The Notaworry Blog

2011-11-27T00:33:00.000-05:00

2 Parties in 2 Worlds

2011-02-03T00:36:00.001-05:00

Ezra comments on how the 2 parties view health-care reform efforts.

In a world where the two parties' top priority on health care was providing answers for the uninsured and cost control, an argument over the best way to do health-care reform would be a very healthy thing. But that's not what we've got. We've got the Democratic Party, whose top priority is to try and solve our health-care problems and who've shown their commitment to that by moving steadily rightward over the last century in a bid to pick up Republican support for some sort of solution, and the Republican Party, whose top priority is that we shouldn't do whatever the Democrats are proposing and have proven their commitment to that by abandoning previously favored policy proposals as soon as the Democrats demonstrated any interest in adopting them.

And that's the fundamental problem here: It's easy to compromise when both sides are committed to solving a problem, because the appeal of solving the the problem is enough to persuade both sides to make concessions. That's why Democrats gave up on single payer, on an employer mandate, on a public option. But it's impossible to compromise when one side is uninterested in solving the problem, as they lack the incentive to make any concessions. That's where the Republicans are on this, and it's why they've not been interested in joining onto a bill even when Bill Clinton moved to the right and adopted the core of Richard Nixon's plan and Barack Obama moved even further to the right and adopted the core of Mitt Romney and Bob Dole's plan.

The Level of Reality in DC

2011-01-20T01:26:00.001-05:00

Ezra on what passes for reality in Washington.

There's a political consultant I know who likes to illustrate the cynicism and dysfunction of our political system with an anecdote from his days as a congressional staffer. He was sitting behind his boss during a hearing when one of the other members -- a well-respected member, no less -- turned to them and gestured at the witness, who was earnestly presenting her case. "Can you believe that?" He laughed. "She thinks this is all on the level!"

Sometimes, I think the biggest analytical mistake I make in my writing is pretending too much of this stuff is on the level. My impulse, when presented with an argument about the cost and deficit impact of the Affordable Care Act, is to launch into a long explanation of why the numbers add up, or at least add up given what we know now. But perhaps it would be better to just show this graph:

That graphs shows the 10-year cost, and the total deficit impact, of a couple of different pieces of legislation. First, the extension of the Bush tax cuts that Republicans supported last year. It would've cost $4 trillion over 10 years, and not a dime would've been offset. So it would've also cost the deficit $4 trillion over 10 years. Then the tax deal that we actually passed, which cost $850 billion and charged it to the country's credit card. Then the 2003 Medicare Prescription Drug Benefit, which is the last major health-care law the Republicans passed. It was projected to cost $394.8 billion over 10 years, and Republicans managed to offset 0.5 billion of that.

Then there's the Patient Protection and Affordable Care Act. It's projected to cost $938 billion over 10 years. But the final legislation included $1.2 trillion in spending cuts and tax increases. So it actually cuts the deficit in the first 10 years. And in case you think that's a trick, CBO projects that it'll cut the deficit by even more than that in the second 10 years. So it's fiscally responsible and getting more so. Indeed, there's not another major law passed in last 10 years that did close to as much to pay for itself. You can be skeptical about certain provisions, or want to see the bill do more, and still admit that.

And yet I turn on C-SPAN or open the paper and watch the legislation's opponents -- most all of whom voted for or supported one of the other bills on that graph -- say things like "repeal is the logical first step toward restoring fiscal sanity."

It's just not on the level.

Repeal is Easy, Reality is Hard

2011-01-20T01:16:00.001-05:00

Ezra on the Republican House and its vote to repeal health-care reform.

As expected, House Republicans have voted to repeal the Patient Protection and Affordable Care Act. Three Democrats voted with them, which is substantially less than the 13 currently serving Democrats who voted against the bill in the first place, and many less than prominent Republicans had been predicting. On health-care reform, the two parties are moving further apart rather than closer together.

What's not as expected, however, is that the GOP gave up on "repeal and replace" so early. Throughout the election, that was their message. If you look at their press language, it's still their message. Being on the side of the status quo is, according to the pollsters, a bad place to be. But that's where they are. They voted for repeal despite offering nothing in the way of replacement, save for the vague intention to have some committees come up with some ideas at some future date. Barry Goldwater might have wanted the GOP to offer a choice, not an echo, but Speaker Boehner saw more upside in a shout than a choice.

There's a reason for that: Opposition is easy, governing is hard. You have to get your members to agree on a single piece of legislation. You have to make the tough tradeoffs that are the hallmark of governance. You have to explain how you'll do things, rather than merely what you want done. You have to own the popular parts and defend the unpopular parts.

Democrats did that for health care. They fought ugly fights in their own party over the public option, the financing of the legislation, the levels of coverage in the bill, the way abortion would be treated in the exchanges. They made some easy decisions, like banning discrimination based on preexisting conditions, and some hard ones, like adding an individual mandate to the bill, and paying for it through Medicare cuts rather than a tax on the wealthy. And in the end, they managed to pass their law through the House and through the Senate. They governed. They sought to move the country forward.

Boehner's GOP, in deciding against offering the promised replacement for the Affordable Care Act, ducked the hard work and highest responsibilities of governance. Maybe, in the coming months, they'll do better than that. Maybe their committees will report out serious alternatives and they'll be brought to the floor of the House. But this isn't the first time health-care policy has come up in Washington. If the GOP had wanted to offer a plan of their own, there are plenty they could've taken off the shelf. If they'd needed more time, well, there was no hurry. But they didn't take more time, or dust off an existing piece of legislation. Backwards was good enough.

Today's vote was a statement, not a policy. Like the public option and cap-and-trade, both of which also passed the House, it will die in the Senate. But unlike the public option and cap-and-trade, it doesn't tell Americans much about how the Republicans would address the nation's toughest problems After the vote total was announced, you could hear some members of the GOP clapping and cheering. And fair enough: They have a win to be happy about. But not one to be proud of.

MUSIC: Top CDs of 2010

2011-01-12T22:36:00.002-05:00

As the sales of CDs continue to decline, music and the music industry continue to shift inexorably away from the concept of albums (much less the concept album). The search for new music now runs from online forums to videos to ad placements (no mention of radio!), making it nearly impossible for new bands to get noticed. So my 2010 list is bereft of new bands, though a new band, the London Souls, rocked my world without a CD release. A few of the names below are newish, but all the music is terrific....presenting 15 keepers from 2010.

Best 5:
The Besnard Lakes – The Besnard Lakes Are the Roaring Night – The third album and second to make my list by the Montreal band headed by a husband and wife tandem mixes psychedelic atmospherics with indie drive.
The Black Angels – Phosphene Dream – Another third release and second to make my list, out of Austin, named after a Velvet Underground song, they blend rock roots and indie flair with psychedelic highlights.
The Bluetones – A New Athens – 14 years after its first release, a favorite at the time, this London band tops the list with this sublime Britpop-survivor collection.
Dead Confederate – Sugar – Grunge meets alt-country in Athens, GA and a brilliant disc is the result.
Midlake – The Courage of Others – A band from Denton, TX that defies description, building from jazz roots, melding gorgeous harmonies, keys, guitars, even 2 flutes to create a remarkable sound that shimmers and glistens.

Next 5:
Black Mountain – Wilderness Heart – Vancouver guitar virtuoso Stephen McBean presents another great set of music.
Blitzen Trapper – Destroyer of the Void – Ethereal, light, beautiful folk rock.
Roky Erickson – True Love Cast Out Evil – Roky Erickson led the seminal psych-rock band 13th Floor Elevators, then spent years in mental hospitals and seclusion. This disc consists of songs written years ago and brought beautifully to life with Will Sheff and Okkervil River
Manic Street Preachers – Postcards From a Young Man – A perennial favorite, the Welsh alt-punk band has survived and thrived thru 10 albums.
Neil Young – Le Noise – Neil just goes on and on. Daniel Lanois produced this solo effort that showcases the breadth of sound that one guitarist can produce.

Another 5:
Against Me! – White Crosses – Their first and only major label release may have alienated some of their punk base, but is a solid set of music by a terrific band.
Arcade Fire – The Suburbs – Much hyped third release by the Montreal collective that continues to explore dark and light in all its musical configurations.
Jesca Hoop – Hunting My Dress – Once nanny to Tom Waits children, this singer-songwriter uses her expressive voice to wondrous effect.
Plants and Animals – La La Land – Post-classic rock from Montreal that takes indie rock back to its roots.
Spoon – Transference – Another fine collection by the veteran indie band from Austin.

And a special mention to Bruce Springsteen for the reissue, The Promise: Darkness at the Edge of Town Story, which includes unreleased songs and live performances in a superb box set.

Deficit Dilly-Dallying

2011-01-07T01:33:00.001-05:00

Sully eviscerates new House Budget Committee head and Republican wunderkind Paul Ryan, who summarized his plan to cut the deficit in a recent radio interview saying:

"We're gonna be reducing all domestic discretionary spending. I can't tell you by what amount and which program, but all of it is going to be going down, and the aggregate amount will be back to 2008 levels before the spending binge occurred."
Before the spending binge occurred? You mean to say that the eight years of George "Deficits Don't Matter" Bush did not include spending binges? You mean to say that emergency spending for the worst downturn since the 1930s was seriously in doubt under any president of either party?

What Ryan is doing is pretty obvious. He is trying to frame fiscal irresponsibility as somehow solely about 2008 - 2010. He's lying about the Republican past and the recession. He has no serious plans to cut entitlements now (anyone only focusing on discretionary spending is a demonstrable fraud), no plans to cut defense, no plans to raise any taxes. And he has thrown away a chance to become a real fiscal conservative in Washington, able actually to tackle the problem rather than exploit it for partisan purposes.

He is the problem with Republicanism today, not its solution. If the debt is such a threat, why do you refuse to tackle it seriously now? Why reduce yourself to the tiniest sliver of the smallest part of the discretionary spending budget ... when you could claim a serious mandate to end the debt for good? Why, after the last campaign, are the Republicans still unserious about cutting spending?

Because they're frauds.

Paying As You Go

2011-01-04T02:05:00.002-05:00

As the GOP takes control of the House, with empty promises of deficit cutting to come, Ezra looks back on one aspect of the health-care debate - its cost.

During the Bush administration, Democrats made a big deal of the Republicans' tendency to pass big initiatives without paying for them. The tax cuts, for instance, went right onto the deficit. So too did the Medicare Prescription Drug Benefit. The Democrats promised that they'd be more responsible. They'd pay for their big projects.

When health-care reform came around, they made good. They cut $500 billion from Medicare, handing conservatives a potent attack line. They introduced a tax on high-value health insurance plans, infuriating their union supporters. They didn't just pay for the bill: They overpaid for the bill, packing it with enough spending cuts and revenue increases to cut the deficit by more than $100 billion in the first 10 years, and then used the momentum of the bill to get liberals to sign off on cost controls, like an independent board designed to control Medicare's costs, that they'd have never countenanced in normal times.

So what do the conservatives who style themselves fiscally responsible say about this effort? "Democrats knew that passing the health-care bill would make it harder to balance the budget, because we used up the easiest, most obvious tax increases and spending cuts on expanding health care coverage," writes Megan McArdle. Democrats "spent budget offsets needed to address our long-term spending problem" complains Keith Hennessey. Points for creativity, at least: You need to work hard to make the very act of finding ways to pay for your spending seem like a calculated plan to increase the deficit.

McArdle says Democrats "knew" what they were doing here, but having spoken to a couple of them, I assure her they didn't: They actually thought that doing the fiscally responsible thing and passing more-than-fully offset legislation that also included an array of attempts to cut health-care spending over the long term would be considered, well, fiscally responsible. Fools!

Tax Reform? Not So Fast

2010-12-28T01:02:00.003-05:00

As talk grows in Washington about the prospects of a rewriting of the US tax code next year, Ezra throws a bit of cold water on the likelihood of success.

With Republicans and Democrats on board, and the relevant players in the House, Senate, and White House interested, this should be easy, right?

I doubt it. If you could agree on what the words "revenue neutral" meant, you really could redesign the tax code to feature lower rates, simpler forms and less economic drag. But given the coming expiration of the Bush tax cuts, you can't agree on what revenue-neutral means, as Democrats will say it means revenue after the cuts expire, and Republicans will say it means revenue if the cuts were extended. Until that question is resolved, every tax reform conversation will break down when Republicans realize Democrats are trying to lock in the expiration of the Bush tax cuts and Democrats realize Republicans will only reform the tax code if it means the Bush cuts live forever and ever, amen.

But the bigger problem is that no one's first love is tax simplification. Politicians don't want to modernize the tax code so much as they want to change the tax code in ways that fit their long-term goals.

Conservatives want lower taxes, particularly on the rich. They want a larger percentage of Americans to pay federal income taxes, as they believe that paying federal income taxes makes you less likely to support federal spending (Question: Is there any evidence for this view?). They want major cuts in existing government programs and a high bar to creating new programs, which means total revenues have to remain below current spending and far below projected spending.

Liberals have their own concerns: They want more revenues, as they know that their programs can't survive forever unless taxes rise to meet spending. They want the tax code to be more progressive, and they want to see inequality fall. They want taxes on wealth-income brought into line with taxes on work-income. They want the social spending that runs through the tax code, like the Earned Income Tax Credit or the breaks for clean energy development, to survive, and even be expanded.

And then there are the parts of the tax code that scare politicians: The mortgage-interest tax deduction, the exclusion for employer-based health insurance, the hundreds of smaller tax breaks that the public doesn't know about but that this or that business group will fight to the death to retain.

A Washington Six Pack

2010-12-11T00:06:00.001-05:00

Ezra lists 6 points that define Washington politics now.

1) No one really cares about the deficit. No sooner had Alan Simpson and Erskine Bowles completed their work on the deficit reduction package than Democrats and Republicans reached a bipartisan accord to add $900 billion to the debt. Republicans wanted their unpaid-for tax cuts for the rich, Democrats wanted their unpaid-for stimulus measures and both sides wanted the unpaid-for tax cuts for income under $250,000. I think it's appropriate to spend while the economy is weak and then repay when it's strong, but then, I didn't just get elected to Congress by promising to rein in spending.

2) Obama is better at the inside game than the outside game. Sarah Palin likes to ask the president "how that hopey-changey stuff" is going. The answer, it seems, is that the changey stuff is going well, but the hopey stuff is proving more troublesome. Obama might have campaigned in 2008 as the inspirational newcomer who had no patience for the broken ways of Washington, but he has governed like a Washington veteran with little patience for inspired outsiders. In health-care reform, in the stimulus, in financial regulation and in the tax-cut deal, Obama has been a tough negotiator able to move his agenda through a gridlocked Congress - but he has not been able to enthuse Democrats or inspire popular support for his initiatives. He has been prickly when questioned about it.

3) And he's not over health-care reform. Among the president's most passionate moments during the post-deal news conference was his long, impromptu scolding of dissatisfied progressives who're making this into "the public option debate all over again." Obama went on to complain that liberals were so focused on the public option that they lost sight of the rest of the health-care bill - which was much larger. And he's right about that. But it's also time for him to get over it.

4) Republicans really, really, really care about tax cuts for rich people. Many Democrats had been operating under the theory that Republicans would simply obstruct everything Democrats attempted, as that was the best way to make Obama a one-termer. At least when it comes to tax cuts for very wealthy Americans, that's not true. Republicans agreed to far more in unemployment insurance and stimulus proposals than anyone expected, and sources who were involved in the negotiations agree that the mistake Democrats made going in was underestimating how much Republicans wanted the tax cuts for the rich extended.

5) It's still Ronald Reagan's world, at least when it comes to taxes. The Sturm und Drang over the tax cuts for the rich obscured the Democrats' massive capitulation on the tax cuts for everyone else. Even the party's liberals had accepted Obama's argument that the tax cuts for income of less than $250,000 - which includes the bulk of the Bush tax cuts - should be permanently extended. Another way of saying that is Democrats had agreed that the Clinton-era tax rates were too high. If you put it to most Democrats that way, they'd protest vigorously. The economy boomed under Clinton, and the Democratic Party is proud of the efforts it made to balance the budget. But Democrats are so terrified of being accused of raising taxes that they've conceded to the Bush tax rates for 98 percent of Americans.

6) We need tax reform, now more than ever. The end result of this deal is going to be an even weirder tax code than we have now - and the one we have now is pretty weird. We're extending old tax cuts and credits and adding new ones. Some of those may be extended further. Businesses won't want to see deductions for investments expire, and workers won't want to see the payroll-tax cut expire, and the super-rich won't want to see the tax exemption for estates up to $5 million expire. There are so many constituencies fighting for so many breaks that the only hope we're going to have when we actually do need to reduce the deficit - which isn't yet, but will be soon - is to start from square one on the tax code.

The Tax Deal

2010-12-08T01:45:00.001-05:00

Sully on the Obama tax deal.

And notice that Obama has secured - with Republican backing - a big new stimulus that will almost certainly goose growth and lower unemployment as he moves toward re-election. If growth accelerates, none of the current political jockeying and Halperin-style hyper-ventilation will matter. Obama will benefit - thanks, in part, to Republican dogma. So here's something the liberal base can chew on if they need some grist: how cool is it that Mitch McConnell just made Barack Obama's re-election more likely? Bet you didn't see that one coming, did you?

The mix of policies is also shrewd from a strategic point of view.

At some point, I suspect, the Congress will have to decide between extending the payroll tax holiday or keeping the Bush tax cuts for millionaires - the double-track of the current Keynesian deal. I think Obama wins on that one, and has set up the kind of future choice the GOP really doesn't want to make. What he has done, in other words, is avoid an all-out fight over short-term taxes and spending now in the wake of a big GOP victory in order to set up the real debate about long-term taxes and spending over the next two years, leading into a pivotal 2012 election that could set the fiscal and political direction of this country for decades, an election in which he may well have much more of an advantage than he does now.

This is the difference between tactics and strategy. The GOP has won again on tactics, but keeps losing on strategy. More broadly, as this sinks in, Obama's ownership of this deal will help restore the sense that he is in command of events, and has shifted to the center (even though he is steadily advancing center-left goals). It's already being touted as "triangulation" by some on the right even as it contains major liberal faves - unemployment insurance for another 13 months, EITC expansion, college tax credits, and a pay-roll tax cut.

My view is that if this deal is a harbinger for the negotiation Obama will continue with the GOP for the next two years, he will come into his own.

The more his liberal base attacks him, the more the center will take a second look. And look how instantly the GOP's position has shifted. They have suddenly gone from pure oppositionism to dealing with the dreaded commie Muslim alien, thereby proving he is not what they have made him out to be. The more often we get the GOP to make actual tangible decisions on policy alongside Obama, the less able they will be able to portray him as somehow alien to the country, and the more they will legitimize him. Their House victory means they can no longer sit out there, portraying the country as somehow taken over by radical, alien forces - which they can simply oppose with ever ascending levels of hysteria and rhetoric. And the more practical and detailed and concrete the compromises, the less oxygen blowhards like Palin and Limbaugh will have to breathe.

Now for the short-term benefits of resolving this tax-and-spend dilemma so swiftly. The president urgently needs to get the new START and DADT through the Senate. DADT would be a major boost for his base - and the country's military. Getting START through is critical to his foreign policy cred. If he can pull all this off by Christmas - and the Senate should indeed stay open for an extra week - the last Congress will indeed be viewed by historians as one of the most substantive (and liberal) in recent history. And Obama will have orchestrated it - while ending up firmly planted and rebranded in the center.

It's Not Really So Bad

2010-12-06T01:40:00.000-05:00

Sully takes exception with the liberal angst about the Obama presidency.

This strikes me as grotesquely unfair. I sure know what maters to the president, and a brief survey of his first two years would reveal it rather baldly. "Non-argumentative reasonableness" so far has prevented a second great depression, rescued Detroit, bailed out the banks, pitlessly isolated Tehran's regime, exposed Netanyahu, decimated al Qaeda's mid-level leadership in Pakistan and Afghanistan, withdrawn troops fron Iraq on schedule, gotten two Justices on the Supreme Court, cut a point or two off the unemployment rate with the stimulus, seen real wages for those employed grow, presided over a stock market boom and record corporate profits, and maneuvered a GOP still intoxicated with failed ideology to become more and more wedded to white, old evangelicals led by Sarah Palin. And did I mention universal health insurance - the holy grail for Democrats for decades?

Euro Indigestion

2010-11-29T23:51:00.001-05:00

Kevin Drum picks up on an interview with author Barry Eichengreen, who has written on the possible demise of the Euro.

What’s your view now?
Rarely does an academic have the privilege of a real-time test of his hypothesis. With the benefit of that test, I would now say that I was both right and wrong. I was right in that, yes, if the Greek government were to announce tomorrow that it had decided to reintroduce the drachma, it would precipitate the mother of all financial crises. Everyone would know that its intention was to depreciate the new drachma, so in the first minute everyone would rush to get their money out of the country, out of its banks, and out of its bond market. The result would be the biggest bank run and financial crisis the world has ever seen. This danger is a formidable deterrent to even contemplating going down this road. So I think the argument I made in 2007, that attempting to exit the euro area would be the equivalent of burning down your own house in order to find a way out, was exactly right.
In what way were you wrong?
I was wrong in that, as Paul Krugman observed earlier this year, if the house is burning down anyway, then the normal advice not to play with matches loses much of its force. If there’s a run on your banking system anyway, then the deterrent to action no longer applies. If there’s a run on your banking system and you have to close down your banks and financial markets anyway, you may want to take that opportunity to reintroduce your own currency. I still don’t think that things will be allowed to get to this point, but I no longer attach a zero probability to a country’s exiting the euro — just a close to zero probability. Never say never, but I still believe that the euro is an example of a path-dependent historical process that is unlikely to be reversed.
I think he's probably right. But I'm also not entirely sure of that. So far there's been no sign of a serious run on any euro-area banking system, but there have been signs of a "bank walk," for lack of a better term. And that could lead to a run on one bank which, in turn, could lead to a run on so many banks that the European monetary authorities can't stop it. Megan McArdle's warning that pundits "have started seeing Creditanstalt everywhere" is a good one, but this is still a scary process we're going through. I'm not sure exactly what nonzero probability Eichengreen would attach to a euro breakup, but even five or ten percent is pretty serious. Buckle up.

