The Deficit in Dealing With the Deficit

Jonathan Chait on the near impossibility of actually dealing with future budget deficits.

Yesterday's Senate vote, in which all forty Republican Senators rejected pay as you go financing, illustrates a couple impediments to reducing the long-term deficit. The first is that it's very hard for one party to reduce the deficit by itself. I wouldn't say that the entire Democratic Party is committed to serious deficit reduction. But major elements are, and nearly the whole party is committed to at least not making the problem worse. But a unilateral commitment to fiscal responsibility is a huge political handicap. Democrats made a push to reduce the deficit in 1993 with zero GOP support, and paid a price for it in 1994. A major reason President Obama has had such a hard slog enacting health care reform is that he has to come up with offsets for every new dollar he spends, and those offsets -- reductions in Medicare, capping the tax deduction for expensive health insurance plans -- are politically unpopular. Meanwhile, George W. Bush had a much easier time enacting his agenda because he simply decided to finance the entire thing with borrowing and got his party to go along.
 
The second problem is that, even if Democrats could reduce the deficit on their own and somehow could be insulated from the political harm, they have no incentive to do it. Why should they, when the Republicans don't share the goal? I strongly supported the Clinton administration's push to save the budget surplus in the late 1990s rather than spend it. In retrospect, that was a mistake. It just made it easier for Republicans to pass big, budget-wrecking tax cuts when they took office. There's no set of fiscal circumstances under which Republicans would not enact large tax cuts if given the votes to do so.

When you combine these two dynamics, the effect is truly toxic. The more Democrats do to reduce the deficit, the easier they make it politically for Republicans to retake power, and the easier they make it fiscally for Republicans to wreck the budget when they do. So, why try?

The biggest change in American politics over the past three decades is that the Republican Party has embraced, with the fervor of religion, the conviction that that tax rates need only be high enough to fund their desired level of government spending, rather than the actual level of spending. (How this came to be is the subject of my book.) There really no solution to the problem of American fiscal policy until the GOP can reform itself.

It's Really Not a Bolsevik Plot

Steve Benen echoes President Obama's jape that Republicans make health care reform sound like a "Bolshevik plot" and makes the fundamental point that the current version is actually moderate and middle of the road.

The biggest irony of the entire health care debate is that Republicans had a complete meltdown -- and may have very well killed the best chance America has ever had to reform a dysfunctional system -- over an entirely moderate bill. Whether they actually believe their own nonsense is unclear, but Republicans managed to convince most of the country that the reform plan is a wildly-liberal, freedom-killing government takeover of one-sixth of the economy. It's tempting to think no one could possibly so dumb as to believe this, but it is, right now, the majority viewpoint in the United States.

 

But that's precisely why the president's comments were so important -- Americans probably should learn the truth about this at some point. The Democratic plan is exactly the kind of proposal that should have generated bipartisan support -- it cuts costs, lowers the deficit, and adds wildly popular consumer protections, while bringing coverage to tens of millions who need it. It includes provisions long-favored by Republicans and policy wonks of both parties.

Indeed, as I noted the other day, if you were to have assembled a bipartisan group of wonks a couple of years ago, and asked them to put together a comprehensive plan that incorporates ideas and long-sought goals from both parties, they would have crafted a plan that looks an awful lot like the current Democratic plan. That's just reality.

That the GOP considers this centrist proposal "a Bolshevik plot" only helps reinforce how fundamentally unserious they are about public policy.

MUSIC: Lightning Dust

Taking a short break from political/economic blogging, but here is a live version of the Lightning Dust song Take It Home to tide you over. Enjoy.

SPORTS: Favre Fail

It is rare in sport or in life that you get the chance to duplicate in a nearly identical way a success or failure in as epic a manner as quarterback Brett Favre did in the NFC Championship Game on Sunday. Two years ago, playing for Green Bay in that year's NFC Championship, in overtime, Favre threw the interception that led to his team's loss to the Giants. On Sunday, he did the same thing in the last minute of regulation time and his team lost to the Saints.

So, as he ponders retirement, perhaps one factor he is considering is would the third time be the charm?

MUSIC: Halo for Haiti

This truly remarkable performance from the Hope for Haiti Now telethon has Chris Martin of Coldplay on piano backing Beyonce singing her hit song Halo.

