2013 - %3, January

The Case Against (Temporarily) Abolishing Taxes

| Fri Jan. 18, 2013 2:06 PM EST

Matt Yglesias argues that since the federal government can borrow money at negative interest rates, it should borrow instead of taxing:

You're the mayor of a city. A storm strikes and ruins a whole bunch of your police cars. Now you need to buy new ones. You have two options for paying for the cars—you can borrow the money and pay the bill ten years from now, or you can raise taxes and pay right now. The case for paying later is pretty clear. In ten years' time your city's overall economic output will be higher so the burden of paying off the loan then will be lessened. On the other hand, the case for paying now is also pretty clear—lenders generally expect interest payments in exchange for their loans so the total cost of the debt option is higher. But wait! The city's accountants show up and point out that it's currently possible for the city to borrow at a negative real rate. Suddenly the interest costs are off the table as a reason to prefer paying sooner.

So what's left? Nothing. The city will be richer in ten years, so pay then. The logic becomes especially compelling when you recognize that the city's income will grow more rapidly under the lower-tax regime that encourages more investment in residential and commercial property and more business activity.

This is true. We should be borrowing more now, when interest rates are negative, and taxing less, since that slows down an already fragile economy.

However, this was written in the context of replying to a critic who thought it was crazy to suggest that we simply not tax at all. But the critic is right. The financial case for borrowing 100% of our budget might be sound, but the political economy case isn't.

One of the fundamental reasons for taxation is that it provides a constraint on democratic governments. If you want to appropriate a certain amount of the productive capacity of the country, you need to get permission from the citizens of the country, and you need to make that permission painful in some way. Otherwise the government will seize an ever bigger portion of the economy essentially by stealth. This is bad juju.

Borrowing is simply too easy. Politicians will always be attracted to it, because the money doesn't have to paid back until they're long out of office. This is one reason that so many states have burgeoning pension problems: politicians would rather hand out pension increases than pay increases, because the pension increases don't come due until they're long gone. Pay hikes, by contrast, require them to either raise taxes or else cut back on other spending.

But that kind of pain is useful. Societies do have to make tradeoffs, and human nature being what it is, those tradeoffs will only be made if the costs are fairly clear and fairly sharp. That's why maintaining the discipline of taxation is important even when borrowing costs are low.

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Let's Get One Thing Straight: It's Republicans Who Are Picking Fights, Not President Obama

| Fri Jan. 18, 2013 12:45 PM EST

David Brooks is worried that Democrats, sensing weakness, will spend the next four years trying to divide and destroy the Republican Party:

He’s already started with a perfectly designed gun control package, inviting a long battle with the N.R.A. over background checks and magazine clips. That will divide the gun lobby from suburbanites. Then he can re-introduce Bush’s comprehensive immigration reform. That will divide the anti-immigration groups from the business groups (conventional wisdom underestimates how hard it is going to be for Republicans to back comprehensive reforms). 

Then he could invite a series of confrontations with Republicans over things like the debt ceiling — make them look like wackos willing to endanger the entire global economy. Along the way, he could highlight women’s issues, social mobility issues (student loans, community college funding) and pick fights on compassion issues, (hurricane relief) — promoting any small, popular spending programs that Republicans will oppose.

Politics is everywhere, and I don't doubt that Democrats would like to take advantage of Republican divisions. What party wouldn't? But look: if one party is dominated by a bunch of loons who make every political skirmish into a sign of the apocalypse, you really can't blame the other side for exposing this. What choice do they have?

Take cabinet appointments, for example. President Obama obviously wanted Susan Rice to be his secretary of state, and spent several weeks in an effort to win over Republicans. But it was impossible. She was a perfectly mainstream choice, but for obviously crackpot reasons Republicans insisted that if she were nominated they'd turn the confirmation process into a scorched-earth battle. And in the end they got their scalp: Obama backed down and nominated John Kerry instead.

And what did that get him? Nada. The fight immediately turned to Chuck Hagel and then Jack Lew. These are both pretty standard mainstream candidates too, but we were nonetheless told repeatedly that Obama knew they were plainly unacceptable and was just trying to pick a fight.

