Kevin Drum

Tom Friedman: Good or Evil?

| Wed Mar. 3, 2010 4:57 PM EST

Tom Friedman devotes today's column to a "public service": bringing Intel CEO Paul Otellini's concerns about the federal tax code to the broader public:

“The things that are not conducive to investments here are [corporate] taxes and capital equipment credits,” he said....If the government just boosted the research and development tax credit by 5 percent and lowered corporate taxes, argued Otellini, and we “started one or two more projects in companies around the country that made them more productive and more competitive, the government’s tax revenues are going to grow.” With the generous research and development tax credits and lower corporate taxes they receive, Intel’s chief competitors in South Korea basically have “zero cost of money,” said Otellini.

Matt Yglesias is gobsmacked: "Read today’s Tom Friedman piece and watch in amazement as he doesn’t even consider the possibility that Paul Otellini’s ideas might be motivated by anything other than a disinterested concern for the welfare of the American people." In other words, it's Friedman being Friedman. Here's an exasperated excerpt from my review of The World is Flat a few years ago:

He reprints entire PR messages from eager CEOs without any apparent sense that of course these guys think their companies are doing world-shaking things. I spent the decade of the 90s as a marketing executive at a software company, and these kinds of breathless paeans are sadly familiar to me.

But Friedman remains resolutely credulous in the face of these gales of corporate spin, and in the end, his corporate triumphalism becomes an idée fixe....Every CEO he talks to is brilliant, insightful, and far seeing. Raising his own everyday experiences to the level of epiphany is yet another. He figures out one day that Southwest Airlines allows you to print a boarding pass on your computer, and it immediately becomes a strained metaphor for a global convergence of technology and human psychology. The chairman of Starbucks tells him they offer soy milk because their customers asked for it, and he presents this mundane act of satisfying customer demand as something new and visionary.

This is what makes Friedman so infuriating. His basic thesis, as it often is, is fine in today's column: Education is important, innovation and entrepreneurship are important, and American competitiveness is important. Even his tin-earred penchant for oversimplification is understandable. It might drive me nuts, but he's writing for a wider audience than just people like me. So that's fine. But then there's his actual narrative, which is so interwoven with almost childlike reverence toward the banal sayings of the rich and powerful that it's enough to make you throw his books across the room and swear off reading forever. If I want to immerse myself in breathless corporate spin, after all, I can always turn on CNBC.

But here's the question that always gnaws at me: on balance, does Friedman do more good than harm? I genuinely don't know. He really does have a huge audience, he really does explain things in a way that probably appeals to a lot of them, and for the most part his hobbyhorses are basically decent ones: clean energy, climate change, dealing with globalization, improving education, etc. He's mostly given up his cheerleading for endless war, too. So does that make up for his corporate shilldom and other assorted sins? I'm not sure.

Advertise on MotherJones.com

Tying a Rock to the Economy

| Wed Mar. 3, 2010 2:01 PM EST

Jim Bunning's ostensible reason for blocking the extension of unemployment benefits was one of fiscal rectitude: he wanted the benefits paid for instead of added to the deficit. For some reason I haven't noticed anyone pointing out how dumb this is, but CBPP does the job today:

The widespread and significant decline in economic activity that defines a recession ended sometime this past summer, and the economy is in the early stages of recovery. That is good news, but it does not mean that the economy no longer needs stimulus. The economy is just beginning to climb out of the longest and most severe recession since the Great Depression. Without additional stimulus, and soon, many economists fear that the pace of recovery will be particularly sluggish — and the economy could even fall back into recession.

....At a time when many people want to work but cannot find jobs and the demand for goods and services falls well short of what businesses are capable of supplying, the key to boosting economic activity and strengthening the fragile recovery is to create additional demand....For Congress to require contemporaneous cuts in federal spending or tax increases so that measures to boost the economy do not increase short-term deficits would be unwise and counter-productive — it would reduce the overall demand for goods and services and thereby partially or fully cancel out the economic boost that the recovery measures were designed to provide.

