2009 - %3, June

Climate Change Hobbles Forward

| Tue Jun. 23, 2009 11:55 PM EDT

Jay Newton-Small reports that Rep. Collin Peterson (D–Minn.) has finally managed to insert enough rapacious farm welfare language into the Waxman-Markey climate bill to satisfy himself and has now agreed to let the bill come to a vote on the House floor.  Then there's this:

Peterson, who said he represents the voting power of 45 Blue Dogs and House Agriculture Committee Democrats, told reporters late Tuesday that he didn't think they'd get a deal. “It was touch and go,” he said, shaking his head. Strikingly, Peterson said he dealt little with the Administration in the negotiations — speaking instead with Waxman and House Speaker Nancy Pelosi. Obama pushed for the legislation in remarks Tuesday, but the Administration has been markedly less involved in the climate change bill than in the stimulus, budget or health care reform. Once the global warming bill clears the House, though, it faces a far from certain future in the Senate where Obama's support will be more keenly needed.

Ugly, ugly, ugly.  Still, if that last part is true, let's hope Obama decides to get a little more involved in things going forward.  The Senate is not exactly the place were mediocre bills are sent to get better, after all, and this one really can't afford to get much worse.

And while we're on the subject of legislation, if you're the kind of person who contributes money to Democratic candidates and fundraising groups, Jonathan Zasloff has some pretty good advice for you.  Click here to read it.

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Military Industrial Complex 2-Robert Gates 0

| Tue Jun. 23, 2009 10:50 PM EDT | Scheduled to publish Wed Jun. 24, 2009 10:20 AM EDT

Barney Frank's amendment removing money for the F-22 got shot down by the Rules Committee last night and won't come up for a vote. That was the House's last chance to take the extra F-22 funds out of the defense budget authorization bill.

The next stop is the Senate, where Armed Services chair Carl Levin and ranking member John McCain both oppose buying more planes than Gates requested—although House Armed Services backed the F-22 over the objections of its chairman, Rep. Ike Skelton. Of course, the appropriators also get to weigh in, too. In the Senate, that means this guy.

So, lawmakers have now come out swinging for two big programs that Defense Secretary Robert Gates wants to cut. In addition to the House's backing for the F-22, the war supplemental passed by Congress earlier this month included $2 billion for C-17 cargo planes that Gates says the DoD doesn't need.

 

Obama and the Press

| Tue Jun. 23, 2009 7:56 PM EDT

Walter Shapiro, after watching Barack Obama reply sharply to a couple of questions at today's press conference, offers up a theory:

In response to the next question — about the potential consequences if Iran continued to suppress demonstrations — Obama said with a sharp edge in his voice, "We don't know yet how this thing is going to play out. I know everybody here is on a 24-hour news cycle. I'm not. Okay?"

Now I am not going to claim that the First Amendment requires presidents always to wear smiley faces when taking questions from reporters. Nor am I going to deny that occasionally — very occasionally — the short-term mindset of the press pack can be irritating for presidents with a more transcendent view of global events.

Instead, I am bringing this up because I want to tentatively advance a larger theory about the president's public moods. Obama tends to drop his cool veneer and sound exasperated when he knows that he is in the wrong.

Hmmm.  I suppose there might be something to this, but I have a different theory: the press only really gets disturbed by Obama's occasional acid tongue when it's aimed at the press.  On a later question about Obama's struggle to quit smoking, Shapiro says, "Words alone cannot convey Obama's mocking tone and his obvious disdain for this 'human-interest story,'" but I watched that part of the press conference and it seemed like a pretty mild dig to me.  You can judge for yourself above.

There's a convention in American politics that says politicians can manipulate the press behind the scenes as much as they like, and for the most part no grumbling is allowed.  It's all part of the game.  On camera, the rules are supposed to be same: the president is expected to pretend that every reporter is serious and well-briefed and every question is smart and penetrating.  But Obama doesn't always like to play by those rules.  He's occasionally willing to pull back the curtain on the media's inanity and to call a dumb question a dumb question.  Unsurprisingly, reporters don't like this much.

Shapiro headlined his post, "Pushing the President's Buttons."  But I think it might have been the other way around: the president was pushing his.

