2010 - %3, March

Chart of the Day: Long-Term Unemployment

| Mon Mar. 1, 2010 2:06 PM EST

Lots of people have been talking about this for months now, and I don't have anything new and unusual to add to the conversation. But it's worth keeping this chart front and center at all times: it's the number of people who are not just unemployed, but who have been unemployed for at least half a year. The red line is the key one, and it shows that the proportion of long-term unemployed during the current recession is nearly twice as high as it was during 1982, the previous record holder since the Great Depression.

What's worse is that we can't expect this to go away quickly. Paul Volcker deliberately created the recession of the early 80s by jacking up interest rates to unprecedented levels, and he dispensed with it just as easily by lowering rates in 1982. That's not going to happen this time because interest rates are already as low as they can go. At best, we're going to hit a plateau and then linger there before a slow, fitful recovery that takes years. At worst — well, things will get even worse.

Mass, long-term unemployment is one of the most corrosive things any country can go through. The fact that we're basically doing nothing about it is not just disgraceful, it's genuinely dangerous.

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It's Not Just Congress That's Broken

| Mon Mar. 1, 2010 1:23 PM EST

David Frum argues today that the congressional revolution of the 70s — when the filibuster was made easier to use, the power of committee chairmen declined, Congress became more egalitarian, and campaign finance reform broke the power of the parties — has caused the legislative process to break down:

Take this quiz. Name the most important legislation enacted in the 30 years between 1950 and 1980.

Overwhelming isn’t it? Civil rights. Voting rights. Interstate highways. Medicare. Medicaid. The deregulation of the airlines, natural gas, trucking, rail and oil. The immigration act of 1965. Clean Air, Clean Water, and the Endangered Species Acts. Supplemental Security Income in 1974. I could fill the whole screen.

Now ... the next 30 years. There’s the Reagan tax cuts of course. Deregulation of the savings & loans in 1982. The Americans with Disabilities Act in 1990. Welfare reform in 1995. Medicare Part D. What else?

Leave aside whether you are liberal or conservative, whether you approve the measures mentioned above or disapprove. It’s hard to dispute: Congress just got a lot more done in the 1950s, 1960s and 1970s than in the 1980s, 1990s and 2000s.

Matt Yglesias points out that you can hardly talk about polarization and gridlock without mentioning the racial realignment of the parties that's affected politics so strongly in the post-Reagan, and I think that's right. But I'd add something else. The era between 1950 and 1980 was an essentially liberal one. That applies to the 60s and 70s pretty obviously, but even the 50s, underneath McCarthyism and the man in the gray flannel suit, was defined mainly by consolidation of the New Deal. Eisenhower wasn't called a New Republican for nothing.

The succeeding 30 years, famously, were primarily conservative. And that makes a fundamental difference. Liberals, by nature, want to change things. They want to pass big stuff. Conservatives, by nature, want to conserve. They want to prevent change. Occasionally this takes the form of rolling back liberal programs (tax cuts, welfare reform), but rolling back progress is hard and rare. For the most part, conservatism takes the form of not undertaking big legislative changes. So it's hardly any surprise that a conservative era is marked by lack of seminal congressional actions.

What's really noteworthy isn't that 1980-2010 was a marked by a conservative approach to legislation, but that we should be at the start of a new liberal era right about now. Maybe not a repeat of the 60s, but still something. Times change, cultures change, and problems change — and conservatives can keep the lid on this bottle just so long before it's ready to blow. By now, America ought to be ready for fundamental financial reform, healthcare reform, energy reform, and social reform.

But it's not, really. All of these things poll well in vague terms, but don't really garner a lot of deep support. It's this, even more than legislative maneuvering, that's allowed Republicans to stop Democratic plans in their tracks. We liberals just haven't made the case for change compellingly enough.

Enviros Pressure Senate to Keep Carbon Cap

| Mon Mar. 1, 2010 1:16 PM EST

Cap and trade may be effectively dead in the Senate, but environmental groups are upping the pressure on the Senate to keep some sort of price on carbon in the draft legislation expected to be released by Sens. John Kerry, Lindsey Graham and Joe Lieberman this week. "The challenges facing the nation today are far too serious and too urgent for half-measures or steps backward," argue 14 groups in a letter sent to senators late last week.