Starve the Beast?

2010-11-28T01:06:00.002-05:00

Kevin Drum quotes Bruce Bartlett as he exposes the Republican tax cutting obsession for the fraud it is.

A prime reason why we have a budget deficit problem in this country is because Republicans almost universally believe in a nonsensical idea called starve the beast (STB). By this theory, the one and only thing they need to do to be fiscally responsible is to cut taxes. They need not lift a finger to cut spending because it will magically come down, just as a child will reduce her spending if her allowance is cut — the precise analogy used by Ronald Reagan to defend this doctrine in a Feb. 5, 1981, address to the nation.
Bruce goes on to look at the empirical evidence — namely that spending went down after the Clinton tax increases and up after the Bush tax cuts — and concludes that STB is a "crackpot theory." True! But what makes it even more crackpotty is that basic economic principles, of the kind that Republicans are endlessly lecturing the rest of us about, predict the same thing. If you raise taxes to pay for government programs, you're essentially making them expensive. Conversely, if you cut taxes, you're making government spending cheaper. So what does Econ 101 say happens when you reduce the price of something? Answer: demand for it goes up.

Cutting taxes makes government spending less expensive for taxpayers, which makes them want more of it. And politicians, obliging creatures that they are, are eager to give the people what they want.

Result: lots of spending and lots of deficits.

If you want to reduce spending, the best way to do it is to raise taxes so that registered voters actually have to pay for the services they get. I don't have a cute name for this theory, but it's true nonetheless. For a while, anyway. Until it's not.

The Folly of Simpson and Bowles

2010-11-14T01:07:00.000-05:00

Kevin Drum points out the glaring flaw in the Simpson-Bowles chairman's mark proposal by the Deficit Commission....that it ignores healthcare costs.

Here's the problem: most plans to reduce the long-term deficit consist of three things: shiny baubles, smoke and mirrors, and actual deficit reduction measures. You want to minimize the former and emphasize the latter, and on that score I don't think Simpson-Bowles does very well.

Their discretionary cuts are a combination of baubles and smoke and mirrors. The baubles are the trivia, like cutting printing costs and eliminating earmarks. The smoke and mirrors comes from vague non-choices like cutting the federal workforce 10% or pretending that a spending cap will actually accomplish anything. Discretionary spending isn't really a long-term problem in the first place, but if you're going to address it anyway, then address it by proposing actual program cuts. You think manned space exploration is a boondoggle and you want to cut NASA's budget in half? Fine. You think ethanol subsidies are outrageous and you want to eliminate them? Great. You think our nation would be safe with nine supercarrier groups instead of a dozen? Preach it. But that's what it takes to cut the discretionary budget: cuts to real programs, not handwaving about caps and generic rollbacks.

Next up are their tax reform proposals, which are almost entirely smoke and mirrors. You can make any deficit reduction plan easier by proposing a tax system that (you claim) will boost growth rates by 1% per year. Run that out over 50 years and economic growth will take care of half your problem. Hooray! But the evidence that this will actually happen is close to zero. Our current tax system just isn't that inefficient. Pretending that a better tax regime will supercharge economic growth isn't as bad as relying on the infamous troika of waste, fraud, and abuse, but it's close.

Their Social Security proposal is.....actually not bad. With one change I could probably accept it as is. Still, even though I favor taking action on Social Security now, this is basically a bauble. It's reponsible for only a small part of the long-term deficit, and it's not something that rises forever. It's a one-time increase associated with the retirement of the baby boomer generation.

And then you get to healthcare. This is the big one. This is 90% of our long-term deficit problem. I don't have any real problem with tackling inefficient discretionary programs or sprucing up the tax code or fixing Social Security. But burbling on at length about this stuff mainly serves to allow us to avoid talking about our real problem. Because, as Derek says, it's too hard. But that's like an alcoholic nattering on about putting a taxi service on speed dial or remembering to take his vitamins every day.
Those are great ideas, but they're basically distractions that prevent you from facing up to the fact that you need to stop getting hammered every night.

The whole point of a deficit reduction commission is that they can address the hard truths that a bunch of politicians can't. If Simpson-Bowles were really dedicated to hard truths, their report would have said two things in no uncertain terms. First, we're not going to waste too much time on discretionary spending or Social Security. They're shiny baubles that distract us. So here are links to half a dozen good plans for reining in both of them. Go ahead and read them at your leisure.

Second, healthcare costs are going up. We're getting older, medical technology is advancing, and the spending curve on healthcare heads to infinity if we don't do something about it. So we've decided that essentially our entire report is going to be about healthcare because we want to rub your faces in the fact that you have to deal with it whether you like it or not. This means, at a minimum, two things: (1) distilling the best ideas around for reining in rising healthcare costs, and (2) acknowledging that costs are going to go up anyway and we're going to have to raise taxes to deal with it.

But as hard truths go, I guess that's a little too hard. Tax increases! Paying doctors less! Telling the American public that they can't have every procedure they want just because they want it! Besides, we just spent over a year passing healthcare reform, and we're all exhausted. PPACA made only modest progress on cost controls, and that was hard enough. Better to just do some handwaving about a cap on growth rates and call it a day.

Lying for Fun and Political Profit

2010-11-10T01:26:00.000-05:00

Sully on the role of the Big Lie in modern American politics.

It seems to me that the last year or so in America's political culture has represented the triumph of untruth. And the untruth was propagated by a deliberate, simple and systemic campaign to kill Obama's presidency in its crib. Emergency measures in a near-unprecedented economic collapse - the bank bailout, the auto-bailout, the stimulus - were described by the right as ideological moves of choice, when they were, in fact, pragmatic moves of necessity. The increasingly effective isolation of Iran's regime - and destruction of its legitimacy from within - was portrayed as a function of Obama's weakness, rather than his strength. The health insurance reform - almost identical to Romney's, to the right of the Clintons in 1993, costed to reduce the deficit, without a public option, and with millions more customers for the insurance and drug companies - was turned into a socialist government take-over.

Every one of these moves could be criticized in many ways. What cannot be done honestly, in my view, is to create a narrative from all of them to describe Obama as an anti-American hyper-leftist, spending the US into oblivion. But since this seems to be the only shred of thinking left on the right (exacerbated by the justified flight of the educated classes from a party that is now openly contemptuous of learning), it became a familiar refrain - pummeled into our heads day and night by talk radio and Fox. If you think I'm exaggerating, try the following thought experiment.

If a black Republican president had come in, helped turn around the banking and auto industries (at a small profit!), insured millions through the private sector while cutting Medicare, overseen a sharp decline in illegal immigration, ramped up the war in Afghanistan, reinstituted pay-as-you go in the Congress, set up a debt commission to offer hard choices for future debt reduction, and seen private sector job growth outstrip the public sector's in a slow but dogged recovery, somehow I don't think that Republican would be regarded as a socialist.

This is the era of the Big Lie, in other words, and it translates into a lot of little lies - "death panels," "out-of-control" spending, "apologies for America" etc. - designed to concoct a false narrative so simple and so familiar it actually succeeded in getting into people's minds in the midst of a brutal recession. And integral to this process have been conservative "intellectuals" who should and do know better, but have long since sacrificed intellectual honesty for the cheap thrills of enabling power-grabs.

The Truth About Social Security

2010-11-02T00:50:00.005-04:00

Kevin Drum posts the chart that shows clearly that the projected shortfall in Social Security is manageable.

This is apropos of nothing in particular, but I guess that Social Security is going to be back in the news when the president's deficit commission reports back, so I want to take this chance to post the single most important chart you'll ever see about the finances of Social Security. Here it is:

This is from page 15 of the latest trustees report. What's important is that, unlike Medicare, Social Security costs don't go upward to infinity. They go up through about 2030, as the baby boomers retire, and then level out forever. And the long-term difference between income and outgo is only about 1.5% of GDP.

This is why I keep saying that Social Security is a very manageable problem. It doesn't need root-and-branch reform. The trust fund makes up Social Security's income gap for the next 30 years, so all it needs is some modest, phased-in tweaks that cut payouts by a fraction of a point of GDP and increase income a fraction of a point. Here's a proposal from Jed Graham that's designed to cut benefits a bit for high earners and encourage them to retire later, and maybe it's great. I haven't looked at it in detail. But the point is that the changes he recommends are fairly small. Any plan for fixing Social Security requires only tiny benefit cuts and tiny revenue increases. It's just not that big a deal.

GDP & the Election

2010-10-31T00:54:00.001-04:00

Ezra looks at the election through the prism of GDP.

Today's GDP numbers are a good way to understand Tuesday's election. Start with who Barack Obama isn't: Franklin Delano Roosevelt. You hear people say that if Obama could only sell his vision, his agenda or his commitments the way FDR could, he'd be safe right now. And the comparison is understandable: Like FDR, Obama took office shortly after a financial crisis. But unlike FDR, who took office after three years in which GDP shrank by an average of 9.6 percent each year, Obama -- and his predecessor -- responded effectively enough and quickly enough to stop the economy from collapsing. Our worst year was 2009, when GDP shrank by 2.6 percent. And that was the only year in which we actually lost ground.

FDR, for his part, took office after the worst of the Great Depression was over, and -- in part because of his efforts -- when the real recovery was beginning. In 1934, the year of his first midterm election, GDP grew by more than 10 percentage points. Obama took office in 2009, which was our worst year. And this year, the year of his first midterm, we're on track to grow by 2.5 percent. That is to say, it isn't a vision thing. If Obama could get FDR's numbers, and if he could've dodged the worst years of the crisis, he could go mute and still win the election.

Obama is also not Bill Clinton. Clinton lost 54 seats in 1994, but the economy wasn't doing particularly badly. It was the third straight year of growth, and when all was said and done, we'd expanded by 4.1 percent. Democrats hold almost exactly as many House seats in 2010 as they did in 2004, and if Nate Silver is right and they lose 53 of them, they will, given the economy, have outperformed Clinton's Democrats quite substantially. Maybe passing health-care reform actually helped?

The best comparison, it turns out, is between Obama and Ronald Reagan. The 1982 midterm election also came amid a weak economy. We'd shrunk by 1.9 percent, although we'd grown -- slowly -- the year before. The two presidents were also posting similar approval numbers: According to Gallup, Reagan had 43 percent at this point in his presidency, and Obama has 44 percent.
There is, however, a difference: Reagan's party was in the minority in the House. They had 192 seats and lost 26 of them. That's a 15.6 percent loss. If Democrats lost the same percentage of their 256 seats, they'd lose 40 seats this year. But because having a large majority means, by definition, holding many more vulnerable seats, the likelihood is that Republicans would have lost much more than 15.6 percent of their seats if they'd had another 54 seats to defend, and if unified government had left all the blame on their shoulders.

So Obama can't show the progress that either Bill Clinton or FDR could in the months before their first midterm elections. He's got more growth than Ronald Reagan did, but also more seats and unified control of government. He's got, in other words, a pretty bad situation. Reagan did too (though the cause of his recession was the Federal Reserve, and so recovery was easier to attain after the election), but Clinton really didn't. It's his losses that really stand out.

It's Not Spending....It's Spending by Democrats

2010-10-19T02:08:00.001-04:00

Kevin Drum nails the dishonesty in the complaints by Republicans about all that spending.

Now, it's true that a divided government is almost certain to spend less than one controlled by a single party. Beyond that, though, there's little evidence that extreme conservatives are any more concerned about spending now than they've ever been, and over the past 30 years they've never been concerned about spending. They didn't cut it under Reagan, they didn't cut it under Bush Sr., and when they finally controlled the government completely under Bush Jr., they didn't cut it then either. Hell, Social Security privatization never got anywhere even within the Republican caucus despite the fact that it was sold relentlessly and dishonestly as a free lunch. Actual cuts in spending were never on the radar.

The tea partiers are angry not over spending, but because a Democrat is in the White House. Rick Santelli's rant, which kicked off the whole movement, occurred one month after Obama took office. That was before the auto bailout, before health care reform, before financial reform, before the Iraq drawdown, before cap-and-trade, and before extension of the Bush tax cuts was even on the horizon. The only thing that had happened at that point was the stimulus bill, but even as big as that was, everyone knew it was a one-time shot, not a permanent change in spending levels.

Really, there's just no evidence at all to suggest that tea partiers are any more upset about the level of spending and deficits than they ever have been. Rather, they're upset because the spending is currently being done by a Democrat. As soon as Republicans are doing it, they won't really care anymore.

Foreclosure Follies

2010-10-18T01:45:00.000-04:00

Barry Ritholtz has the perfect summary of the state of play in how the major banks handle the foreclosure process,

I am not sure why so many people are so confused over the concerns of the legal status of robo-signers.

I’ll let Thomas A. Cox, a retired lawyer, describe GMAC’s foreclosure process and the work of its limited signing officer, Jeffrey Stephan in a court filing:
“When Stephan says in an affidavit that he has personal knowledge of the facts stated in his affidavits, he doesn’t. When he says that he has custody and control of the loan documents, he doesn’t. When he says that he is attaching ‘a true and accurate’ copy of a note or a mortgage, he has no idea if that is so, because he does not look at the exhibits. When he makes any other statement of fact, he has no idea if it is true. When the notary says that Stephan appeared before him or her, he didn’t.”
Gee, how could anything go wrong in that situation?

It's the Legislature, Stupid

2010-10-04T23:39:00.000-04:00

Ezra counters a Tom Friedman column calling for a third party Presidential candidate as the solution to government gridlock.

That might actually be the easiest thing you can say in American politics. John McCain ran as the enemy of special interests. Barack Obama did, too. His compromises and disappointments, as Friedman admits, had nothing to do with a paucity of anti-special interest applause lines. They had to do with the limits of Congress. "Obama probably did the best he could do," says Friedman, "and that’s the point. The best our current two parties can produce today -- in the wake of the worst existential crisis in our economy and environment in a century -- is suboptimal, even when one party had a huge majority."

And the answer to that is ... a tiny third party running a presidential candidate? No. If the legislative system is broken -- if the best we can do is not good enough -- you need to change the legislative system. Friedman laments Obama's "limited stimulus" and decision to "abandon an energy-climate bill altogether," but he doesn't mention the one thing that would've allowed for a larger stimulus and a fighting chance on an energy and climate bill: eliminating the filibuster.

The worst illusion pundits foist on the populace is the idea that if we just elect the right guy (or gal) to be president, everything will be fine. It won't be. If you don't like how our laws are being made, you have to change how our laws are being made. And that doesn't mean changing the president, who's not even in the branch of government that makes our laws. Elect Ralph Nader, or some other hard-charging third-party candidate with a penchant for applause lines, and everything will just be filibustered to death.

"He probably did the best he could do," some pundit will say, "and that’s the point. The best our current three parties can produce today is suboptimal."

Center to the Right?

2010-10-03T00:56:00.001-04:00

Ezra Klein on the question of whether the US is a center-right nation.

We know that self-described conservatives outnumber self-described liberals, and appear to have done so for as long as we've been polling the question. But we also know that self-described Democrats outnumber self-described Republicans -- even when conservative pollsters are asking the question -- and that's been true for decades, too. So we're a conservative country ... that leans towards the Democrats? Huh.

We know, for instance, that Americans are less bothered by inequality than Europeans. But we also know that, when given a choice (pdf), Americans say they'd like their level of wealth inequality to look less like America's and more like Sweden's.

America's center-rightness is supposedly proven by the fact that we don't have a government-run health-care system. But we love our Medicare. We prefer it, in fact, to our private insurance. And we're less satisfied with our system than Europeans are with theirs. So we're a country that opposes government-run health care -- except when we have it, and then we far prefer it to the private market, and we're more likely than people in other countries to demand that our health-care system gets rebuilt.

I want to be clear what I'm arguing here: It's not that Americans don't have measurably different opinions than Europeans. It's that our opinions and the outcomes of our political system are not closely correlated. Rather, I think that the exceptionalism of the American political system comes from its structure, which is conservative with a small-c.

Because it's harder for the government to do things, the government does fewer things. At least seven presidents have run for office with some sort of universal health-care plan. In another system, one of them would've succeeded, and we would have had national health care by the mid-20th century, and one of the central policy differences between America and Europe wouldn't exist. As it happens, our system makes legislative change difficult, and so they all failed. But in the cases when they succeeded -- Social Security and Medicare -- their successes are wildly popular, and efforts to roll the programs back have been catastrophic failures. The American political system isn't so much biased against the left or the right as against change in general, and though there are occasional moments when events and majorities align to allow a political party to achieve a lot of the items on its agenda, they're quite rare, and almost never durable.

The Amorality of Economics

2010-09-29T01:52:00.002-04:00

Paul Krugman blogs on the fundamental absence of morality in economic theory.

I understand from the Times that whenever I mention in my column that WWII ended the Great Depression, the paper gets a lot of mail accusing me of being a warmonger. Amazing.

But maybe this is an opportunity to reiterate a point I try to make now and then: economics is not a morality play. It’s not a happy story in which virtue is rewarded and vice punished. The market economy is a system for organizing activity — a pretty good system most of the time, though not always — with no special moral significance. The rich don’t necessarily deserve their wealth, and the poor certainly don’t deserve their poverty; nonetheless, we accept a system with considerable inequality because systems without any inequality don’t work. And before the trolls jump in to say aha, Krugman concedes the truth of supply-side economics, that’s not an argument against progressive taxation and the welfare state; it’s just an argument that says that there are limits. Cuba doesn’t work; Sweden works pretty well.

And when we’re experiencing depression economics, by which I mean a situation in which it’s hard to create sufficient demand to achieve full employment — mainly because short-term interest rates are up against the zero lower bound — the essentially amoral nature of economics becomes even more acute. As I’ve said repeatedly, this is a situation in which virtue becomes vice and prudence is folly; what we need above all is for someone to spend more, even if the spending isn’t particularly wise.

The trouble in practice is that conventional modes of thought tend to prevail even when they shouldn’t; in particular, public spending on the scale needed never seems to happen. That’s why Keynes facetiously proposed burying bottles full of cash in coal mines, so people could dig them up again: since any proposal to spend money on things we need got shot down on grounds of prudence and efficiency, he proposed completely pointless spending instead.

And what actually ended up doing the trick was spending that was beyond pointless, it was actually destructive – a sort of cruel joke on the part of the gods of economics.

The Democrat's Tax Strategy

2010-09-24T02:05:00.001-04:00

Jonathan Zasloff explains the political logic behind the decision to defer a vote on the expiring tax cuts until after the elections (h/t Kevin Drum).

Josh Marshall and Jonathan Chait are fighting back aneurysms upon hearing the news that Capitol Hill Democrats will not put forth a bill maintaining middle-class tax cuts.

But Nancy Pelosi and Harry Reid aren’t stupid. They did what they had to do. This was the best of a bad series of choices.

Here were their options:

1) Bring up the middle-class tax cut bill free-standing in the House. The Republicans would offer a “Motion to Recommit” to the Ways and Means Committee with instructions to include the tax cuts for the rich. With Blue Dog support, it would have won. No go.

2) Bring up the middle-class tax cut bill freestanding in the Senate. The Republicans would offer an amendment to include the tax cuts for the rich. It could have won: 41 Republicans plus Lieberman, Lincoln, Pryor, Landrieu, Ben Nelson, Bayh, Hagan, Dorgan, Baucus, Conrad, and then maybe Bill Nelson, Webb, or Warner. Then where would you be?

3) Bring up the middle-class tax cut bill free-standing in the House under a “Suspension of the Rules,” which requires a two-thirds vote and is not subject to the Motion to Recommit. My favorite option, because theoretically, the Republicans would be in a bind. Either they would vote no, in which case they would have voted no on a tax cut, or they would have voted yes, in which case the Dems win and they tick off their base. BUT — they probably would have split, meaning that the Dems would not have not gotten a win AND the partisan difference would have been muddied.
In other words, there was no way to get an actual win under these circumstances. You could only get a loss that would muddy the partisan split.

Under these circumstances, Pelosi and Reid decided not to have the vote. Why? Because you can still make the issue about it being the “Republicans holding the bill hostage.” You can still say that the Republicans won’t vote for a middle-class tax cut unless they borrow $700 billion dollars to give to millionaires and billionaires. President Obama still has the biggest megaphone in the country, and to his great credit, he is using it. Just an hour or so after the decision was announced, he was blaming the Republicans for holding middle-class tax cuts hostage.

In other words, you can go to the country with a clear message, and without the picture of Democrats reprising the circular-firing squad. It’s not perfect, but it’s the best of all possible situations given the unprecedented plutocratic obstructionism of the GOP.

Ironically, though, critics like Marshall and Chait could undermine the strategy if the meme becomes “Democrats cave.” If instead the meme becomes, “Democrats refuse to borrow $700 billion to pay off billi0naires,” then it looks like they are stronger, not weaker. Marshall and Chait are calling it like they see it, and I take their points, but they are creating some bad spin here: let’s not let the complaints become a self-fulfilling prophecy.