MUSIC: Top CDs of 2009

A difficult year to limit picks to anything like a top 10 as few stand out from all the great music I heard. So I have created 3 groups of 7. The first 2 groups are virtually interchangeable; the 3rd group is new releases by personal faves that hung around the playlist all year. Plus a special shout-out to The Beatles Mono Box Set, a wondrous success in bringing the Fab Four into the digital age.

First 7
A Place To Bury Strangers - Exploding Head - Swirling noise that seen live may actual cause some heads to explode.
Animal Collective - Merriweather Post Pavilion - A brilliant mixture of experimental soundscapes tethered to a more accessible rock idiom.
The Decemberists - The Hazards Of Love - An intriguing song cycle that hearkens back to 1970s British folk rock.
Great Lake Swimmers - Lost Channels - Toronto singer-songwriter Tony Dekker's beautiful folk-pop songs shine in this, his 4th release.
Grizzly Bear - Veckatimest - String quartets and choral arrangements duel with acoustic guitars and vocal harmonies, sometimes rock, sometimes folk-jazz, always fun.
Lightning Dust - Infinite Light - A side project of Black Mountain fronted by vocalist Amber Webber highlighted by my personal song of the year, Take It Home.
The Warlocks - The Mirror Explodes - Taking a name used by the early Velvets and Dead, LA-based Bobby Hecksher blends shoegaze and Brit-pop to great effect.

Second 7
Built To Spill - There Is No Enemy - The lastest from guitar god Doug Martsch continues a wonderful tradition of scintillating rock and roll.
Doves - Kingdom Of Rust - Manchester Brit-pop thrives as Doves makes my list for the 4th time in 4 releases.
Green Day - 21st Century Breakdown - A worthy follow-up to their Broadway-bound mega-smash American Idiot.
Heartless Bastards - The Mountain - Erika Wennerstrom moved from Cincinnati to Austin, replaced her 2 bandmates, and crafted another great disc.
Bob Mould - Life And Times - From Husker Du to Sugar (to writing wrestling scripts) Mould returns to his guitar roots with this follow-up to last year's District Line.
The Von Bondies - Love Hate And Then There's You - A 5-year hiatus did not dim the power of this Detroit quartet's hard-edged rock.
Wussy - Wussy - Chuck Cleaver of Ass Ponys joins with Lisa Walker in a rootsy, rollicking set.

Third 7
Neko Case - Middle Cyclone - The voice of The New Pornographers continues to produce gorgeous solo albums.
The Church - Untitled #23 - The Aussie masters of jangly guitar not only released this wondrous record, but also gave one of the best live shows of the year.
Peter Holsapple/Chris Stamey - Here And Now - The duo behind the dB's reunite for their second album and nearly top their masterful Mavericks.
Mark Knopfler - Get Lucky - Everything that comes out of Knopfler's guitar is worth hearing, and this release is among the best he has done, including the Dire Straits years.
AC Newman - Get Guilty - The other half of The New Pornographers also released a terrific sole set this year.
Sonic Youth - The Eternal - Now joined by Pavement's Mark Ibold, SY continue to crank out fantastic music.
Yo La Tengo - Popular Songs - Hoboken lives and thrives in the latest opus from Ira, Georgia and James.

Pass the Bill

Sully joins the growing chorus singing "Pass the Bill."

But I have come around to thinking that the one huge mistake right now would be to surrender the Senate health reform bill.

The dust should indeed settle. But it is absurd that one special election should upend a clear campaign promise, a year of work, and a necessary start on a critical reform without which we hurtle toward bankruptcy even more quickly.

More to the point, politics is also about morale and will as well as reason and moderation. I believe Obama has been both reasoned and moderate and civil in navigating between the Democratic Congress and the embittered, mutinous GOP. I don't think his tone should change. But I do think that any surrender on health now would be a betrayal of his entire campaign. I don't think the Senate bill is perfect; but it's far far better than nothing. And not passing it means not passing anything and surrendering to forces that are as proto-fascist as any we have seen in recent times.

This is about more than health reform and we have to see it in that context. This is about a cynical nihilist attempt to break this presidency before it has had a chance to do what we elected it to do by a landslide vote. It is an attempt to destroy a majority's morale, to break a president's foreign policy autonomy, to prevent engagement in the Middle East peace process, to stop action on climate change, to restore torture, to increase tensions with the Muslim world, to launch a war on Iran. We cannot delude ourselves that if Obama fails, this is not the alternative. It is.

