Kevin Drum

Michael Mania

| Fri Mar. 13, 2009 10:56 AM PDT
Big news from across the pond:

Tickets for Michael Jackson's 50 live dates at London's O2 arena have sold out, meaning that a staggering one million tickets to see the singer have been bought in a matter of hours....Those not lucky enough to secure a ticket can head to eBay to buy them second hand, providing they are prepared to pay between £170 and £10,000.

Obviously I'm not a cultural critic or anything, but seriously?  A million people still want to see Michael Jackson?  WTF?

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Summers at Brookings

| Fri Mar. 13, 2009 9:56 AM PDT
Tim Fernholz highlights a passage from Larry Summers' speech at Brookings today:

The stress tests now underway will enable a realistic assessment of the position of each different institution and appropriate responses in each case to assure their ability to meet their commitments and lend on a substantial scale. And as the President said in his joint address to Congress, “When we learn that a major bank has serious problems, we will hold accountable those responsible, force the necessary adjustments, provide the support to clean up their balance sheets, and assure the continuity of a strong, viable institution that can serve our people and our economy.”

As Tim says, "That answer, I think, will disappoint almost everyone with it's lack of detail, but at least doesn't rule out the various receivership plans people are discussing. Interesting, there was no mention of the public-private partnership that would supposedly be creating a market for the various toxic assets."

But while it might be wishful thinking on my part, this strikes me as a slightly stronger statement than Tim makes it out to be.  It's possible, of course, that the stress tests are intended to be fig leaves: they'll deliberately be done using scenarios that make the banks look relatively healthy and in no need of dramatic action.  But the other possibility is that they're intended in just the opposite way: as a fig leaf for the president that practically forces him to take dramatic action.  Note, for example, that Summers didn't simply make an anodyne statement about safety and security, he specifically said that the administration's response would be designed to insure that big banks "meet their commitments and lend on a substantial scale."  That's a stiffer metric than simply being able to meet their payroll.

Like I said, I might be reading too much into this.  But we know two things about pronouncements like this: (a) they're usually very, very circumspect in order not to panic the markets, and (b) they're very carefully vetted.  Summers chose his words deliberately here, and it's possible that they really mean something.

Cramer Folds

| Fri Mar. 13, 2009 9:25 AM PDT
Like everyone in the galaxy, I watched Jon Stewart eviscerate Jim Cramer last night. But it was kind of weird. The conventional wisdom is that Stewart ripped Cramer to shreds — and he did — but he only succeeded because Cramer apparently made a preemptive decision not to fight back. He just sat there and took it. Felix Salmon has the right take:

Jim Cramer was craven and highly apologetic on the Daily Show last night [...] and almost never attempted to defend himself, preferring to go the mea culpa route.

....In a sense, it's a shame that Stewart had on his show the most self-loathing of all the CNBC personalities — but then again he, too, had little choice, since Santelli cancelled on him. But the lesson of this interview is that when CNBC is pressed on the way in which it has hurt America, its response is to capitulate and say "well I guess that's true". Which means that the bigger lesson is simpler still: don't watch CNBC. Doing so will do you no good at all, and will quite possibly do you a lot of harm.

There's a real sense in which CNBC is truly a microcosm of the entire financial meltdown.  Sure, they were irresponsible, and they deserve the hits they're taking.  At the same time, they only succeeded because the more irresponsible they got, the more their audience grew.  Their audience deserves a share of the blame in the same way that the voracious buyers of preposterously leveraged and tranched CDOs share some of the blame with the financial engineers who put them together.  None of this works without a willing buy side, does it?

Glenn Beck

| Fri Mar. 13, 2009 8:28 AM PDT
It's more and more obvious that Glenn Beck has decided that becoming a male Ann Coulter is good for his ratings.  So his show is now dedicated to saying increasingly outrageous things solely in an attempt to get liberals to denounce him and drive his ratings yet higher.  Conclusion: it's time to start ignoring him, right?

