Kevin Drum

At a Loss for Words

| Tue Dec. 30, 2008 7:32 PM EST

AT A LOSS FOR WORDS....In case you're wondering what I think about Rod Blagojevich having the balls to appoint a replacement to Barack Obama's Senate seat, I don't really have the words for it. I mean, what can you say about something like this? Blagojevich is obviously living in his own personal looking-glass land these days.

Still, the silver lining here is that maybe this will give the Illinois legislature the kick in the butt it needs to get cracking on impeachment. Maybe.

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Housing Market Continues to Suck

| Tue Dec. 30, 2008 6:51 PM EST

HOUSING MARKET CONTINUES TO SUCK....Housing prices are still plunging:

Home values in 20 large metropolitan areas across the country dropped at a record pace in October as the fallout from the financial collapse reverberated through the housing market, according to data released Tuesday.

...."October was clearly the free-fall month," said David M. Blitzer, chairman of the index committee at Standard & Poor's. "Everything was going against us in October, without exception."....Prices are falling at the fastest pace on record, a sign that the housing market is a long way from recovery.

The housing market is obviously in terrible shape, but for what it's worth, I think the idea that October was uniquely bad is slightly miscast. As you can see in the Case-Shiller index at right, housing prices began plunging at a rate of 2-3% per month in October 2007, moderated a bit starting in May 2008, and then resumed their 2-3% monthly decline in September. It's not so much that we're suddenly seeing record declines, as it is that the record declines that started last year got interrupted for a few months this summer and are now back in business. But this is no surprise: the Case-Shiller index is still only down to 158, and we've always known that it's not going to stop much before it gets into the 100-120 range. What's more, rapid declines aren't entirely bad news. We're probably better off getting to 100 sooner rather than later, since economic recovery almost certainly can't start until housing prices bottom out.

In the meantime, of course — and I say this as someone currently trying to sell a house — the news is grim every direction you look. Even at 2-3% per month, we've got at least another year before the housing market starts to reach its natural level. Until then, we're screwed.

*The Stimulus Bill

| Tue Dec. 30, 2008 2:37 PM EST

THE STIMULUS BILL....Tim Fernholz points to this Bloomberg piece about Mitch McConnell's reaction to a massive stimulus bill:

"A trillion-dollar spending bill would be the largest spending bill in the history of our country at a time when our national debt is already the largest in history," McConnell, a Kentucky Republican, said in a statement. "As a result, it will require tough scrutiny and oversight. Taxpayers, already stretched to the limit, deserve nothing less."

McConnell called for giving lawmakers and the public at least one week to review the legislation once it has been written. He also said he wanted Senate committee hearings on the measure, rather than immediate floor consideration.

Italics mine. Obviously McConnell is just trying to rustle up opposition to the bill, and his tired invocation of "fraud and waste" harkens back to equally tired Republican opposition to the WPA in FDR's day. It's pretty weak tea. Still, I'll give him a pass on this. If the public stance of the Democratic leadership during a Republican presidency was a request for one week of hearings and review on a $700 billion measure, that would seem pretty reasonable to me. Coming from a Republican during a Democratic presidency, it seems pretty reasonable too. I'll bet McConnell gets that and more. Hopefully, the days of thousand-page bills coming out of conference and getting sent to the floor within 24 hours died when....

....Mitch McConnell's party lost control of the Senate. I say, let it stay dead.

Quote of the Day - 12.30.08

| Tue Dec. 30, 2008 12:37 PM EST

QUOTE OF THE DAY....From Treasury Secretary Henry Paulson, looking back on his handling of the economic crisis:

I easily could imagine and expected there to be financial turmoil. But the extent of it, O.K., I was naïve in terms of — I knew a lot about regulation but not nearly as much as I needed to know, and I knew very little about regulatory powers and authorities. I just had not gone into it in that kind of detail.

This is from the same Vanity Fair piece that I linked to a few minutes ago. Hat tip to Dan Drezner, whose only comment is an apt one: "Sweet Jesus."

Bush and Katrina

| Tue Dec. 30, 2008 12:26 PM EST

BUSH AND KATRINA....In Vanity Fair this month, both Dan Bartlett and Matthew Dowd say that Hurricane Katrina was the event that finally, irrevocably, killed the Bush presidency. Here's Dowd:

Katrina to me was the tipping point. The president broke his bond with the public. Once that bond was broken, he no longer had the capacity to talk to the American public. State of the Union addresses? It didn't matter. Legislative initiatives? It didn't matter. P.R.? It didn't matter. Travel? It didn't matter. I knew when Katrina — I was like, man, you know, this is it, man. We're done.

I think this is only half right. I've long believed that what really killed Bush was the contrast between his handling of Katrina and his handling of the Terri Schiavo case, which had come only a few months earlier. It was just too stark. What the American public saw was that when the religious right was up in arms, the president and the Republican Party acted. Bill Frist performed his famous long-distance diagnosis; Tom DeLay fulminated on the floor of the House; Republicans tried to subpoena both Terri and Michael Schiavo; and President Bush interrupted his vacation and made his famous midnight flight to Washington DC to sign a bill transferring the case to federal court. It was both a whirlwind and a political circus.