This is a little bloodless, as befits a policy shop full of economist wonks. So let's translate into bloggish: Bunning is a moron. The goal of stimulus spending is to increase the federal deficit. Paying for it misses the whole point. It's like putting high-test fuel in your car and then tying a lead weight to your bumper so you can't accelerate too fast.1

This is especially noteworthy in light of a recent research note from Joshua Aizenman and Gurnain Kaur Pasricha suggesting that "the aggregate fiscal expenditure stimulus in the United States, properly adjusted for the declining fiscal expenditure of the fifty states, was close to zero in 2009." That is, federal spending went up but state and local spending went down, for a net stimulus of zero. (Via Tyler Cowen.)

To sumarize, then: not only is Jim Bunning a cranky old man who held the entire Senate hostage just because he could, he's a cranky old man whose grasp of economics is nonexistent. And even at that, there were at least half a dozen Republicans who actively supported his cranky tirade and virtually none who did anything to actively fight it. Quite a party they have there.

1As CBPP points out, we should be doing something credible to rein in our long-term deficits. But that has very little to do with running short-term deficits to fund emergency stimulus during a recession.

MoJo Nominated for Online Awards

| Wed Mar. 3, 2010 1:02 PM EST

Hooray for us! Starting this year the American Society of Magazine Editors has decided to start handing out awards for online media, and Mother Jones has been nominated in two categories: news reporting (along with BusinessWeek, Slate, Time, and the Virginia Quarterly Review) and blogging (along with the Atlantic, the Economist, Foreign Policy, and the New Yorker). Wish us luck. Full list of nominees here.

So How's the Economy Doing?

| Wed Mar. 3, 2010 12:33 PM EST

Email from a friend involved in the legal end of the commercial real estate market:

We just had yet another lender pull the plug on a commercial real estate deal that was set to go.  The stated reason was minor and technical.  The real reason we're guessing is that it has too many underwater loans on its books and simply doesn't have the resources.

So what is happening now?  Remember the doom and gloom scenario of mass foreclosures by banks to get the bad commercial real estate loans off their books?  Well, if my purely anecdotal experience with the first few months of 2010 are any indication, that scenario will not be happening any time soon — which is a bad thing.  It will not be a dramatic cascade but a slow tentative process with limited positive impact on the economy.

Instead, it appears that banks are continuing to grant very long deferments rather than take the loans down.  The logic here is bizarre, but understandable I guess.  They are punting on the issue until the economy improves, which they are betting is next year or so.  But if they don't get the bad loans off their books, they can't free up their resources to provide the necessary new financing to recharge the economy.  Then next year they'll punt again.  And the vicious circle continues. I'm not sure what the government can do here, but I sure hope there is some creative thinking going on in D.C.

It's just a single data point, but I'll bet there's a lot of similar stories out there. We may have saved the banking system last year, but it's still in pretty fragile shape.

And Now, the Parliamentarian

| Wed Mar. 3, 2010 12:13 PM EST

In a display of chutzpah extreme even by modern conservative standards, Sam Stein reports that Republicans have begun a campaign to "cast doubt" on the impartiality of Senate Parliamentarian Alan Frumin. Why is this so brazen? Because they're the ones who hired him in the first place:

Frumin was elevated to the post by Republican leadership in 2001, in part because he had a reputation for adhering to institutional mores rather than personal ideology. At the time, Majority Leader Trent Lott said he was confident Frumin could do the job, having known him for many years.

....In May 2001, Republican leadership fired Frumin's predecessor, Robert Dove, after he issued a series of rulings that complicated their efforts to pass aspects of the Bush tax cuts and budget proposals through reconciliation. Dove had decided it was inappropriate for money intended for natural disaster relief to be considered through budgetary rules — and he was summarily axed.

Nickel summary: Republicans hired Frumin in 2001 specifically because they thought he might issue friendlier rulings to Republicans. Now they're afraid he's turned on them.

This is like Bush v. Gore all over again: no matter what happens, cast doubt on the legitimacy of the process. And, of course, Republicans can do this safe in the knowledge that Beck and Drudge and Rush and Fox will always faithfully adopt their latest meme, no matter how inane, and crank up the outrage machine to fever pitch. Crank it up loud enough and the rest of the media will follow because "it's news." It's a nice little racket as long as you don't mind undermining public faith in virtually every institution of democracy. Which, apparently, they don't.