Corn on "Hardball": Michelle Obama Helping Health Care Reform?

| Tue Jun. 23, 2009 6:00 PM EDT

On a day when the politerati focused on President Barack Obama's press conference (Iran, health care, Iran, health care, the economy, smoking, Iran), Chris Matthews, Richard Wolffe, and I went off-topic to discuss whether Michelle Obama can help her husband sell the health care bill now under construction in Congress. We then moved on to the "disappearance" of GOP South Carolina Governor Mark Sanford.

 

You can follow David Corn's postings and media appearances on Twitter.

 

League of Conservation Voters to Congress: Support Climate Bill or Else

| Tue Jun. 23, 2009 5:50 PM EDT

For a mainstream green group, the League of Conservation Voters took a fairly radical step today.

In an unprecedented move, the LCV sent letters to all members of the US House with this promise: Vote against the American Clean Energy and Security Act (HR 2454), and you can forget about getting the conservation group's endorsement in November, 2010.

"The stakes could not be higher," Gene Karpinski, president of the bi-partisan group, explained in the letter. "A safer, healthier planet and a new energy economy hang in the balance."

Osha Gray Davidson covers solar energy for The Phoenix Sun, and is a contributing blogger for Mother Jones. For more of his stories, click here.

"Torture": The Song

| Tue Jun. 23, 2009 5:32 PM EDT

Nearly two decades ago, lyricist Ellen Fitzhugh and composer Jan Hammer wrote a ditty called "Torture" for a Star Wars musical that never came to light. The tune was supposed to be crooned by a robot controlled by Darth Vader. Instead, it's being released to lament the robotic torture policies controlled by Vader's doppelganger, Dick Cheney, for Friday's U.N. International Day in Support of Torture Victims and Survivors.

Today, the words ring eerily true. Sample lyric: "For you it's just a pain/For us it's justified/But you're too self-absorbed/To see it from our side."

Watch the song's YouTube treatment—set to creepy old cartoons—here:

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Catching Up To My Brain

| Tue Jun. 23, 2009 5:16 PM EDT

Over at The Opinionator they round up some blog reaction to Barack Obama's increasingly tough talk on Iran and then say this:

At Mother Jones, Kevin Drum remarked on the shift in tone on Iran without being so fazed by it.

Reading this reminded me of one of the dangers of blogging: it's such a conversational medium that you sometimes forget which parts you've said aloud and which parts you haven't.  I've been emailing and chatting (and just thinking) about Iran the same as everyone else, and one of the things I've been emailing and chatting and thinking about is the strong likelihood that the Iranian regime is going to crack down ever harder as the protests continue, producing ever greater brutality and ever greater bloodshed.  So far, for good and sound reasons, Obama has taken a restrained tone toward this, but if it continues he's obviously going to react ever more strongly and more concretely.  And he'll have to do it without either overpromising or actively making things worse for the protesters.  It's already a tough tightrope to walk, and it's going to get tougher.

So the reason I wasn't fazed by Obama's statement today is because I've been expecting it all along.  And unless the opposition has already fizzled, I expect Obama's position to get even more difficult.  I haven't actually said any of that on the blog, however, which might make my reaction today seem a little jaded.  Really, though, it wasn't: it was just the natural endpoint of a conversation I've been having for the past week outside the blog.  Now, with this post, I'm letting the blog catch up to my brain.  Finally.

Hillary Clinton Could Make or Break U.S. Dependence on the Tar Sands

| Tue Jun. 23, 2009 4:56 PM EDT

An obscure executive order issued by President Lyndon B. Johnson in 1968 has given Secretary of State Hillary Clinton the power to approve or deny a massive oil pipeline between Canada's controversial tar sands and U.S. oil refineries.

In the coming weeks, the State Department will decide whether to grant a permit for the  1,000-mile Alberta Clipper pipeline, which would be capable of carrying up to 800,000 barels per day of crude oil--or about 8 percent of net U.S. oil imports--from the tar sands in eastern Alberta to refineries on Lake Superior in Wisconsin.

