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Job Creation!

| Tue Feb. 17, 2009 1:37 PM EST
JOB CREATION....So how many jobs will the stimulus package create for my hometown?  Luckily, the White House has a fact sheet to tell me exactly that.  Lessee....California....48th district....ah, here it is: 8,000 jobs.

Suspiciously, this just happens to be exactly the number you get if you divide 3.5 million jobs by 435 congressional districts plus DC.  Which makes me think that this is not exactly a fine-grained exercise in employment econometrics.  Still, there are differences: Delaware supposedly gets 11,000 jobs, for example, while my mother's district just north of here only gets 6,500 jobs.  That's less than I get, which seems a shame since she has a Democratic congresswoman who voted for the stimulus and I have a Republican critter who voted against it, but them's the breaks.  That's our brave new postpartisan world for you.

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Turn the Other Cheek, Barack

| Tue Feb. 17, 2009 1:16 PM EST

Hendrik Hertzberg thinks that Obama's continued willingness to engage the Republican minority, despite the fact that it stonewalled him on the stimulus bill, is a crafty decision:

Fifty years ago, the civil-rights movement understood that nonviolence can be an effective weapon even if—or especially if—the other side refuses to follow suit. Obama has a similarly tough-minded understanding of the political uses of bipartisanship, which, even if it fails as a tactic for compromise, can succeed as a tonal strategy: once the other side makes itself appear intransigently, destructively partisan, the game is half won. Obama is learning to throw the ball harder. But it’s not Rovian hardball he’s playing. More like Gandhian hardball.

This makes sense to me. If Obama bends over backward to court Republicans (and, importantly, does so in a highly visible way), the GOP will lose support for refusing to engage, not gain it. And if Obama has the majorities to get his priorities through Congress without Republican support, there's no harm in taking this approach.

So, essentially, here's Obama's task. Get beat up. A lot. Because no one wants to vote for the bullies, the jerks, and the malcontents.

Who's Afraid of the Filibuster?

| Tue Feb. 17, 2009 1:04 PM EST
WHO'S AFRAID OF THE FILIBUSTER?....Steve Benen explains why there's support for the filibuster in both parties:

The status quo is a mess. The American electorate can give a party the White House and sizable majorities in both chambers, but that party will still struggle badly to pass its agenda. A 41-member minority party can block legislation — controversial or not — by abusing an obscure procedural tactic that was never intended to be used to necessitate supermajorities on literally every piece of legislation.

....Those who approve of keeping the filibuster around as a "check" — despite the fact that it was never intended to block congressional majorities from passing legislation — envision a cyclical dynamic: Republicans win voter approval, but are limited by the Senate minority. Democrats win voter approval, but are limited by the same obscure legislative tactic. Government through obstructionism. Everyone has a credible excuse for failing to deliver on a policy agenda.

I'd put this a little bit differently.  I think it's fear that's kept the filibuster around for so long.  Republicans could have gotten rid of it in 1983 if they'd wanted to.  Democrats could have axed it in 1993.  Republicans could have killed it in 2003.  Democrats could do it again today.  So why is it still around?

Tradition and custom are part of the answer, but mostly it's fear.  Fear of what the other guys will do when they eventually come back into power.  Both parties are so afraid of what their opposite numbers could do with simple majority rule that they've lost sight of what they could do with it.

This is especially short-sighted coming from liberals.  I got several emails after my last filibuster post suggesting that I should think twice.  What if the GOP had been able to get all their judicial nominees through during the past eight years?  What if Bush had passed Social Security reform?  What if, what if, what if.

But look: only a handful of Bush's judges were successfully filibustered.  Social Security reform never even came up for a vote.  But even conceding that, yes, there would be some short-term pain from conservative rule in a filibuster-less world, in the long run the filibuster is bad for liberalism because liberals are fundamentally in favor of change and the filibuster is fundamentally obstructive.  It's well suited for a movement that wants to stand athwart history and yell "Stop!" but less well suited to a movement that has a positive agenda revolving around the enactment of ambitious new social programs.

This makes it unsurprising that conservatives want to keep the filibuster around.  They know perfectly well that once liberal social programs are enacted, they become very popular and very hard to get rid of.  They can't count on the swing of the pendulum to eventually turn the public against Social Security or Medicare or national healthcare, so their only alternative is to stop programs like this in the first place.  For them, the filibuster is a key tool.