The Liberal Disadvantage Looms Large

2010-09-22T00:09:00.001-04:00

Kevin Drum looks at the political ideology polling and concludes that it is much harder for the Left to craft political strategy that appeals to its base than it is for the Right.

I'll repeat a point I made a few weeks ago: this is baked into the cake of modern American politics. Every local race has its own dynamics, but it's still worth taking a look at the Gallup chart above to get a sense of the broad national hole that liberals are in. About 40% of the electorate self-identifies as conservative and getting their votes is critical for any conservative politician. If you piss off a few moderates in the process, that's life. After all, if you win the conservative base convincingly, then on average you only need to hold on to the most conservative 10% of moderates to win an election.

But only 20% of the electorate self-IDs as liberal. So the math is exactly the opposite: you need to win nearly all the moderates in order to win an election. If you piss off centrists by playing too hard to the base, you'll lose.

This is a bummer, but it's reality, and lefties really need to suck it up and get less annoyed by the fact that politicians react to the world as it is, not as we wish it were. Like it or not, most pols just can't afford to give the liberal base too much rhetorical lip service until and unless it gets a lot bigger than it is today.

Still, there's a mystery here. Not why Obama feels the need to market himself the way he does, but why he lately seems so clumsy at it. As Krugman implies, dog whistling can be subtle but still clear. So where's the subtlety in the Obama White House these days?

Taxing Politics

2010-09-20T00:09:00.001-04:00

Jonathan Chait on how the Democrats should handle the upcoming tax debate.

Wall Street Journal opinion columnist Kimberly Strassel has a column entitled "Why Democrats Can't Win On Taxes," purporting to show that the awesome power of (massively unpopular) tax cuts for the rich has put the Democrats into a political bind. Oddly, in the course of running down the party's alternatives in an attempt to prove her point, she winds up with this final option:
The Democrats' best shot is procedural, to somehow allow only one vote—on extending rates for just the "middle class"—and dare Republicans to vote against it. Democrats might then peel off GOP support and provide themselves cover this fall. If the majority senses fear—like what emanated from Minority Leader John Boehner this past weekend when he suggested he wouldn't take that dare—it'll take this shot.
Right! That's what you do -- hold a vote on the extremely popular proposal to extend tax cuts for income under $250,000. I highly doubt Republicans are going to want to vote that down. If they do, it's the best possible election frame for Democrats. Which is to say, the Democrats can win on taxes. Strassel continues this scenario by observing, "If Mr. Obama has such a winner tax position, it isn't clear why his leaders are ducking tax bills and his members are running for cover." I'll answer that: moderate Democrats really like tax cuts for the rich, because they and their most influential supports are rich. That doesn't mean their hand is weak.

Now, you can also hold another, subsequent vote on tax cuts exclusively for income over $250,000 if the Blue Dogs so desire. That's fine. The only way Republicans win is if the two issues are combined.

We Are All in Kansas Now

2010-09-11T00:49:00.000-04:00

Kevin Drum summarizes the key points from the new book by Jacob Hacker and Paul Pierson, "Winner-Take-All Politics" which analyzes how political changes led to the increase in income inequality over the past 30 years. Drum zeroes in on the reasons that middle- and lower-income voters opt to vote against their own economic interests, a phenomenon Thomas Frank first addressed in his book "What's the Matter With Kansas?".

In the 60s, at the same time that labor unions begin to decline, liberal money and energy starts to flow strongly toward "postmaterialist" issues: civil rights, feminism, environmentalism, gay rights, etc. These are the famous "interest groups" that take over the Democratic Party during the subsequent decades.
At about the same time, business interests take stock of the country's anti-corporate mood and begin to pool their resources to push for generic pro-business policies in a way they never had before. Conservative think tanks start to press a business-friendly agenda and organizations like the Chamber of Commerce start to fundraise on an unprecedented scale. This level of persistent, organizational energy is something new.
Unions, already in decline, are the particular focus of business animus. As they decline, they leave a vacuum. There's no other nationwide organization dedicated to persistently fighting for middle class economic issues and no other nationwide organization that's able to routinely mobilize working class voters to support or oppose specific federal policies. (In both items #2 and #3, note the focus on persistent organizational pressure. This is key.)
With unions in decline and political campaigns becoming ever more expensive, Democrats eventually decide they need to become more business friendly as well. This is a vicious circle: the more unions decline, the more that Democrats turn to corporate funding to survive. There is, in the end, simply no one left who's fighting for middle class economic issues in a sustained and organized way. Conversely, there are lots of extremely well-funded and determined organizations fighting for the interests of corporations and the rich.
The result is exactly what you'd expect. With liberal money and energy focused mostly on non-economic concerns, the country moves steadily leftward on social issues. With conservative money and energy focused mostly on the interests of corporations and the rich—and with no one really fighting back—the country moves steadily rightward on econonomic issues. Thomas Frank's famous working-class Kansans who vote against their own economic interests are easily explained. It's not just that conservatives appeal to them on social grounds, it's that there's no one left to really make the economic case to them in the first place. And even if anyone did, they have little reason to believe that Democrats would actually follow through in concrete ways. So why not vote on abortion and gay rights instead?

More on the Republicans

2010-09-07T22:25:00.001-04:00

Sully takes a comment by David Frum and extends it into a stark indictment of the Right.

Without the housing claim, it would have been hard to depict the Bush economic record as very much of a success. Employment was up, the Dow was up, but median incomes still lagged behind 2000 levels. It was the rise in home prices that represented the administration’s main argument that its economic policies had helped the American middle class. No way was the administration going to act to slow – let alone halt – that rise. To the extent that political appointees regulated the lending industry, the political appointees understood what was expected of them and did not interfere.
I don’t raise this point to cast aspersions, but to inspire thought as to how Republicans can deliver better results next time. Republicans talk budgetary policy (that’s why Paul Ryan has become a heart-throb of the party). They need to think about economic policy. The measure of success is not shrinking the deficit – that’s just a means to an end – but raising incomes. We need an open discussion about why our policies failed to deliver that result in the 2000s as a preliminary to doing better after 2012 or 2016.
Which is roughly a paraphrase of the president's critique yesterday. I suspect the answer is pretty bleak: conservatism as it has evolved since the 1980s has no fundamental solution to how to raise the incomes of the lower middle class in a global economy where Chinese and Indians can do what any American can for a fraction of the cost. If that's true for high-tech, how much truer for other sectors? Education is key, and is one of Obama's least-appreciated emphases. In other words, the free lunch is over. America's unique advantages and blessings during the Cold War have been removed. Protectionism won't help. And even higher levels of education won't make much difference. At some point, as David Brooks shrewdly notes today, the culture will have to adjust away from the pursuit of wealth to the pursuit of happiness within far more constrained horizons.

What I fear and see is the right's inability or refusal to face this or to innovate genuinely new policies to address these questions (Manzi is an exception who proves the rule). And in its place, they will offer a cultural politics of reaction at home and war abroad. They will intensify the red-blue divide, and blame the "elites" for everything, and turn Islam into the modern equivalent of Communism (unwittingly helping the enemy), and take the world to the brink of chaos. That's what I fear in my bleaker moments. Because it works for a while. And it will make millions for those who want to use America's decline rather than reverse it, and will distract the heart by deadening the mind. And I see no one with the gravitas or decency or responsibility in the GOP to be an Eisenhower.

That's why Obama still matters. It's why, in my view, he matters more than ever.

The State of the Republicans and the Right

2010-09-07T22:19:00.001-04:00

Sully is back from his vacation with a blistering commentary on the state of the Right as they approach an election they may win.

The other brutal truth is that the opposition has nothing substantive to offer to remedy this. If all they've got is keeping the Bush tax cuts for those earning over $250,000 a year, they really have got nothing. What they do have is cultural symbolism and the exhausted right-left tropes that were trotted out at the mercifully vacuous parade of God and Country on the Mall with Beck and Palin. (A cynical atheist's parody of such vacuousness can be read here.) Maybe in power, by some miracle, the Tea Party Republicans will actually propose the long-term massive cuts in entitlements they claim to believe in. But I don't believe it for a second. I don't believe they are in any way serious about spending restraint and are only serious about their bewilderment at the real America where racial, religious and cultural diversity is a fact, where illegal immigration has been plummeting, where gay marriage is winning, where legal abortion will never go away, and where the new empire the last administration embarked upon has bankrupted us for a generation at least.

And this, in the end, must be what our politics is about: substantive policy responses to profound crises inherited from the past. Obama's call for transportation infrastructure investment is one tiny but real response and no panacea but it's paid for and it's something. His persistent attempt to get a real two-state solution in Israel-Palestine is unlikely to succeed given the forces arrayed against it in Washington and Tehran but it is necessary if we are to win this long war against Jihadism. His endurance in Afghanistan is, in my view, a tragic mistake, but anyone who claims that withdrawal would not have appalling moral consequences and great strategic risks is lying to you. His diplomatic and economic isolation of Iran's coup regime may also fail to prevent the Revolutionary Guards getting a nuclear capacity, but the alternative - a military strike - would initiate a new round of global religious warfare of terrifying gravity, where the Islamists would have the moral high-ground of being attacked first. His success in bringing a modicum of healthcare security to the working poor is also a work in progress but again, the practical alternative on the table is ... what exactly?

In the end, these difficult practical decisions will count because they have to count. And Obama's persistent refusal to take the red-blue bait still pushed by Fox News like a cheap bump of ideological meth is to his credit. It is emphatically not about his failure to "take them on". He is taking them on - but on his terms, not theirs'. Take it away, Mr president:
When it comes to just about everything we’ve done to strengthen our middle class, to rebuild our economy, almost every Republican in Congress says no. Even on things we usually agree on, they say no. If I said the sky was blue, they say no. If I said fish live in the sea, they’d say no. They just think it’s better to score political points before an election than to solve problems. So they said no to help for small businesses, even when the small businesses said we desperately need this. This used to be their key constituency, they said. They said no. No to middle-class tax cuts. They say they’re for tax cuts; I say, okay, let’s give tax cuts to the middle class. No. No to clean energy jobs. No to making college more affordable. No to reforming Wall Street. They’re saying right now, no to cutting more taxes for small business owners and helping them get financing.
You know, I heard -- somebody out here was yelling “Yes we can.” Remember that was our slogan? Their slogan is “No we can’t.”

Lehman Revisited

2010-09-03T02:27:00.003-04:00

In response to former Lehman Bros. CEO Dick Fuld's claim that the Fed chose to let Lehman fail in 2008, Barry Ritholtz reviews once again what actually happened and why.

1. Under-capitalized, over-leveraged: Lehman Brothers was the biggest bankruptcy in US history. To avoid that fate, LEH needed to be sufficiently capitalized, and use only moderate leverage (LEH embraced 40 to 1 leverage). Rather than have a sufficient capital base, the bank chose instead to chase profits: A greater capital cushion meant less underwriting activity, smaller gains, greater risk. The downside of having a de minimus capital structure is when bad investments are made, there is no room for error.

2. Bad Modeling Assumptions: LEH made numerous false assumptions in their econometric models: a) Residential RE never goes down; b) The derivatives market is always liquid, with ready buyers available; c). We can always borrow short and lend long with no liquidity concerns; There was substantial evidence and warnings that ALL of these assumptions were false, but they were ignored by management as a risk to profits.

3. Excess RE Exposure: Lehman was the biggest securitizer of mortgages on Wall Street. They underwrote more mortgages than any other bank on Wall Street. By 2004, LEH was originating $40B per year in mortgages to feed their own CDO machine (which as Roger Lowenstein has pointed out, was more lucrative than the stock and bond business).

4. Reliance on Ratings: Lehman’s entire business model was predicated on the ratings of Moody’s and S&P being reliable. However, LEHMAN was one of the prime purveyors of credit rating payola — they were paying the NRSROs a fee to slap a Triple AAA rating on junk paper. If they did not know the credit ratings were utterly worthless, they sure should have.

5. CDO Ownership: Lehman kept the senior-most layers of CDOs they created for themselves, but bought credit default swaps on them “for safety.” Consider that they were not confident enough of the models which forecast the solvency of those tranches, yet they used the same models to determine AIG was a credit worthy counter party to insure them.

That’s why LEH collapsed, and it was apparent (at least to us) back in June 2008 they were in trouble. Why did the Fed not save them? There were several reasons:

1. One off: The Bear Stearns bailout was supposed to be a “one of a kind,” not the start of a series of rescues. The Fed hoped to hold the line at only one such taxpayer backed rescue. The fear was if they did a 2nd, they could not say no to the rest of the Street. Lehman was in effect the Fed’s Maginot Line (it also was out flanked and rendered strategically useless).

2. Fed Overreach: Bernanke was widely criticized for the Bear rescue as a huge overstep of authority. Even former Fed Chair Paul Volcker overcame the inherent reluctance of formerFOMC chairs to to criticize sitting Fed heads to express his concern about the over reach and power grab.

3. No to Private Rescue: Dick Fuld turned down a private rescue just months earlier. Warren Buffett offered Fuld billions, plus the equivalent of the Berkshire Hathaway Good corporate Housekeeping seal of approval. FULD TURNED BUFFET DOWN. How could the Fed, in good conscience, bail out a firm that refused to accept a Buffett rescue? Indeed, his terms for LEH were far more generous than what BRK ultimately offered Goldman Sachs and GE.

4. Insolvent: Lehman books are why a loan never happened. LEH was essentially insolvent, with liabilities that vastly outweighed what few assets there were. This insufficiency is why a loan was simply not possible — it was considered a guaranteed loss.

5. Moral Hazard: How much of a clusterfuck must any financial firm be before a rescue is deemed an outrageous moral hazard? For the 3rd and 4th reasons above, Lehman was believed to be “Beyond rescuing.” And it was due to the specific choices Lehman’s management made.

The Tea Movement

2010-08-28T23:51:00.001-04:00

On the day of Beckapalooza, Steve Benen tries to figure out what it is exactly that the Teabaggers are for.

This is about "freedom."
Well, I'm certainly pro-freedom, and as far as I can tell, the anti-freedom crowd struggles to win votes on Election Day. But can they be a little more specific? How about the freedom for same-sex couples to get married? No, we're told, not that kind of freedom.

This is about a fight for American "liberties."
That sounds great, too. Who's against American "liberties"? But I'm still looking for some details. Might this include law-abiding American Muslims exercising their liberties and converting a closed-down clothing store into a community center? No, we're told, not those kinds of liberties.

This is about giving Americans who work hard and play by the rules more opportunities.
I'm all for that, too. But would these opportunities include the chance for hard-working Americans to bring their kids to the doctor if they get sick, even if the family can't afford insurance? No, we're told, not those kinds of opportunities.

This is about the values of the Founding Fathers.
I'm a big fan of the framers' generation, who created an extraordinary nation. But if we're honoring their values, would this include their steadfast commitment to the separation of church and state? No, we're told, not those values.

This is about patriotic Americans willing to make sacrifices for the good of their country.
That sounds reasonable; sacrifices can be honorable. But if we're talking about patriots willing to sacrifice, does that mean millionaires and billionaires can go back to paying '90s-era tax rates (you know, when the economy was strong)? No, we're told, not those kinds of sacrifices.

This is about a public that, at long last, wants to hear the truth from those who speak in their name.
What a great idea. Maybe that means we can hear the truth about global warming? About the fact that health care reform wasn't a socialized government takeover? About Social Security not going bankrupt? About how every court ruling conservatives don't like doesn't necessarily constitute "liberal judicial activism"? No, we're told, not those truths.

Movements -- real movements that make a difference and stand the test of time -- are about more than buzz words, television personalities, and self-aggrandizement. Change -- transformational change that sets nations on new courses -- is more than vague, shallow promises about "freedom."

The Captured Government

2010-08-24T01:30:00.000-04:00

Mike Lux at Open Left has an interesting analysis of how frustration with government because of the dominance of narrow special interests is manifesting itself in the political debate.

This is going to sound counter-intuitive at first but I have become convinced in the course of discussions with both conservative and progressive people in recent months that at its core, the surge in anti-government sentiment and the progressive angst in the Obama era so far both come from the same root issue. The heart of the problem is that our government has become captured by a small number of very big and very powerful corporate interests, and that has made the federal government increasingly dysfunctional.

This dysfunction feeds the right-wing plenty of fuel for its anti-government-all-the-time narrative, helping them build their movement. Unfortunately, though, it has also created a crisis point for progressives. Progressives have always understood that government not only has an important role to play in promoting the public good in areas the market doesn't work well, but is sometimes the only entity that can be strong enough to take on monopolistic or oligarchic private corporations who can become too powerful in a free market economy. When government gets captured by these powerful interests and becomes dysfunctional as a result, it puts progressives in a bad spot: defending the role of government when it keeps screwing up doesn't play very well with voters.

Because the progressive movement got used to the federal government playing a mostly positive role in economics, civil rights, the environment, and other issues during the New Deal era and the decades after, and because we don't worship the free market in all things and at all times the way conservatives do, there has been a tendency on our side in these last three decades of brutal attack on all things government to be reflexively defensive about it. As one example, I have had friends argue that progressives should avoid using the term "government waste" because it just feeds a bad frame about government. I have also heard many people talk about how important it is for us to be spending a lot of time explaining to people the positive role of government.

As someone who wrote about the historic political debate between the conservative and progressive movements, I don't agree with these arguments. The role and size of government in our society has changed dramatically over the course of American history, as has the role and size of private corporations, but the bedrock values and goals of the progressive movement have not changed. We stand for more democracy, more equality, and a better economic situation for poor and middle-income people, and we oppose trickle-down economics and the concentration of wealth and power for economic elites. To get better results in terms of those goals, we have frequently turned to government. But government is only a means to those ends, not the ends themselves- and it is not the only means to those ends, either. I want wages to go up for poor and working class people, and that can happen because the minimum wage increases (government) or through workers organizing a union and negotiating (collective action). I want to lessen the concentration of wealth and power of big corporations, and that can happen through regulation and anti-trust and progressive taxation (government), or through class action lawsuits, consumer boycotts, and shareholder resolutions (collective action). Of course it is always better for our purposes to have government on the right side, but we are not limited to government action to improve people's lives, and we also shouldn't be stuck defending government when it is on the wrong side.

How Voters Choose

2010-08-18T00:36:00.000-04:00

Ezra discusses what drives voters decisions.

First, campaigns don't matter as much as we think. I take that as a good thing: Democracy shouldn't be overly reliant on whose political consultants are better at spinning the truth into advertisements and attack mailers.

Second, "elections writ large depend more on performance than on policy -- that is, they depend more on how things are going (for which the incumbent party is on the hook) than on specific policies, bills, legislation, etc." That's a bit unfair to incumbents, who aren't totally responsible for conditions, but it's nevertheless a fairly decent way for voters to make decisions.

Third is that voters don't approach elections with strong views on policy issues. Instead, they look to the political leaders they already trust to tell them what their views should be. If President Romney had proposed ObamaCare before a mostly Republican Congress, it would've gotten an easy majority of Republicans -- both in Congress and in the country -- and almost zero Democrats. Party affiliation drives policy opinions, and not the other way around.

The political science take on elections is sometimes accused of being nihilistic, as if doubting the importance of campaigns is like quoting Nietzsche and dressing in black. In fact, it's fairly optimistic: Elections are driven by the real state of the country, not the money candidates spend to advertise to voters. You could say that it would be better if people made their judgments based on the policy Congress was passing to change conditions rather than the conditions themselves, but when you really look into how people decide which policies they support, it's actually not clear that a more policy-centric process would be an improvement. Conditions are what voters know best, and so it's good that they rely on them.

The Bill Will Come Due Before They Know It

2010-08-12T01:14:00.000-04:00

Steve Benen on the political trade-off behind the Republicans embrace of changing the 14th Amendment.

When Republican leaders embraced partial repeal of the 14th Amendment, knowing full well that this isn't going to happen, it seemed pretty obvious that we were seeing a cynical, nativist, election-year scheme at work. The message wasn't even subtle -- the GOP is prepared to be just as reactionary as its base when it comes to immigration, even if that means going through the motions on giving the Constitution a little touch-up.

The goal is to win some votes in the short term. Harold Meyerson reminds us that the ploy -- and the larger effort behind it -- will very likely cost far more votes in the long term.
By proposing to revoke the citizenship of the estimated 4 million U.S.-born children of undocumented immigrants -- and, presumably, the children's children and so on down the line -- Republicans are calling for more than the creation of a permanent noncitizen caste. They are endeavoring to solve what is probably their most crippling long-term political dilemma: the racial diversification of the electorate. Not to put too fine a point on it, they are trying to preserve their political prospects as a white folks' party in an increasingly multicolored land.
Absent a constitutional change -- to a lesser degree, even with it -- those prospects look mighty bleak. The demographic base of the Republican Party, as Ruy Teixeira demonstrates in a paper released by the Center for American Progress this summer, is shrinking as a share of the nation and the electorate. As the nation grows more racially and religiously diverse, Teixeira shows, its percentage of white Christians will decline to just 35 percent of the population by 2040.
The group that's growing fastest, of course, is Latinos. "Their numbers will triple to 133 million by 2050 from 47 million today," Teixeira writes, "while the number of non-Hispanic whites will remain essentially flat." Moreover, Latinos increasingly trend Democratic -- in a Gallup poll this year, 53 percent self-identified as Democrats; just 21 percent called themselves Republican.
I got the sense that the Bush/Cheney team was very cognizant of this. The Bush team proposed a fair and reasonable approach to comprehensive immigration reform; made an effort to promote ethnic diversity in the administration; and made sure the former president spent plenty of time doing outreach (and pretending to speak Spanish). The result was a very competitive contest for the Latino vote in 2004.