The Sierra Club, Environmental Defense Fund, Natural Resources Defense Council, Blue Green Alliance, and the National Wildlife Federation are among the signatories. And the green groups do have some support in Washington; Lindsey Graham has indicated that a "half-assed" measure that doesn't include a carbon price won’t be sufficient, and Barack Obama has echoed this point as well.

Some lawmakers have been pushing for the Senate to ditch a specific measure to tackle carbon emissions and instead pursue an energy-only bill that won’t do much to curb pollution. The letter argues that the energy-only route would mean the Senate would "forgo over 1 million potential jobs, fail to reduce our oil dependency, pose serious risks to the environment, and potentially increase carbon pollution."

Right now, no-one knows what mechanism the forthcoming Kerry-Graham-Lieberman bill will adopt to price carbon. But so far at least, the senators are indicating that it won't be the energy-only approach.

Richard Shelby, Financial Saboteur?

| Mon Mar. 1, 2010 12:36 PM EST

Did Sen. Richard Shelby (R-Ala.), the Senate banking committee's ranking member, try to sabotage the Senate's financial-reform talks last week by leaking a draft proposal on consumer protection from committee chair Sen. Chris Dodd (D-Conn.)? A source with close knowledge of the Senate's negotiations tells Mother Jones that Shelby, who'd abandoned his role as the Republican lead negotiator and was replaced by Corker, could very well have leaked the two-page proposal to news outlets to kneecap Dodd's ongoing efforts to craft a comprehensive financial-reform bill. "Dodd gave it to Shelby and Corker, so one of them leaked it," the source says. "Shelby could've leaked it to sabotage the talks."

To be sure, the draft proposal has circulated among both Democrats and Republicans involved in financial-reform talks. Both Corker and Shelby, however, have openly opposed an independent consumer protection agency—Corker called it a "non-starter," and Shelby said it was "folly and dangerous." A stronger consumer-protection agency has support elsewhere: The House included an independent Consumer Financial Protection Agency in its reform bill passed in December. And even Dodd himself has previously said that "[t]here needs to be an independent agency that looks out for people when they take out a loan, open a checking account or use a credit card." Dodd's leaked proposal—which would create a Bureau of Financial Protection within the Treasury Department to oversee large banks and some non-bank institutions—has been viewed as a political compromise to his Republican counterparts, yet unnamed sources with knowledge of the ongoing talks have been quoted as saying that the BFP is unpalatable to Corker and Shelby. Because Dodd has tried to keep a tight lid on the progress of his negotiations, it's unclear whether his BFP proposal is still being considered or not. The Senate banking committee is supposed to release a draft of its bill sometime this week.

Reforming the Filibuster

| Mon Mar. 1, 2010 12:20 PM EST

OK, here's my idea: mend it, don't end it. How about if both parties agree to a limited number of cloture votes per congressional session? Let's say, 20 per session per party. Ditto for holds. Maybe one per senator per session. The minority would still have a broad ability to force a supermajority on major legislation like healthcare reform, or to hold a nominee who they considered truly noxious, but they wouldn't have the ability to simply bring the Senate to a grinding halt out of pique or pure partisan rancor.

I know, I know, it's not going to happen. But it would be interesting if it did! Maybe even better than pure majority rule, since it would introduce some genuinely intriguing strategy and maneuvering to Senate procedures. Sort of like coaches deciding when to burn timeouts or challenge rulings on the field during a football game. It would also give party leaders some much-needed additional power, since they'd necessarily be the clearinghouse for filibusters. Who's with me?

Actually, It's 50 Votes, Not 51

| Mon Mar. 1, 2010 11:44 AM EST

From Monday's Washington Post:

Increasingly, the White House appears to favor having the House pass a version of the measure that cleared the Senate with 60 votes in December. The Senate would then pass changes to the bill to satisfy some demands of House Democrats. That Senate vote would take place under a parliamentary procedure known as reconciliation, which requires 51 votes rather than 60.