And we have to re-engage as powerfully as we did in the campaign to fight back against these now emboldened forces of reaction. I think this is true not just for the sake of the country but also for the sake of the GOP. The nihilist obstructionism and rhetoric they have embraced makes constitutional democracy close to impossible. Their total lack of any workable alternatives to dire problems is a form of degeneracy we have to avoid empowering.

So fight, Mr President. And to the House Democrats who won't go along with the only way to salvage health reform: this is the only sure-fire way you will lose in November. If you pass this bill, you may also go down in this climate. But you will have done something you can be proud of. Politics cannot always be about narrow self-interest. If it always is, nothing important can get done.

Another Option

Ezra proposes an alternate path to health care reform.

There is another option.
 
Democrats could scrap the legislation and start over in the reconciliation process. But not to re-create the whole bill. If you go that route, you admit the whole thing seemed too opaque and complex and compromised. You also admit the limitations of the reconciliation process. So you make it real simple: Medicare buy-in between 50 and 65. Medicaid expands up to 200 percent of poverty with the federal government funding the whole of the expansion. Revenue comes from a surtax on the wealthy.

And that's it. No cost controls. No delivery-system reforms. Nothing that makes the bill long or complex or unfamiliar. Medicare buy-in had more than 51 votes as recently as a month ago. The Medicaid change is simply a larger version of what's already passed both chambers. This bill would be shorter than a Danielle Steel novel. It could take effect before the 2012 election.
 
If health-care reform that preserves the private market is too complex and requires too many dirty deals with the existing industries, then cut both out. But get it done. Democrats have a couple of different options for passing health-care reform this year. But not passing health-care reform should not be seen as one of them.

60 is the Loneliest Number

Mark Schmitt on TAPPED points out the inherent instability that the now-lost 60-seat Democratic majority created in the Senate.

To the extent that the outcome is perceived as the beginning of the end of the Obama administration, and a one-blue-state equivalent to the 1994 Republican takeover, it is potentially a disaster. But that is the kind of straight-line projection that is the stock-in-trade of both Chris Matthews and the folks at OpenLeft.com, which produces the wild gyrations from ecstasy to despair that rarely prove correct. To the extent that it is perceived as an opportunity to press the reset button on the administration, to focus on the economy, and to go to the people rather than work inside Congress, with almost 11 months before the next election, it is potentially healthy.
 
The second set of consequences is the set of practical ones, starting with the loss of the "filibuster-proof Senate." And here, at the risk of seeming Pollyanna-ish, I want to make the case that having exactly 60 votes put Democrats -- and good policy -- in an excruciatingly vulnerable position. Of all the possible numbers of senators, between 51 and 100, that a party could have, 60 is arguably the worst. That is, there never was a "filibuster-proof Senate." Having exactly 60 votes made it a filibuster-dependent Senate.

Everything came down to a question of whether the party could break a filibuster -- and 90 percent of the time on big questions, with the single exception of a miraculous and not-final vote on health reform, the party would not be able to. With 60 votes, Democrats were expected to be able to get things done, and bloggers on the left could chide Max Baucus for wasting six weeks trying to negotiate with some Republicans on health care. Yet in the end, achieving anything would be entirely dependent on de facto co-presidents Joe Lieberman and Ben Nelson, one a genuinely malevolent force and the other just a hack, both of whom damaged the public perception of the health-care bill in significant ways. (Imagine the reception for a health bill that didn't include the poisonous payoff to Nebraska to buy Nelson's vote -- the strongest talking point the bill's opponents discovered -- and did include Medicare buy-in for those ages 55 to 64, which would have provided an immediate tangible benefit for the population that needs it most, but which Lieberman scuttled!)

Sixty votes not only put Lieberman and Nelson in charge, it meant that every little twist and turn in political life became the difference between total policy deadlock and historically breathtaking progress. A butterfly flaps its wings in Uruguay, and health reform survives or dies. Just as a few hundred votes in Minnesota created the 60-vote majority, a bizarrely incompetent candidate in Massachusetts took it away, but if it had not been that, it would have been something else. Consider the possibility of 92-year-old Robert C. Byrd being unable to vote but not resigning, to take only the most easily predictable event. There will always be unusual elections, flawed candidates, scandals, health problems, deaths (14 Democratic senators are 70 or older), odd retirements, not to mention senators who can't stick with the party because they face a tough re-election or because a bill affects their state in a particular way. (A Democrats-only 60-vote majority on cap-and-trade, for example, has never been plausible.) A supermajority so fragile is really no supermajority at all.

