2012 - %3, February

Mitt Romney's Bank-Friendly Plan to Save Detroit

| Fri Feb. 17, 2012 1:26 PM EST

Last year I took a long look at Mitt Romney's position on the auto bailout and concluded that he was kinda sorta right to say that Obama's eventual plan was close to the one he had previously recommended. Romney seems bound and determined to make me regret ever writing that, but so far I haven't had the energy to revisit the subject. Today, though, Steve Benen directs my attention to a piece by Tom Walsh in the Detroit Free Press. Romney swung by to talk to their editorial board and Walsh took notes:

To be specific about the editorial board discussion, Romney feigned surprise and outrage that anyone might conclude from his November, 2008 op-ed article in the New York Times, entitled “Let Detroit Go Bankrupt,” that he would have allowed GM and Chrysler to be liquidated if he were president. “That is so absurd,” he said.

Rather, Romney insisted, citing the second-to-last sentence in his 2008 op-ed essay, he would have steered the companies into managed bankruptcy — but with loan and warranty guarantees, not tens of billions of dollars in bailout cash. [I think Romney is right on this point. He didn't write the headline for that NYT op-ed. –ed.]

And who would have made the big loans that Romney would have federally guaranteed? The private credit markets were frozen in the financial panic of late 2008 and early 2009, leading many experts to conclude that no private lender would have stepped up to finance bankruptcies as huge and risky as those of GM and Chrysler.

When I pressed Romney on this point, he insisted that if the U.S. Treasury issued bonds or guarantees, plenty of private lenders would have surfaced.

That's probably not true. But leave that aside for the moment. Why does Romney favor loan guarantees instead of direct federal loans in the first place? The way this works, taxpayers don't just risk taking a loss, they're practically guaranteed to take a loss. If the loans perform well, private lenders get all the profit. If they tank, Treasury pays the bill. And in the meantime, billions of dollars in scarce private loans are directed toward GM and Chrysler, making it even harder for other businesses to access the credit markets.

In what way is this a better deal than just making the loans directly? As with college loan guarantees, it's really nothing more than a way of ensuring private banks a surefire profit with no risk. Republicans need to find a new wheeze. This one is getting long in the tooth.

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Quote of the Day: Negative Campaigning in Venezuela

| Fri Feb. 17, 2012 12:46 PM EST

From Venezuela's Hugo Chávez, upon learning that his opponent in October's election will be Henrique Capriles Radonski:

Now we have the loser, welcome! We're going to pulverise you. You have a pig's tail, a pig's ears, you snort like a pig, you're a low-life pig. You're a pig, don't try and hide it....The only place you're going to govern is the land of Tarzan and his monkey Cheeta.

Via Dan Drezner, who points out that Chávez's allies have also tarred Capriles at various times as gay, Zionist, fascist, and bourgeois. And the race hasn't even heated up yet.

Why Can't Republicans Figure Out How to Hold a Primary Caucus?

| Fri Feb. 17, 2012 12:31 PM EST

Adam Sorensen on the embarrassing spectacle of the Republican caucuses so far:

Sure it took a month to declare the actual winner of the Iowa caucuses, tallies from eight precincts were lost altogether and vote counting in Nevada dragged on for days, but you can’t really understand the depth of dysfunction in the caucus system until you behold the caricature of incompetence that is Maine.

A nickel summary of the Maine fiasco follows. So what's going on? I don't remember anything like this on either side in 2008. Is it just an artifact of a bunch of close contests? Are Republicans trying to prove that we need tougher election laws by holding lots of seemingly corrupt elections themselves? What the hell is going on?

The Internet Is a Major Driver of the Growth of Cognitive Inequality

| Fri Feb. 17, 2012 12:07 PM EST

Apropos of yesterday's post about using Google to convert joules to electron volts, a friend of mine emailed this morning to say that Wolfram Alpha would be an even better choice. It's one of his favorite time wasters, he said.