Under current law--rarely invoked, given that oil imports typically arrive in the U.S. by tanker--the Secretary of State must receive all applications for the construction of "pipelines, conveyor belts, and similar facilities for the exportation and importation of petroleum." If the Secretary finds that granting a permit "would not serve the national interest," she can deny it.

Getting Incentives Right

| Tue Jun. 23, 2009 4:36 PM EDT

Martin Wolf has a bit of an odd column today.  His basic point is that financial bubbles are generally caused by too much borrowed money:

At the heart of the financial industry are highly leveraged businesses....In a highly leveraged limited liability business, shareholders will rationally take excessive risks, since they enjoy all the upside but their downside is capped: they cannot lose more than their equity stake, however much the bank loses. In contemporary banks, leverage of 30 to one is normal. Higher leverage is not rare.

....A solution seems evident: let creditors lose. Rational creditors would then charge a premium for lending to higher-risk operations, leading to lower levels of leverage. One objection is that creditors may be ill-informed about the risks being run by banks they are lending to. But there is a more forceful objection: many creditors are protected by insurance backed by governments. Such insurance is motivated by the importance of financial institutions as sources of credit, on the asset side, and suppliers of money, on the liability side. As a result, creditors have little interest in the quality of a bank’s assets or in its strategy. They appear to have lent to a bank. In reality, they have lent to the state.

So far, so good. Even rational managers and shareholders have a big incentive to take outsize advantage of cheap money if it produces many years of great returns and only occasional big losses.  Ditto for lenders — especially if, in the case of catastrophe, they can expect to be protected by central bank guarantees of various sorts.  But then the column ends with this:

The unpleasant truth is that, today, the incentive to behave in this risky way is, if anything, even bigger than it was before the crisis. [Yikes! –ed.]

Regulatory reform cannot end with incentives. But it has to start from incentives. A business that is too big to fail cannot be run in the interests of shareholders, since it is no longer part of the market. Either it must be possible to close it down or it has to be run in a different way. It is as simple — and brutal — as that.

Wolf's focus on abuse of leverage is right on target, as is his observation that regulation by itself isn't enough to stop it.  Regulators will inevitably become captured, banks will figure out ways to get around them, and politicians will do nothing to stop it since that would run the risk of hurting the economy with an election coming up.  (And there's always an election coming up.)

So what's the answer?  The academic paper that inspired the column suggests that reforming executive compensation in the financial sector is part of the answer, but Wolf himself doesn't really follow that up.  So we're not left with much.  Saying that big banks "cannot be run in the interests of shareholders" is a provocative statement, but following that up by suggesting only that they need to be "run in a different way" isn't a very provocative response.  Perhaps this column was a season finale cliffhanger and we have to wait until next week for the mind blowing conclusion?

40 Days Without a Leader

| Tue Jun. 23, 2009 2:00 PM EDT

On Friday, May 15, I attended the confirmation hearing for Robert M. Groves, Obama's designee to become the next director of the U.S. Census Bureau. Groves, formerly an academic from the University of Michigan, has dedicated his life to census-related matters. A total of three senators attended his hearing, including Susan Collins, the lone GOP representative. Without objections, the Senate Committee on Homeland Security and Governmental Affairs unanimously approved Groves' nomination by voice vote five days later. However, Groves's confirmation by the full Senate has been stalled by at least one anonymous Republican senator. Under Senate rules, a Senator can hold up a nomination without going public or providing an explanation.

It has now been 40 days since Groves's nomination hearing. One reason for the anonymous hold may be Groves's support for statistical sampling. This practice is controversial because it involves using expert opinions to calculate the accuracy of figures rather than relying solely on a door-to-door headcount. As Time reported, when Groves was "an associate census director in the 1990s, [he] angered Republicans by supporting a statistical adjustment to compensate for the 1990 undercount."

However, sampling should be a nonissue because the method was banned for decennial headcounts by the United States Supreme Court, and Groves has sworn not to use it for the 2010 Census.

In addition to Groves, 61 other Obama nominees remain unconfirmed. (Also, Obama has yet to fill 210 open positions.) The longer these positions sit vacant, the greater the chance that bureaucratic errors will be made due to a lack of leadership.

And no place is more prone to bureaucratic error than the Census Bureau.