So what's he supposed to do? After winning reelection handily, is he supposed to agree that he won't nominate anyone to serve in his cabinet who isn't pre-approved by the most hardcore members of the opposition party? Of course not. That's crazy. Hagel and Lew are perfectly ordinary nominees, and Obama wasn't picking a fight with anyone by selecting them. He was just nominating people who agree with his policy positions. It was Republicans who insisted on turning this into a mortal insult.

The same is true for Brooks's examples. It's Republicans who picked a fight over the debt ceiling that makes them look like wackos. It's Republicans who picked a fight over hurricane relief, earning the ire of Chris Christie and other members of their own party. (What was Obama supposed to do? Not propose any hurricane relief?) Ditto for gun regulations, where it's the NRA taking an absolutist position, not the president. Obama is plainly willing to compromise here, just as he's plainly willing to compromise over the budget. It's Republicans who aren't.

Brooks thinks Democrats should skip this stuff entirely. Not propose any significant legislation at all. Hell, the GOP is apparently so fragile that he's not even supposed to propose small stuff that might be popular (!) because it would do damage to a Republican party held hostage by—what was Michael Gerson's phrase? Oh yes: the "momentum of their ideology," which, like the law of gravity, literally forces Republicans to oppose even small, sensible spending programs.

This is crazy. You can't expect a president to back down on everything simply because the opposition party is in thrall to a bunch of fanatics who will interpret any action at all as a step on the road to tyranny or financial ruin. You have to try to get things done anyway. And along the way, if that exposes the fanatic faction as a millstone that needs to be dealt with, isn't that all to the good? After all, Brooks plainly has no sympathy for the tea party wing of the GOP. How else does he expect their influence to wane except by exposing their crackpottery to public view?

UPDATE: Jon Chait writes pretty much the same thing here, but better than me.

Why You Should Be Optimistic About Renewables, In One Chart

| Fri Jan. 18, 2013 12:40 PM EST

When it comes to America's energy future, it seems like all we ever hear about these days is natural gas. To hear the deafening outcry over fracking, to see the flares of North Dakota's drilling boom twinkling in space, you'd think we'd gone ahead and set every other type of power production to low simmer on the backburner. Turns out, it just ain't so. The latest update from the Federal Energy Regulatory Commission, an independent government agency that regulates interstate electricity trading, reveals that in 2012 wind was the fastest-growing energy source, adding a full seven percent more megawatts than natural gas. Dig it:

new renewables
Chart by Tim McDonnell

An Inauguration Highlight Made in China

| Fri Jan. 18, 2013 12:29 PM EST

Inaugurations bring out the hokey in the nation's capital. Every day, the planners of the inauguration announce an official inauguration this or that: The official menu of the inauguration lunch, the official inauguration gifts of the American public to the president and vice president, and so on. There is much self-congratulatory celebration about US democracy, some justified, some perhaps a tad over-the-top. But one highlight of this days-long PrezFest is happening at night, just a few blocks from the Capitol steps where President Barack Obama will be sworn in for his second term on Monday. At the Newseum, the work of Ai Weiwei, the politically-minded Chinese artist (and dissident), is being projected onto the exterior of the museum, atop its permanent ten-story-high rendition of the First Amendment.

The art of Ai Weiwei, who helped design the Bird's Nest stadium for the 2008 Olympics in Beijing, is currently being featured in a marvelous and provocative retrospective at the Hirshhorn museum on the National Mall. With his art—sculpture, photography, and other media—Ai Weiwei has operated as a sharp social and political critic, often examining the abuse of power in China and elsewhere. As a payback, he has been detained, roughed up, and placed under surveillance by Chinese authorities—which has motivated him to produce more compelling art. (The Chinese government prohibited him from attending the opening of this exhibit in Washington.) "I'm just an undercover artist in the disguise of a dissident," he says.

Well, this undercover artist, who maintains that artists ought to challenge "the will of the times," has a featured spot in the run-up to this celebration of the American political system.

 
 

Farewell, Obama's "Green Dream Team"

| Fri Jan. 18, 2013 12:02 PM EST
Energy Secretary Steven Chu speaks at a Bike to Work Day event in May 2009.

Another member of President Barack Obama's cabinet is on his way out the door. On Thursday night, Bloomberg News reported that Energy Secretary Steven Chu is planning to leave the Obama administration. The Nobel Prize winner plans to announce his intentions next week, according to sources "familiar with the matter."