And it showed that Bush could be moved to action if the right constituency was at risk. It wasn't just that Bush was mostly MIA during the early stages of Katrina, but that he was plainly capable of being engaged in an emergency if it was the right kind of emergency. But apparently New Orleans wasn't it. And that was the final nail in the coffin of his presidency.

More Unions

| Tue Dec. 30, 2008 11:48 AM EST

MORE UNIONS....Yesterday I said that unionization, especially in the service sector, was pretty much the only serious idea on the table for increasing low-end wage growth. Mickey Kaus responds:

The only idea on the table? How about restoring economic growth and creating a tight labor market, giving all workers (not just the unionized) greater bargaining leverage? That's the traditional Clintonite formula, no?

This is a point Mickey has made repeatedly to me, both in print and in person. Unfortunately, he's never explained just how we're going to get to this paradise of perpetual high economic growth and tight labor markets — even though there's a Nobel prize waiting for him if he does. The dotcom bubble managed to accomplish it for three or four years out of the last 30, but that's about it. So until I hear the plan, I'll stick with my support for unions, flawed though they may be.

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Don't Let the Door Hit You Etc.

| Mon Dec. 29, 2008 8:53 PM EST

DON'T LET THE DOOR HIT YOU ETC....What's the right going away present for a guy who's a serious contender for worst president in history? I can think of a few, but alas, they're beyond my meager powers to provide. So instead, how about sending us an entry in our "Goodbye, George W. Bush" video contest? Just put your 30-second (or so), PG-13 video on YouTube labeled "Mother Jones Goodbye Bush Video" and send us the link at:

mojobushvideo@gmail.com

All styles of entries are welcome, from simply talking at the camera to fancier stuff. There will be prizes, of course. So rip, riff, and rant away. And tell your friends! The more entries the merrier.

*Quote of the Day - 12.29.08

| Mon Dec. 29, 2008 3:46 PM EST

QUOTE OF THE DAY....From Marcia Angell, former editor of the New England Journal of Medicine:

It is simply no longer possible to believe much of the clinical research that is published, or to rely on the judgment of trusted physicians or authoritative medical guidelines.

That is her conclusion in a review essay published in The New York Review of Books. Click the link to learn what it's based on.

Unions

| Mon Dec. 29, 2008 2:38 PM EST

UNIONS....Ezra Klein on unions:

The last great leap forward for unions was during World War II, and the last great expansion of the American middle class followed in its aftermath. In contrast, the most recent expansions — which have largely occurred in the absence of unions — have benefited America's rich.

Yep. And if there's one thing you definitely can't blame our current economic crisis on, it's spiraling middle class wages. In fact, there's a pretty good case to be made that stronger middle class wage growth would have reduced the motivation to borrow so heavily, which is a big contributing factor to the depth of the recesson we're facing now. (It also might have kept a little more money out of the hands of idiot Wall Street bankers, which would have been no bad thing either.)

Unions are hardly a panacea for middle class wage growth, but they can help. I'm pretty open to the idea that Mickey Kaus has been writing about lately, namely that mushrooming work rules are a specific problem for American-style unionization, and I'd be happy to see good-faith efforts to address reform in that area. Unfortunately, good faith is in very short supply in the anti-union camp. Conservatives flatly oppose anything that gives labor any additional bargaining power, full stop, and that doesn't leave much room for compromise. So unions it is. Especially in the service sector, they're pretty much the only idea on the table for seriously addressing low-end wage growth, and that means I'm for 'em.

Gaza

| Mon Dec. 29, 2008 1:53 PM EST

GAZA....Richard Boudreaux of the LA Times writes that Israel's goals in the Gaza Strip are vanishingly limited:

Instead of boasting that they would "destroy" the enemy, as they did in the case of Lebanon, Israeli leaders set the more modest aim of "improving the security" of terrorized Israeli communities.

...."The army doesn't even have the pretense of neutralizing Hamas' ability to launch rockets. We have tried that before and failed," said Alon Ben-David, military correspondent for Israel's Channel 10 television.

"This operation," he explained, "is directed at Hamas' motivation to fire rockets at Israel rather than its actual ability to do so."

....And it remains to be seen whether Israeli leaders have prepared adequately for the complications that may lie ahead if their army launches a ground campaign against Hamas' 15,000-man paramilitary force, which has drawn its own lessons from Hezbollah's success in the Lebanon war.

If the point of the Gaza offensive is truly just to hit Hamas hard enough that they basically give up, then it strikes me as possibly even more poorly thought out than the Lebanon war. But on the larger issue of what the U.S. response should be, I'm keenly aware of Jonathan Zasloff's point in this post:

All those who insist that the United States should "solve" the problem should explain how. And if they can't do that, then maybe they should take some quiet time.

I doubt very much that the Israeli offensive will do them any good in the long term. But it's also not clear to me exactly what the way forward is at this point. So, for the most part, I'll stay quiet. Needless to say, plenty of other people won't, so I'm sure my voice won't be missed.