from going bankrupt. Under the Romney proposal, the government would contribute a fixed amount of money on behalf of each beneficiary, and future beneficiaries could use the money to buy private insurance or to help pay for traditional Medicare...Mr. Obama assails the Romney proposal for the same reason he denounced a similar plan devised by Representative Paul D. Ryan, Republican of Wisconsin and chairman of the House Budget Committee: the government contribution, he says, would not keep up with the rising cost of health care, so Medicare beneficiaries -- older Americans and people with disabilities -- would have to pay more of the cost." Robert Pear in The New York Times.
A primary care turf war is heating up. "Nurse practitioners are rolling out a campaign this week to explain what, exactly, nurse practitioners do -- and why patients should trust them with their medical needs...The AANP will follow up on the public relations blitz with state-level lobbying efforts, looking to pass bills that will expand the range of medical procedures that their membership can perform...All states have 'scope of practice' laws, which regulate what medical procedures each profession can, and cannot, perform, given their level of education...In 16 states, nurse practitioners can practice without the supervision of another professional such as a doctor. Other states, however, require a physician to sign off on a nurse practitioner’s prescriptions, for example, or diagnostic tests. As the health insurance expansion looms, expanding those rules to other states has become a crucial priority for nurse practitioners." Sarah Kliff in The Washington Post.
A senator is floating a plan to make HIV drugs cheaper. "Why do American patients pay tens of thousands of dollars each year for HIV drugs that cost just hundreds in Africa? Drugmakers wave their patent rights in developing countries as part of the President’s Emergency Fund for AIDS Relief. But the higher cost of brand-name drugs in the United States makes it difficult for many HIV patients to stay on drug regimens that can cost as much as $30,000 a year. That’s the challenge a Senate subcommittee will explore on Tuesday at a hearing on how to narrow the gap. It’s mainly a vehicle one proposed solution -- a proposal by Sen. Bernie Sanders (I-Vt.) that would award prize money rather than grant patent rights to manufacturers that develop new HIV drugs, allowing the medication to go straight to the generic market. But the hearing will also look at the root causes of a dilemma that has had some HIV patients and drugmakers at odds for years." J. Lester Feder in Politico.
@petersuderman: This new issue of Health Affairs looks so, so awesome. All coverage expansion all the time!
Broadcasters are pushing back on recent FCC moves. "TV broadcasters look at the Federal Communications Commission’s recent drive to move them off frequencies and put their political advertising rates on the Internet and draw one conclusion: The FCC has it in for television. And broadcasters are fighting back by publicly airing that charge in the midst of the ongoing policy debate on freeing up airwaves for wireless broadband...For decades, television’s use of the airwaves was virtually unchallenged. Under Chairman Julius Genachowski, the FCC has focused on fostering mobile broadband as the essential communications platform of the future. As broadcasters see it, television has become a much less important medium to the agency...In the wrangling over spectrum, broadcasters see the wireless industry -- which is clamoring for access to more airwaves to satisfy the exploding amount of broadband data traffic -- as their main foe. As the wireless industry sees it, the best use of finite spectrum resources is mobile broadband." Brooks Boliek in Politico.
A federal judge struck down a NLRB rule on union elections. "A federal judge ruled Monday that a contentious union election rule proposed by the National Labor Relations Board (NLRB) is 'invalid.' In an 18-page memorandum opinion, U.S. District Judge James Boasberg struck the regulation down, saying the labor board only had two members when it voted on the final rule in December 2011. Boasberg said the agency needed at least three members to have a quorum for action on the rule...Two NLRB members -- Chairman Mark Pearce and then-Member Craig Becker, both Democrats -- participated in adopting the rule. The labor board’s third member at the time, Republican Brian Hayes, did not participate...The judge said the decision by the U.S. District Court for the District of Columbia 'may seem unduly technical,' but cited a 2010 Supreme Court ruling that the NLRB needs a quorum of three members to issue regulations and make rulings. Boasberg said his ruling was not made on the merits of the union election rule and noted the NLRB could vote again to pass it." Kevin Bogardus in The Hill.
@AlecMacGillis: Dems' failure to pass labor law reform in '09-'10 haunts once again--a judge just threw out NLRB's incremental new rule to ease organizing.
Colleges are beginning to confront costs. "College presidents across the country are confronting the same realization, trying to manage their institutions with fewer state dollars without sacrificing quality or all-important academic rankings. Tuition increases had been a relatively easy fix but now -- with the balance of student debt topping $1 trillion and an increasing number of borrowers struggling to pay -- some administrators acknowledge that they cannot keep putting the financial onus on students and their families. Increasingly, they are looking for other ways to pay for education, stepping up private fund-raising, privatizing services, cutting staff, eliminating departments -- even saving millions of dollars by standardizing things like expense forms...The problems aren’t confined to public colleges. Administrators at some nonprofit private institutions said they too had come to realize they could not keep raising tuition and fees." Andrew Martin in The New York Times.
Adorable animals exploring the world interlude: The firsts of a harbor seal pup.
A transmission line for offshore wind is moving forward. "A pioneering proposal to build a wind power transmission line on the ocean floor from southern Virginia to northern New Jersey cleared a hurdle on Monday when the Interior Department opened the way for the project’s sponsors to start work on an environmental impact statement. The Bureau of Ocean Energy Management, part of the Interior Department, said that no competitor had emerged for the right-of-way for the proposed transmission line, known as the Atlantic Wind Connection, allowing the bureau to issue a 'determination of no competitive interest.' By linking wind farms 15 to 20 miles off the coast, the backbone would greatly reduce the number of individual radial lines needed to bring the energy to shore...Construction of the full project would take about 10 years, according to the company. The right-of-way corridor, including branches to reach the shore at intermediate points, would run about 790 miles, the Interior Department said." Matthew Wald in The New York Times.
Regulators are considering options to protect the grid from solar flares. "With a peak in the cycle of solar flares approaching, U.S. electricity regulators are weighing their options for protecting the nation's grid from the sun's eruptions--including new equipment standards and retrofits--while keeping a lid on the cost. They are studying the impact of historic sunstorms as far back as 1859 to see if the system needs an upgrade, and encountering a clash of views on how serious the threat is and what should be done about it...The sun is expected to hit a peak eruption period in 2013, and while superstorms don't always occur in peak periods, some warn of a disaster. John Kappenman, a consultant and former power engineer who has spent decades researching the storms, says the modern power grid isn't hardened for the worst nature has to offer. He says an extreme storm could cause blackouts lasting weeks or months, leaving major cities temporarily uninhabitable and taking a massive economic toll." Ryan Tracy in The Wall Street Journal.
Highway crashes are the leading cause of fatalities for oil and gas workers. "Over the past decade, more than 300 oil and gas workers like Mr. Roth were killed in highway crashes, the largest cause of fatalities in the industry. Many of these deaths were due in part to oil field exemptions from highway safety rules that allow truckers to work longer hours than drivers in most other industries, according to safety and health experts. Many oil field truckers say that while these exemptions help them earn more money, they are routinely used to pressure workers into driving after shifts that are 20 hours or longer...Last year, the National Transportation Safety Board said it 'strongly opposed' the oil field exemptions because they raise the risk of crashes. This threat will grow substantially in coming years, safety advocates warn. According to federal officials, more than 200,000 new oil and gas wells will be drilled nationwide over the next decade." Ian Urbina in The New York Times.
Wonkbook is compiled and produced with help from Karl Singer and Michelle Williams.