2009 - %3, January

Off the Jetway and Into the Stocks

| Mon Jan. 26, 2009 1:25 PM EST

pillory_stocks.jpg Word is out that Citigroup is finalizing the purchase of a $50 million corporate jet, complete with a luxury interior that includes leather seats, sofas, and a customizable entertainment center. The new jet will be managed by CitiFlight Inc., a Citi subsidiary that manages Citigroup's entire fleet of corporate jets.

Why is this all so outrageous? (1) Because Citigroup has received $45 billion in taxpayers funds as part of the bailout program, money earned by hard-working American men and women who have never so much as sniffed first class. (2) Commercial air travel still exists in this country! Citigroup executives don't even have to fly coach! They could fly business or first and still save money!

There is only one solution here. Please see the photo at right. President Obama, make it happen.

Update: Opprobrium works! Citigroup is backing down.

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Desperately Seeking Conservatives

| Mon Jan. 26, 2009 12:53 PM EST

DESPERATELY SEEKING CONSERVATIVES....I see that today's Bill Kristol column in the New York Times will be his last. Good. He was boring.

But who should the Times replace him with? It shouldn't be a "liberal's conservative," it should be a genuine, dedicated, smart, reality-grounded, conservative's conservative — someone who will drive liberals crazy. Who best fits that bill?

UPDATE: I was going to add something to this post and then decided not to bother. But I guess I should have. So, in response to Matt's criticism, what I meant is: a conservative who drives liberals crazy because he makes such compelling and hard-to-refute arguments for conservative ideas.

New DNI Set to Tackle Over-Classification

| Mon Jan. 26, 2009 12:46 PM EST

DennisBlair.jpg Over-classification and pseudo-classification are largely unknown but very serious problems in this country, ones that were made drastically worse during the Bush years. For additional information, see Chapter C in this report [pdf] from the 21st Century Right to Know project. We're lucky that the man slated to become the next Director of National Intelligence, Adm. Dennis C. Blair, apparently agrees. Not only that, Blair understands that the Bush Administration's use of over-classification and pseudo-classification was a product of both incompetence and, as Sen. Sheldon Whitehouse describes, an effort "to mislead the public and to frame, or more particularly, mis-frame, an outside political debate." Blair's committed to changing all of that, and I have to say, I'm happily surprised.

Getting Serious About Climate Change

| Mon Jan. 26, 2009 12:19 PM EST

GETTING SERIOUS ABOUT CLIMATE CHANGE....Barack Obama says he will direct the EPA today to take another look at its refusal to allow California to set stricter tailpipe CO2 standards than the feds:

President Obama will direct federal regulators on Monday to move swiftly on an application by California and 13 other states to set strict automobile emission and fuel efficiency standards, two administration officials said Sunday.

....Beyond acting on the California emissions law, officials said, Mr. Obama will direct the Transportation Department to quickly finalize interim nationwide regulations requiring the automobile industry to increase fuel efficiency standards to comply with a 2007 law, rules that the Bush administration decided at the last minute not to issue.

To avoid losing another year, Mr. Obama will order temporary regulations to be completed by March so automakers have enough time to retool for vehicles sold in 2011.

This shouldn't come as a surprise: during the campaign Obama said he would change course on California's application, and now he has.

For my money, though, it's the second part of this that's the most impressive. EPA was pretty much bound by court order to reconsider its CO2 position anyway, but ordering a temporary fuel efficiency regulation right away so that changes could take place in 2011 instead of 2012 shows a refreshing sense of urgency about energy and climate change policy. By itself it doesn't have an enormous impact, but then, almost nothing has an enormous impact by itself. Nonetheless, tighter mileage standards are one of the best tools we have for reducing the growth of greenhouse gases, and the fact that Obama is serious about this suggests that — as promised — he's serious about the rest of his energy package too. Happy days.

Krugman Owns "This Week" (Video)

| Mon Jan. 26, 2009 11:41 AM EST

I want to build on the point that Adam Green, writing at Open Left, makes about the need for more liberals in the mainstream media. Watch the clip below from the "Roundtable" segment on yesterday's This Week with George Stephanopoulos. Aside from Krugman, there are no liberal voices. The others on the panel either spout tendentious re-imaginings of political and economic history (George Will) or half-baked solutions that are grounded in little to no schooling or expertise (Sam Donaldson).

Green asks, "What would this segment be like if Krugman wasn't there?" I totally agree, but not just because Krugman reps the lefty point of view. In the absence of expertise, conventional wisdom fills the void. You see that from Will, Donaldson, and Cokie Roberts. Krugman pairs a liberal perspective with actual knowledge, and it's that combo that makes him the most effective member of the panel. We need more liberals in the media, but we really more liberal experts in the media. So go out and nab those Nobel prizes, folks. There's an idea war to be won.

Fed Up

| Mon Jan. 26, 2009 2:55 AM EST

FED UP....Barney Frank wants to give the Fed more regulatory power:

Congress is moving to create strong new oversight of the financial sector that would likely give the Federal Reserve authority to examine the workings of a wide range of companies in an attempt to address one of the key failures that led to the financial crisis.

But the initiative, which could be finalized in the House by spring, is raising concerns about whether it would muddy the Fed's traditional mission and concentrate too much power in a single federal body.