Chu came to Washington from the Lawrence Berkeley National Laboratory in California, where he served as director. He's a nerd's nerd—a guy who does physics problems for fun and continued to bike to work in Washington (at least when the Secret Service would allow him to). He has been an advocate of a better energy policy and expanded government investment in research and development in his post at the department. But he often found himself stymied by the politics and bureaucracy of Washington, as The New Republic chronicled last year. He also found himself on the hot seat when the solar company Solyndra went bankrupt shortly after receiving a $528 million loan guarantee from the DOE.

With Chu's departure, there will be only one person left from Obama's original "Green Dream Team," a term environmental groups endowed upon the president's appointees to key departments. Green jobs guru Van Jones is long gone. Climate "czar" Carol Browner resigned two years ago, and the special post created for her was dissolved a few months later. Jane Lubchenco, the head of the National Oceanic and Atmospheric Administration, has said she plans to depart in February. EPA head Lisa Jackson also announced her plans to leave the agency at the end of December. And earlier this week, Interior Secretary Ken Salazar signaled that he, too, is signing off. Meanwhile, the change of leadership at the State Department—with John Kerry likely taking over for Hillary Clinton—is expected to shape our international climate policy as well as key decisions like the fate of the Keystone XL pipeline.

That leaves only one of President Obama's original "green" appointments in place (at least as far as we know right now)—Council on Environmental Quality Chair Nancy Sutley. This is pretty significant, as the appointees on in these posts have pretty major roles in shaping environmental policy. The administration keeps saying that climate and energy will be an important issue in the next term, but there's no question that a change of leadership in all the key agencies will impact what happens in the next four years.

Will Conservative Media Give the GOP Cover to Make A Deal on Immigration?

| Fri Jan. 18, 2013 12:00 PM EST

After non-white Americans voted overwhelmingly for Democrats in the 2012 election, prominent conservative pundits like Sean Hannity and Charles Krauthammer began signalling a willingness to shift on immigration reform. At the time, Republicans were still sitting shiva for Mitt Romney's campaign, so it's possible all the talk of compromise was just post-election despair. But the right wing media's reaction to Florida GOP Sen. Marco Rubio's new immigration proposal—a plan that resembles the one put forth by the White House—suggests conservatives may really be changing their tune on immigration reform.

As Rubio elaborated on his pitch for immigration reform, which would include a pathway to citizenship for unauthorized immigrants already in the US, to Fox News' Bill O'Reilly Wednesday, O'Reilly listened and said "that seems pretty fair." Likewise, when Rubio showed up on Laura Ingraham's show Wednesday, Ingraham sought to put distance between Rubio and the White House saying, that "Obama’s going to seek citizenship in one fast push," whereas Rubio's plan would be more "piecemeal." (Ingraham's wrong: How long any undocumented immigrant would have to wait for citizenship under either plan actually remains undetermined.) Meanwhile, Rubio, in both instances, said he didn't really know where the White House stood on the issue. Rubio also appeared on Sean Hannity's radio show Thursday, and Hannity called Rubio's immigration plan "the most thoughtful bill I have heard heretofore."

Here's why this is important: When George W. Bush sought to pass immigration reform, his plan was killed by the GOP base, who had been whipped up by conservative media and talk radio. Hannity himself was key to the effort. With some exceptions, conservative media seems more inclined to cover for Rubio this time around. That could all change pretty quickly, but given how much influence Fox News and talk radio have on the conservative base (remember when they convinced Republicans Mitt Romney was on the verge of a landslide victory?), how the right-wing media approach this issue could determine whether immigration reform actually has a chance of passing. For the moment, conservative pundits are playing up a distance between Rubio's proposal and the Democrats that doesn't really exist. That could make a potential compromise seem more palatable to the Republican base. "Why do I think regardless of what you propose that would solve the problem Democrats are going to demagogue it?" Hannity asked Rubio Thursday. "Well, that may be the case," Rubio replied solemnly.

Immigration reform advocates have noticed—and are elated by—conservative media's new tone on immigration. "It shows the power of the messenger," says Frank Sharry, who runs the pro-immigration reform group America's Voice. "It's going to be hard for the right-wing echo chamber to get whipped up the way they did in 2007."