But not for us.  Sure, if we get rid of the filibuster we'll pay a price when Republicans get back into power.  But overturning conservative programs isn't that hard.  And in return we'll make a lot of progress during out own time in office, progress that's largely permanent.  But only if we have the courage of our convictions.  If we truly think that our programs will work and become popular, then we shouldn't worry about what will happen when the opposition eventually returns to power.  We should be more concerned about what we can do while we're in power.  And the answer is: a lot more.  Throughout history, the filibuster has been a tool that makes America a more conservative place, and any liberal who's afraid to get rid of it is crazy.

Ol' Blue Eyes

| Tue Feb. 17, 2009 12:05 PM EST
OL' BLUE EYES...In the LA Times today, Allen Goldberg worries that genetic screening for inherited diseases is being corrupted to "satisfy the whims of parents":

Recently, the Los Angeles-based Fertility Institutes announced that it would soon be offering patients at its clinics the chance to choose traits such as "eye color, hair color and complexion." The clinics already offer gender selection to patients undergoing in vitro fertilization.

The Fertility Institutes employs a technique known as "preimplantation genetic diagnosis," which allows doctors to screen embryos soon after they are created in a petri dish and implant only the ones that meet certain criteria. The technique was invented to help high-risk families avoid or manage potentially deadly genetic traits, and to help women who've had multiple miscarriages conceive babies they can carry to term.

Now the Fertility Institutes is corrupting this lifesaving clinical procedure by using it to help families create designer babies, and I worry that their excesses will turn public sentiment against all preimplantation genetic diagnosis. That would be wrong.

I confess that this particular controversy has always perplexed me.  If, for religious reasons, you flatly oppose the creation and destruction of embryos, then I disagree with you but I understand your objection.  Outside of that, though, who cares if parents start selecting for left-handed saxophone players with a gift for languages?  It's true that as the technology progresses, it will probably become possible to perform more problematic types of screening — perhaps for behavioral traits like sexual orientation or political persuasion — but there's every reason to think that this is a lot harder than it sounds no matter how good the technology gets.  And in any case, parents already select for these traits constantly when they make decisions about how and where to raise their children, and nobody objects to that.

Like every other medical procedure, this one will eventually be bound up in a rigid code of ethics that will be the end result of the usual messy political process.  And there will always be a few parents willing to fly to Burma or Albania or wherever to get treatments they can't get at home.  If that becomes a big problem 30 years from now, we can deal with it then.  In the meantime, if you've always wanted a blue-eyed kid (and we blue-eyed kids are pretty adorable), then go ahead and have a blue-eyed kid.  It's OK with me.

The Treasury Plan

| Tue Feb. 17, 2009 11:13 AM EST
THE TREASURY PLAN....The Washington Post has a brief tick-tock today explaining why Tim Geithner's bank rescue plan, announced last week, was so anemic and lacking in detail.  And I have to say that it didn't leave me brimming with confidence in my economic betters.  The basic problem, they say, was that at the last minute the Obama economic team decided that their plans were unworkable:

Senior economic officials had several approaches in mind, according to officials involved in the discussions. One would be to create an "aggregator bank," or bad bank, that would take government capital and use it to buy up the risky assets on banks' books. Another approach would be to offer banks a government guarantee against extreme losses on their assets, an approach already used to bolster Bank of America.

As the first week of February progressed, however, the problems with both approaches were becoming clearer to Geithner, said people involved in the talks. For one thing, the government would likely have to put trillions of dollars in taxpayer money at risk, a sum so huge it would anger members of Congress. Officials were also concerned that the program would be criticized as a pure giveaway to bank shareholders. And, finally, there continued to be the problem that had bedeviled the Bush administration's efforts to tackle toxic assets: There was little reason to believe government officials would be able to price these assets in a way that gave taxpayers a good deal.

Say what?  After nearly two years of crisis and weeks of work, they suddenly discovered that buying up toxic assets from banks was problematic because the assets were expensive, hard to value, and risky for taxpayers?  That's not exactly rocket science.  Hell, someone who had only casually browsed through the blogosphere over the past year would know that.  And not even the financial blogosphere.  Just ordinary lay blogs like this one.

I really don't know what to think of this.  Maybe the Post has it wrong.  (Though their account matches others I've read.)  Maybe the problems were actually more subtle than the Post lets on.  But it sure sounds as if the Treasury team spent months discovering little more than that the world is round.  WTF?