Obama's Choice

| Thu Mar. 12, 2009 10:47 PM PDT
The New York Times reports that President Obama has a decision to make:

In separate, strongly worded orders, two judges of the federal appeals court in California said that employees of their court were entitled to health benefits for their same-sex partners under the program that insures millions of federal workers. But the federal Office of Personnel Management has instructed insurers not to provide the benefits ordered by the judges, citing a 1996 law, the Defense of Marriage Act.

....Now, Mr. Obama is in a tough spot. If he supports the personnel office on denying benefits to the San Francisco court employees, he risks agitating liberal groups that helped him win election. If he supports the judges and challenges the marriage act, he risks alienating Republicans with whom he is seeking to work on economic, health care and numerous other matters.

Look: this isn't so tough.  Just do the right thing.  How hard is that?

Testing Our Kids

| Thu Mar. 12, 2009 2:38 PM PDT
In his big education speech on Tuesday, President Obama said this:

Today’s system of fifty different sets of benchmarks for academic success means fourth-grade readers in Mississippi are scoring nearly 70 points lower than students in Wyoming—and getting the same grade.

Bob Somerby wants to know what he's talking about:

According to Obama, fourth-grade readers in Mississippi “are scoring nearly 70 points lower than students in Wyoming—and getting the same grade.” Does anyone know what that actually means? Mississippi kids are scoring “seventy points lower” on what? (Seventy points can represent a very large or very small difference in achievement, depending on the measure in question.) And what “same grade” are both groups of kids getting? This was a very important speech—and this was a central contention within it. And yet, this statement makes no sense at all. (The spectacularly unhelpful White House “fact sheet” makes no attempt to explain it.)

I'll take a guess.  Obama was talking about state testing regimes, and a couple of years ago the Department of Education released a study (here) that tried to convert passing scores on the various state tests to more standardized NAEP scores.  In fourth grade reading, they found that the passing score in Wyoming was equivalent to an NAEP score of 228, while in Mississippi it was equivalent to an NAEP score of 161.  That's a difference of 67 points.

This was a poorly worded passage in Obama's speech, but my guess is that "getting the same grade" was supposed to mean something like "meeting the minimum state requirement."  As Bob says, there are some pretty obvious explanations for all this, but still, the difference between the highest and lowest state standards really is an astonishing 70 points or so (very roughly equivalent to seven grade levels).  That's probably what Obama was getting at.

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Vetting Hell

| Thu Mar. 12, 2009 12:09 PM PDT
We have yet another casualty in the vetting wars:

Democratic sources say that H. Rodgin Cohen, a partner in the New York law firm Sullivan & Cromwell LLP, and the leading candidate for Deputy Treasury Secretary, has withdrawn from consideration.

....Democratic sources said that an issue arose in the final stages of the vetting process.

Cohen had risen to the top after the withdrawal last week of expected deputy treasury secretary pick Annette Nazareth. As one source put it, "it's back to the drawing board."

Without knowing what the "issue" was, I guess there's no way to comment on this.  But if it didn't come up until the final stages of the vetting process, I wouldn't be surprised if it's substantively minor but politically dangerous, the kind of thing that grandstanding senators will turn into a cause célèbres even though they know it's fundamentally trivial.  And when they're done, they'll go back to asking why Obama isn't taking the financial crisis more seriously.

Bah.  Get the Senate out of this whole process.  Let 'em confirm cabinet heads and leave it at that.  Do they really need to pretend to care about every deputy and assistant deputy too?

Bottle Wars

| Thu Mar. 12, 2009 11:52 AM PDT
Hanna Rosin — currently nursing her third baby — says she accidentally picked up a magazine one day and discovered that breast feeding isn't quite the miracle cure everyone thinks it is these days.  In fact, the studies on its benefits are mostly pretty indeterminate:

Extended breast-feeding did reduce the risk of a gastrointestinal infection by 40 percent....in real life, it adds up to about four out of 100 babies having one less incident of diarrhea or vomiting.

