Kevin Drum

Up until 2010 merchants weren't allowed to charge extra for purchases made by credit card even though they had to pay swipe fees every time one was used. But that year the Department of Justice settled a lawsuit against the big credit card companies which put an end to this prohibition. Since then, subject to state laws, merchants have been allowed to offer cash discounts. Alternatively, they can pretend to raise all their prices by 3-4% and then rebate the extra to cash customers. This is the equivalent of charging more to credit card customers.

I was all in favor of this—but not because I objected to swipe fees. It costs money to run a credit card network, and swipe fees are a reasonable way of recouping those costs. My problem was that, thanks to the near-monopoly they enjoyed, credit card companies could keep their fees invisible and almost certainly too high. After all, credit card companies charge swipe fees and then rebate much of it in the form of reward programs for affluent customers. This makes no sense.

So why not let merchants charge the fees openly and let consumers choose? If merchants decide to charge more for credit card purchases, it's a sign they think swipe fees aren't worth it and would prefer cash. If they don't, it's a sign they think they're getting their money's worth.

Since then I haven't noticed many merchants charging for credit card use, but that's largely because I live in California, where it was still illegal until a few years ago. Today, though, the Wall Street Journal tells us how things are going:

Overall, about 3% of merchants offer cash discounts. This is up from 2% before the pandemic, but it's still a pretty low number. The evidence isn't entirely in yet, but I'd say I turned out to be wrong. Even in the face of ever-rising swipe fees, barely any merchants feel slighted enough to bother trying to get their customers to pay cash. Inertia and habit are a big part of this, but it's nevertheless the case that changing the rules made little difference. Apparently the vast majority of merchants are OK with funding bank reward programs. Go figure.

A recent article in the Journal of Pediatrics concludes that increasing mental health problems in teens and young adults have been caused by a decline in the amount of unsupervised play time they were allowed as kids.

I really want to believe this. It makes perfect sense to me that being constantly under the protection of adults leads to anxiety and worse as you grow up and are forced to live more independently. Unfortunately, this article fails to make the case at a critical juncture. Here's how it goes:

1. Mental health has been declining for decades among children. The article presents fairly solid evidence for this.
2. Free play has been declining for decades. Again, the evidence is solid.
3. Free play makes kids happy. Also solid.
4. Free play has long-term effects on mental well-being. This is the key step, and suddenly the evidence disappears:

Beyond promoting immediate mental well-being, children’s independent activity also may help build mental capacities and attitudes that foster future well-being. One way of thinking about this involves the concept of internal [good] vs external [bad] locus of control (LOC)....Many research studies, mostly cross-sectional but some longitudinal, have shown that a low internal LOC, assessed by a standard questionnaire, is highly predictive of anxiety and/or depression in both children and adults....Twenge and her colleagues also documented a dramatic decline in internal LOC among them over that same period. Logically, it seems likely that a decline in internal LOC was a mediating cause of the decline in mental well-being.

....And so, we have a cause–effect sequence that plausibly contributes to the relationship between children’s independent activity and their mental well-being: Experiences of having control ⇒ internal LOC ⇒ mental well-being.

In this final step, the wording changes dramatically. Things are "likely" or "plausible" or "logically likely." There's only one piece of research cited, a weak lab-based study showing only that children with controlling mothers have low internal LOC. There's nothing more on the crucial claim that lack of free play leads to low internal LOC.

So I'm unconvinced. I agree about the logical, plausible likelihood of all this, but that's all the more reason to be cautious about accepting weak confirming evidence. And I'm afraid that in this case the evidence is in fact pretty thin.

This is a rare archival photograph of Hilbert and Charlie back in Charlie's younger days. Such a cute couple.

I'm catching up on the news, and I see that Steve Scalise has dropped out of the race to replace Kevin McCarthy as Speaker of the House.

I think this is wise, but not for political reasons. As someone who's been through chemotherapy for multiple myeloma, I know that it gets worse as it progresses. Scalise was diagnosed with multiple myeloma a few weeks ago, and while he may feel OK now, in a few more weeks he's likely to start feeling pretty awful. Everyone responds to chemo differently, but I sure wouldn't recommend taking on a stressful new job in the middle of it.