Those efforts appear to have been tossed aside entirely, replaced not only with cynicism and divisiveness, but sacrificing the Republican Party's future for immediate gain. It's less of a gamble and more of last-gasp strategy -- let's just get all the angry white votes we can get right now, the argument goes, even if it means driving a fast-growing minority away for a generation.

It's a dessert topping, it's a floor wax, it's both!!

2010-08-08T01:22:00.000-04:00

Ezra examines the many and varied ways that the Republicans tout the Bush tax cuts.

Republicans have taken something of an infomercial approach to extending the Bush tax cuts. It's not just that they lower tax rates. They also stimulate the economy, increase revenue, shrink government, encourage small businesses, keep the feds from buying private companies, and allow corporations to plan for the future. No word, as of yet, on whether they will blend.

But there's a reason I don't use a blender to listen to the radio or a cloth to cover my house. And there's a reason you don't want to use a raft of tax cuts meant to lower marginal rates as a way to reduce the deficit, which they wouldn't do, or stimulate the economy and encourage small businesses, which they would do poorly.

If you want to help small businesses, cutting taxes for rich individuals -- some of whom file as small businesses -- is an awful way to do it. The average business income on a 1040 is $40,000. Extending the tax cuts for filers making more than $250,000 isn't going to do much for small businesses. But you know what would do a lot for small businesses? The small-business bill, which spends tens of billions of dollars opening lines of credit to small businesses that want to expand. And you know why we don't have a small-business bill? Because Republicans are filibustering it.

Similarly, a bill to reduce the deficit would do a good job of reducing the deficit. The Bush tax cuts, by contrast, will add about $4 trillion to the deficit over the next 10 years. A bill designed to stimulate the economy could do quite a bit to stimulate the economy. But the Bush tax cuts weren't designed to stimulate the economy, and so they're not good at it: You only get about 32 cents of stimulus for every dollar you spend, as opposed to a payroll tax cut or job-creation tax credit, both of which give you about $1.25.

The issue isn't that the Bush tax cuts do nothing but lower marginal tax rates. It's that they do the other things poorly, as those weren't things they were designed to do. Republicans, faced with the expiration date that they passed into law, are now grabbing every argument in the area to support an extension. But the tax cuts don't slice, dice and juice. If Congress wants to, say, help small businesses, it should pass the legislation it's considering to do exactly that. If it wants to reduce the deficit, or stimulate the economy, it should design a bill suited to that purpose. It shouldn't extend the tax cuts as some sort of fourth-best alternative.

The Amendments Are Coming....The Amendments Are Coming

2010-08-07T01:48:00.001-04:00

Think Progress has an excellent compendium of all the Constitutional Amendments that the Republicans and their Tea Party allies have proposed in their goal of perfecting our governmental system (h/t Joan on DailyKos)..

REPEALING CITIZENSHIP: Numerous GOP lawmakers, including their Senate leader and the most-recent Republican candidate for president, are lining up behind a “review” of the 14th Amendment’s grant of citizenship to virtually all persons born within the United States. Such a proposal literally revives the vision of citizenship articulated by the Supreme Court’s infamous pro-slavery decision in Dred Scott v. Sanford. It has no place in the twenty-first century.

REPEALING CONGRESS’ POWER TO REGULATE THE ECONOMY: The Constitution’s “Commerce Clause” gives national leaders broad authority to regulate the national economy, but much of the GOP has embraced “tentherism,” the belief that this power is small enough to be drowned in a bathtub. The most famous example of tentherism is the ubiquitous frivolous lawsuits claiming that health reform is unconstitutional, but these lawsuits are part of a much greater effort. In his brief challenging health reform, Virginia Attorney General Ken Cuccinelli claims that Congress is allowed to regulate “commerce on one hand” but not “manufacturing or agriculture.” Cuccinelli’s discredited vision of the Constitution was actually implemented in the late 19th and early 20th century, and it would strike down everything from child labor laws to the federal ban on whites-only lunch counters.

REPEALING CONGRESS’ POWER TO SPEND MONEY: The Constitution also gives Congress power to “provide for the common defense and general welfare,” a broad grant of authority to create federal spending programs such as Social Security. Sen. Tom Coburn (R-OK), however, recently called upon the Supreme Court to rewrite the Constitution’s clear language and repeal parts of the budget he doesn’t like. A Texas GOP official even went so far as to claim that the federal highway system is unconstitutional. Should this GOP vision of the Constitution ever be adopted, it could eliminate not just Social Security, but also Medicare, Medicaid, federal education spending and countless other cherished programs.

REPEALING CONGRESS’ POWER TO RAISE MONEY: The Constitution also gives Congress broad authority to decide how to distribute the tax burden. Thus, for example, Congress is allowed to create a tax incentive for people to buy houses by giving a tax break to people with mortgages, and it is allowed to create a similar incentive for people to buy health insurance by taxing people who have health insurance slightly less than people who do not. Nevertheless, the frivolous assaults on health reform would eliminate this Constitutional power. Many Tea Party Republicans go even further, calling for a full repeal of the 16th Amendment, the amendment which enables the income tax. Paying taxes is never popular, but it would be impossible to function as a nation if America lacked the power to raise the money it needs to pay our armed forces, among other things.

REPEALING EQUALITY: The Constitution entitles all persons to “equal protection of the laws,” a provision that formed the basis of Judge Vaughn Walker’s decision yesterday that California cannot treat gay couples as if they are somehow inferior. Immediately after this decision was announced, former House Speaker Newt Gingrich (R-GA) called upon Congress to “act immediately” to overturn it — something that it could only do through a constitutional amendment. Of course, Newt’s proposal does nothing more than revive President Bush’s call for a constitutional amendment repealing the parts of the Constitution that protect marriage equality.

REPEALING FUNDAMENTAL RIGHTS: As Judge Walker also held, marriage is a fundamental right protected by the Constitution’s Due Process Clause. The GOP’s anti-gay amendment would repeal this constitutional protection as well.

REPEALING ELECTION OF SENATORS: Finally, a number of GOP candidates have come out in favor of repealing the 17th Amendment, the provision of the Constitution which requires direct election of senators, although many of these candidates also backed off their “Seventeenther” stand after it proved embarrassing. It is simply baffling how anyone could take one look at the U.S. Senate, and decide that what it really needs is even less democracy.

Tax Cut Follies

2010-07-27T01:27:00.001-04:00

Jonathan Chait on the politics surrounding the upcoming debate over the expiring Bush tax cuts.

Now, here's the underlying dynamic. Raising taxes on the middle class is unpopular. But raising taxes on the rich is wildly popular. The truth is that neither party cares very much about the portion of the Bush tax cuts that benefit the middle class. Republicans just threw that in to sell the upper-bracket tax cuts, which is what they care about. Democrats might prefer a more progressive tax code with lower middle-class taxes, but most of them would rather have the revenue instead. But Democrats promised not to raise taxes on people earning less than $250,000 a year -- a promise they felt they had to make in order to win. And they can't break that promise without suffering political consequences.

Republicans, on the other hand, don't want to pass an extension of the middle-class Bush tax cuts without the upper-bracket tax cuts. That would leave the federal tax code more progressive than it was under Bill Clinton -- you'd have a combination of Clinton-era tax rates on the rich and Bush-era tax rates on the middle class. Conservatives have been fretting about such a result for more than a year, warning ominously about a country in which half the population pays no income tax. (They'd still pay other taxes, but the central Republican goal is to minimize the progressivity of the tax code.)

So we're down to a game of chicken. Here's why the Democrats hold the whip hand. They can pass an extension of the middle-class Bush tax cuts through the House. If Republicans let the bill pass, then they've lost their leverage to extend the unpopular Bush upper-income tax cuts. If they filibuster it, then Democrats can blame them for raising taxes on middle-class Americans. It would let Democrats out of their pledge. (Hey, they tried to keep the middle-class tax cuts.) Then nothing would pass, and we'd instantly revert to Clinton-era rates across the board.

Afghanistain After the Leaks

2010-07-27T01:09:00.002-04:00

Sully on the WikiLeaks Afghanistan document dump.

What do we really learn from the WikiLeaks monster-doc-dump? I think the actual answer is: not much that we didn't already know. But it's extremely depressing - and rivetingly explicit - confirmation of what anyone with eyes and ears could have told you for years. We already know the following:

The notion that a professional military and especially police force can be constructed and trained by the West to advance the interests of a "national government" in Kabul within any time frame short of a few decades of colonialism is a fantasy.

We are fighting a war as much against the intelligence services of Pakistan as we are the Taliban. They are a seamless part of the same whole, and until Pakistan is transformed (about as likely as Afghanistan), we will be fighting with two hands tied behind our backs.

This is the Taliban's country. Fighting them on their own ground, when they can appear in disguise, can terrify residents by night if not by day, and fight and then melt away into the netherworld of mountains and valleys is all but impossible. And as the occupation fails to secure popular support (and after ten years and a deeply corrupt government in Kabul, who can blame the Afghans?), the counter-insurgency model becomes even less plausible than it was before.

The enormous cost in lives and money is in no way proportionate to the eradication of around 500 Qaeda leaders, including bin Laden, who are effectively being protected by a foreign government, Pakistan, we aid with a $1 billion a year.

His conclusion is simple.

When one weighs the extra terror risk from remaining in Afghanistan, the absurdity of our chief alleged ally actually backing the enemy, the impossibility of an effective counter-insurgency when the government itself is corrupt and part of the problem, the brutality of the enemy in intimidating the populace in ways no civilized occupying force can counter, the passage of ten years in which any real chance at success was squandered ... the logic for withdrawal to the more minimalist strategy originally favored by Obama after the election and championed by Biden thereafter seems overwhelming.

When will the president have the balls to say so?

The Stimulus Failure

2010-07-27T00:36:00.000-04:00

Ezra explains what went wrong with the stimulus.

The original stimulus package should've been bigger. Rep. David Obey, chairman of the House Appropriations Committee, says the Treasury Department originally asked for $1.4 trillion. Sen. Kent Conrad, chairman of the Senate Budget Committee, wanted $1.2 trillion. What we got was a shade under $800 billion, and something more like $700 billion when you took out the AMT patch that was jammed into the package. So we knew it was too small then, and the recession it was designed to fight turned out to be larger than we'd predicted. In the end, we took a soapbox racer to a go-kart track and then realized we were competing against actual cars.

This was a mistake, of course. But the mistake may not just have been the size of the stimulus package. I wonder if it wasn't fed by a belief that there'd be other chances. If all we needed was the $700 billion package, then great. But if unemployment remained high and the recovery had trouble taking hold, surely there would be the votes for further stimulus and relief spending. No one in the political system could possibly look at 10 percent unemployment and walk away from it, right?

Wrong. Ten percent unemployment and a terrible recession ended up discrediting the people trying to do more for the economy, as their previous intervention was deemed a failure. That, in turn, empowered the people attempting to do less for the economy. So rather than a modestly sized stimulus leaving the door open for more stimulus if needed, its modest size was used to discredit the idea of more stimulus when it became needed.

The Lunatics Taking Over the Asylum

2010-07-18T23:05:00.000-04:00

Jonathan Chait on the takeover of the GOP by its radical fringe.

One interesting sidelight of the current election cycle is that there are several races in which the Republican establishment has either lost control of the race or lost any sense of its own partisan self-interest. The Nevada Senate race is a prime example. Harry Reid, once a dead man walking, is now sitting on a nice lead because Republicans nominated a lunatic to oppose him. "A total f*** up by the state and national Republicans to allow Angle to get nominated," a source notes to Ben Smith.

But of course there are numerous such fuckups. In Kentucky, Republicans turned a rock-solid safe seat into a toss up by nominating ultra-radical Rand Paul over party hack Trey Grayson. In Pennsylvania, they turned a relatively safe seat in Arlen Specter, who had been almost completely housebroken by the right since 2004, into another toss-up. (More importantly, they drove Specter from the party and made him the 60th Senate seat, allowing the passage of health care reform.) And in Florida, they turned another safe hold into a toss-up by challenging, and driving from the party, Charlie Crist.

Florida is actually the closest thing to a rational move for the right. First, I think Crist's current lead is far from safe, because the Democratic vote is likely to consolidate above its current abysmal level and that will come out of Crist's hide. Second, Crist is a genuine moderate, so there really was a more reasonable risk-reward calculation for conservatives looking to gain a more ideologically reliable Senator at the risk of losing the seat altogether. There's at least a strong chance that the Rubio challenge will burn them.

This is four Senate seats put at serious risk by running right-wing primary challenges, plus one enormous liberal domestic policy accomplishment. In all these instances, conservatives either celebrated the right-wing primary challenge or, at the very least, quietly accepted it. There was very little pushback at the time from the party establishment, other than a feeble effort in Kentucky. I have seen no recriminations whatsoever in hindsight. And yet it seems perfectly clear that the effect of these challenges has been a disaster from the conservative perspective. You don't have to love Sue Lowden to understand that a 90% chance of Lowden winning is better than a 20% chance of Sharron Angle winning. Nor is there any recognition on the right that conservatives paved the way for health care reform by driving Specter out. In conservative lore, the Pat Toomey primary challenge remains a glorious triumph, when in fact it's a disaster of historic proportions.

Obviously the conservative movement is intoxicated with hubris right now. Part of this hubris is their belief that the American people are truly and deeply on their side and that the last two elections were either a fluke or the product of a GOP that was too centrist. It's a tactical radicalism, a belief that ideological purity carries no electoral cost whatsoever. Right-wing tactical radicalism has an old pedigree, and of course there is an equivalent (though less influential) tactical radicalism on the left-wing of the Democratic Party. Tactical radicalism is not the same thing as ideological radicalism. Tactical radicals are a subset of ideological radicals; some ideological radicals have clear-eyed of the pragmatic steps needed to advance their goals incrementally.

In the past, the Republican Party has always managed to hold in check the tactical radicalism of its base. It's starting to run wild. In past elections, I would have totally discounted the possibility that the party might nominate a figure like Sarah Palin, because the party establishment has always been strong enough to push aside candidates who were not strong electoral vehicles for conservatism. I'm no longer sure they have that power anymore.

It's possible that the GOP wave will be strong enough in 2010 to push most or even all these weak candidates into office. If that doesn't happen, I wonder if we'll start to see some recriminations. If it does, tactical radicals will be even more emboldened, and I don't see what could stop Sarah Palin from taking the 2012 nomination if she wants it.

Deficit Posers

2010-07-15T00:10:00.000-04:00

Matt does not understand why anyone takes Republican protestations about deficit reduction seriously.

It’s genuinely hard for me to know what would persuade people that I’m correct about this, but to recap the key points:
1) There have been two presidents who were members of the modern conservative movement, Ronald Reagan and George W Bush, and they both presided over massive increases in both present and projected deficits.

2) The major deficit reduction packages of the modern era, in 1990 and 1993, were both uniformly opposed by the conservative movement.

3) When the deficit was temporarily eliminated in the late-1990s, the mainstream conservative view was that this showed that the deficit was too low and needed to be increased via large tax cuts.

4) Senator Mitch McConnell says it’s a uniform view in his caucus that tax cuts needn’t be offset by other changes in spending.

5) The deficit reduction commission is having trouble because they think conservative politicians won’t vote for any form of tax increase.
In sum, there are zero historical examples of conservatives mobilizing to make the deficit smaller. What is true is that most conservatives oppose increases in non-military spending when those increases are proposed by Democratic presidents. A minority of conservatives are more consistent opponents of increases in non-military spending. But the key element of conservative fiscal policy is that tax revenue as a percent of GDP should be made as low as possible. This isn’t a goal they pursue that stands in some kind of balance with concern about the deficit, it’s the only goal they pursue. You can like that or not, but every single journalist who writes articles about the deficit debate that doesn’t highlight the conservative movement’s deep, decades-long hostility to deficit reduction is being grossly irresponsible.

Those Nutty Neocons

2010-07-10T01:09:00.000-04:00

Sully lambastes the neocons once again.

It tells you something about the laws of unintended consequences (something missing from the neocon handbook) that the man they championed as Iraq's "democratic" leader, Nouri al-Maliki, recently went to Beirut to pay his respects to a Hezbollah mullah regarded as a terrorist by the neocon chorus. It also tells you something that the neocon attempt to impose crippling sanctions on Iran is now being undermined by ... large amounts of oil supplies getting to Iran by road via Iraqi Kurdistan.

What has neoconservatism achieved? In Afghanistan, the best possible option is a country dominated by an increasingly Islamist and nuclear-armed Pakistan. In Iraq, the best possible option is a country dominated by Shiites far more aligned with Iran than many Sunni Arab states. And so the upshot of the Bush-Cheney years is an empowerment of both Iran and Pakistan, the two Muslim countries either with or close to nuclear capacity.

That is the end result of a policy designed above all to prevent WMDs getting into the hands of terrorists. I mean: you couldn't make this up.

And still they want more war. In fact, they are now angling for American support for Sunni Arab states (and Israel) to launch a war against the Shiite power of Iran. Not content with enmeshing the US in two intractable wars, they actually want America to take sides in the ancient intra-Muslim feud between Shiite and Sunni. Yes, that sounds like something brilliant doesn't it? No unintended consequences could come from diving into that briar patch.

And, remember, nothing in the neoconservative mind exists that can actually take account of flaws in their own thinking. Because neoconservatism is a doctrine, and a doctrine cannot have flaws, just as neocon columnist can never make errors, or account for them.

Rove to the Rescue

2010-07-08T23:59:00.005-04:00

Steve Benen reacts to Karl Rove's op-ed in the Wall Street Journal that urges Republicans to run in the fall on protecting the Bush tax cuts as the way to generate economic growth.

That's right -- Karl Rove's "jobs and prosperity" agenda encourages Republicans to, quite literally, support the Bush/Cheney "jobs and prosperity" agenda from the last decade.

There was no indication that Rove was kidding, or that his column was published as some kind of satire.

Look, I realize that Rove isn't the sharpest crayon in the box, but his advice to the GOP is so ridiculous on its face, I'm hard pressed to imagine why the Wall Street Journal published it. His argument is that the Bush/Cheney policies that already failed spectacularly might work if we just try them again.

How would Rove suggest paying for these tax cuts? The same way Rove dealt with this when he ran the White House: by not paying for them at all. The tax cuts that didn't create jobs and didn't generate economic growth did leave us with massive budget deficits, but that doesn't stop ol' Karl from insisting that the already-failed policies will this time make reducing deficits -- the deficits Rove left for Democrats to clean up -- "more manageable."

Republicans will win, Rove concludes, if they just tell voters we should go back to the policies we already know don't work. Bush failed miserably, but if we just give his painful failures one more try, everything will work out fine.

Honestly, maybe Karl Rove is just some kind of performance artist, hoping to make Republican pundits look foolish. It would make more sense than Rove actually believing this nonsense.

John Boehner's America

2010-07-05T01:12:00.001-04:00

Brooklynbadboy has a marvelous post on Daily Kos commenting on John Boehner's lament that "They are snuffing out the America I grew up in."

I don't know the America John Boehner grew up in.

I don't know what it's like for a high school graduate to be able to get a union job at a factory and earn enough money to support a wife and kids. I don't know what it's like to be born at a hospital and have my parents rejoice at my birth rather than cower in fear of the bill. I don't know what it's like to have food, clothing and housing expenses constitute reasonable percentage of household income.

I don't know what it's like to grow up as child without fear of gangs, crooked police, and a proliferation of guns and ammo. I don't know what it's like to get a job as a paperboy or delivery boy because those jobs are done by adults. I don't know what it's like to come home to momma or poppa every day because one wage earner can support a family. I don't know what it's like to attend well-financed public schools with well-paid teachers that are the envy of the world. I certainly don't know what it's like to attend an inexpensive private school like John Boehner did because today only the wealthy can afford private school.

I don't know what it's like to have shop class in high school or apprentice programs to learn a trade. I don't know what it's like to be able to simply pick a college, write them a letter, and then attend. One has to hire a consultant these days and I couldn't afford that. I don't know what it's like to have no worries about my parents mortgaging their home to finance my education. I don't know what it's like to get through college without amassing a mountain of debt and ruined credit. I don't know what it's like to have multiple job prospects upon graduation.

I don't know what it's like to look forward to 30 years at one company. I don't even know what it's like to have one profession! I can't even begin to fathom what it must have been like to have an inexpensive, reliable vehicle to go from place to place. Good roads to go from place to place. Inexpensive gas to get from place to place. Public transportation that didn't take 15 percent of a paycheck. I don't know what it's like never having to choose between food and gas to get to work every day.

I don't know what it's like to go to a bank and be offered one type of 30-year fixed rate mortgage. I don't know what it's like not to have to worry about bank fees that cost more than small household appliances. Usury laws. Boy, those must have been nice! There were all those heavy regulations on banks that were in place since the 1930's. John Boehner didn't have to worry about financial crashes during his first 37 years of life because there weren't any. Since deregulation began in 1982, I've had three.

I don't know what it's like to live under a government that looked out for ordinary people. Never have. I don't know what it's like to have a government that did great things like build national highway systems or explore the heavens. Or alleviate poverty in city centers and far-away mountains. I don't know what it's like to never have to worry about the national debt. That's because in John Boehner's America rich people paid taxes. I bet it was really awesome to live in an America that was a net exporter rather than importer. A nation that was a creditor and not a debtor. A nation where the brightest minds and best salaries went into science and engineering rather than banking and advertising.