Yet the perception of a Democratic supermajority freed Republicans from any responsibility to engage at all. With complete impunity, they were able to unite in opposition to a health bill that in other years they would have called their own. Rather than propose serious amendments, or try to improve things they didn't like, they were able to denounce the whole thing as being rammed through on a partisan basis.

What Does it Mean?

Sully reacts to the Brown victory in Massachusetts.

There is, moreover, the incredible lie that somehow all the debt that lies ahead was created by Obama in twelve months, in a recession, when austerity would be fatal. This was a lie propagated mercilessly by the FNC/RNC and by partisan bloggers like Glenn Reynolds. And it has stuck, as Obama has pressed for centrist reform between the screamers on the left and the haters on the right.

 

I'm sorry but this is not an anti-government vote. It's a hissy fit because reality has finally hit and the conservative bromides of the 1980s work as poorly as the liberal bromides of the 1970s. If Brown were urging big, structural cuts in entitlements, if he were proposing junking health insurance reform because he has a plan to balance the budget in five years, if he were pledging to vote against the wars for the deficit's sake, if he were proposing ways to restrain private healthcare costs and Medicare's GOP-passed Medicare D - whose fiscal impact makes the current reform look like a tightwad's - it would be one thing. But he isn't and they aren't.

They merely want to kill a reform presidency. They have no alternative. They have no policy that could restrain health insurance costs and the desperate plight of the uninsured. They have no plans for tackling climate change, when they can bring themselves to admit it exists. They have no plans to win or end the wars in Iraq and Afghanistan that Obama himself isn't trying. They have no idea how to balance the budget - except more tax cuts!

Just Pass the House Bill

Ezra on why the House should simply pass the Senate health care reform bill, regardless of the results in the Massachusetts Senate election.

There is a tendency, however, to get caught in the politics and process of health-care reform. But the most important fact is not that House Democrats can pass the Senate bill. It's that they should, if it comes to that.
 
This argument is generally made in terms of the politics of health-care reform. Both chambers of Congress have already voted for reform. The question is simply whether Democrats want to own a historic legislative success or a calamitous political failure. If Democrats pass the bill, they have a major accomplishment to message around in 2010. Every paper in the country will have a front-page headline featuring the word "historic." If Democrats don't pass it, they must explain away their failure, and beyond their failure, their decision to try at all. Just as no campaign is ever as good as it looks when it's winning or as bad as it seems when it's losing, bills that pass look better than bills that fail, regardless of the underlying merits.

But that argument is almost sociopathically detached from the actual bill. Democrats should pass health-care reform because it's the right thing to do. They should pass health-care reform because between 18,000 and 45,000 people die each year because they don't have health-care insurance, and this bill will save many of those lives. They should pass health-care reform because it will prevent countless medical bankruptcies and an enormous amount of needless chronic pain and infirmity. They should pass it because it will take important steps towards cost control. They should pass health-care reform, as my friend Chris Hayes says, because it's important for the American people to see their government doing more than starting wars and bailing out banks. They should pass health-care reform because it's the right thing to do, both for the millions of people whom it will directly affect and for the country as a whole.

The fact that this argument is being made by a blogger rather than a congressional leader, however, is exactly the problem. This legislation, like all legislation, is the product of an unending series of compromises and a long and tough political fight. The bill's natural allies have made painful concessions that have sapped their enthusiasm, and its natural opponents have had a long time to learn to hate it. But for all the concessions, the bill is not that different, in effect or in construction, than it was at the beginning. The problem is that the bill's supporters seem to have forgotten why they were doing this in the first place. And if they can't remember the bill's virtues, who will remind the country?

It's the Rhetoric Stupid!

Paul Waldman on TAPPED analyzes the ideological imbalance in American poliics.

No one doubts now that Barack Obama was never going to be a rhetorical partisan. He makes a show of "reaching out" to Republicans and treating them with respect, even when they react by spitting in his outstretched hand. This approach has some strategic benefit, in that he comes off seeming reasonable and open-minded, unlike his opponents.