....What does all the evidence add up to? We have clear indications that breast-feeding helps prevent an extra incident of gastrointestinal illness in some kids—an unpleasant few days of diarrhea or vomiting, but rarely life-threatening in developed countries. We have murky correlations with a whole bunch of long-term conditions. The evidence on IQs is intriguing but not all that compelling, and at best suggests a small advantage, perhaps five points; an individual kid’s IQ score can vary that much from test to test or day to day.

....So overall, yes, breast is probably best. But not so much better that formula deserves the label of “public health menace,” alongside smoking. Given what we know so far, it seems reasonable to put breast-feeding’s health benefits on the plus side of the ledger and other things—modesty, independence, career, sanity—on the minus side, and then tally them up and make a decision. But in this risk-averse age of parenting, that’s not how it’s done.

It's an interesting read.  Her takeaway is that breastfeeding is probably a good thing, but being manic about doing it exclusively isn't really justified.  Letting Dad warm up a bottle of formula in 3 in the morning isn't likely to do any harm, and the extra sleep might make you a better mother in the long run.

Frozen Pork

| Thu Mar. 12, 2009 11:07 AM PDT
Jonathan Stein and David Corn have perused the recently passed omnibus spending bill in search of the dreaded earmark, and guess what?  Alaska got a lot of them!  So what does that firebreathing scourge of earmarks, Sarah Palin, have to say about that?

Asked by Mother Jones about the Alaska earmarks, Bill McAllister, Palin's communications director, pointed to Sen. Lisa Murkowski (R-Alaska) and Rep. Don Young (R-Alaska) as responsible for these provisions. But in an email, he noted that a "few of [the Alaska earmarks] were requested directly" by Palin. But how many? And which ones? McAllister declined to say.

Earmark opposition is so 2008, darlings.  How long do you think it will be before Palin flip-flops yet again and decides she supports the Bridge to Nowhere after all?

Chart of the Day - 3.12.2009

| Thu Mar. 12, 2009 10:33 AM PDT
Should healthcare reform include a public option?  That is, even if most people continue to get their healthcare via private insurers, should they have the option of signing up with a public plan if they want to?

The argument in favor is fairly simple: it keeps private insurers honest.  If the free market really does produce efficiencies and lower costs, then private plans ought to be able to provide medical services for less than the bloated government bureaucracy that runs Medicare.  If it turns out they can't, then they'll go out of business.

The argument against, such as it is, is that a public option will....what?  Force doctors to accept lower payment by fiat, I guess.  Or compete unfairly in some way.  I'm not sure.  My own guess is that a public option would be a boon for private insurers.  They really don't want to treat the sickest, costliest patients, after all, and even if they're required to insure all comers they'll still do everything they can to avoid taking them on.  That's a whole lot easier if turning the hardest cases away merely means they sign up for Medicare rather than being left to die in the street.

Anyway, it turns out the American public agrees.  In a recent survey, 71% said they favored "access to affordable, quality health care for all Americans even if it means a major role for the federal government."  This held up even under a barrage of hostile questions.  Ezra Klein summarizes:

The poll was conducted by Lake Research Partners and it tests reactions to the public insurance option seven ways to Sunday. It asks whether the public insurance option "will have an unfair competitive advantage over private insurance because the government will set rules that favor the public plan" and suggests that "a new public health insurance plan will reimburse doctors and hospitals at much lower rates, causing many doctors and hospitals to shift higher costs onto people who buy private health insurance." It dangles that "a public health insurance plan will be another big, government bureaucracy that will increase costs to taxpayers" and warns that it might "force people into lower quality care including long waiting times and rationing of care."

It doesn't matter. In case after case after case, the public insurance option retains majority support.

The bad guys haven't started up their PR blitz yet, of course, so this could all change.  But it's an encouraging sign.