I don't know what it's like to know there is a pension waiting for me when I retire. I've got to risk it on the stock market or else I'm surely screwed, assuming I'll have any money to save. Maybe if I can overcome 29.9 percent credit card rates, disappearing private sector unions, $100,000 student loans, 15-year adjustable-rate-mortgages, kids at underfunded, inadequate public schools, health insurance that costs more than food, the saving up of the 401(k) and then cashing in of the 401(k) and then saving up of the 401(k) again, maybe I'll just barely have some inkling of the America John Boehner grew up in.

I do know what it's like to have very low taxes. Hooray.

John Boehner grew up in an America ruled by FDR's Democratic majority. I grew up in an America ruled by Ronald Reagan's Republican majority. The America he grew up is already "snuffed out." I doubt he will ever realize that it was people like him who did the snuffing.

Don't Rile Up Taibbi

2010-06-30T00:44:00.001-04:00

Matt Taibbi eviscerates Lara Logan of CBS after Logan blasts the RS article on McChrystal.

Lara Logan, come on down! You're the next guest on Hysterical Backstabbing Jealous Hackfest 2010!

I thought I'd seen everything when I read David Brooks saying out loud in a New York Times column that reporters should sit on damaging comments to save their sources from their own idiocy. But now we get CBS News Chief Foreign Correspondent Lara Logan slamming our own Michael Hastings on CNN's "Reliable Sources" program, agreeing that the Rolling Stone reporter violated an "unspoken agreement" that journalists are not supposed to "embarrass [the troops] by reporting insults and banter."

Anyone who wants to know why network television news hasn't mattered since the seventies just needs to check out this appearance by Logan. Here's CBS's chief foreign correspondent saying out loud on TV that when the man running a war that's killing thousands of young men and women every year steps on his own dick in front of a journalist, that journalist is supposed to eat the story so as not to embarrass the flag. And the part that really gets me is Logan bitching about how Hastings was dishonest to use human warmth and charm to build up enough of a rapport with his sources that they felt comfortable running their mouths off in front of him. According to Logan, that's sneaky — and journalists aren't supposed to be sneaky:

"What I find is the most telling thing about what Michael Hastings said in your interview is that he talked about his manner as pretending to build an illusion of trust and, you know, he's laid out there what his game is… That is exactly the kind of damaging type of attitude that makes it difficult for reporters who are genuine about what they do, who don't — I don't go around in my personal life pretending to be one thing and then being something else. I mean, I find it egregious that anyone would do that in their professional life."

When I first heard her say that, I thought to myself, "That has to be a joke. It's sarcasm, right?" But then I went back and replayed the clip – no sarcasm! She meant it! If I'm hearing Logan correctly, what Hastings is supposed to have done in that situation is interrupt these drunken assholes and say, "Excuse me, fellas, I know we're all having fun and all, but you're saying things that may not be in your best interest! As a reporter, it is my duty to inform you that you may end up looking like insubordinate douche bags in front of two million Rolling Stone readers if you don't shut your mouths this very instant!" I mean, where did Logan go to journalism school – the Burson-Marsteller agency?

But Logan goes even further that that. See, according to Logan, not only are reporters not supposed to disclose their agendas to sources at all times, but in the case of covering the military, one isn't even supposed to have an agenda that might upset the brass! Why? Because there is an "element of trust" that you're supposed to have when you hang around the likes of a McChrystal. You cover a war commander, he's got to be able to trust that you're not going to embarrass him. Otherwise, how can he possibly feel confident that the right message will get out?

The Script is Confusing

2010-06-23T00:33:00.000-04:00

Steve Benen zeroes in on the growing confusion on the right as to whether Obama is a bully or a wimp.

The tragically embarrassing Michael Barone has decided that President Obama has resorted to "thuggery" in dealing with BP and the oil spill disaster. That seems consistent with the broader far-right push against the president -- or at least half of it.

After all, what's the conservative message about Obama? He's not only a "thug," the president and his team are also "bullies." Obama isn't above a "Chicago-style political shakedown." Bachmann thinks he runs a "gangster government."

The president, we're told, is a hardball partisan operator, who doesn't believe in compromise. One can almost imagine Obama in the Oval Office, polishing his brass knuckles.

Except, as digby reminded us, conservatives are simultaneously arguing that the president has adopted the exact opposite persona: he's a professorial pushover. The conservative line includes phrases like "limp and weak" to describe the president. He's not tough enough. He bows too much. He doesn't instill enough fear.

Is it too much to ask that the right pick one? The president can be a vicious thug, intimidating his way into getting what he wants, or he can be a spineless weakling, intimidating to no one.

He can't, however, be both.

Your Liberal Press At Work

2010-06-21T00:46:00.000-04:00

Eric Boehlert blames the press for enabling right-wing candidates to avoid serious interviews (h/t Steve Benen).

Why are they to blame for the two Republican candidates and their current refusal to talk openly to reporters who don't work for Fox News or some other RNC-friendly outlet? Journalists are to blame because Sharron Angle in Nevada and Rand Paul in Kentucky are simply following Sarah Palin's strategy of stiffing the press; an insulting approach that journalists themselves let happen and, in a collective act of cowardice, refused to protest.

I've been writing about Palin's press boycott for months now, simply because we've never seen anything like this. We've never seen a high-profile politician categorically refuse to engage with serious, independent journalists. And we've certainly never seen a politician stiff the press and then have the press lay down in response. We've never seen the press so willingly get steam-rolled before. But with Palin and her news media boycott, that's exactly what's happened: Palin refuses to acknowledge their existence (except to ridicule it) and in return they fawn over her.

So why is anybody surprised that controversial senatorial candidates such as Angle and Paul, after having recently stepped in on the campaign trail, are now duplicating Palin's strategy and declining to talk to legitimate, non-partisan reporters? That's right, we now have two major party candidates running for state-wide office who pretty much won't answer questions from reporters.

This is beyond unprecedented. It's Bizarro World.

But guess what? It's the press' fault. They opened this door when Palin told them to buzz off. And rather than fighting back, rather than calling Palin out for this timidity and her refusal to have an honest exchange via public dialogue, reporters reduced themselves to typing up her Facebook posts as news and launching a Twitter beg-a-thon. (Boy, that'll show her!)

This election cycle it's Angle and Paul who have essentially opted out of the press pool. But next cycle we'll see more and more Republicans who decide they're also done talking to the press and will only sit down for Fox News and hold audience for the GOP Noise Machine. Obviously, the long-term implications for democracy here are alarming.

But again, this is all the press' fault. When confronted with Paliln's audacious blackout, journalists blinked.

Obama's Speech

2010-06-17T00:59:00.000-04:00

Ezra on Obama's oil spill speech:

I'd go so far as to say that last night's speech got the worst reaction of any speech Obama has given since his address at the DNC convention in 2004. Ross Douthat rounds up some of the commentary, and to unexpected comic effect, here. But for all that, it wasn't that bad of a speech. It's more of a bad situation.

Start with the BP spill. I thought the president did all right in this section, but the reality is there's not a whole lot he can do. The oil gushing into the gulf is not going to be stopped by words, and it's not even clear that it'll be stopped by policies. If there were an obvious path forward, it would've been tried by now. Sarah Palin tried to claim otherwise, but even Bill O'Reilly wasn't credulous enough for that one. If they could stop this thing, they would.

Then there's a climate bill. There's no speech Obama could've given that would've gotten him to 60 votes, or anywhere near to it. Democrats pretty clearly believe that any tax or price on carbon is a loser for them, so any effort by the White House to set that out as a marker will just allow Republicans to beat them over the head with it. The end result is no carbon bill, and even less of a chance for one at some future date.

So operationally speaking, the gap between what people want to happen right now and what Barack Obama could do, or set in motion, with a speech was pretty large. But there was a hunger, I think, for Obama to convince us that he had some kind of plan. Particularly on a climate bill, very few got that sense. And that's where the frustration comes from.

As Brad Plumer writes, climate change is "arguably the biggest, most severe problem the world faces. And it's going to be incredibly tough to avert." The fact that there's not currently 60 votes for what we need to do doesn't change the fact that it needs to be done, and so it doesn't exempt us from figuring out a way to get from here to there. Like most everyone else, I don't know how to get from here to there. But then, I didn't run for president. And right now, I'm pretty glad of it.

A New Approach to Taxes

2010-06-15T00:25:00.000-04:00

Kevin Drum proposes a new twist on taxation as an intriguing sop to corporate interests

I figure Mark Halperin is useful for letting us know what the current DC conventional wisdom is, and today he says that the business community's love affair with Barack Obama is over. To be honest, I thought it was over sometime around January 21st of last year, but what do I know? In any case, Halperin writes that not only do the nation's CEOs hate the White House, but things are still going downhill:
The President's current priorities are all liable to make a now bad relationship that much worse. The financial regulation bill is viewed as a typically ignorant Washington overreach. The ongoing efforts to deal with the BP spill are seen as proof that Obama is an incompetent manager and serial scapegoater of large corporate interests. And the attempt to use the Gulf crisis to revive the stalled effort to get Congress to pass major energy legislation appears to many business types as a backdoor gambit to raise taxes on corporations, mom-and-pop enterprises and consumers.
Even by bizarro standards I don't get the "scapegoater of large corporate interests" thing at all. Is the business community upset that Obama is blaming BP for a blowout at BP's oil platform? Or what?

But forget that. The other two items suggest a way to take those business lemons and make lemonade out of them. Here's my idea: Obama should propose that the corporate income tax be abolished completely, to be replaced by a carbon tax and a financial services tax. And then sit back and see what happens.

Here's the pitch: corporate income taxes are a drag on businesses and are ultimately paid by consumers anyway. That's bad. Conversely, a tax on carbon would reduce our oil use and spur energy efficiency. That's good! Likewise, a tax on financial transactions would reduce speculative volatility and help stabilize the financial sector. Also good! So we'd trade one bad tax for two good Pigovian taxes.

What's more, although receipts from the corporate income tax are down right now thanks to the recession, within a couple of years they should be back up to around $400 billion a year. A financial services tax is probably worth around $100 billion a year, give or take, and that means we'd need a carbon tax of around $300 billion to keep everything revenue neutral. This is far higher than anything we could dream of without the grand corporate income tax bargain and holds out hope of being big enough to actually make a difference.

Am I serious about this? Why not? Everyone should love it. Taxing carbon and financial speculation is a lot more useful than taxing business activity, and I imagine the boffins on the appropriate committees could figure out ways to keep the distributional impacts fairly small. And getting rid of the corporate income tax would not only make business owners deliriously happy (or should, anyway), but it would remove forever Congress's ability to provide quiet subsidies and corporate welfare handouts for their buddies. Conventional wisdom says that the corporate tax code needs to be seriously overhauled every few decades, but why bother? Why not get rid of it altogether instead?

They're Doing It Again

2010-05-30T00:24:00.000-04:00

Steve Benen picks up on the latest feigned right wing outrage attack (over Obama not going to Arlington on Memorial Day) to review the fainting spells that have afflicted the GOP (and Fox News) over the past 16 months.

Several months ago, Atrios noted, "When Dems are president, perfectly normally ways of doing things are rebranded as somehow odd."

Ain't that the truth.

* Teleprompters: This trend of characterizing routine developments as controversial started very early in the Obama presidency. Every modern president has used teleprompters, but Republicans and the media thought it was hilarious and wildly important when Obama did the same thing.

* Bowing: Several presidents have been photographed bowing to foreign heads of state, but Republicans and the media thought it was absolutely scandalous when Obama did the same thing when meeting leaders where bowing is customary.

* Talking to school kids: Presidents Reagan and H.W. Bush spoke to school children in national addresses, even taking a little time to push their political agendas. When Obama delivered a speech encouraging kids to do well in school, Republicans freaked out; Fox News compared the president to Saddam Hussein; and the New York Times literally ran a front-page story about it.

* Czars: For a half-century, presidents have relied on so-called "czars" for various policy areas. By one count, George W. Bush had 36 czar positions filled by 46 people during his two terms. No one cared. Obama's use of czars became the subject of months of media scrutiny, and even congressional hearings in response to Republican apoplexy.

* Oval Office attire: Several modern presidents have been seen in the Oval Office without wearing a suit jacket. When Obama did it, Republicans ran to the press to complain, and the media actually published pieces on the subject.

* Criticizing partisan media: White House complaints about unfair media coverage are as old as the republic. When the Obama White House noted what is plainly true about Fox News -- it's a Republican outlet -- the media went a little berserk, with the Washington Post and NPR characterizing the administration's criticism as "Nixonian."

* Reconciliation: Republican policymakers have relied on reconciliation to get around filibusters for decades. When Obama recommended the same tactic for health care, the GOP pretended it was an outrageous assault on the political process, and the media pretended Republicans' cries were legitimate.

* Industry bailouts: Government bailouts of struggling American industries and major companies have been common for decades. When Obama rescued GM, it was used as an example of his purported desire to a communist dictator.

* Campaign intervention: Every president has had a hand in campaign activities, with several presidents offering jobs to candidates to get them out of various races. When the Obama White House intervened in Pennsylvania's Democratic Senate primary -- offering a House member an unpaid advisory gig -- the media found it fascinating and Republicans called for the FBI and a special prosecutor to intervene.

* Memorial Day: Many presidents have not appeared at Arlington on Memorial Day. When Obama does it, there's a "controversy."

2010-05-27T01:06:00.001-04:00

The FT has a good summary of the possible reasons behind the North Koreans deliberate sinking of the South Korean warship on March 26.

● Revenge
North Korea wanted revenge for a sea battle in November, when one of its ships was badly damaged. The vessel had exchanged fire with South Korean gunboats after straying across a disputed maritime border into what Seoul insists are its waters. South Korean military intelligence says revenge is Pyongyang’s primary motive.

● To smooth the succession
Kim Jong-il, North Korea’s dictator, is almost certainly transferring power to his third son, Kim Jong-un. Some defectors have said he is trying to associate Jong-un’s name with major successes in domestic propaganda. One civic group with contacts in North Korea says celebrations at a naval base directly honoured Jong-un for the sinking.

● An internal power struggle
Some analysts believe the attack could have been the work of a single rogue commander, possibly vying for patronage as the succession gathers pace. North Korea this month made the highly unusual announcement that it was removing Kim Il-chol, a senior admiral on the National Defence Commission, prompting speculation the navy could have exceeded its authority. But most mainstream analysts think the attack would have been impossible without the green light from Kim Jong-il.

● A reversion to hardline ideology
Some scholars say Kim Jong-il had, until last year, been increasingly open to advice from a more liberal faction, advocating market and currency reform. When this backfired, he had no choice but to listen more to Cold War-era ideologues who favoured tactics such as assassinations and submarine attacks. Seoul’s spy service has also recently detained assassins sent into South Korea to assassinate the most senior communist official to flee to the south.

● Breakdown of command in North Korea
Perhaps the most worrying of the possibilities is that Kim Jong-il is no longer in full command, possibly because of a stroke the North Korean leader suffered in 2008. This could mean the sinking was either the result of jostling commanders or poor judgment from Mr Kim himself. Andrei Lankov, a North Korea expert at Kookmin University in Seoul, believes the country has become a “rudderless ship” and that logical decision-making has fallen to pieces, as seen when Pyongyang revalued its currency to disastrous effect late last year.

● To distract from economic woes at home
South Korea’s military intelligence argues the sinking of one of its warships by Pyongyang could distract from hunger and economic failure in the north. However, North Korea openly denies the attack and there is little evidence of it being mentioned in propaganda beyond that intended for small numbers of senior military and Communist party officials.

● Bitterness about G20 meeting in Seoul
Seoul has been turning its presidency of the G20 group of leading economies this year into domestic propaganda, parading how well it has developed economically since the Korean War of 1950-1953. Pyongyang has historically been resentful of South Korea hosting major international events such as the Olympics and the World Cup and has tried to wreck any positive press.

Rand Paul and Civil Rights

2010-05-21T11:02:00.001-04:00

Bruce Bartlett summarizes the central problem with Rand Paul's opposition to the Civil Rights Act of 1964.

As we know from history, the free market did not lead to a breakdown of segregation. Indeed, it got much worse, not just because it was enforced by law but because it was mandated by self-reinforcing societal pressure. Any store owner in the South who chose to serve blacks would certainly have lost far more business among whites than he gained. There is no reason to believe that this system wouldn't have perpetuated itself absent outside pressure for change.

In short, the libertarian philosophy of Rand Paul and the Supreme Court of the 1880s and 1890s gave us almost 100 years of segregation, white supremacy, lynchings, chain gangs, the KKK, and discrimination of African Americans for no other reason except their skin color. The gains made by the former slaves in the years after the Civil War were completely reversed once the Supreme Court effectively prevented the federal government from protecting them. Thus we have a perfect test of the libertarian philosophy and an indisputable conclusion: it didn't work. Freedom did not lead to a decline in racism; it only got worse.

Sadly, it took the Supreme Court more than 50 years after Plessy before it began to undo its mistake in Brown. This led to repeated efforts by the Eisenhower administration to enact civil rights legislation, which was opposed and gutted by Senate Democrats led by Lyndon Johnson. But by 1964, it was clear to Johnson that the tide had turned. The federal courts were moving to dismantle segregation to the extent they could, and the 1963 March on Washington, the murder and beating of civil rights demonstrators in the South and growing awareness of such atrocities changed the political climate and made the Civil Rights Act of 1964 possible--despite the filibuster against it by Senator Robert C. Byrd, who still serves in the Senate today.

If Rand Paul were saying that he agrees with the Goldwater-Rehnquist-Bork view that the Civil Rights Act of 1964 was unconstitutional and that the Supreme Court was wrong to subsequently find it constitutional, that would be an eccentric but defensible position. If he were saying that the Civil Rights Act were no longer necessary because of the great strides we have made as a country in eradicating racism, that would also be defensible. But Rand's position is that it was wrong in principle in 1964. There is no other way of interpreting this except as an endorsement of all the things the Civil Rights Act was designed to prohibit, as favoring the status quo throughout the South that would have led to a continuation of segregation and discrimination against African Americans at least for many more years. Undoubtedly, changing mores would have broken down some of this over time, but there is no reason to believe that it would have been quick or that vestiges wouldn't still remain today. Indeed, vestiges remain despite the Civil Rights Act.

I don't believe Rand is a racist; I think he is a fool who is suffering from the foolish consistency syndrome that affects all libertarians. They believe that freedom consists of one thing and one thing only--freedom from governmental constraint. Therefore, it is illogical to them that any increase in government power could ever expand freedom. Yet it is clear that African Americans were far from free in 1964 and that the Civil Rights Act greatly expanded their freedom while diminishing that of racists. To defend the rights of racists to discriminate is reprehensible and especially so when it is done by a major party nominee for the U.S. Senate. I believe that Rand should admit that he was wrong as quickly as possible.

Not Your Grandfather's Tea Party

2010-05-15T01:36:00.001-04:00

Michael Kinsley compares the Tea Party movement to 1960s antiwar activists (h/t Sully).

A final difference: although the 1960s featured plenty of self-indulgence, this wasn’t their essence. Their essence was selfless and idealistic: stopping the war; ending racism; eradicating poverty. These goals and some of the methods for achieving them may have been childishly romantic or even entirely wrongheaded, but they were about making the world a better place. The Tea Party movement’s goals, when stated specifically, are mostly self-interested. And they lack poetry: cut my taxes; don’t let the government mess with my Medicare; and so on. I say “self-interested” and not “selfish” because pursuing your own self-interest is not illegitimate in a capitalist democracy. (Nor is poetry an essential requirement.) But the Tea Party’s atmospherics, all about personal grievance and taking umbrage and feeling put-upon, are a far cry from flower power. There is a nasty, sour, vindictive tone to the Tea Party that certainly existed in the antiwar movement and its offspring, but never dominated the atmosphere created by these groups.

Some people think that what unites the Tea Party Patriots is simple racism. I doubt that. But the Tea Party movement is not the solution to what ails America. It is an illustration of what ails America. Not because it is right-wing or because it is sometimes susceptible to crazed conspiracy theories, and not because of racism, but because of the movement’s self-indulgent premise that none of our challenges and difficulties are our own fault.

“Personal responsibility” has been a great conservative theme in recent decades, in response to the growth of the welfare state. It is a common theme among TPPs—even in response to health-care reform, as if losing your job and then getting cancer is something you shouldn’t have allowed to happen to yourself. But these days, conservatives far outdo liberals in excusing citizens from personal responsibility. To the TPPs, all of our problems are the fault of the government, and the government is a great “other,” a hideous monster over which we have no control. It spends our money and runs up vast deficits for mysterious reasons all its own. At bottom, this is a suspicion not of government but of democracy. After all, who elected this monster?

This kind of talk is doubly self-indulgent. First, it’s just not true. Second, it’s obviously untrue. The government’s main function these days is writing checks to old people. These checks allow people to retire and pursue avocations such as going to Tea Party rallies. This basic fact about the government is no great secret. In fact, it’s a huge cliché, probably available more than once in an average day’s newspaper. But the Tea Party Patriots feel free to ignore it and continue serving up rhetoric about “the audaciousness and arrogance of our government,” and calling for the elimination of the Federal Reserve Board or drastic restraints on the power of the Internal Revenue Service.

Taxing Policy

2010-05-06T01:34:00.000-04:00

Jonathan Chait summarizes the insanity that is Republican thinking on tax policy.

In the Republican view, tax cuts do not increase deficits, because they either 1) produce enough growth to increase revenue, or 2) reduce revenue and thus "starve the beast" of spending, or, somehow, both. A corollary holds that tax hikes do not reduce deficits, because they either 3) decrease economic growth and thus decrease revenue, or because 4) the added revenue will cause the government to spend more money.