But there is a cost as well. Because Obama doesn't speak in ideological terms – attacking conservatism by name and praising progressivism – he fails to give the public the kind of rhetorical signposts they can use to understand things. You can't be subtle in politics – people need shorthands and summaries to contextualize events and arguments. If Obama had spent the last couple of years criticizing conservative economic policies and saying they failed because of their inherent conservative nature, it would be much harder for Republicans to continue arguing that some tax breaks for the wealthy are all we need to turn around the economy.

Because Obama didn't do that, Republicans are now forced to spend virtually no time defending the fact that the years 2001-2008 provided a near-perfect test of their economic ideas, and those ideas failed miserably. As Dionne reminds us, Reagan provided a clear ideological framework that structured the entire debate around economics and government, serving him just as well when things were going poorly as when they were going well.

Right now, the debate is being shaped not by the president but by the opposition. We’re talking about whether government has gotten too big, not how to correct the mistakes of the Bush years and make it work better. It would be great to see Obama start talking in ideological terms, in order to lay that foundation Dionne talks about. But given his history, it's hard to see that happening.

Whither America?

Sully posts a letter from one of his readers.

I simply cannot grasp what motivates these people, what compels them to thwart even the smallest attempts to clean up the enormous destruction they wrought under Bush and Cheney. Irresponsible, hateful, mendacious, sleazy, destructive - these words do not even begin to describe them.
 
I am unemployed and have not found a new job after almost a year of searching. I have a mortgage. I also have a preexisting medical condition, thanks to emergency surgery I had to undergo nearly 18 months ago. My unemployment benefits expire in five months, my COBRA not long after. Like untold millions of Americans, I am preparing for the worst as the economy slogs through its agonizing turnaround.

I voted for Obama with proud but open eyes, knowing full well not just the magnitude of the tasks he faced, but the pure, unrestrained malevolence of his opposition. Health care reform will unquestionably help people like me. And now some low-rent hairdo, whose sole claim to fame is posing naked for some ladies' magazine way back when, may happily destroy whatever chance this country has at moving in a more just, humane, and morally and fiscally responsible direction.

As you stated, the Republican Party of this new century is shot through with nihilists. Unabashed nihilists. But what leaves me shaking with anger damn near every day since President Obama's inauguration is the pure smugness and nonchalance of their nihilism.

Palin, McConnell, DeMint, Boehner, Cantor, Rubio, Scott Brown and the rest of the Ailes- and Limbaugh-warped GOP: Would you trust any one of these goons to greet you at Wal-Mart, much less govern our country? The question answers itself. They literally care nothing for America. They have spent the past decade doubling the national debt, running up record deficits, indulging the depradations of Wall Street, expanding Medicare by a trillion dollars while refusing to cover the cost, needlessly and shamelessly cutting taxes by two trillion dollars while again refusing to cover the cost, degrading the Army and Marine Corps to the point where it will take them both at least a decade to recover, jailing and torturing detainees and lying about it, manipulating intelligence in order to invade Iraq out of some sick neocon thirst for vanity and glory. I could go on, but that would take hours, and only make me angrier.

Suffice to say that Republicans lecturing the country about fiscal responsibilty, economic recovery, governing - or anything else, for that matter - would be like Mick Jagger lecturing Mother Teresa about excessive promiscuity.

Karl Rove and Dick Cheney were thankfully not present at America's founding. But their political descendants will certainly be present at America's demise.

Communication Problems?

As picked up by Sully, Mark Halperin on Meet The Press has a counter-intuitive analysis of Obama's first year as President.

The country took a risk on Barack Obama, he was untested. And if you look at what Hillary Clinton and John McCain both said about him, they said, "He's just words. He doesn't know how to run the government." I think, ironically, it's just the opposite. He's done, I think, an extraordinary job running the government, as John said, under difficult circumstances.

He managed the economic crisis and kept the world from going into a depression. He staffed the government with very quality, quality people. He showed he could be commander-in-chief and manage these two difficult wars. What I think, ironically, the problem has been is he's not inspired the country to feel a sense of optimism and renewal and to be unified in a bipartisan way. Those are the things I think people thought he would excel at. Those are, I think, are the problems. He's making progress in governance, not necessarily in that bully pulpit leadership.