If this is President Barack Obama's path to health care reform—and it seems like his only option at this point (though I'm told some in the White House have not given up on the idea of a bipartisan deal)—he won't need 51 votes in the Senate. He will need 50. On a 50-50 tie, Vice President Joe Biden will get to be the decider. That would, no doubt, prompt futher howls from Republicans who already are trying to denigrate reconciliation as the absolute antithesis of constitutional democracy. But a close win is a win, whether it's with 51 or 50 votes. And given that the vote count in the Senate seems unclear but rather close, it's important for anyone following the debate to realize that the magic number is 50, not 50-plus-one.

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Cap and Trade: Officially Dead?

| Mon Mar. 1, 2010 11:10 AM EST

Is cap-and-trade officially out of the picture in the Senate? That appears to be the message from Sen. Lindsey Graham (R-SC), a key senator working to formulate a comprehensive energy and climate bill. "Cap-and-trade is dead," Graham declared last week, according to a Washington Post piece on a meeting he held with environmentalists.

Graham, John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) may release a draft of their plan to price carbon dioxide pollution as early as this week, according to reports. The pricing part of the bill has remained one of the key sticking points, Kerry told reporters last week, and they are considering a variety of alternatives to a cap and trade mechanism—from cap-and-dividend to a carbon tax to a bill that targets specific industries instead of imposing an economy-wide cap.

It seems most likely that the senators will run with some combination of these different systems. From the Post:

Power plants would face an overall cap on emissions that would become more stringent over time; motor fuel may be subject to a carbon tax whose proceeds could help electrify the U.S. transportation sector; and industrial facilities would be exempted from a cap on emissions for several years before it is phased in. The legislation would also expand domestic oil and gas drilling offshore and would provide federal assistance for constructing nuclear power plants and carbon sequestration and storage projects at coal-fired utilities.

Cap and trade has long been regarded as the most politically feasible option to rein in greenhouse gas pollution. That Kerry, Graham and Lieberman are considering dropping the idea is evidence that it has now become politically unpalatable. The three senators are slated to have a number of meetings with colleagues this week as they hammer out the final details of their proposal. But, Kerry said last week, the system they'll offer for regulating emissions "will be different than anything that has been put on the table in the House or Senate to date."

Corn Ethanol: Still a Boondoggle

| Mon Mar. 1, 2010 11:00 AM EST

Corn-based ethanol is supposedly a green alternative to gasoline. The corn farming lobby certainly thinks so, anyway, and they've persuaded Congress to mandate (and subsidize) increased corn ethanol production through the year 2015.

But is corn ethanol really greener than gasoline? If you analyze total lifecycle emissions directly (i.e., including the CO2 emissions involved not just in burning ethanol, but also in producing it), the answer is yes, though not by much. But there's more to it than just production. When you switch forest or pasture land to cropland in order to grow more corn, that releases CO2 as well, and you have to take that into account whether the farm lobby likes it or not. (And they don't.) The chart on the right shows the effects. So what's the conclusion? A new paper in BioScience1 takes a fresh look at what the market response is to increased corn production, including (a) reduction in food consumption due to higher food prices, (b) intensification of agricultural production, (c) land use change into cropping in the US, and (d) land conversion in the rest of the world. The paper suggests that previous estimates of induced land use changes (ILUC) have been too high, but:

Using straight line amortization over 30 years of production at current fuel yields [] results in ILUC emissions of 27 g CO2 per MJ....[A]dding our lower estimate of emissions to the direct emissions from typical US maize ethanol production (about 65 g CO2e per MJ) would nearly eliminate carbon benefit of this biofuel relative to typical gasoline (94-96 g per MJ).

(Note: MJ = megajoule, a unit of energy.) In other words, even giving corn ethanol the maximum benefit of the doubt, it's still no greener than gasoline: it releases about 92 grams of CO2 per megajoule of energy compared to 94-96 for gasoline. What's more, if you assume a more reasonable 20-year amortization period, corn ethanol's greenhouse gas emissions are even higher. And if you don't assume that people eat less thanks to increased corn ethanol production, but instead just spend more on food, it goes up even more.

Bottom line: corn ethanol is no greener than gasoline. In fact, it's almost certainly less green, and at the very least, there's no urgent need for the U.S. government to pay billions of dollars to subsidize its production. Too bad Iowa is the first state on the primary calendar every four years, isn't it?