This is how discussions of tax revenue that involves any Republican or almost any member of the conservative movement has gone over the last two decades. The discussion is completely detached from reality. All four elements of the Republican tax catechism have been utterly destroyed by empirical reality. It may be theoretically possible for tax rates to be high enough that tax cuts could produce higher revenue, but we're nowhere close to that point. Nor is there any evidence that a lack of revenue will cause the government to stop spending money. (Look around.) Indeed, evidence points in the opposite direction, with rising revenues correlating with falling expenditures, and falling revenues with rising expenditures.

Nonetheless, this has been the state of Republican thinking on taxes since 1990. Supply-side economics gained a foothold within the GOP in the late 1970s, and reached its glory in 1981. But moderate Reaganites realized that supply-side economics had created massive deficits and enormous tax inequities, and clawed back the effects of their policies by enacting tax hikes in 1982 and 1983 and a progressive tax reform in 1986. In 1990, George H.W. Bush clawed back the supply-side revolution a bit more by agreeing to a small tax hike as part of a major deficit reduction package. Conservatives, led by Newt Gingrich, revolted, and vowed never to permit such heresy again. The moderates were banished, and anti-tax absolutism became the sole permissable point of view. Republican candidates for office henceforth had to sign anti-tax pledges (not, however, anti-spending pledges.) In the last presidential election, every major Republican presidential contender asserted that George . Bush's tax cuts had caused revenue to rise. Every major conservative opinion outlet backed this line. (In 2007, libertarian Megan McArdle had a right-wing book review spiked because it asserted that the Laffer Curve did not apply to current U.S. tax rates.)

This is a long way of saying that Kevin Williamson's recent National Review article criticizing supply-side economics is a very big deal. It's not quite a full frontal attack on supply-side economics, more of a lament that the dogma has been stretched in ways that even its founders would find extreme. It resembles Kruschev's "secret speech" (subsequently made public) denouncing Stalin's cult of personality more than actual Perestroika. Still, the article makes plain the clear fact that, at the very least, supply-side economics has been a total failure from the conservative point of view.

Oil Spill.... Blame Cheney

2010-05-05T00:57:00.000-04:00

Jonathan Chait pins the blame for the oil spill on Dick Cheney.

William Galston puts together the pieces on the apparent regulatory failure that led to the Gulf disaster. During George W. Bush's first term, the Minerals Management Service proposed -- and them under heavy industry pressure, relented -- upon requiring a remote-control failsafe to prevent offshore disasters like this one. Galston asks:
So here’s my question: what is responsible for MMS’s change of heart between 2000 and 2003 on the crucial issue of requiring a remote control switch for offshore rigs? What we do know is that unfettered oil drilling was to Dick Cheney’s domestic concerns what the invasion of Iraq was to his foreign policy—a core objective, implacably pursued regardless of the risks. Is there a connection between his infamous secret energy task force and the corrupt mindset that came to dominate a key program within MMS? Would $500,000 per rig have been regarded as an unacceptably expensive insurance policy if a drill-baby-drill administration hadn’t placed its thumb so heavily on the scale?

A National ID Card?

2010-04-30T23:52:00.000-04:00

Ezra on the viability of a national ID card as a component of immigration reform.

But it's still a biometric national ID card. It's handed out by the Social Security Administration and employers are required to check it when hiring new employees. Essentially, if you want to participate in the American economy, you need this card. "Within five (5) years of the date of enactment, the fraud-proof social security card will serve as the sole acceptable document to be produced by an employee to an employer for employment verification purposes," the bill says. "This requirement will exist even if the employer does not yet possess the capability to electronically verify the employee by scanning the card through a card reader."

The theory here is simple: Illegal immigration is a problem because illegal immigrants can get jobs. As the bill says, "in order to prevent future waves of illegal immigration, this proposal recognizes that no matter what we do on the border, our ports of entry, and in the interior, we will not be completely effective unless we can prevent the hiring, recruitment, or referral of unauthorized aliens in America’s workplaces. Jobs are what draw illegal immigrants to the United States."

That's why some think the biometric ID card a game changer for immigration politics. Enforcement might be popular, but the public knows full well that it doesn't really work. As things stand, the border is pretty militarized but the flow of illegal immigrants hasn't stopped. By focusing on the employment prospects of illegal immigrants and forcing workplaces to use biometric identification, Democrats hope to convince people that they have a real strategy for ending the problem of illegal immigration. And if they can convince people of that, they think they can get a path to legalization for the existing community of illegal immigrants as a way to mop up the remainder of the problem.

The oddity of this strategy, of course, is that anti-immigration sentiments run highest among the same communities that are most opposed to national ID cards. Now, it's also the case that if you're going to support citizenship searches for people with Hispanic-looking shoes, it's a bit odd to worry about an ID card to verify employment. But even so, without Republicans on the bill to give this strategy cover, it'll be interesting to see whether the anti-immigrant right embraces the ID card as a way of staunching the flow of illegal immigrants or assails Democrats for trying to create a biometric police state.

The Case Against Goldman Sachs

2010-04-26T01:52:00.000-04:00

Barry Ritholtz (who is a lawyer, as well as a financial advisor and blogger), lists 10 points supporting the case against Goldman Sachs.

1. This is a Weak Case: Actually, no — its a very strong case. Based upon what is in the SEC complaint, parts of the case are a slam dunk. The claim Paulson & Co. were long $200 million dollars when they were actually short is a material misrepresentation — that’s Rule 10b-5, and its a no brainer. The rest is gravy.

2. Robert Khuzami is a bad ass, no-nonsense, thorough, award winning Prosecutor: This guy is the real deal — he busted terrorist rings, broke up the mob, took down security frauds. He is now the director of SEC enforcement. He is fearless, and was awarded the Attorney General’s Exceptional Service Award (1996), for “extraordinary courage and voluntary risk of life in performing an act resulting in direct benefits to the Department of Justice or the nation.”
When you prosecute mass murderers who use guns and bombs and threaten your life, and you kick their asses anyway, you ain’t afraid of a group of billionaire bankers and their spreadsheets. He is the shit. My advice to anyone on Wall Street in his crosshairs: If you are indicted in a case by Khuzami, do yourself a big favor: Settle.

3. Goldman lost $90 million dollars, hence, they are innocent: This is a civil, not a criminal case. Hence, any mens rea — guilty mind — does not matter. Did they or did they not violate the letter of the law? That is all that matters, regardless of what they were thinking — or their P&L.

4. ACA is a victim in this case: Not exactly, they were an active participant in ratings gaming. Look at the back and forth between Paulson’s selection and ACAs management. 55 items in the synthetic CDO were added and removed. Why?
What ACA was doing was gaming the ratings agencies for their investment grade, Triple AAA ratings approval. Their expertise (if you can call it that) was knowing exactly how much junk they could include in the CDO to raise yield, yet still get investment grade from Moody’s or S&P. They are hardly an innocent party in this.

5. This was only one incident: The Market sure as hell doesn’t think so — it whacked 15% off of Goldman’s Market cap. The aggressive SEC posture, the huge reaction from Goldie, and the short term market verdict all suggest there is more coming.
If it were only this one case, and there was nothing else worrisome behind it, GS would have written a check and quietly settled this. Their reaction (some say over-reaction) belies that theory. I suspect this is a tip of the iceberg, with lots more problematic synthetics behind it.
And not just at GS. I suspect the kids over at Deutsche bank, Merrill and Morgan are working furiously to review their various CDOs deals.

6. The Timing of this case is suspect. More coincidental, really. The Wells notice (notification from the SEC they intend to recommend enforcement) was over 8 months ago. The White House is not involved in the timing of the suit itself, it is a lower level staff decision.

7. This is a Complex Case: Again, no. Parts of it are a little more sophisticated than others, but this is a simple case of fraud/misrepresentation. The most difficult part of this case is likely to turn on what is a “material omission.” Paulson’s role in selecting mortgages may or may not be material — that is an issue of fact for a jury to determine. But complex? Not even close.

8. The case looks thin: What we see in the complaint is the bare minimum the prosecutor has to reveal to make their case. What you don’t see are all the emails, depositions, interrogations, phone taps, etc. that the prosecutors know about and GS does not. During the litigation discovery process, this material slowly gets turned over (some is held back if there are other pending investigations into GS).
Going back to who the prosecutor in this case is: His legal reputation is he is very thorough, very precise, meticulous litigator. If he decided to recommend bringing a case against the biggest baddest investment house on Wall Street bank, I assure you he has a major arsenal of additional evidence you don’t know about. Yet.
Typically, at a certain point the lawyers will tell their client that the evidence is overwhelming and advise settling. That is around 6-12 months after the suit has begun.

9. This case is Political: I keep hearing that phrase, due to the SEC party vote. It is incorrect. What that means is the case is not political, it means it has been politicized as a defense tactic. There is a huge difference between the two.

10. I’m not a lawyer, but . . . Then you should not be ignorantly commenting on securities litigation. Why don’t you pour yourself a tall glass of STF up and go sit quietly in the corner.

Tea for Dupes?

2010-04-25T01:32:00.000-04:00

Jonathan Chait looks at the fundamental duplicity behind the Tea Party movement.

Jonah Goldberg says the Tea Party movement is, in part, "a delayed Bush backlash." George W. Bush, the argument goes, was a squish who betrayed the conservative philosophy. But since the right had nowhere to go, the current backlash against deficits and the financial bailout is a time-released backlash against his policies, because "Conservatives don’t want to be fooled again."

But they are being fooled again. Indeed, the Tea Party movement is a vehicle of the fooling. The conservative movement is organized around the principle of opposition to progressive taxation. Tax cuts -- the more regressive the better -- take priority over everything else. That was also the organizing priority of the Bush administration -- which, unsurprisingly, enjoyed overwhelming support from conservative elites and conservative voters in both 2000 and 2004.

Now, one problem with the conservative movement's monomaniacal opposition to progressive taxation is that it's a poor way to shrink government spending. People don't favor tax cuts for the rich, so the only way to enact those tax cuts is to deny that there's any trade off between them and more popular spending programs. Bush was never going to be able to oppose the wildly-popular prescription drug benefit in 2000 while also favoring a huge tax cut. He may have gotten away with abandoning the prescription drug benefit in 2003 by telling the public it was no long affordable, but that would have complicated his ability to pass another huge tax cut in 2003. So he did it all and set a fiscal time bomb.

The backlash against Bush from the right is largely a way of absolving conservatism of Bush's failures. Indeed, the Tea Party movement is largely driving the Republican Party along the same lines that Bush did. The central emphasis of the movement is opposition to progressive taxation -- hence the emphasis on Tax Day rallies, the defining of "Tea" as an acronym for "Taxed Enough Already," and the general Randian flavor of the movement.

On the merits, taxes are a strange focus of conservative ire. President Obama has kept in place the Bush tax cuts for 98% of the public, tax revenues are at a low point, and the stimulus included hundreds of billions of dollars in new tax cuts for businesses and individuals. (To be sure, you can dismiss these as temporary, and I'd agree, but on the same grounds, you ought to dismiss as temporary the rise in stimulus spending that went along with the tax cuts.)

But the emphasis on opposing progressive taxation does serve the interests of the Republican Party just fine. If you look at the general thrust of the Tea party complaints -- the focus on taxes, the persistent denunciations of Medicare cuts -- you can see it's pushing the GOP in the direction it already wants to go, which is to replicate the policy mix of the Bush administration. This isn't a rebellion against Bush's policies but a way of displacing anger at their failure.

Brown for the Count

2010-04-20T01:23:00.001-04:00

Steve Benen on Massachusetts Republican Senator Scott Brown's TV appearance on Sunday.

Yesterday, the dimwitted senator appeared on CBS's "Face the Nation," and was asked about far-right Tea Party activists and their fears about "socialism." Host Bob Schieffer wanted to know if Brown agrees with their paranoia. Here's the senator's response in its entirety, exactly as it appeared in the official transcript:
"I know that the President should start to focus on jobs and job creation and -- and -- and -- and -- and that hasn't been done. Since I've been here we've done health care, which they obviously rammed through by using a parliamentary procedure that has never been used for something this big ever. And then the bill as we're finding out is -- is flawed, seriously flawed. It's going to cost medical device companies in my state, you know, thousands of jobs. But then, we're taking -- we're talking now about regulation reform. We're politicizing that. Maybe -- I've heard illegal immigration is going to come forth. When we're in Pakistan and Afghanistan, the only thing they talked about from the Presidents all the way down to the poorest farmer were jobs. Since I've been here, I've heard zero talk about jobs. So, I'll let -- leave that up to the political pundits, but I know from what I've seen that we need to focus on jobs and the President should start to do so."
Now, with a response like this, it's tough to know where to start. One could point out that Brown is wrong about the focus on job creation by pointing to the stimulus bill that rescued the economy. One could note that Brown is wrong about health care, which wasn't "obviously rammed through by using a parliamentary procedure," but rather, passed the Senate through regular order.

But I was particularly struck by the notion that Brown believes he's "heard zero talk about jobs." I realize Brown isn't the brightest light in the harbor, if you know what I mean, but after only three months in the Senate, I do expect him to have some sense of the bills he's already voted on. For example, he might remember voting on this "tax extenders" bill last month, which was intended to spur job creation, or perhaps voting on this job bill in February. In both instances, Scott Brown voted with Democrats, which was a fairly big deal with his far-right buddies. Seems like the kind of thing he might remember. It really wasn't that long ago.

And yet, there was Brown, telling a national television audience he's "heard zero talk about jobs." That's true, so long as one ignores all the talk about jobs.

Financial Reform: Regulations or Wall Street?

2010-04-14T01:03:00.001-04:00

Ezra shifts his focus from health care reform to financial regulation reform and points out the difference in the background of the debate, especially the divergence in the views of Washington and Wall Street reform advocates.

Financial regulation reform has been just the opposite. The administration and Hill sources I've spoken to have been much more positive on the regulatory proposals than the experts and analysts I've sounded out. Indeed, it's been hard to believe the two sides are looking at the same legislation.

The difference, as far as I can suss it out, appears to be this: A lot of the people examining the bill from afar believe that it doesn't go far enough in reforming Wall Street itself. The financial sector after regulatory reform will look a whole lot like the financial sector before regulatory reform. A lot of the people helping to write the bill see it differently: The regulatory structure will look a lot different after reform than before reform. There will be a body charged with watching systemic risk, and systemically important non-bank entities will be subject to regulation, and derivative bets will (hopefully) be a lot more visible and the Federal Reserve will have a lot more power and information when it needs to break up failed banks.

That difference in what the bill needs to do -- change Wall Street or change the regulation of Wall Street -- is leading to a much more divided elite discussion than we saw during health-care reform. in part, that's because the two sides don't see their interests as aligned. Many people who supported more radical health-care reform proposals saw the Affordable Care Act as a step in their direction. Many people who want more radical reform of Wall Street do not see the proposals on offer as leading to the same endpoint. Regulating this system more effectively is not the first step to changing the sector dramatically.

But as often happens, that distinction is getting confused in the political discussion. The Democratic National Committee's press e-mails have taken to calling this "Wall Street reform." Wall Street reform is what a lot of people would like to see us do. But it's not, as far as they can tell, what we're doing.

Blame the South

2010-04-10T01:45:00.001-04:00

Noah Millman at The American Scene (h/t Sully) posits that the cause of the closing of the conservative mind in recent decades is the growing power of the South in its ranks.

Blame the South. The argument, in a nutshell, is that a successful political coalition in America cannot be dominated by the South, as the GOP currently is. The South is a distinct region in America, significantly different in history and political culture from the rest of the country. Moreover, regional identity in the South is manifested substantially in opposition to the rest of the nation. A political movement dominated by the South will necessarily manifest a political culture that is more similar to that of the South than to that of the rest of the nation, and that political movement is also going to absorb this oppositional element of Southern identity, and will necessarily become overly invested in intellectual shibboleths. What looks like epistemic closure is really just identity politics.

I don’t think this explanation can be dismissed out of hand – in particular, dismissing it out of hand as “insulting” to the South would be in instance of precisely the dynamic I’m outlining. The South does have a distinct history and culture; that culture is substantially oppositional; and the American right is dominated by the South in a way that it has not been before. Dominance of a party by an atypical and oppositional region is just a structural problem. And, if this is a problem, it is going to be a hard one for the American right to solve, because the South is now large enough and strong enough, and remains cohesive enough, that its leaders should expect to lead any coalition of which they are a member.

There Are Idiots

2010-04-08T01:42:00.001-04:00

Ezra riffs on an underlying theme of Michael Lewis's new book on the financial meltdown, The Big Short. He starts by referencing Larry Summers and goes on from there.

Larry Summers famously wrote -- but sadly, did not publish -- a paper that began with a timeless bit of wisdom: "THERE ARE IDIOTS," Summers said. "Look around." That paper was written decades ago. Maybe it's time to finally publish it. Particularly that second line.

Michael Lewis's latest book, “The Big Short,” is an attempt to explain the financial crisis, and in doing, it goes through correlation errors and collateralized debt obligations and mortgage fraud and all the other financial arcana the meltdown forced onto the front pages of our newspapers. But in the end, Lewis's explanation is simpler than all that: There were idiots. And no one was looking around.

The worst of the idiots were the ratings agencies: By slapping that "AAA" seal of approval on packages of bonds made from packages of subprime loans, they said those bonds were no riskier than treasury securities, which are considered virtually risk-free. In retrospect, their analytical mistake was almost comically ridiculous: They figured that each subprime mortgage was a unique little snowflake unto itself, and that what happened to one was irrelevant to what happened to others. Nice thought. In reality, when the teaser rates vanished and the loans revealed their true nature, they all went belly-up at the same time, for the same reason. The rating agencies' idiocy was the idiocy that made everyone else's idiocy possible, because it was what they all pointed to in justification.

But why were they justifying it? The downside risk turned out to be tremendous. And yet the big banks were full of idiots who were selling bonds based on mortgages they knew nothing about. They were run by idiots who were rolling in profits coming from underlings selling bonds based on mortgages they knew nothing about. As things began to go south, they started aggressively selling those packages of bonds to smaller investors who were also dumb to the nature of the underlying asset.

And you could drill down further. There were consumers buying into mortgages they didn't understand at prices that were too good to be true. There were regulators who refused to see the very excesses they were supposed to stop. There was a media that occasionally mentioned the odd divergence of housing prices from their historical norms but didn't see the enormity of the problem.

Partying in the Past

2010-04-08T01:10:00.000-04:00

Ta-Nehisi Coates of the Atlantic pithily eviscerates the modern Republican Party.

The GOP is, effectively, the party of willfully unlettered Utopians. It is the party of choice for those who believe global warming is a hoax, that humans roamed the earth with dinosaurs, and that homosexuals should work harder at not being gay.

That the party of unadulterated quackery also believes that Birth Of A Nation is more true to the Civil War than Battle Cry Of Freedom, is to be expected. Ignorance does not respect boundaries. It is, at times, qualified and those who know more, often struggle to say more. But people who believe that the Census is actually a covert attempt to put Americans in concentration camps, are also likely to believe that slavery was incidental to the Civil War.

This is who they are--the proud and ignorant. If you believe that if we still had segregation we wouldn't "have had all these problems," this is the movement for you. If you believe that your president is a Muslim sleeper agent, this is the movement for you. If you honor a flag raised explicitly to destroy this country then this is the movement for you. If you flirt with secession, even now, then this movement is for you. If you are a "Real American" with no demonstrable interest in "Real America" then, by God, this movement of alchemists and creationists, of anti-science and hair tonic, is for you.

2010-04-04T01:39:00.000-04:00

Steve Benen reviews the recent decision by the Texas School Board to shift educational guidelines away from established history in such areas as separation of church and state and the role of Thomas Jefferson to promoting Phyllis Schlafly and the Heritage Foundation and extrapolates its impact on policy debates.

It's not especially surprising, of course. Reading this, it's hard not to think of the Ron Suskind classic when a senior adviser to then-President George W. Bush dismissed those who "believe that solutions emerge from your judicious study of discernible reality.... That's not the way the world really works anymore. We're an empire now, and when we act, we create our own reality."

If today's conservative Republicans reject reality, it stands to reason that they'll reject history, too.

But it's nevertheless a reminder of why conversations with those immersed in a right-wing ideology tend to be rather frustrating, if not futile, experiences. In order for political discourse to have any meaning or value, there have to be certain agreed upon facts that serve as a foundation for the dialogue. But as the McClatchy piece notes, that foundation is no longer stable -- conservatives frequently choose to believe versions of events that aren't real, because the make-believe version makes them feel better.

The result is an American history in which every era can be distorted to satisfy the far-right ego. Indeed, it continues to apply to more contemporary events -- tell the typical Republican that Ronald Reagan raised taxes in six of his eight years in the White House, and he/she will probably look at you as if you've lost your mind. That is, in fact, what happened, but the right chooses to reject this history, because they don't like it. (Tell these same Republicans that Barack Obama's health care plan is in line with what moderate Republicans have supported for years -- and that the individual mandate was actually a GOP idea -- and you'll get the same reaction, even though it's true.)

For all the talk about getting reasonable people with different ideologies into a room to find common ground on a host of complex issues, it's worth remembering that for many political actors in 2010, there isn't even agreement on the basics. When dealing with a large group of influential conservatives who believe FDR created the Great Depression, Theodore Roosevelt was a socialist, and Joe McCarthy was a hero, what's there to talk about?

Affordable Care Swindles

2010-04-03T02:01:00.001-04:00

Suzy Khimm guest posts on Ezra's blog about the newest in health care scams.

NPR has a good story about how swindlers are already trying to take advantage of the confusion over the Affordable Care Act to run health-care scams:

Days after President Obama signed the $938 billion bill into law, a cable television advertisement exhorted viewers to call an 800-number so they wouldn't miss a "limited enrollment" period to obtain coverage available "now that historic health-care legislation has passed."