This is just an initial gut reaction on my part, but I don't really care much for this idea. Rationalizing our hodgepodge of regulatory agenices is a good idea, but the Fed chairman already has enormous power over the economy — too much power, perhaps — and placing both monetary authority and a vastly increased centralized regulatory authority under a single person strikes me as a pretty severe case of putting all our eggs in one basket. I'd prefer instead to see the Fed streamlined a bit, with an entirely new agency taking over the super-regulatory role if that's the road we go down.

I'm open to arguments on this, of course. But the instinct to create a single, vast, centralized oversight agency whenever something goes wrong — like the Office of the Director of National Intelligence created after 9/11 — deserves to be resisted. It's the kind of thing that makes people think they're solving a problem when they're really just redrawing the org chart. It also makes dissent harder, and that's no good thing. We could probably use more of that, not less.

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Crunching the Numbers on Obama's California Auto Move

| Mon Jan. 26, 2009 1:56 AM EST

President Barack Obama's EPA now looks likely to reverse Bush and allow California and 13 other states to set their own stricter auto emission and mileage standards. By 2016, the California rules will require automakers to show a 30 percent overall reduction in their vehicles' greenhouse gas emissions. That's not bad considering that at least 40 percent of the 16 million new cars sold each year come from states that want to adopt the California standards (and that the California rules might just become the national default anyway). The transportation sector accounts for 26 percent of U.S. greenhouse gas emissions--the largest single chunk after the catch-all category of "industry."

By 2015, the California rules are at least 3 miles per gallon stricter than federal standards. That translates into a first-year savings of at least 200 million gallons of gas. It doesn't seem like much when you consider that each day the United States uses about 390 million gallons of gas, but the savings will grow each year as more new cars hit the road, until 2020, when the California standards become 7 mpg more stringent than the federal rules and things really get interesting.

Obama's Lifeline: For a Change, a Stimulus Plan That Actually Helps the Poor and the Sick

| Sun Jan. 25, 2009 11:21 PM EST

Republicans took to the Sunday morning news shows to express their "concern" about parts of the stimulus package presented by the Obama administration last week. House Minority Leader John Boehner declared that he would vote no "if it's the plan I see today"—a pretty idle threat, since even if he takes his entire party with him, the Democrats still have nearly an 80-vote margin. In the Senate, however, two Republican votes are needed to create a filibuster-proof majority, which might at least slow the package down and could force some compromises.

There's good reason for the Republican resistance. While it makes numerous concessions to favored conservative approaches--lots of public-private partnerships that will allow the private sector to cash in, tax cuts for businesses and the middle class, and no immediate end to the Bush tax cuts (which will expire on their own in 2010)—the $820 billion stimulus package also includes some dramatic increases in support for the nation's social welfare programs.

With this package, Obama begins the process of reversing cutbacks initiated by Reagan and carried forward by the two Bushes, with some help from Clinton's welfare "reform." There may still be plenty of holes, but with this plan, the new government confirms that has some responsibility for providing a safety net for its poor and disabled, its children and elderly. To see the magnitude of the shift, it is only necessary to glance at the last budget drawn up by President Bush, for fiscal year 2009: In the midst of the growing recession, it had yet more cuts to the social welfare system, reducing already inadequate health and feeding programs for the most vulnerable Americans.

Here are some of Obama's initiatives—not quite the New Deal, but quite a new deal compared to what we've grown used to over the past 30 years:

Factoid of the Day - 01.25.09

| Sun Jan. 25, 2009 1:45 PM EST

FACTOID OF THE DAY....From Mark Kleiman, who has some advice on crime and drug policy for the Obama administration:

Doubling the tax on beer (from a dime to twenty cents a can) would reduce the assault rate by at least 5%, and maybe as much as 20%.

More advice at the link.

Pricing Carbon

| Sat Jan. 24, 2009 3:05 PM EST

PRICING CARBON....A few days ago I linked to post by Sean Casten about the implied cost of CO2 reduction in the Illinois legislature's recent deal to subsidize a "clean coal" plant in Taylorville. It came to about $400 per ton of CO2, which is fantastically higher than anyone would pay if it were done openly, rather than as part of a byzantine maze of corporate giveaways.

Sean is back today with another interesting post that looks at the cost of CO2 reduction implied in the hodgepodege of tax credits and loan guarantees that are scattered around the legislative landscape right now. Depending on who you are and what's on offer, it turns out that your reward for getting a ton of CO2 out of the atmosphere ranges anywhere from $15 to $253. This, of course, is nuts, and Sean asks:

What might a world look like that did provide a consistent policy signal on CO2? One, we would deploy a host of technologies that are cheaper and more diverse than those we currently deploy in the name of CO2 reduction. Two, we would deploy a host of technologies that cannot possibly be contemplated by those who's knowledge of possibilities is limited to those possibilities we are currently deploying. In other words, all of us.

It's all well and good to have programs that motivate people to develop and deploy technologies that reduce greenhouse gases, and carbon pricing can be an effective part of a broad regulatory program to do that. But if we're going to use carbon pricing as part of our toolkit, we're way better off simply setting a price and letting people figure out for themselves which technologies to develop, rather than having the government pick and choose for us. Not only would that get rid of absurdities like subsidizing ethanol at a higher rate than wind (it ought to be just the opposite), but it would open up the playing field to anyone who can come up with a bright idea for reducing greenhouse gases, not just those who have a big enough lobbying presence to get a break for their particular industry. The result would almost certainly be cheaper and more efficient than a patchwork of targeted tax breaks, and would also promote the development of technologies that no one is even thinking about today. It's time to start.