Contra Hannity, Democrats have already signalled they're willing to work with Rubio. "I expect that the Judiciary Committee will devote most of our time this Spring working to pass comprehensive immigration reform," Senator Patrick Leahy (D-Vt) said during an appearance at the Georgetown University Law Center Wednesday. "I have a lot of respect for Marco Rubio," Leahy added. "We disagree on some things, but we agree on others, but I found him to be very open in his views and I'll seek that."

Rubio told Ingraham yesterday that "I'll work with anybody" on immigration reform. That claim will be tested in the next few months.

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Post-Election, The Obama Machine Goes to the Dark (Money) Side

| Fri Jan. 18, 2013 11:37 AM EST
Jim Messina managed Obama's 2012 campaign and will now lead Organizing for Action, a post-election nonprofit backing Obama's second-term agenda.

Barack Obama's 2012 campaign was the most technologically advanced political operation in American history, a techie's wet dream. The campaign, led by Jim Messina, amassed and distilled vast quantities of voter data, built apps and networks to mobilize voters and enlist volunteers, and practically perfected the science of email fundraising. Post-election, Messina and his lieutenants weren't about to let their data files, email lists, algorithms, and grassroots machine simply gather dust. Instead, they will soon launch Organizing for Action, a standalone advocacy group created to bolster Obama as he pursues his second-term agenda. Messina wrote in an email to donors and staffers that the new group "will be a supporter-driven organization, as we've always been, staying true to our core principles: 'respect, empower, include.'"

But there's a rub: Organizing for Action will be formed under section 501(c)(4) of the tax code, and will not be required to disclose its donors. (The Los Angeles Times first reported this.) For context, Karl Rove's dark-money juggernaut, Crossroads GPS, is a 501(c)(4), as is the Koch-backed national conservative group Americans for Prosperity. The decision to make Organizing for Action a dark-money nonprofit makes sense strategy-wise: as a nonprofit the new group can meet and coordinate with members of the Obama White House, which it couldn't do as a super-PAC. But the decision flies in the face of Obama and the Democrats' supposed commitment to transparency. 

Obama has pledged to make his administration the most transparent in history. His reelection campaign also took steps to be open to the public, including the admirable move of disclosing all its super-fundraisers, or "bundlers," each quarter, which it didn't have to do. (Mitt Romney's campaign did not name its bundlers.) But going the dark-money route leaves Organizing for America vulnerable to criticism. "It's the right vehicle from a legal perspective, but it is breathtakingly hypocritical," says Charles Spies, a Republican lawyer who ran the pro-Romney super-PAC Restore Our Future.

The new group will be used to mobilize Obama supporters around the key issues of Obama's second term in office. Those issues include battles over raising the debt ceiling, gun control, and immigration reform. Alums of Obama's 2008 campaign launched a similar post-election effort called Organizing for America, but it had little impact, especially on the defining policy fight of Obama's first term, health-care reform.

Organizing for Action, the post-2012 project, will accept individual and corporate contributions, according to the Associated Press, but not money from lobbyists or political action committees. (That said, Team Obama has found ways to sidestep earlier restrictions on interacting with lobbyists.) The new group, which will be separate from the Democratic National Committee, claims it will voluntarily disclose its donors even though it is not legally required to do so.

That's well and good—if it follows through with the disclosure pledge. But even then, Organizing for Action will be far less transparent than a super-PAC. Super-PACs can raise and spend unlimited amounts of money, but they must disclose all donations and all spending in a timely way. The type of nonprofit Organizing for Action wants to become is not required to disclose its spending in a timely way—it will detail its spending in IRS filings made available many months after the fact. And it's unclear how often the group will release the names of its donors. Monthly? Quarterly? Annually?

Organizing for Action could, if it wanted, go above and beyond what the law requires by disclosing its donors and spending in real time. For now, it remains to be seen whether the new group will live up to the president's transparency promises.

My Modest Proposal to Solve the Debt Ceiling Fight

| Fri Jan. 18, 2013 11:07 AM EST

National Journal reports:

Republicans appear to be willing to avoid a showdown over the debt limit and instead use the sequester as their main negotiating lever in upcoming fiscal fights with the White House and Senate Democrats.