And there have already been reports of door-to-door salespeople peddling "Obamacare" insurance policies.

There is, of course, no limited enrollment period for any coverage, and no such thing as a new federal insurance policy named after the president.

As NPR notes, the "bitter and divisive" debate over health reform has been a boon for the scam market, which has sought to exploit the public misconceptions about the bill. Given how quickly the "death panel" meme caught on -- and how long such fabrications have persisted in the political discourse -- the idea of purchasing an "Obamacare" insurance policy might not seem so far-fetched.

Strange Winning Ways

2010-03-27T23:58:00.001-04:00

Matt points to a fundamental truth about movement conservatives in the wake of the Frum firing...how they define success.

I think that to understand what’s wrong with the conservative movement today, you need to think about Barry Goldwater’s 1964 Presidential campaign. In ‘64, the GOP establishment felt that Goldwater was too radical. They said that nominating a hard-rightist like Goldwater would be counterproductive. But conservative activists worked hard, and they did it. Goldwater got the nod. And, just as the establishment predicted, Goldwater got crushed. And just as the established predicted, it proved to be counterproductive. The 1964 landslide led directly to Medicare, Medicaid, Title I education spending, and the “war on poverty.” In the 45 years since that fateful campaign, the conservative movement managed to gain total control over the Republican Party and to sporadically govern the country. But it’s only very partially rolled back one aspect of the Johnson administration’s domestic policy.

Which is just to say that the conservative movement from 1964-2009 was a giant failure. By nominating Goldwater, it invited a massive progressive win that all the subsequent conservative wins were unable to undue. But the orthodox conservative tradition of ‘64 is that it was a great success that laid the groundwork for the triumphs to come.

Which is to say that it’s not just a movement incapable of thinking seriously about the interests of the country, it can’t think rigorously about its own goals. 2009-2010 has already seen the greatest flowering of progressive policy since 1965-66. No matter how well Republicans do in the 2010 midterms, the right will never fully roll back what the 111th Congress has done. And yet, as Andrews suggests, if they win seats in 2010, conservatives will consider their behavior during 2009-10 to have been very successful.

Far Frum Home

2010-03-27T23:23:00.002-04:00

Sully on the Frum firing fiasco.

The Times of London has some useful perspective. Here's the timing, so use Occam's Razor. David writes his "Waterloo" post on Sunday afternoon at 4.59 pm. On Monday morning, the Wall Street Journal publishes an editorial lacerating Frum:
Mr. Frum now makes his living as the media's go-to basher of fellow Republicans, which is a stock Beltway role.
Mid-morning, Frum gets a summons to lunch at AEI, where one way he "makes his living" is removed. This could all be a total coincidence. But the right's fatal miscalculation on healthcare - and their clear defeat last weekend - must surely have led to some gnashing of teeth and fury.

The tea-partiers yell and shoot and throw bricks; the neoconservatives just take one of their own dissidents out and metaphorically shoot him.

The assumption is that conservative intelligentsia acts often as a kind of group-think Politburo in Washington, an elaborate and bizarre conspiracy theory until you realize it's completely true. They loathe liberals; but they hate intellectually honest conservatives more.

Especially when those intellectually honest conservatives are proven right.

Pretzel Logic

2010-03-26T01:01:00.000-04:00

Jonathan Chait looks at the strategic logic that the Republicans have embraced in their fight against HCR.

The most amusing spectacle of the health care debate has been watching Republicans rally with the utmost earnestness around principles that literally nobody within their party had ever considered before the health care debate. So, we've seen them rail against the use of budget reconciliation, previously a procedure they'd employed for major tax cuts, as something akin to dictatorship. They've embraced the notion that passing major legislation that commands less than fifty percent in the polls is an abrogation of democracy, an idea none of them considered when they passed a Medicare prescription drug benefit in 2003 that lacked plurality support.

The most comical iteration of this phenomenon has to be the ongoing attempts by Republicans to overturn health care reform in court on the grounds that the individual mandate is unconstitutional. First of all, as Paul Campos notes, this would be a wild exercise in judicial activism, opposition to which is the alleged lodestar of conservative judicial philosophy. And second, until very recently, Republicans considered the individual mandate not only Constitutional but utterly uncontroversial. Last year, Republican Senators Robert Bennett, Lindsey Graham, Mike Crapo, Judd Gregg and Lamar Alexander all co-sponsored a health care bill that included an individual mandate. Olympia Snowe voted for a Senate Finance Committee health care bill that included an individual mandate before subsequently voting with her entire party to call the mandate unconstitutional. Texas Attorney General Greg Abbott, currently suing to overturn the individual mandate, once supported a mandate that parents purchase insurance for their children.

HCR & Foreign Policy

2010-03-23T01:45:00.001-04:00

Heather Hurlburt on Democracy Arsenal looks at the foreign policy implications of the enactment of health care reform.

1. An international boost. Israeli, Russian and Chinese leaders and elites have all let it be known more or less quietly that they treat Obama as if he is weak abroad because they perceive him as weak at home. I heard a fabulous story about a senior Iranian official explaining off-the-record to a Westerner how Obama wouldn't accomplish anything this year "in analysis that would have sounded right at home on FOX." Those elites follow American politics closely and will understand that this is a big, big win. They'll also get the message that Obama doesn't go away easily.

2. Momentum. Internationally, it looks as if this long drawn out process will close just before we finally get a new START Treaty, a mark of both serious steps down the road to reducing the nuclear threat and a success in renovating the US-Russian relationship. That in turn will be followed by a signature Obama initiative, the 43-nation Nuclear Security Summit, which will build new momentum for international action against the supply side of nuclear materials. After that, Iraq will confound the skeptics by putting a government together -- not elegantly, but successfully.

3. Space and Oxygen. As my colleague Paul Eaton discussed with the Times' Peter Baker earlier this weekend, many international issues have been off the agenda while health care burned bright. There will be more bandwidth for other, merely vital, issues now -- from Afghanistan to foreign assistance reform to human rights and democratization. This has a downside, though: with the healthcare debate lost, the opponents of a sane, pragmatic foreign policy will have more oxygen to ramp up the volume on Iran and other issues.

4. Ambition. Just the progress to this point threw Obama's approval rating back over 50%. Progressives both in and outside government have been needing a little boost of energy. This moment should give us lots of case studies about 1) how the Administration likes to work and will work when the crunch is on and 2) how to advocate to the Administration effectively -- and ineffectively.

HCR Passes!!

2010-03-22T01:24:00.001-04:00

Jonathan Chait leads the cheers for Obama and the historic passage of healt care reform.

Let me offer a ludicrously premature opinion: Barack Obama has sealed his reputation as a president of great historical import. We don't know what will follow in his presidency, and it's quite possible that some future event--a war, a scandal--will define his presidency. But we do know that he has put his imprint on the structure of American government in a way that no Democratic president since Lyndon Johnson has.

The last two generations have no model for such a president. The only two other Democratic presidents of the last four decades are Jimmy Carter, a failure, and Bill Clinton, who enjoyed modest successes but failed in his most significant legislative fight. Obama, who helped pull the country out of a depression and reshaped the health care system, has already accomplished far more than Clinton. (This isn't necessarily Clinton's fault--he lacked the votes to break a Republican filibuster that Obama has--but the historical convention is to judge a president by what he and the Congress achieve together.) He will never be plausibly compared with Jimmy Carter.

Historians will see this health care bill as a masterfully crafted piece of legislation. Obama and the Democrats managed to bring together most of the stakeholders and every single Senator in their party. The new law untangles the dysfunctionalities of the individual insurance market while fulfilling the political imperative of leaving the employer-provided system in place. Through determined advocacy, and against special interest opposition, they put into place numerous reforms to force efficiency into a wasteful system. They found hundreds of billions of dollars in payment offsets, a monumental task in itself. And they will bring economic and physical security to tens of millions of Americans who would otherwise risk seeing their lives torn apart. Health care experts for decades have bemoaned the impossibility of such reforms--the system is wasteful, but the very waste creates a powerful constituency for the status quo. Finally, the Democrats have begun to untangle the Gordian knot. It's a staggering political task and substantive achievement.

Threading the Needle

2010-03-19T00:50:00.001-04:00

Steve Benen points out the remarkable hurdles that the Democrats have had to overcome to actually bring a health care reform bill to the brink of passage.

It's probably an esoteric point, but it's worth pausing to appreciate just how ridiculously challenging it was to craft this health care reform proposal. There's a very good reason this legislation has never passed up until now, and why presidents who've tried have failed, and it goes beyond just right-wing hysterics and corporate pushback.

Think about the scope of the task -- Democrats were told they needed a health care reform bill that spends a lot of money on covering the uninsured, lowers the deficit, strengthens Medicare, helps businesses, eases government budgets, protects consumers, and controls costs, all at the same time. It would also need to earn the blessing of Congressional Budget Office, the American Medical Association, the AARP, and the nation's largest labor unions.

Democrats were also told they needed to do all of this in the face of unanimous and apoplectic Republican opposition, far-right manipulation of gullible conservative activists, and media coverage that largely ignores the substance of the bill while pretending every right-wing attack deserves attention.

This is a needle that's almost impossible to thread. And yet, that's exactly what the White House and congressional leaders have done. It's no small feat.

MUSIC: OK Go Video

2010-03-15T00:02:00.003-04:00

Rube Goldberg goes viral in this video from the LA indie band (originally from Chicago) OK Go. After disagreements with their label, EMI, over this video and its 2007 Grammy winner "Here It Goes Again," the band left the label altogether this month, got outside funding, and are on their own.

History Beckons

2010-03-13T01:30:00.000-05:00

Matt points out what should be obvious, that the reason governments are elected is to actually DO THINGS!

I don’t think the arguments mounted by Pat Caddell and Douglas Schoen that Democrats will face political disaster if they pass health reform hold water. Or, rather, I think they disingenuously fail to consider the alternative. If reform passes, Democrats will almost certainly lose a whole bunch of seats in November. But if reform fails, Democrats will also almost certainly lose a whole bunch of seats in November. At the margin, passing reform helps the party’s prospects in the midterms in my view, but the midterms outlook is just bad and there’s nothing to be done health care-wise at this point to change that.

A larger question any member of congress reading the op-ed ought to ask himself is “so what?” If reform passes and is signed into law, then immediately Barack Obama’s position in history is secured. When people look back from 2060 on the creation of the American welfare state, they’ll say that FDR, LBJ, and BHO were its main architects, with Roosevelt enshrining the principle of universal social insurance into law and Obama completing the initial promise of the New Deal. Members of congress who helped him do that will have a place in history. Nobody’s going to be very interested in a story like “Mike Ross served a bunch of years in Congress and people were impressed with his ability to win a relatively conservative district; he didn’t achieve very much and one day he wasn’t in Congress anymore.”

Which is just to say that nobody lasts in office forever, no congressional majority lasts forever, and no party controls the White House forever. But the measure of a political coalition isn’t how long it lasted, but what it achieved. From the tone of a lot of present-day political commentary you’d think that the big mistake Lyndon Johnson made during his tenure in the White House was that by passing the Civil Rights Act he wound up damaging the Democratic Party politically by opening the South up to the GOP. Back on planet normal, that’s the crowning achievement of his presidency.

Rep. Ryan's Roadmap

2010-03-12T00:46:00.000-05:00

Jonathan Chait has a cogent analysis of the budget proposal from Republican Congressman Paul Ryan.

The roadmap clarifies the essence of the Republican Party's approach to domestic policy issues. The essence is opposition to the downward redistribution of income. The principle first emerged under Ronald Reagan, but only in fits and starts--Republican presidents agreed to a tax reform in 1986 and a deficit reduction in 1990 that did redistribute income from rich to poor. Over the last twenty years, though, opposition to downward redistribution has hardened into the sacred tenet of Republican policymaking. Ryan's plan both codifies this principle and shows just how far the party is willing to go in its service.

Every major element of Ryan's plan reflects this commitment. Begin with his proposed tax changes. Ryan would not only retain the Bush tax cuts for the highest earners, he would further lower the top tax rate to 25%. On top of that, he would repeal all taxes on corporate income, inherited estates, capital gains, and dividends. In other words, he would completely eliminate the most progressive elements of the tax code, and slash the next most progressive element. In their place he would impose a value-added tax, which would not bring in nearly enough revenue to replace the revenue lost from his tax cuts, but would fall much more heavily on the poor and middle class.

It's worth keeping in mind that the current tax system in this country is only very slightly progressive. State and local taxes are regressive, federal taxes are somewhat progressive, and the net effect redistributes income, very slightly, from the rich to the not-rich:

Ryan's plan would make the federal tax code regressive, especially at the top, on top of an already-regressive state and local tax base. According to the Tax Policy Center, the richest 1% of all taxpayers, who earn more than 21% of the national income and currently pay about 25% of federal taxes, would pay 13% of federal taxes under Ryan's plan. (Ryan's response argues that the corporate income tax he'd eliminate is already born by consumers anyway, a contention most economists including the CBO reject, and even if true would only chip away slightly at the overall critique of his plan's regressive nature.) Ryan's tax plan alone would amount to the greatest shift of resources from the non-rich to the rich in the history of the United States, by far.

And that is just the beginning. Ryan would impose a series of dramatic social policy changes that would all push in the same direction. He would blow up the employer-based health care system, pushing workers into an under-regulated individual market. Instead of sharing medical risk with their fellow employees, they'd bear it entirely by themselves, which would be good for the healthy but bad for the sick. He would convert Social Security into primarily a network of individual investment accounts--meaning that some workers would do well and others poorly. And he would convert Medicare into a voucher system, capping the value of each voucher at well below the rate of medical inflation, which would make the elderly bear a far greater share of medical risk.

All these changes push in the same direction. The basic thrust of liberal public policy over the last century is to keep in places the market system but use government to slightly mitigate against risk--the risk of getting sick, the risk of outliving your savings, the risk that you just won't make much money in the first place. The downside of these policies is that, in order to mitigate the downside risk, you also have to mitigate the upside benefit. If you're unusually rich, you have to pay a somewhat higher tax rate than most people. If you're unusually healthy, you have to subsidize medical care for people who aren't. If you were able to invest well enough to cover your entire retirement, some of your good fortune will be siphoned off to those who weren't. The rewards for getting rich, or merely being born rich, will remain enormous, just slightly less so than in a completely free market.

Why They Oppose Health Care Reform

2010-03-10T00:35:00.001-05:00

Ezra looks at a recent Gallup poll showing Americans opposing Health Care Reform by a narrow 48-45 margin (consistent with most other recent polls) and goes behind the numbers to see what the opponents actually oppose.

The country is closely divided on health-care reform, with a slight plurality in opposition. Moreover, health-care reform is actually getting a bit more popular as it nears passage. Presumably, that's because people are hearing more about the bill and less about why the bill is failing.

But Gallup did something interesting and asked respondents who disapproved of the bill why they disapproved. The top reason was that the bill "will raise the cost of insurance or make it less affordable." It's understandable why people say that. But the best evidence we have is that it's not true.

When the Congressional Budget Office looked at this question (pdf), they found that for Americans in the large-group market (134 million of us), premiums would go down by 1 to 3 percent. For Americans in the small-group market (25 million of us), the change in premiums would be between an increase of 1 percent and a decrease of 2 percent -- so the likeliest outcome was a savings of about 1 percent. And they found that people in the individual market (32 million of us) would find that a given insurance product would become 7 to 10 percent cheaper, but that they'd purchase much better insurance under the bill (that meant their premiums would go up, but because they could now buy something better). And that's before accounting for subsidies, which make things even more affordable for small businesses and people in the individual market.

The next most common objection was that the plan "doesn't address real problems." I'm not really sure what this means, so I can't comment on it. But it's followed by people who simply want more information on how this would all work. I'm not certain this can properly be called opposition. Later in the series, you have 3 percent of people who don't like the plan naming the public option as their problem. The public option, of course, isn't in the plan any longer. Some people think the plan is "socialism." By definition, it is not. Some people simply think we should take more time with the legislative process. They are hardy souls.

The argument over reconciliation was always a distraction. If you follow the rules, you're following the rules. The GOP's more salient objection was that it's somehow unethical to pass a bill that polls show doesn't have support. That wasn't the party's position during George W. Bush's administration, but that doesn't make it wrong.

But it only works if you think that Americans are really against this bill. If you think they don't know much about it, or have been misinformed about it, then it is not only proper, but core to how our government was structured, for the representatives of the people to assess the legislation and make the decision they think to be in their constituents' best interest. Then, of course, an election will happen, and those representatives will have a chance to defend their decision and their constituents will have the opportunity to render a verdict. Gallup's poll is evidence, first, that the public is closely divided on health-care reform, and second, that many of those in opposition do not know that much about the bill.

When Republicans Ruled the Roost

2010-03-08T23:21:00.001-05:00

Ezra recalls the glorious days of parliamentary rigour when the Republicans controlled Congress and were trying to pass the Medicare prescription drug bill in November 2003.

A 15-minute vote was scheduled, and at the end of 15 minutes, the Democrats had won. The Republican leadership froze the clock for three hours while they desperately whipped defectors. This had never been done before. The closest was a 15-minute extension in 1987 that then-congressman Dick Cheney called “the most arrogant, heavy-handed abuse of power I’ve ever seen in the 10 years that I’ve been here.”

Tom DeLay bribed Rep. Nick Smith to vote for the legislation, using the political future of Smith's son for leverage. DeLay was later reprimanded by the House Ethics Committee.
The leadership told Rep. Jim DeMint that they would cut off funding for his Senate race in South Carolina if he didn't vote for the bill.

The chief actuary of Medicare, Rick Foster, had scored the legislation as costing more than $500 billion. The Bush administration suppressed his report, in a move the Government Accounting Office later judged "illegal.”

Rep. Jo Ann Emerson, a "no" vote, spent the night "hiding on the Democratic side of the floor, crouching down to avoid eye contact with the Republican search team."

Rep. Butch Otter, who provided one of the final votes after hours of arm-twisting from the Republican leadership, said, “I thought there was a chance I would get sick on the floor.”

Under The Tea Party

2010-03-07T01:50:00.000-05:00

Matt Taibbi uses a segment on CNBC that featured Rick Santelli arguing that there was no such thing as predatory lending prior to the real estate crash to go off on the Tea Party movement.

This whole scene sort of encapsulates what’s wrong with the Tea Party movement. The movement, and let’s admit this, has some of its roots in legitimate grievances about government waste and some not-entirely-inaccurate observations about what’s left of the American welfare state. Of course what resonates most with the suburban whites who mostly make up the Tea Party are stories about minorities and immigrants using section 8 housing, food stamps, Medicaid, TANF and other programs, with the Obama stimulus being for them a symbol of this ongoing government largess. The heat of the Tea Party movement comes from the racial frustrations that actually exist out there, in the real world outside New York and LA, as urban expansion and immigration increasingly throw white and nonwhite communities together, with white Tea Party types more and more often blowing gaskets over increased crime rates, declining school standards, and mislaid or wasted tax revenue.

That this perception that minorities are the prime or sole consumers of government entitlement programs is absurdly inaccurate — white people, for instance, are overwhelmingly the largest nonelderly recipients of Medicaid, making up 42.8% of the program’s rolls nationwide, compared to 22.2% for blacks and 27.9% for Hispanics — is beside the point. The point is that the Tea Party is built largely on this narrative of “personal responsibility,” where the central demons are unwed black and Hispanic mothers and absent black and Hispanic fathers, who are, let’s face it, not uncommon characters in the American melodrama.

Which is another subject for another time, but let’s just say this: the Tea Party movement contains a lot of people who are far more impressed by what they can see with their own eyes than with what, for instance, they read about. I’ve been to Tea Party events where global warming was dismissed by speakers who, without irony, pointed to the fact that there was snow on the ground outside. And while very few people have ever actually seen a CDO manager or a Countrywide executive, or were aware if it when they saw them, the Tea Party folks sure as hell have seen who their neighbors in foreclosure are.

The Fox/CNBC types have very cannily latched on this narrative to rewrite the history of the financial crisis. They know that Tea Partiers will go for any narrative that puts blame on poor (and especially poor minority) homeowners, because the idea of poor blacks and Hispanics borrowing beyond their means fits seamlessly with their world view. But this is a situation where poor minorities were really incidental to a much larger fraud scheme that culminated in a welfare program — the bank bailouts — that dwarfs the entire “entitlement” infrastructure. But the millions of people who are actually in the Tea Party movement seem to have absolutely no idea that their so-called leaders, the Santellis of their world, are shilling for tax cheats and crooks and welfare bums of the sort they would despise (perhaps even more than their black and Hispanic neighbors), if they could actually see them.

It's Different for Democrats

2010-03-06T01:38:00.001-05:00

Ezra comments on the difference in approach to the media by Democrats and Republicans.

People say the media is more viscerally sympathetic to Democrats than Republicans. But working in the other direction is the fact that Republicans understand the media much better than Democrats do. Take the reconciliation process. The media is giving blanket coverage to this "controversial" procedure being used by the Democrats. But using reconciliation for a few fixes and tweaks isn't controversial historically, and it's not controversial procedurally. It's only controversial because Republicans are saying it is. Which is good enough, as it turns out. In our political system, if Democrats and Republicans are yelling at each other over something, then for the media, that is, by definition, controversy. This is something Democrats did not understand when George W. Bush was in power.

He then reviews the near total absence of media coverage of a reconciliation debate and vote in May 2003 and goes on to point out some of the reasons.

And why was there nothing? Because Democrats weren't complaining. The tax cuts might have been controversial, but they weren't creative enough to polarize the procedure the Bush administration was using to pass them.