Dear US Mint: Pump Your Brakes

| Tue Feb. 17, 2009 11:00 AM EST

The US Mint is completely out of control. Most recent illustration: the release of four (4!) new pennies commemorating the 200th anniversary of Abraham Lincoln's birth. The first, shown at the right, is already in production. Here are details:

The first coin, nicknamed the "Kentucky Penny," features an image of one-room log cabin where Lincoln was born on Feb. 12, 1809, near Hodgenville, Ky....
The second design, the "Indiana Penny," features an image of a young Lincoln taking a break from his work as an Indiana rail splitter. It will find its way into pockets and change purses starting May 14.

The "Illinois Penny," marking Lincoln's work as a state legislator, will start dropping into tip jars Aug. 13.

And the fourth penny, with an image of the unfinished U.S. Capitol dome, makes its debut Nov. 12. The unfinished dome symbolizes the nation torn apart by the Civil War and Lincoln's resolve to bring it back together.

And just in case that wasn't enough, the Mint is also producing 500,000 commemorative Lincoln silver dollars. This is officially Minters Gone Wild. Tourists visiting America already have to deal with the fact that our quarters have over fifty different images on the back, many of which are obscure references to local tourist attractions. (Some don't even exist any more!) There are two different versions of Jefferson on our nickles, there are dollar and half-dollar coins you've never heard of, and starting in 2010 the US Mint is going to start featuring national parks on our quarters. Did you know that there are $10 coins featuring famous first wives?

Enough! The pictures on the back of our coins ought to mean something. I know this is a bizarre place to make a stand for tradition, but we're now printing coins with middling Presidents Harrison, Tyler, Polk, and Taylor on them. At this point, the national Mint is like a frantic crack addict, looking desperately for a new fix that it knows it will enjoy less than the last. Consider this an intervention, Mint. Go check yourself into rehab before we find you sprawled out in a gutter surrounded by dimes with pictures of Grover Cleveland's private commode on the back.

Update: This post was originally titled "Dear US Mint: Pump Your Breaks," because I am an idiot.

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Should We Be Critical of the Geithner About-Face?

| Tue Feb. 17, 2009 10:28 AM EST
A lot of early morning chatter on the internets is focusing on this WaPo story, which suggests that Treasury Secretary Tim Geithner's rollout of the Wall Street bailout version 2.0 was "hobbled" by a last minute change of plans. "According to several sources involved in the deliberations, Geithner had come to the conclusion that the strategies he and his team had spent weeks working on were too expensive, too complex and too risky for taxpayers," the article says. "They needed an alternative and found it in a previously considered initiative to pair private investments and public loans to try to buy the risky assets and take them off the books of banks."

This news isn't being received kindly. TPM's top headline: "How Geithner's Bailout Rollout Flopped." Mike Tomasky echoes the Post and says that Geithner's effort was "hobbled." Conservative blog Red State is calling the situation a "picture of dysfunction."

And yet, why? I agree that Geithner should have ignored his arbitrary deadline in order to put more meat on the bones of his plan. I agree that it is ridiculous that the administration gave Geithner no staff to work with. But shouldn't we applaud the fact that Geithner did not stubbornly stick to a plan that he could see was not working, despite the fact that he had spent weeks working on it? Wasn't it characteristic of the Bush Administration to never admit mistakes and to obstinately stick with policies that were obvious failures? Doesn't that explain years 2003-2006 of the Iraq War and Donald Rumsfeld's tenure as Secretary of Defense?

Geithner saw that he had a flawed plan. Instead of saying, "It's too late to change course" or "We put too much work in to switch things now," he scrapped what he had and went with something better. I say we give him credit for that.

538's Nate Silver Predicts the Oscars

| Mon Feb. 16, 2009 6:27 PM EST
If you thought you had post-election letdown syndrome, with the endless hours of TV punditry and blog pontification that once filled your days and nights suddenly evaporating, imagine what Nate Silver feels like. His labor-intensive web site, fivethirtyeight.com, rocketed to prominence last year as the most reliable and thorough electoral predictor around, but after the election, what does he have to post about? Well, it turns out his geeky brilliance can be used to predict other things as well, including the lame old Oscars, heading to your TV this Sunday. Silver fed the history of Oscar winners into his supercomputer for New York magazine, and the results included both the obvious and the somewhat surprising.