Sudden Acceleration

| Wed Mar. 3, 2010 11:59 AM EST

Here's the latest on the Toyota "sudden acceleration" problem:

Momentum is building for a rule requiring automakers to install brake override systems so drivers can stop their cars during incidents of sudden acceleration, which has been blamed in the deaths of more than 50 people in accidents involving Toyota vehicles nationwide.

At a Senate Commerce Committee hearing on Toyota's sudden-acceleration problem Tuesday, Sen. John D. Rockefeller IV (D-W.Va.) said "strong legislative action," including mandates for brake overrides, is needed to protect motorists....The Department of Transportation is also considering a rule to mandate an override system. "We think it is a good safety device, and we're trying to figure out if we should be recommending that," Transportation Secretary Ray LaHood told members of the committee.

I'd like to see this happen if it's technically feasible. Here's why: Toyota obviously didn't take the reports it received of sudden acceleration problems seriously enough. My sense, though, it that there was probably a reason for that: drivers have been complaining about sudden acceleration in a wide variety of cars for decades, and their complaints almost always turn out to be bogus.1 Most of the time, what happened was that they panicked and actually had their foot on the throttle, not the brake. They're absolutely sure their foot was on the brake, but it wasn't.

This history doesn't defend Toyota's slow response, but it does make it understandable. They probably figured it was just more of the same. That's why the brake override would be a good idea. It's human nature to downplay a problem that you think you already know the answer to, and a brake override would eliminate that. If you got a report of sudden acceleration, you'd have to take it seriously. The old saw about the driver panicking wouldn't hold water. You'd know immediately that there had to be some other problem.

Plus, of course, it would also save lives when people do panic and jam their foot on the accelerator.2 Like everyone, I'll wait for the technical assessment of this, but it sure sounds like a good idea to me. How expensive can a simple mechanical linkage be, after all?

1If I'm off base about this, let me know in comments.

2Sorry, complete brain meltdown there. Obviously a brake override won't have any effect if your foot is on the throttle. Thanks to Omega Centauri in comments.

Advertise on MotherJones.com

The Postpartisan Schtick

| Wed Mar. 3, 2010 11:27 AM EST

Another Rahm Emanuel profile? How many of these things do we need? But Noam Scheiber's piece in the New Republic does contain this interesting backstory tidbit:

From the very beginning, Emanuel had a clean, elegant theory for how to guide a health care bill through Congress. He’d closely studied each previous failure from Harry Truman to Bill Clinton and concluded that time was their biggest enemy. Because remaking the health care system is such a complex task, it necessarily requires complex legislation. And there hasn’t been a 1,000-page–plus bill in history that didn’t start to stink after several months. It’s just too easy for opponents to cull a few smelly details.

So Emanuel placed a premium on speed. He nagged constantly, setting numerous deadlines....The corollary to this theory was that speed required momentum. If the hundreds of players in Congress and the health care industry believed reform would pass, then they would act so as to make that likely.

....For the first half of last year, this was almost all you needed to know about the administration’s strategy. Then, in July, the White House faced a key decision. Max Baucus, the chairman of the Senate Finance Committee, probably the most important of the five committees considering health care, had spent months negotiating with his Republican counterpart, Chuck Grassley, with little to show for it. Emanuel was getting antsy. He gathered his top aides and pressed for a way to hurry the process along. The Senate labor committee had produced its own health care bill. Perhaps, Emanuel wondered, Majority Leader Harry Reid could bypass Baucus and bring it to the floor. Or maybe Baucus could just stop bargaining with Grassley and let Reid move a more partisan version of his bill.

But, in the end, Obama himself favored letting Baucus negotiate until September....In fairness, even internal skeptics believed a bipartisan package might be attainable. The problem was that, overlaid on a strategy based on speed and momentum, the extra two months exacted a major cost.

Matt Yglesias says he's happy that Obama mostly pays attention to his policy shop, not his political shop. "The pacing of health care, however, was really just an argument about politics and would have been a smart time to listen to your savvy DC political hand."

True. But I'd tentatively take another conclusion away from this. One of the questions that's been in the front of my mind ever since the 2008 campaign is: Is Obama serious? Does he really believe in all that bipartisan booshwa? If Scheiber is right, this anecdote suggests that he really, really does. It's not just a political ploy, and it's not just a way of gaining public support. He really did think that if he negotiated long enough and treated Republicans with enough respect, a few of them would climb on board.