But some of the credit for that has to go to the Bush administration, which took seriously the need to institutionalize reconciliation when they were strong and popular rather than weakened. When Bush came into office, he used reconciliation for his first tax cuts. That was a sharp break with precedent: Reconciliation had never been used to increase the deficit, and the process was so poorly suited to the purpose that the Bush administration had to let all of them sunset after 10 years. It was a bizarre, bizarre bill. But by using it for his popular first round of tax cuts, Bush normalized it such that Democrats couldn't really complain when he used it for his much more controversial second round of tax cuts.

Reconciliation Bipartisanship? Not!

2010-03-03T22:24:00.000-05:00

Ezra looks back at reconciliation in the past.

Among the odder arguments Republicans are making against the reconciliation process is that the process should only be used for bipartisan bills, and since they refuse to vote for health-care reform, Democrats can't give their package of fixes an up-or-down vote.

But reconciliation hasn't been limited to bipartisan bills. Here's the recent record: The 1995 Balanced Budget Act was passed in reconciliation. The final vote was 52 to 47. The 2001 Bush Tax Cut was passed in reconciliation. The final vote was 58 to 33. The 2003 Bush Tax Cut was passed in reconciliation. The final vote was 50 to 50, with Dick Cheney casting the tie-breaking vote. The 2005 Deficit Reduction Act was also passed in reconciliation with a 50 to 50 vote and a Cheney intervention. The 2006 Tax Relief Extensions Act was passed in reconciliation. The final vote was 54 to 44. This is as you'd expect: If bills had overwhelming bipartisan majorities, they wouldn't need to go through reconciliation.

As it happens, Republicans controlled the Senate during each and every one of these bills. And they got less votes than Democrats will likely get for the health-care fixes. It's also worth reminding people that it's harder for Democrats to get Republican votes because voters elected a lot more Democrats in the past two elections. Republicans had a number of moderate Democrats who could be brought into a 58-vote majority, and Democrats don't have as many moderate Republicans who can do the same.

IOKIYAR

2010-03-01T15:12:00.001-05:00

In the category of Its OK If You Are Republican, Josh made this comment today.

Mike Kinsley once had a great line to the effect that what really irked Republicans about Bill Clinton's fundraising tactics was that he'd violated the cardinal rule of Washington which was that Democrats only get to use the latest and brassiest campaign tactics after the GOP has already been using them for several cycles.

And it seems like we've got something similar with reconciliation. What's outrageous is that Democrats have decided to avail themselves of the rules that Republicans have been using consistently for almost thirty years.

The only bizarre thing is how many reporters (though, candidly, fewer than I'd anticipated) really do think this is an immutable law of the universe.

Obama Takes Ownership

2010-02-26T00:57:00.001-05:00

Ezra sums up the purpose of today's health care summit.

The big story out of the summit is not that Republicans and Democrats extended their hands in friendship, but that the White House has dug its heels into the dirt. The Democrats are not taking reconciliation off the table, they are not paring back the bill, and they are not extricating themselves from the issue. They think they're right on this one, and they're going to try and pass this legislation.

Today was a boost for that effort. The Democrats got hours to make their case, at an event they planned, with one of their own controlling the discussion. For that reason, I imagine that this will be the last bipartisan summit we see for awhile. The format is simply too kind to the president, and he takes advantage of it ruthlessly. When the camera panned, you could almost see Republicans wondering why they'd accepted the invitation.

The people who came off best were those who knew the most about the issue. Paul Ryan and Tom Coburn on the Republican side. Dick Durbin and Chris Dodd for the Democrats. But above all of them, the president, who got to enter, adjudicate and conclude discussions at will -- not to mention say when others didn't know that much about the issue, or weren't offering comments in good faith. That willingness to put himself above Congress, combined with the structure of the event, allowed Obama to fully dominate the proceedings, and he used the opportunity to firmly assert ownership over the health-care bill. This is now his legislation.

Old and In the GOP

2010-02-23T00:53:00.001-05:00

Jonathan Chait comments on the success of the GOP in gaining support among the over-65 crowd.

Daniel Larison flags a Pew Survey showing that the Republican party's recent gains have come overwhelmingly among the elderly. Specifically, since 2006, Baby boomers, Generation X and Millenials have all moved 5-6 percentage points away from the Democratic Party and toward the GOP when asked which party in Congress they intend to vote for. (Though all those groups still, on the aggregate, plan to vote Democratic over Republican.) The oldest cohort, the "Silent Generation," has shown a staggering 17 point shift toward the GOP.

This seems to suggest that Republicans have successfully stoked fears of fears of "redistribution of health" -- cutting expenditures on Medicare and shifting resources toward the uninsured. (Lamar Alexander: "[D]on't cut grandma's Medicare and spend it on some new program. If you can find some savings in the waste, fraud, and abuse of grandma's Medicare, spend it on grandma.") It also explains why President Obama's health care proposal now completely fills in the Medicare "doughnut hole." The Democrats need most of all some deliverable to show to the elderly.

I would go one step further and suggest that Democrats can reverse this trend by highlighting Republican budget proposals that are based on privatizing Social Security and Medicare, hardly a pro-oldster policy.

A Tortured Defense

2010-02-22T01:19:00.002-05:00

Keven Drum examines the tortured logic used by the former Bush Administration torture apologists.

A few days ago, Jonathan Bernstein pointed out that former Bush/Rumsfeld speechwriter Marc Thiessen was continuing to claim that the torture of Khalid Sheik Mohammed in 2003 helped foil a terrorist plot to crash an airplane into a Los Angeles skyscraper. This was obviously a lie. Why? Because the cell leaders of the LA plot were arrested a year before KSM was captured.

Apparently this kind of crude, low-rent deception isn't limited to Thiessen. It turns out that the same sort of clumsy lying was also part of the CIA's classified "Effectiveness Memo," which the Bush administration relied on to bolster its legal case for torturing terrorist suspects. In Newsweek yesterday, Michael Isikoff reported that the recently released Justice Department report about the lawyers who approved the CIA's interrogation program spilled the beans on what this memo said. In particular, the memo defended torture by claiming it was critical to the capture of al-Qaeda operative Abu Zubayda:
One key claim in the agency memo was that the use of the CIA’s enhanced interrogations of Zubaydah led to the capture of suspected “dirty bomb” plotter Jose Padilla....“Zubaydah’s reporting led to the arrest of Padilla on his arrival in Chicago in May 2003 [sic].”

But as the Justice report points out, this was wrong. “In fact, Padilla was arrested in May 2002, not 2003 ... The information ‘[leading] to the arrest of Padilla’ could not have been obtained through the authorized use of EITs.” (The use of enhanced interrogations was not authorized until Aug. 1, 2002 and Zubaydah was not waterboarded until later that month.)....As Newsweek reported last year, the information about Padilla’s plot was actually elicited from Zubaydah during traditional interrogations in the spring of 2002 by two FBI agents, one of whom, Ali Soufan, vigorously objected when the CIA started using aggressive tactics.
If torture were really as effective as the Thiessen/Cheney wing of the conservative movement thinks, they'd hardly risk resorting to such obvious lies to defend it. They'd have so much good evidence in favor of it that they wouldn't need to bother. But apparently they don't.

It's Not My Tea Party

2010-02-18T02:28:00.000-05:00

Matt notes what the polling tells us about the Tea Partiers.

Turns out that the “tea party” movement sweeping the nation is disproportionately composed of individuals who have higher-than-average incomes. It’s also disproportionately composed of men. And disproportionately composed of white people. And disproportionately composed of self-identified conservatives. And disproportionately composed of self-identified Republicans.

In other words, well-to-do conservative white men don’t much care for Barack Obama’s policies. Which, of course, is something we already knew from the exit polls back in November 2008.

It's Not a Fair Fight When One Side Changes the Rules

2010-02-16T23:54:00.002-05:00

Paul Waldman on TAPPED reviews the core imbalance that plagues the legislative process in Washington...the fact that the Republicans have changed the rules and not only suffered no consequences, but are actually benefiting.

If you're a Democrat, chances are that on more than a few occasions in the last few months, you've heard about the latest tactical maneuver from Republicans in Congress and said, "This time they've gone too far. Surely they'll pay a price for this latest outrage."

Maybe it was when they filibustered a defense-appropriations bill (not supporting our troops!). Or maybe it was when, just after the attempted Christmas bombing, they held up confirmation of the man President Barack Obama appointed to head the Transportation Safety Administration, leaving the agency leaderless. Or maybe it was the "Shelby Shakedown," when Alabama Sen. Richard Shelby put a "hold" on 70 administration appointees so he could get some pork for his home state. Or maybe it was the way they argued that trying terrorist suspects in civilian court made Obama soft on evildoers, when the Bush administration did the same thing hundreds of times.

Every society has its rules and its norms. The former come with penalties, but the latter persist only so long as the community has some kind of informal enforcement mechanism. We used to have laws against adultery, but today marital fidelity is a norm -- you can't be imprisoned for violating it, but if it is revealed, you may suffer some public shaming. In Washington, it turns out, many of the norms people thought existed can be violated without cost.

When this session of Congress started, Republicans said to themselves something like the following: It's true that the minority in the Senate has never tried to filibuster everything, but what's to stop us? Democrats may complain about obstructionism, but to most of the Americans who pay only passing attention to politics, it just looks as if "Washington" can't pass anything -- not that one party is at fault. So the minimal cost of looking obstructionist is far outweighed by the political benefit of keeping the Democrats from accomplishing anything.

He concludes:

What we are left with is a situation in which one party is assiduously adhering to the norms it believes are still in place, while the other party long ago concluded that norms are meant to be ignored. Republicans aren't so much the "party of no"; they're the party of "yes we can" -- yes we can filibuster everything, yes we can put holds on nominees for no good reason, yes we can argue in the most dishonest ways imaginable (see panels, death), yes we can be as hypocritical as we like. The Democrats, on the other hand, continue to be the party of "maybe we shouldn't."

It's My Party and I'll Rage If I Want To

2010-02-14T11:36:00.000-05:00

Steve Benen hits the nail on the head with respect to Obama, tea-partiers, and taxes.

National Review published a couple of items recently about President Obama having cut taxes for 95% of working families. This is, in reality, what happened, but the conservative magazine was incredulous. "If the taxes of 95 percent of Americans actully [sic] had been cut, surely somebody other than Obama would have noticed," one NR writer put it.

It was a curious argument. It doesn't matter what President Obama did -- in this case, approval of a tax cut -- it matters what people perceive, even if the perceptions are patently false.
And perhaps no group of people is fueled more intensely by misperceptions of reality than the Tea Party crowd.
Of people who support the grassroots, "Tea Party" movement, only 2 percent think taxes have been decreased, 46 percent say taxes are the same, and a whopping 44 percent say they believe taxes have gone up.
Now, we know that this 44% is wrong. We also know that in nearly every instance, the 46% are wrong, too. Indeed, my challenge to them would be to go look at their most recent paystub, and then dig up their paystub from, say, December 2008, before Obama took office. The math isn't that hard -- did their tax rate go up, down, or stay the same? Opinions and perceptions are nice, but arithmetic can be stubborn.

But as this relates to politics, John Cole noted that these folks "don't even know what they are mad about." Indeed, it's easy to forget this, but the first Tea Party crowds started protesting in March 2009 -- exactly one month after President Obama signed one of the largest tax-cut packages in American history into law. The protestors wanted to make clear that they are "taxed enough already," choosing to pretend that they hadn't just received a tax cut from the president they hate so intensely.

John added, "It really is quite amazing what you can do with a group of people who are completely uninterested in the truth, unwilling to believe anything that comes from someone other than Rush or Glenn Beck or an 'acceptable' source of information, and who have a vested interest in believing what they want to believe, reality be damned."

Health Care or Terrorism

2010-02-10T01:10:00.004-05:00

Courtesy of Sully, a poster for the current political debate.

MUSIC: Mad World

2010-02-10T00:44:00.000-05:00

A truly revelatory cover version of the early-80s Tears for Fears song "Mad World" performed by Gary Jules and Michael Andrews in a video directed by Michael Gondry.

The Kitchen Analogy

2010-02-09T01:57:00.000-05:00

EJ Dionne quotes a clever story told by Congressman Jay Inslee (h/t Ezra) discussing why passing health care reform is essential for the Democrats and the incoherence of those who already voted for the bills yet are leery of voting for final passage.

This made no sense to Inslee, a Democrat from Washington state. First elected to the House in 1992, he was swept out of office in the 1994 Republican landslide that followed the collapse of Bill Clinton's health-care efforts. Four years later, Inslee returned to Congress.

"I introduced myself as a fella who was defeated in 1994, the last time we didn't pass meaningful health-care reform," Inslee recalls saying. "I said it was a painful event, and I didn't want them to go through that pain." In politics, he told his colleagues, assuming the "fetal position" can be the most dangerous thing to do.

And then he recounted all the grief he and his family went through while work on their kitchen renovation dragged on and on and on. "During that time, I had blood lust against my contractor," Inslee said. "Six months went by, and he was still arguing with the plumber. Eight months went by, and there were still wires hanging down everywhere, and he was having trouble with the building inspector."

But eventually, the job got done. "And now I love that kitchen," Inslee recalls saying. "I bake bread in that kitchen. My wife cooks great meals in that kitchen. The contractor's now a buddy of mine, and I've had beers with him in that kitchen."

Inslee looked at his colleagues and declared: "We've got to finish the kitchen." His point was that Americans won't experience any of the benefits of health-care reform until Congress puts a new system in place.

Odd Constitutional Powers

2010-02-05T02:19:00.001-05:00

Matt points out one of the more intriguing dichotomies of Presidential powers in the American constitutional system.

A pretty odd feature of our political system, namely that the president seems most empowered in precisely those areas of governance that ought to give you the most concern about tyrannical abuses.

If the President wants to do something like implement a domestic policy proposal he campaigned on—charge polluters for global warming emissions, for example—he faces a lot of hurdles. He needs majority support on a House committee or three. He also needs majority support on a Senate committee or three. Then he needs to get a majority in the full House of Representatives. And then he needs to de facto needs a 60 percent supermajority in the Senate. And then it’s all subject to judicial review.

But if Scooter Libby obstructs justice, the president has an un-reviewable, un-checkable power to offer him a pardon or clemency. If Bill Clinton wants to bomb Serbia, then Serbia gets bombed. If George W Bush wants to hold people in secret prisons and torture them, then tortured they shall be. And if Barack Obama wants to issue a kill order on someone or other, then the order goes out. And if Congress actually wants to remove a president from office, it faces extremely high barriers to doing so.

Whether or not you approve of this sort of executive power in the security domain, it’s a bit of a weird mismatch. You would think that it’s in the field of inflicting violence that we would want the most institutional restraint. Instead, the president faces almost no de facto constraints on his deployment of surveillance, military, and intelligence authority but extremely tight constraint on his ability to implement the main elements of the his domestic policy agenda. I think it’s telling that the US has generally not advised countries engaged in a democratic transition (think Germany and Japan after WWII or Poland, Hungary, Czech Republic, etc. after the fall of Communism) to imitate our form of government.

Socialist? Bolshevik? Are You Kidding?

2010-02-02T21:37:00.001-05:00

Daniel Larison on The American Conservative (h/t Adam Serwer on TAPPED) summarizes the lunacy of depicting centrist opponents as being on the fringe politically. As he states at the end of the third paragraph below, "It is not analysis of political reality. It is therapy for the person making the statement."

From the start, Republicans had been labeling Clinton a radical leftist, when he was on the whole the most “centrist” Democrat in the White House since Grover Cleveland. The 1994 result itself was the product of a number of factors, including a huge number of retirements in the House, but these included the demoralization of union members and party activists in the wake of NAFTA and the failure of health care legislation. I very much doubt that the midterm elections are going to be anything like ‘94, but one similarity that exists is the disillusionment and loss of enthusiasm among party activists and rank-and-file voters. On the whole, aside from a few badly-handled, largely symbolic culture war controversies, Clinton governed as a “centrist” more or less from the beginning, and he moved even farther away from liberals after 1994, which did not stop the charges that he was a huge leftist.

Many progressives always remained cool to Obama throughout the primaries and the general election, and many netroots and other activists on the left never really embraced him as one of their own. They discerned correctly that Obama was running a primary campaign that put him to the right of his other two main rivals, and the best observers on the left realized that Obama did not have a record of challenging entrenched interests. As Election Day approached, Obama pursued the safe course of becoming ever more conventional and comfortable with the ideas of the Washington establishment, and his most prominent economic advisors and Cabinet members were mostly drawn from the friends and disciples of Rubin. As the health care debate continued, progressives kept losing ground, and the rank corporatism of the Senate version finally precipitated serious protests and discontent on the left. This was not a case of ideological activists and voters making even greater demands on an administration that was already doing what they wanted. It was instead a sign that some progressives were losing patience with the substance of the bill and the nature of the reform being proposed. Whatever else the last year has shown us, it has not shown us that the administration and the Democratic Party is currently in thrall to the left.

The impulse to label an opponent as an extremist is a common and tempting one. It is a very easy thing to do, provided that you are not concerned with accuracy or persuading undecided and unaffiliated people that you are right. These labels are not descriptive. They are a way to express the extent of one’s discontent and disaffection with the other side in a debate. When some Republican says that Obama and his party have been governing from “the left,” he might even believe it inasmuch as Obama and his party are to his left politically, but what he really means is that he strongly disapproves of how Obama and his party have been governing. He may or may not have a coherent reason for this disapproval, but declaring it to be leftist or radical leftist conveys the depth of his displeasure. That is, it is not analysis of political reality. It is therapy for the person making the statement.

The same thing goes for progressives who were trying to find words to express how outraged they were by Bush. Inevitably, many resorted to using labels such as theocrat, extreme right, radical right and the like. These did not correctly describe the content of Bush’s politics, but they did express the critics’ feelings of disgust and loathing for Bush’s politics. That doesn’t mean they weren’t right to be disgusted and outraged, but the words they used to express these sentiments typically had no relationship to the substance of what Bush was actually doing. Likewise, there could be merit in objecting to Obama’s agenda, but if critics begin by using the wrong definitions and descriptions they will not be critiquing an agenda that really exists, but it will instead be a fantastical one that they have imagined. Where this creates problems in understanding political reality is when partisans begin believing their own inaccurate descriptions of their opponents and then when they draw conclusions about the political landscape based on their misinterpretations of their opponents’ beliefs.

Bungle in the Budget

2010-02-02T01:23:00.000-05:00

Brad DeLong quotes from an editorial in the Financial Times to comment on the Obama 2011 budget.

FT.com / Comment / Editorial - Budget distractions: The Obama administration’s 2011 budget... the mood is more siege mentality... deficit dread sweeps the country and hence Washington, the focus is on short-term medication of the deficit rather than two altogether more important tasks – strengthening the recovery and securing lasting fiscal health... reckless politicians have persuaded voters that runaway deficits threaten their livelihoods more than a renewed slowdown. This makes the administration sound a bit like a small European country eager to reassure Brussels: it wants to cut the deficit to 4 per cent of GDP within three years.

Such a large swing is fine if growth proves robust, but dangerous if it does not, which is far from unlikely. Unemployment is likely to stay above 9 per cent into 2011....

Deficit-reduction noises may be no more than that: what matters politically is to be seen to care about the deficit but not do anything painful to shrink it. Besides, the US can afford a few more large deficits: net public debt, now just over half of GDP, is manageable. In the fine tradition of US budgets, however, the real fiscal threats are left unaddressed: untamed growth in health spending; demographic pressures on social security; and waste and lack of control over military spending, a sacred cow comfortably nestled in every congressional district. A proposed three-year spending freeze signally fails to apply to any of these....

Obama must push harder: that structural fiscal problems are not of his making does not make them any less of his responsibility.

Parliamentary Futility

2010-02-01T01:27:00.000-05:00

Steve Benen picks up and expands on a comment made by Ron Brownstein of the National Journal on a fundamental absurdity of modern American politics.

Ron Brownstein noted recently:
We are operating in what amounts to a parliamentary system without majority rule, a formula for futility.
In some respects, it's even worse than that. In nearly all modern democracies, parties that win elections get a shot -- they're able to do what they want to do, putting their party platform to work. If the policies are effective and voters are satisfied, the parties are rewarded. If not, they're punished.

The job of the minority party (or minority parities) in modern democracies is not to stop the majority from governing. Indeed, the very idea is practically absurd. Rather, minority parties consider it their job to criticize the majority, tell the electorate how they'd be doing things better, and hope voters agree when the next election rolls around.

But we're dealing with expectations and procedural tools in the U.S. that are inherently foolish. We can elect one party to lead, and then give the minority party the ability to stop the majority from leading. Worse, the political establishment tells voters -- and the public agrees -- that the majority is doing something intrinsically wrong if they advance policies that the minority disagrees with.

Boehner left no doubt this morning that he and his party don't want to work with Democrats on shaping legislation. That's fine. But with that in mind, can we let go of the ridiculous notion that Democrats are on the wrong track unless Boehner likes their ideas? And more importantly, can we abandon the absurd procedures that allow a small minority party to prevent the legislative process from functioning?

The Deficit in Dealing With the Deficit

2010-01-31T01:18:00.000-05:00

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

2010-01-30T01:36:00.000-05:00

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

2010-01-29T01:59:00.001-05:00

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

2010-01-26T01:20:00.001-05:00

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

2010-01-26T01:11:00.001-05:00

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

2010-01-24T01:35:00.000-05:00

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

2010-01-23T02:03:00.001-05:00

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

2010-01-21T00:45:00.000-05:00

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.