Politically, it's a different story. After winning the Republican nomination for speaker—by a bare 113-99 vote—Scalise eventually concluded that he had no chance of winning the 217 votes necessary to actually become speaker. The problem is that no one else does either. It takes only five votes to torpedo a candidate, and no Republican can come close to winning all but five votes.

So now what? Even Republicans are starting to admit their party is so muddled that they have no choice: they have to ask for help from Democrats. As long as Democrats cast all their votes for their own leader—which is traditional—Republican candidates need 217 votes to win. But if Ds vote present, a Republican can win with only a majority of Republican votes—which Scalise already has. Alternatively, a "Gang of 217" Ds and Rs could get together and agree on a compromise candidate.

Until something like this happens the House is paralyzed. Without a speaker they can't vote on anything—not budgets, not aid to Israel, not so much as a post office renaming. And as long as the House is paralyzed, America is paralyzed. Something has to give.

Yes, I'm traveling this week. Here's where I stopped for the night. Can you identify the city?

UPDATE: leszekmp got it right: it's Flagstaff, Arizona, taken from an overlook on the road up to Lowell Observatory. We stopped in Flagstaff on our way to Durango, Colorado, where (a) we have friends, and (b) I will be a few minutes drive from Saturday's annular eclipse. There will be photos, of course.

After last month's big spike—mostly due to gasoline prices—inflation settled down a bit in September:

But the news was mixed: CPI was down but core CPI edged up. That's both surprising and unwelcome.

Alex Tabarrok agrees that the "deaths of despair" narrative has been oversold. But he's not ready to give it up completely:

I wouldn’t, however, throw out despair as an organizing principle. The evidence on “despair” goes beyond death to include a host of co-morbidities such as mental stress, marriage rates, labor force participation rates and other measures of well being. Regardless of the precise population to which these problems attach they are co-morbidities and I suspect not by accident.

I'm sympathetic to this notion. The mental image it brings to mind is a poverty-stricken Appalachian community with no jobs and half the people strung out on Oxy or worse. But this probably just shows that I'm as vulnerable to media hysterics as anyone. So let's look at the evidence for the three things Alex mentions.

Remember that we're trying to account for a slowdown in life expectancies that began around 1998 among high school dropouts. But here are marriage rates:

As you can see, marriage rates have been falling since the '60s. Among high school dropouts they actually stabilized in the late '90s.

Next up is labor force participation:

Among men, labor force participation has been falling forever with one exception: high school dropouts. Their labor participation has been increasing recently:

There's certainly no indication here that anything negative happened around 1998. Among women, labor force participation declined after the Great Recession but then turned back up. Today it's only about 2% below its peak.

Finally we have mental stress, and here the evidence is conflicting. Evidence from disability claims suggests mental health in general got worse until the early 2000s, when it flattened and then improved:

The annual APA survey says that stress hasn't increased lately:

But then again, there's this:

The increase here isn't huge, but it's been steady since 1999 for all age groups. In addition, there's considerable evidence of increasing teen stress, though only since about 2012 or so.

Altogether, of the three co-morbidities Alex mentions, marriage has been stable since 1998 among high school dropouts; labor force participation has improved; and mental health is equivocal. Over the same period material conditions have improved:

Overall, the notion that despair has increased among Americans in general, and among high school dropouts in particular, is an attractive theory but it really doesn't seem to be supported by the evidence. Americans have gotten angrier over the past 20 years, but probably not gloomier.

This is an LBB, a little brown bird. There's nothing special about him except for excellent lighting and exceptional sharpness. So he is your bird of the day.

Travel day today. I'm calling a lid.

Prosecutors in the case of Donald Trump's effort to overturn the 2020 election want to know if he plans to blame poor advice from his attorneys. But why do they care? The New York Times explains:

Defendants who pursue advice of counsel arguments waive the shield of attorney-client privilege that would normally protect their dealings with their lawyers. And, as prosecutors reminded Judge Chutkan, if Mr. Trump heads in this direction, he would have to give them not only all of the “communications or evidence” concerning the lawyers he plans to use as part of his defense, but also any “otherwise-privileged communications” that might be used to undermine his claims.

This strikes me as a pretty iffy defense in the first place, since there's mountains of evidence that Trump got plenty of good advice from the non-lunatic attorneys in the White House and elsewhere. He just chose to ignore any of the attorneys who didn't tell him what he wanted to hear.

But maybe it's the best chance he has. After all, blaming others is what Trump is best at.