Insolvency

| Mon Feb. 16, 2009 2:34 PM EST
INSOLVENCY....Is the U.S. banking system insolvent?  John Hempton provides five different definitions of insolvency and suggests that the answer isn't as clear as we might like:

Now when a blogger or an analyst tells you a bank or the system is insolvent then ask them what definition of insolvency they are using and test them against that definition. Then test them against others — and work out — in the context given — whether the institution is solvent against the definition appropriate for the circumstances. People who do not think clearly as to definition of insolvent are being sloppy — and that includes most the bloggers I most admire including Paul Krugman. The context in which the banking system is insolvent is that (a) it is illiquid because people don’t trust it and (b) it can’t get enough liquidity because it has to sell assets into a market in which they are trading considerably below their “yield to maturity or GAAP price” and if you sell it at that price you reveal “mark-to-market” insolvency as per Roubini. However provided the banking system could remain liquid it is unlikely it will actually be insolvent though individual banks might be. [I should note that this is a US conclusion. The UK banks started much more thinly capitalised and I think they are insolvent.]

This is what the stakes are in the (so far incompetent) government policy as to how the banking crisis is to be dealt with. What is a marginal solvency crisis (and that is all it is on a yield to maturity basis) is being turned into the mother-of-all-liquidity-and-solvency crises. Sure the banks bought in on themselves by telling so many lies in the good times (so they are never believed now). But now the problem is beyond their ability to control.

Anyway wholesale nationalisation is not the right policy per-se. It will the inevitable result of following the wrong policies. The right policies will involve selective nationalisation — what I have described in other posts as “nationalisation after due process”.

The whole post is a long one, and hinges largely on a combination of regulatory forebearance issues and questions of whether toxic assets in the banking system are valued at fire sale prices or their most likely long-term yield.  I don't know if I agree with the whole thing or not, but I do agree that some kind of consistent and transparent test for solvency is needed to replace the ad hoc mess we've had up until now — and Hempton proposes one at the very end of the post.  The whole thing is educational and worth a read.

Filibuster Reax

| Mon Feb. 16, 2009 12:58 PM EST
FILIBUSTER REAX....Guess what?  It turns out that the blogosphere is chock full of pie-in-the-sky alternatives for doing away with the filibuster.  I've even got one myself.  But let's round up the others first.  Here's Matt Yglesias:

Pass a measure in the 111th congress saying that there will be no filibustering starting with the 113th congress. That would avoid the sense that the reform was a mere power grab.

I like this idea a lot. Unfortunately, my understanding of the rules suggests it's impossible. The only way to do away with the filibuster is via an arcane challenge to a point of order that would be sustained by the vice president while presiding over the Senate.  So it either happens or it doesn't.  There's no way for the 111th congress to pass a resolution that's binding on the 113th.

Hilzoy offers a couple of other alternatives.  She notes that modern filibusters are tepid affairs, but there's a reason for that: old-school filibusters are actually more tiring for the majority than for the filibustering minority.  Everybody got tired of that starting in the early 60s, and the reforms that were put in place eventually degenerated into today's routine requirement for 60 votes to pass virtually all legislation in the Senate.  What to do?

The Senate might make cloture votes require 60% of the votes of those who are present and voting, for instance. That would mean that the side that was mounting a filibuster would have to keep all its members around for the duration. Alternately, the Senate might adopt a rule that said that during filibusters, if a quorum was not present, the Senator who was speaking could decide to go on speaking or to allow a vote on cloture, to be decided by a majority of those present and voting. If s/he decided to go on speaking, s/he could do so, but no other Senate business could be conducted until the next business day. If s/he opted for the cloture vote, it would take place.

Maybe, though once again it's not clear how this could happen since I think it takes a two-thirds vote to change Senate rules.  Stuck again.

But as long as we're chattering about impossible things, here's my idea: a court case challenging the constitutionality of the filibuster.  Basically this would take the form of an originalist argument that the framers always intended for bills to be passed by majority votes in both Houses.  This wasn't spelled out specifically in Article 1, but that's only because it was such a deeply held assumption that nobody even thought it necessary to put it in writing.  Majority rule was quite plainly the default requirement, and in cases where a supermajority was required it was spelled out specifically.

In practice, of course, there's no chance that the Supreme Court would insert itself so deeply into the internal workings of the legislative branch, especially in the case of a custom that's been around for nearly two centuries.  So there's only one alternative left.  Steve Benen explains:

Perhaps there can be some kind of limit on the number of filibusters (kind of like NFL coaches having a limit on how many times they can challenge a referee's call on the field).

James Joyner is enthusiastic too ("Perhaps if they successfully challenge two bills, they get a third!").  Count me in as well. If it's pie-in-the-sky we're going to talk about, what better model do we have than professional sports?  The NFL might have a bad habit of changing its rules about as often as most of us change our shirts, but at least they manage to crown a champion every year.  Compared to Congress, that's not bad.