Now, Scheiber also reports that "even internal skeptics" favored the bipartisan approach. But I don't know if this makes things better or worse. Was the White House really packed full of people so pollyannish that they believed Chuck Grassley and John Kyl and a handful of other Republicans might eventually jump on board a policy that the Republican Party had feverishly opposed for decades? Further, that they might do so in a political environment that was growing more toxic with every passing day, fueled by the likes of Glenn Beck, Sarah Palin, and the tea partiers? Seriously? What were they smoking over there?

From 3,000 miles away, I know this stuff can seem a lot simpler than it really is. But this really flabbergasts me. It just seems wildly divorced from political reality. What did they see that I didn't?

Can Climate Legislation Be Salvaged?

| Wed Mar. 3, 2010 1:57 AM EST

Yesterday I posted briefly about a new climate change proposal floated last week by the Kerry-Graham-Lieberman team in the Senate. The problem they're trying to solve is a political one: since the cap-and-trade bill in the House (ACES) has become radioactive, they need to somehow implement carbon pricing without looking like they're just doing the same thing as the House bill. But how? Their answer is a change in policy: instead of a single, economy-wide cap on carbon, how about treating various sectors differently? Maybe a cap on coal, a tax on oil, and something else for industry.

But what was the problem with ACES in the first place? David Roberts figures there were three big ones. The first is that too many people just fundamentally misunderstood how it worked and who would benefit. Plus this:

Second, relative to Big Coal, Big Oil got the short end of the stick in ACES. Unlike the utilities, oil companies (or rather, their representatives in the House, who are mostly Republican) weren’t in the room during negotiations, so they didn’t get many favors. But while coal has a lot of power in the House, oil has enormous power in the Senate, particularly over the conservadems and Republicans needed to put the bill over the top. Big Oil’s choke hold on the Senate explains a great deal about the dynamics of climate legislation in that body.

And third, senators — particularly conservadems and Republicans — have an obsession with nuclear power that is nothing short of pathological. It would take a post, nay, a book to dig into all the reasons why, but suffice to say, to get any conservative votes in the Senate will require major sops to nuclear. Again, these particular senators, not being the sharpest pencils in the box, never understood that a cap on carbon would in and of itself provide a massive boost to nuclear. They want something special for nukes. Special and big. Something that will really piss off liberals. And they’ll get it.

So will the Kerry-Graham-Lieberman proposal fix these problems? The short answer is no: it will just piss off some brand new constituencies without really gaining the support of the folks who were opposed to ACES in the first place. For the long answer, click the link.

Filibuster Madness

| Tue Mar. 2, 2010 8:18 PM EST

Back in 2005 Democrats filibustered ten of George Bush's judicial nominees, ending with the famous "Gang of 14" compromise.1 Apparently Republicans have decided to get their revenge by filibustering every Barack Obama nominee, even ones that Republicans themselves unanimously approve of. Steve Benen has the capsule summary of Barbara Milano Keenan's meandering journey to the 4th Circuit Court of Appeals.

So what's the strategy here? Take your pick: (a) It's just to piss off Democrats. (b) It's got nothing to do with judges, it's just to slow down the Senate so that it has less time for other business. (c) It's habit. (d) All of the above. Me? I guess I'll go with (d).

1By the way, whether or not the Democratic filibusters were defensible, they had pretty good reason for them. Everybody seems to have forgotten about this history, though, so here's the background.

Latest Bunning News

| Tue Mar. 2, 2010 6:07 PM EST

Time's Jay Newton-Small on the latest Jim Bunning news:

Roll Call reports that Dems are lining up a series of senators who will attempt to move for a vote on the bill all night long, forcing Bunning to be present in the chamber to physically voice his objection to prevent a vote. It's unclear if the handful of Republicans who've spoken out on Bunning's behalf — Sam Brownback, Jon Kyl, Jim DeMint and John Cornyn — will help him sustain his block on the bill.

Later she tweets:

Bunning has placed a hold on all nominations, Reid's office tells me.

Is this guy God's gift to Democrats, or what? If he didn't exist, we'd have to invent him. It's like Dr. Strangelove except it's about Senate procedure instead of nuclear war.