Kevin Drum

Your Tax Dollars at Work

| Sat Mar. 14, 2009 3:12 PM PDT
Here's something a little different to take advantage of our brief respite between Friday the 13th and the Ides of March.  Yesterday Marian and I had lunch at Ruby's, and as usual our utensils came wrapped in a napkin that was held in place by a paper napkin ring.  I have helpfully recreated this setup in the picture on the right.

Seems ordinary enough, doesn't it?  But as I unwrapped the silverware I noticed something: a patent notice.  This little paper napkin ring, it turned out, was protected by U.S. Patent No. 6,644,498.  I was intrigued.  What was patentable about this thing?  The stickum?  It seemed like ordinary Post-It Note type stuff.  The size and shape?  Couldn't be.  The logo?  No.

Luckily, the web knows all.  When I got home I pulled up the patent to see what it was for.  The answer is below the fold.

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Friday Cat Blogging - 13 March 2009

| Fri Mar. 13, 2009 11:54 AM PDT
Today is Friday the 13th and Inkblot and Domino have decided they should lie low.  No point in taking chances, right?  My mother's kittens, however, have no such superstitions and were delighted to romp around for the camera.  On the left, Ditto (because he's a carbon copy of one of my mother's other cats) is staring at a bug in the garden, waiting for a chance to pounce.  It came a few seconds after I took this picture.  On the right, Tillamook (because he looks like a piece of cheese) has scampered up a tree and is obviously delighted with the way the setting sun shows off his orange coat.

(And why was I over visiting mom?  Because Tillamook dived into her wall unit the other day, knocked the cable box down the back, and then bolted out of the room.  He was fine.  The TV, not so much.  So I went over to fish the thing out and get it reconnected.  Only time will tell if Tilly has learned his lesson.)

King Coal

| Fri Mar. 13, 2009 11:26 AM PDT
Barack Obama has promised to push cap-and-trade legislation this year, and one way of getting it approved in the Senate is to push it through via the budget reconciliation process, where it would require only 50 votes to pass.  Elana Schor reports that this has run into a roadblock:

In a letter delivered to the Senate Budget Committee yesterday, eight Democratic senators joined 25 Republicans to defend the GOP's right to set a 60-vote margin for passing emissions limits.

"We oppose using the budget process to expedite passage of climate legislation," the senators, including eight centrist Democrats, wrote in their missive.

....Late Update: The eight Democratic senators who signed on to the letter are Robert Byrd (WV), Blanche Lincoln (AR), Ben Nelson (NE), Evan Bayh (IN), Mark Pryor (AR), Bob Casey (PA), Carl Levin (MI), and Mary Landrieu (LA).

Take a look at those names: six are from the midwest and the south, joined by Casey and Byrd.  In other words, coal country senators.  Nearly all the electricity generated in these regions comes from coal, and a lot of that coal comes from West Virginia and Pennsylvania, the #2 and #4 coal-producing states in the country.

This is a dynamic to watch.  The battle over cap-and-trade isn't just between liberals and conservatives, it's also between regions.  You'll find coal-fired electric plants all around the country, but the midwest and the south rely on it much more heavily than the west and the northeast, which generate a lot of their electricity via hydro and natural gas.  Cap-and-trade will raise the price of coal-fired electricity more than any other kind, which means the price increases will hit the south and midwest especially hard.

This letter, then, isn't just a sign that there are some Democratic senators who feel strongly about not bending Senate rules.  It's a sign that Democrats from the south and midwest are probably going to have to bribed to support cap-and-trade.  The big question is, how?  Can they be bought off in fairly benign, traditional ways, or will their price effectively mean the gutting of the legislation?  Stay tuned.

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?

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?

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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.

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?