Voting for Coakley

Sully explains why the rational choice is to hold your nose and vote for Coakley for Senate in MA even if you are dissatisfied with her as a candidate.

First off, there's no compromise with the current GOP. They make Gingrich look like Pope John XXIII. If they got back majorities in the Congress, there will be no debt reduction; there will simply be nihilism until they can try to beat Obama in 2012.

Secondly, there's a lie masquerading as analysis going around. And that is that the health insurance bill is some sort of radical idea, fomented by "radical leftists", etc etc. This is propaganda. In fact, the final bill is exactly where a sane compromise is to be found: near-universal coverage; no single payer; no public option; reforms for pre-existing conditions and other injustices; cost control mechanisms; Medicare cuts; deficit reduction. 16 years after the Clintons tried, it's a more moderate bill. It was widely debated in the campaign. It isn't perfect. It needs work. But it's a start.

The blame for the delay lies fundamentally with a GOP that is still intent on putting power before country, and decided the day Obama took office that he was such a threat to their beleaguered brand that they would oppose everything he proposed, demonize him as much as possible, forgo any cooperation, and then try to blame him for the recession, the wars, the unemployment, and the debt he inherited ... while never actually proposing any serious alternative on any of them.

It is a nihilist, populist, primal scream. And if the Massachusetts result is interpreted as a vindication of that strategy, we will have thrown away a very rare constructive moment for targeted government action to tackle the deep problems - healthcare access and cost, too much reliance on carbon energy, an empire bogged down in two quagmires, a debt that will soon threaten this country's currency - in favor of news cycle, tactical Rovian bullshit.

Out of Focus?

Kevin Drum pushes back on the sudden spate of arguments that Obama did not focus intensely enough on the economy over the past year, instead getting distracted by health care reform.

I don't really understand this. Is it a purely political argument that, regardless of the merits, Obama should have been viewed as spending 24/7 hunkered down in the West Wing helping create jobs for American workers? Or is it a substantive argument that governments have limited bandwidth and Obama should have spent more of his on reducing the unemployment rate?
 
The former is puerile and the latter is mysterious. What exactly should he have done? He passed a big stimulus bill, and it's plain that there's no political will in Congress to pass another one of any size. He extended unemployment benefits. He tried to take action on mortgage foreclosures, and perhaps he could have done more along those lines. But the financial lobby fought him, Congress wouldn't support cramdown legislation, and banks have resisted taking part in his program. The Consumer Financial Protection Agency would be a nice pro-worker feather in his cap, but it wouldn't help anyone find a job and probably wouldn't have gotten through Congress any quicker even if they weren't busy with healthcare.

So exactly what would his "pivot" back to jobs¹ have looked like? Nobody ever really says. But aside from giving rousing speeches, the big levers available to fix the economy are monetary, which is in the hands of the Fed; fiscal, which he's done; and meliorative, which he's largely done too. The rest is mostly window dressing.

¹Assuming that this mythical "more modest" healthcare bill really could have passed any faster than the current one in the first place. Frankly, given the Republican Party's dedication to "What part of NO! don't you understand" as its political strategy, I doubt it.

The Logic Behind Health Care Reform

Paul Krugman neatly summarizes the logic that drove the drafting of the version of health care reform that is nearing passage in Congress.

Start with the proposition that we don’t want our fellow citizens denied coverage because of preexisting conditions — which is a very popular position, so much so that even conservatives generally share it, or at least pretend to.
 
So why not just impose community rating — no discrimination based on medical history?

Well, the answer, backed up by lots of real-world experience, is that this leads to an adverse-selection death spiral: healthy people choose to go uninsured until they get sick, leading to a poor risk pool, leading to high premiums, leading even more healthy people dropping out.

So you have to back community rating up with an individual mandate: people must be required to purchase insurance even if they don’t currently think they need it.

But what if they can’t afford insurance? Well, you have to have subsidies that cover part of premiums for lower-income Americans.

In short, you end up with the health care bill that’s about to get enacted. There’s hardly anything arbitrary about the structure: once the decision was made to rely on private insurers rather than a single-payer system — and look, single-payer wasn’t going to happen — it had to be more or less what we’re getting. It wasn’t about ideology, or greediness, it was about making the thing work.