Well. I remember using Alpha back when it first came out, and then giving up because it didn't seem to live up to its hype. But I haven't used it in quite a while, so I headed over to try it out. But what to ask? Hmmm. How about asking it to check the price of a gallon of milk?1 So I did. Answer: $20 million gal, whatever that means, which converts to $4.62 billion cubic inches, whatever that means. If you ask for the price of a quart of milk, it tells you the milk production budget for the Quart region of Italy. Thanks, Wolfram Alpha!

But does Google do any better? Sort of. I typed in the same question, and one hit was from an elementary school class project telling me that a gallon of milk costs $2.99 in Bakersfield, along with conversions of that amount into pounds, lira, and punts. Which suggests this data might be a wee bit out of date.

Another hit was from Yahoo Answers, which informed me that the price of milk was "OUTRAGEOUSLY TOO HIGH," and then provided a range of prices from around the country. The "Best Answer," garnering two votes, was $3.50. That was in 2008. Ask.com provided answers for 1917, 1950, and 2007.

In a way, this is the internet in a nutshell. One site provides a very precise answer that's spectacularly wrong. Another site provides a fantastic wealth of answers, all of which are sort of wrong in various different ways. But if you're smart enough to reformulate your search as "usda milk price retail," as I eventually did, you'll get this extremely authoritative-looking document from the USDA that provides average retail whole milk prices in 30 different U.S. cities for January 2012. The average is $3.69 per gallon. Other reports are available for reduced fat milk, organic whole milk, and organic reduced fat milk.

Moral of the story: the internet makes dumb people dumber and smart people smarter. If you don't know how to use it, or don't have the background to ask the right questions, you'll end up with a head full of nonsense. But if you do know how to use it, it's an endless wealth of information. Just as globalization and de-unionization have been major drivers of the growth of income inequality over the past few decades, the internet is now a major driver of the growth of cognitive inequality. Caveat emptor.

1Yes, I know that's not really what Wolfram Alpha is for. No need to ruin an entertaining post over it, though.

UPDATE: Via comments, it turns out that if you type "How much does a gallon of milk cost?" into Wolfram Alpha you get the nonsense above. But if you type "price of milk" instead, you get a nice chart showing the price of milk. Live and learn.

Could the Blunt Amendment Allow Employers to Block HIV Screening?

| Fri Feb. 17, 2012 11:48 AM EST

The Weekly Standard's John McCormack insists that my piece a few days ago on Sen. Roy Blunt's (R-Mo.) amendment, which would expand "conscience" exemptions in the Affordable Care Act, is inaccurate. He maintains that it would not allow health care providers or employers to deny certain services or treatments:

Can Democrats cite real examples of Christian businessmen denying AIDS treatment or screenings prior to Obamacare's passage? No, they can't. Because that never happened. (Though you can find countless examples of Christians setting up ministries specifically devoted to providing care to AIDS patients.) Furthermore, the conscience bill would not let employers decide by themselves to ban coverage of specific services. If an employer wanted to target AIDS victims who work for him, he would have to find an insurance company that specifically denied treatment for AIDS. Does such an insurance company exist in the United States of America?

McCormack writes that "the conscience bill would not let employers decide by themselves to ban coverage of specific services." Except, that's exactly what the bill says it would do. It states that "a health plan shall not be considered to have failed to provide [Essential Health Benefits or Preventive Services]" if it fails to cover the service or benefit because "providing coverage...of such specific items or services is contrary to the religious beliefs or moral convictions of the sponsor, issuer, or other entity offering the plan." Moreover, employers frequently set up their own insurance plans and then pay insurance companies to administer them—more than half of workers were covered by such plans, according to the Employee Benefit Research Institute. So employers wouldn't have to find an insurance company that denied treatment for services or benefits mandated under the Affordable Care Act. They could design their own. 

McCormack further expresses utter disbelief that an employer or an insurance company would deny treatment to someone who has HIV or AIDS. There is actually a long history of employment discrimination cases involving employers either using this pretense to fire employees whose health care costs are expected to skyrocket on the basis of having HIV/AIDS or insurance companies denying benefits, and they're hardly just a thing of the past. On the one hand, it's a sign of progress in the fight against HIV/AIDS that McCormack finds the idea of this unconscionable; on the other hand, there was an Academy Award winning film starring Tom Hanks and Denzel Washington on the subject, so it's the kind of history he should be aware of. 