House Budget Committee Chairman Paul Ryan, R-Wis., said Republicans at a closed-door retreat in Williamsburg were weighing a short-term increase in the country’s borrowing limit, giving all sides time to work on a broader fiscal plan in March that would include substantial spending cuts.

I'm not a conservative, so I can't pretend to have their best interests at heart. But it sure seems to me that their best bet right now is to unpaint themselves from their corner and make sure they never go back. The last thing they should do is approve a short-term increase in the debt ceiling and then have this same, self-defeating argument all over again in March.

Here's my suggestion: pass a law that gives the president the ability to raise the debt ceiling on his own, but put some limits on it. Every month the Treasury has to release a statement showing how much we've spent, how much tax revenue we took in, projected bond sales over the next month, and the amount the debt ceiling needs to be increased. The statement has to be signed by the president of the United States.

This gets Republicans off the hook from ever having to play a hostage game they can't win, but it forces the president to put his name to a monthly statement showing just how rapidly he's building up debt and turning America into the next Greece. It would be harmless campaign fodder for 2014 (good for Republicans), and would also prevent any further market-panicking showdowns (also good for Republicans). As a bonus, it would also be good for the country. What's not to like?

We're Still at War: Photo of the Day for January 18, 2013

Fri Jan. 18, 2013 10:00 AM EST

Squeezing the near freezing trigger of his machine gun, Pvt. Jeff Richardson, an Infantryman with the 2nd Battalion, 502nd Infantry Regiment, 2nd Brigade Combat Team, 101st Airborne Division, prepares for realistic combat environments during a weapon’s malfunction training session held on a wet, 24-degree Fort Campbell field, Jan. 16. U.S. Army photo by Sgt. Joe Padula.

Plastics Suck Up Other Toxins: Double Whammy for Marine Life, Gross for Seafood

| Fri Jan. 18, 2013 6:21 AM EST

Photo courtesy of Kent K. Barnes / kentkb

Some plastics are worse than others for the marine life that accidentally or intentionally eat them. That's because not only are the plastics themselves toxic but some also act as sponges for other toxins. Unfortunately the most commonly produced plastics also absorb the most chemicals. This according to a new study in early view in Environmental Science & Technology

"It surprised us that even after a year some plastics would continue to take up contaminants."

The researchers measured the absorption of persistent organic pollutants (POPs)—specifically polychlorinated biphenyls (PCBs) and polycyclic aromatic hydrocarbons (PAHs)—to the five most common types of mass-produced plastics:

  • Polyethylene terephthalate (PET). Recycling symbol #1. Example: Water bottles.
  • High-density polyethylene (HDPE). Recycling symbol #2. Example: Detergent bottles. 
  • Polyvinyl chloride (PVC). Recycling symbol #3. Example: Clear food packaging
  • Low-density polyethylene (LDPE). Recycling symbol #4. Example: Plastic shopping bags
  • Polypropylene (PP). Recycling symbol #5. Example: Yogurt containers, bottle caps.

From this research it seems that stuff made from polyethylene and polypropylene likely poses a greater risk to marine animals (and presumably the people that eat them) than products made from PET and PVC. Though the authors note that PVC is carcinogenic and toxic all by itself.

Laysan albatross carcass filled with ingested plastic debris, Midway Island. Nearly all carcasses found here have marine debris in them. It's estimated that albatross feed their chicks ~10,000 lbs of marine debris annually on Midway. Andy Collins, NOAA Office of National Marine Sanctuaries

The authors were also surprised to find how long the plastics kept absorbing the contaminants. At one site they estimated it would take 44 months for high-density polyethylene to stop absorbing POPs.

"As the plastic continues to degrade, it's potentially getting more and more hazardous to organisms as they absorb more and more contaminants," says lead author Chelsea Rochman (UC Davis). 

The research was conducted over a year at five sites in San Diego Bay with pellets of each type of plastic immersed in seawater and retrieved periodically for absorption measurements. 

The paper:

  • Chelsea M. Rochman, Eunha Hoh, Brian T. Hentschel, and Shawn Kaye. Long-Term Field Measurement of Sorption of Organic Contaminants to Five Types of Plastic Pellets: Implications for Plastic Marine Debris. Environmental Science & Technology (2013).