1No link yet. I'll add one if and when it's available. UPDATE: It's not online yet, but the reference is BioScience, March 2010 / Vol. 60 No. 3.

Obama and American Exceptionalism

| Mon Mar. 1, 2010 10:45 AM EST

The New Republic's Damon Linker has already written the definitive takedown of Ramesh Ponnuru and Richard Lowry's exceptionally silly National Review cover story about Barack Obama and American exceptionalism. It turns out that if you think "believing in American exceptionalism" is the same as subscribing to all of the tenets of a certain kind of National Review-style political conservatism, it's pretty easy to prove that Barack Obama doesn't believe in American exceptionalism. So please read Linker's piece. But when you're done, I'd like to point you to Robert Lane Greene's demolition of a single sentence in the Lowry/Ponnuru essay:

This sentence tripped me up:

[America] is freer, more individualistic, more democratic, and more open and dynamic than any other nation on earth.

... But the statement that America is "freer" or "more democratic" than literally every other society on earth, is argued largely through the quotations of founding fathers and Lincoln, as if saying something made it so.

Greene goes on to explain how even Freedom House, a US-based organization widely seen as center-right, ranks America far below first in terms of freedom and democracy. In fact, the US finishes in a multi-way tie for 30th.

Greene isn't using the Freedom House rankings as an excuse for America-bashing. Instead, he's simply pointing out that "the blanket statement that America is the 'most free, most democratic' country on earth strikes the serious comparativist as what it is: not an empirical fact but as an article of faith." And there's the rub: many American right-wingers, including (apparently) Lowry and Ponnuru, are far from "serious comparitivists."

Lots of conservatives base their belief in America's total, overwhelming awesomeness in every facet of everything on faith, not reason. That's one reason why so many conservatives seem comfortable making fact-free claims about American superiority—like when they say the US has "the best health care system in the world," as House minority leader John Boehner did last week. Any serious comparitivist knows that's ridiculous. But for too many conservatives, serious comparitivism is out of the question.

No Wall St. Reform Better than Dodd?

| Mon Mar. 1, 2010 10:37 AM EST

If you're Paul Krugman, then the answer to that question is, Yes. In his column today, the liberal economist essentially calls the Senate's financial-reform talks a fakery and a sham, adding that the only thing weak financial reform would do "is create a false sense of security and a fig leaf for politicians opposed to any serious action—then fail in the clinch."

The impetus for Krugman's remarks is Sen. Chris Dodd's plan (PDF) to create not an independent consumer protection agency—the kind the House passed and the Obama administration purportedly supports—but a Bureau of Financial Protection housed within the Treasury Department much like the Food and Drug Administration is housed within the Health and Human Services Department. Consumer advocates and experts say Dodd's watered-down version of consumer protection raises numerous questions about the independence and efficacy of a Treasury-housed bureau, especially given the subpar records before the crisis of two other regulators within the Treasury—the Office of Thrift Supervision and the Office of the Comptroller of the Currency. And there's also the problem of no apparent Republican support for Dodd's compromise plan, too.

When it comes to consumer protection, Krugman argues, no reform would be better than what Dodd is proposing:

Some have argued that the job of protecting consumers can and should be done either by the Fed—or as in one compromise that at this point seems unlikely—by a unit within the Treasury Department. But remember, not that long ago Mr. Greenspan was Fed chairman and John Snow was Treasury secretary. Case closed. The only way consumers will be protected under future antiregulation administrations—and believe me, given the power of the financial lobby, there will be such administrations—is if there’s an agency whose whole reason for being is to police bank abuses.

In summary, then, it’s time to draw a line in the sand. No reform, coupled with a campaign to name and shame the people responsible, is better than a cosmetic reform that just covers up failure to act.

Now, while consumer protection is arguably the centerpiece of financial reform, there's still the issue of regulating over-the-counter derivatives, monitoring and reining in banks that become too big and too interconnected to fail, and creating some kind of authority to unwind or "euthanize" institutions when they pose that kind of systemic threat. Which is to say, a watered-down consumer protection agency won't kill the entire bill. But don't be surprised to hear many more reform advocates joining Krugman's line-in-the-sand camp.