Chart of the Day: Republicans Losing Ground on Their Beloved Tax Jihad

| Fri Feb. 17, 2012 11:22 AM EST

The folks at Democracy Corps are practically giddy over the results of their latest polling:

The Republican brand is in a state of collapse — over 50 percent of voters give the Republican Party a cool, negative rating....Romney may be on the edge of political death....President Obama is now at the critical 50 percent mark on approval and is approaching 50 percent on the ballot....On the named Congressional ballot, Democrats continue to lead Republicans....Unmarried women, young voters, and minorities [...] have returned in a big way for Democrats....A drop in negative feelings about the direction of the country and the economy are major and are shaping the mood going into 2012.

What's more, as Lisa Mascaro writes in the LA Times this morning, as the fight over the payroll tax cut extension unfolded, "something damaging happened to the Republican Party's once-dominant position on tax policy." By opposing the payroll tax cut, they've allowed Obama to take the tax high ground:

The way the debate took shape has "certainly caused damage" to the GOP image, House Budget Committee Chairman Paul D. Ryan (R-Wis.) said Thursday. "It muddled the differences" between the two parties, he said.

Very sad. The chart below shows the damage to the Republican Party brand.

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GOP Rhetoric vs. GOP Reality on Slashing the Safety Net

| Fri Feb. 17, 2012 10:34 AM EST

Greg Sargent asks:

One of the central, driving questions in our politics is this: Why are people who are themselves reliant on government programs so prone to electing anti-government politicans who want to put them on the chopping block?

When we ask this question, I think you really have to distinguish between Social Security, Medicare, and everything else. Like it or not, most people simply don't think of Social Security and Medicare as "safety net" programs. They think of them as programs they've paid into all their lives and are now simply drawing down from. It's basically their own money being returned to them, not a "government program."

But there's another piece to this question that I think gets less discussion than it deserves: a lot of voters don't take seriously Republican bluster about cutting safety net programs, and they don't really trust Democrats to save them either. So from an electoral perspective, the contrast between the two parties isn't as great as it seems. The bottom line is that a lot of voters like the idea of talking tough about the safety net — it shows that your heart is in the right place, especially if you're talking about parts of the net for other people — but they don't really want the net slashed in real life. Republicans mostly deliver that combination. What's more, even if they get a little carried away, Democrats will stop them for purely partisan reasons. What's to get worked up about?

That may change if the tea-party wing of the GOP really takes over and a Republican president gets elected, but even then I suspect it won't change a lot. In fact, the recent deal over the payroll tax cut/doc fix/unemployment benefits bill suggests that even tea-party-ized Republicans can get chastened pretty quickly after a few weeks back home during an election year. They'll keep up the bluster, but they're not going to make any big cuts to the programs that their constituents truly want to keep. I think most of the people who vote for them understand this pretty well.

New Report Slams Justice Department Transparency, Goes Easy on Obama

| Fri Feb. 17, 2012 10:01 AM EST
Shh! Top secret.

Each year, the National Security Archive at George Washington University announces its Rosemary Award, given to the government agency that is deemed the most abysmal at transparency and "open government performance"—think of it as the RAZZIE Awards, but for FOIA and NatSec nerds.

And the watchdog group's 2011 Rosemary goes to (drum roll, please...) the Department of Justice, narrowly beating out the Department of Homeland Security, two senior CIA officials, CENTCOM, and the US Agency for International Development.

The Archive's report lists the following indictments:

  • persisting recycled legal arguments for greater secrecy throughout Justice's litigation posture, including specious arguments before the Supreme Court in 2011 in direct contradiction to President Obama's "presumption of openness";

"This Means War": A Lazy, (Vaguely) Pro-Patriot Act Bore

| Fri Feb. 17, 2012 6:00 AM EST

A delectable post-chase sequence Reese-Witherspoon-sandwich in "This Means War" (2012).: Photo courtesy of 20th Century FoxA delectable post-gunfight Witherspoon-sandwich in This Means War (2012).

Photo courtesy of 20th Century FoxThis Means War
20th Century Fox
98 minutes

After sitting through This Means War, you will probably feel like someone hit you with a large truck, and then forced you to eat the truck: mentally reeling, bilious, and more than a little mad at the world.