Broder Hits Bottom

Adam Serwer on TAPPED serves up perhaps the ultimate in Broderian illogic.

David Broder, high priest of false equivalencies, outdoes himself in his column today:

Was Christmas Day 2009 the same kind of wake-up call for Barack Obama that Sept. 11, 2001, had been for George W. Bush?
The near-miss by a passenger plotting to blow up an American airliner as it flew into Detroit seems to have shocked this president as much as the attacks on the World Trade Center and the Pentagon did the last.

If we are to understand Broderism as the casual equivalence of catastrophic Republican failures with trivial Democratic ones, then this -- the comparison of an terrorist attack in which nearly 3000 Americans died with one in which some loser with a bomb in his underpants set himself on fire and was put down by unarmed civilians -- is Peak Broder, the most Broderesque statement that has ever been made.

It Came From The West (Coast)

Steve Benen joins the discussion on the creeping Californification of America as the minority in Congress seeks to do nothing other than obstruct.

A congressional minority would, in theory, have three possible motivations for cooperating with the majority in tackling policy problems. The first would be a modicum of patriotism -- the country has problems that need fixing, and patriots who care about the nation's future would feel the urge to do the right thing. That doesn't apply to the modern GOP -- it's not that they hate the United States, it's that they believe some problems are imaginary (global warming) and other problems can be addressed just as soon they're done destroying Democrats.

The second is fear. If the minority believes the public will be outraged by blind obstructionism and a deliberate effort to make national conditions worse, the minority would fear electoral punishment and, as such, be more responsible. That that doesn't apply to the modern GOP, either -- Republicans assume (probably correctly) that most voters aren't paying enough attention to current events to notice their tactics. And if recent prognostications are accurate, the GOP will be rewarded in the midterms for their misconduct, creating an even stronger incentive to reject and block problem-solving.

The third is the desire to produce better policy results. As Bruce Bartlett, among others, has written of late, if Republicans were less reckless, they could work with Democrats and move policy proposals to the right, which presumably would be a party goal. But the modern GOP prefers to take its chances, and hope that its obstructionist tactics are enough to stop progressive legislation from passing anyway.

Of course, the problem isn't limited to motivations. As Ezra put it, "What happens when one of the two major parties does not see a political upside in solving problems and has the power to keep those problems from being solved?"

We now have a political system in which a majority of the House, a majority of the Senate, a majority of the electorate, and the president can all agree on a specific policy proposal, but it still can't become law due to obstructionist tactics from the minority. Ours is the only major democracy on the planet that gives the minority the tools to stop the majority from governing.

He concludes:

In other words, in our 21st-century political system, Republicans, after having failed and been discredited, can still block the majority's agenda, still have an incentive to undermine American public policy, and still complain if Democrats don't do enough to satisfy their misguided demands.

Lessons of the Last Decade

Barry Ritholtz picks up on an interesting piece by economist Joseph Stiglitz.

Economics Nobel laureate and Columbia University professor Joseph E. Stiglitz has what very well be the best year end piece I have seen to date;

“The best that can be said for 2009 is that it could have been worse, that we pulled back from the precipice on which we seemed to be perched in late 2008, and that 2010 will almost surely be better for most countries around the world. The world has also learned some valuable lessons, though at great cost both to current and future prosperity – costs that were unnecessarily high given that we should already have learned them.”

What were those 6 “harsh” lessons?

1. Markets are not self-correcting, and without adequate regulation, they are prone to excess.

2. There are many reasons for market failures. Too-big-to-fail financial institutions had perverse incentives: Privatized gains, socialized losses. .

3. When information is imperfect, markets often do not work well – and information imperfections are central in finance.

4. Keynesian policies do work. Countries, like Australia, that implemented large, well-designed stimulus programs early emerged from the crisis faster

5. There is more to monetary policy than just fighting inflation. Excessive focus on inflation meant that some central banks ignored what was happening to their financial markets. The costs of mild inflation are miniscule compared to the costs imposed on economies when central banks allow asset bubbles to grow unchecked.

6. Not all innovation leads to a more efficient and productive economy – let alone a better society. Private incentives matter, and if they are not properly aligned, the result can be excessive risk taking, excessively shortsighted behavior, and distorted innovation.

Why this was published in the China Daily, and not in the US is beyond my understanding