This latest romantic comedy with guns works off a popcorn plot cobbled together from the scraps of other big-budget fluff: A pair of young and debonair CIA operatives are at the top of their globetrotting, terrorist-neutralizing game. There's FDR (played by Chris Pine), the kind of 21st-century spook who spends almost as much time clubbing as he does womanizing. And then there's Tuck (Tom Hardy), his British-American partner who serves as the emotionally mature foil. On top of that, the two are best friends—you might even say that they're bromantically inseparable.

And, sometime between all the overseas terrorist-killing and looking enviably chiseled, the two agents start falling for the same woman: a consumer-products tester and Georgia native named Lauren Scott (a vivacious Reese Witherspoon). FYI, she doesn't know that her suitors are secret agents, or that they're best buds. So begins the personal "war" between two spies, replete with elaborate pranks and borderline-psychotic acts of sabotage.

Who Actually Benefits From Federal Benefits?

| Fri Feb. 17, 2012 6:00 AM EST
Roger Ippolito, a 74-year-old Korean War veteran, receives $450 a month in social security benefits.

Republican candidates have lately been parroting Charles Murray's argument that our "entitlement society" has created a nation of deadbeats who would rather live off government benefits than find a job. In response, the Center on Budget and Policy Priorities (CBPP) released a study earlier this week showing the fraction of government benefits that go to able-bodied workers.

Their estimate is about 9 percent. I linked to the CBPP study on Monday, and since their methodology was fairly complex, I added a back-of-the-envelope version that simply added up the benefits of programs that don't serve the elderly, disabled, or working poor. I figured that would make the source of CBPP's number a little more understandable.

The next day I got an email from Arloc Sherman, one of the authors of the study. You can't just add up these programs, he told me, because even a lot of programs that people think of as "welfare" actually serve the elderly, disabled, and working poor too. Medicaid is the biggest example: Most of us think of Medicaid as a program for the poor, but more than half of all Medicaid spending actually goes to the elderly and the disabled.

So what percent of each program goes to the elderly, disabled, or working poor? The bulk of both Medicare and Social Security goes to the elderly and most of the balance goes to the disabled. The Earned Income Tax Credit goes almost entirely to the working poor. But what about the others? I was surprised when I saw the complete breakdown, and you might be too. Here it is:

Eighty-three percent of Medicaid goes to the elderly, disabled, or working poor. Seventy-nine percent of school lunches. Sixty-nine percent of unemployment compensation. Sixty-four percent of SNAP (food stamps). Even TANF, the classic "welfare" program, clocks in at 46 percent—and it's a very small program. The other 54 percent only amounts to about $6 billion, a minuscule fraction of federal benefits, and ever since the 1996 welfare reform bill those benefits have been temporary anyway. It's not really possible to become dependent on TANF any longer.

Overall, only about 9 percent of government benefits go to those who could be thought of as able-bodied workers who either can't or won't find a job. And as the study says:

Moreover, the vast bulk of that 9 percent goes for medical care, unemployment insurance benefits (which individuals must have a significant work history to receive), Social Security survivor benefits for the children and spouses of deceased workers, and Social Security benefits for retirees between ages 62 and 64. Seven out of the 9 percentage points go for one of these four purposes.

Sherman adds this:

Another point: Many of those who decry the growth of entitlement spending seem to forget the most basic of all facts about it: it continues to be driven overwhelmingly by the twin engines of an aging population and the rising cost of medical care. Neither of which has much to do with dependency among the working-age population.

This is especially true for medical care, I think. We spend a fair amount of money on health care services for the poor, but even theoretically that does nothing to make them less likely to work. They still need money for everything else, after all. All it does is provide them with a bare minimum of decent health care. We can afford that, can't we?

UPDATE: I mistakenly said that all of Medicare and nearly all of Social Security goes to the elderly. In fact, about 81% of Medicare and 77% of Social Security goes to people over the age of 65. However, the chart is correct: 100% of Medicare and 96% of Social Security goes to the elderly, disabled, and working poor. I've corrected the text.