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Income vs. Consumption

| Fri Oct. 31, 2008 1:27 PM EDT

INCOME vs. CONSUMPTION....In recent years, as it finally became impossible to deny that income inequality had risen to unnerving levels, conservatives began trying out a new argument: it's not income inequality that matters, they said, it's consumption inequality. If middle class people were buying 50% as much stuff as rich people two decades ago, and they're buying 48% as much as rich people today — well that's not such a big deal, is it? Middle class lifestyles, contra liberal whining, are in pretty good shape.

This has always been a fairly desperate attempt to deny an obvious problem. At the low end of the income spectrum it mostly depended on the fact that government welfare programs boost the incomes of the poor, which, though true, is something that's happened only over many a dead conservative body. They never approved of most of these programs in the first place, but they were happy to use them as evidence that the economy was doing fine for poor people anyway.

In the middle part of the income spectrum, the consumption argument relied on — what? Well, it's obvious: if your income is flat or down, but your consumption is rising, that means you're borrowing. It means you're taking out home equity loans, or maxing out your Visa card, or paying usurious rates to your local payday loan outlet. And sure enough, broad statistics show that as median incomes stagnated over the past eight years, household debt exploded. Of the increase in consumer spending we've seen over that period, several trillion dollars of it has been fueled solely by increased borrowing. It turns out — surprise! — that income inequality mattered after all. This debt explosion couldn't keep up forever, which means that eventually middle class consumption was bound to plummet. And now it has.

As for what this means, Paul Krugman explains it all for you today:

The long-feared capitulation of American consumers has arrived. According to Thursday's G.D.P. report, real consumer spending fell at an annual rate of 3.1 percent in the third quarter; real spending on durable goods (stuff like cars and TVs) fell at an annual rate of 14 percent.

To appreciate the significance of these numbers, you need to know that American consumers almost never cut spending. Consumer demand kept rising right through the 2001 recession; the last time it fell even for a single quarter was in 1991, and there hasn't been a decline this steep since 1980, when the economy was suffering from a severe recession combined with double-digit inflation.

....It's true that American consumers have long been living beyond their means....Sooner or later, then, consumers were going to have to pull in their belts. But the timing of the new sobriety is deeply unfortunate. One is tempted to echo St. Augustine's plea: "Grant me chastity and continence, but not yet." For consumers are cutting back just as the U.S. economy has fallen into a liquidity trap — a situation in which the Federal Reserve has lost its grip on the economy.

....The capitulation of the American consumer, then, is coming at a particularly bad time. But it's no use whining. What we need is a policy response.

The ongoing efforts to bail out the financial system, even if they work, won't do more than slightly mitigate the problem. Maybe some consumers will be able to keep their credit cards, but as we've seen, Americans were overextended even before banks started cutting them off.

No, what the economy needs now is something to take the place of retrenching consumers. That means a major fiscal stimulus. And this time the stimulus should take the form of actual government spending rather than rebate checks that consumers probably wouldn't spend.

Let's hope, then, that Congress gets to work on a package to rescue the economy as soon as the election is behind us. And let's also hope that the lame-duck Bush administration doesn't get in the way.

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The Obama Tapes***

| Fri Oct. 31, 2008 11:48 AM EDT

THE OBAMA TAPES....In an update on Michael Malone's General Theory of Media Tankiness for Barack Obama, John Derbyshire offers a Special Theory of Media Tankiness for Barack Obama that applies only to the LA Times. Sam Zell and Hank Paulson are involved. And a unicorn.

For those of you with the good sense not to have followed this story, it's about a piece the Times ran a few months ago describing a testimonial dinner in Chicago for Rashid Khalidi, a professor of Arab studies now at Columbia University. The Times has a videotape of Barack Obama's speech at the event, and wingers everywhere are demanding that they release it so that Fox News can put it on a 24/7 loop over the weekend. The Times says it can't release the tape because they promised their source they wouldn't, but conservoland unanimously agrees that only fools and knaves believe this transparently ridiculous story. The Times is really holding it back because Khalidi shouted "Death to Israel" on the tape while Bill Ayers lit an Israeli flag on fire, and Barack Obama laughed and clapped while all this was going on.

It's unclear, of course, why the Times even revealed the existence of this testimonial dinner in the first place if they were so in the tank for Obama, but I'm sure the wingers have an explanation for that. Conspiracy theorists always do. Stay tuned.

UPDATE: I don't actually know anything about Khalidi myself, but it's worth noting that he's a perfectly respectable scholar with mildly pro-Palestinian views that the McCain campaign is trying to use in one of their usual cackhanded efforts to convince the rubes that Obama is a radical/Muslim/Jew-hating/terrorist sympathizer. Hell, even Marty Peretz is standing up for Khalidi. Jo-Ann Mort has more here.

Only four more days until this vile swill finally comes to an end.

Putting the Democrats' Impending Congressional Victory in Historical Context

| Fri Oct. 31, 2008 10:05 AM EDT

In 2006, the Democrats picked up 30 House seats. This year, they are slated to pick up anywhere from 15 to 30. Those numbers hold some pretty historic potential. Here's CQ:

The last time a party made a net gain of 15 House seats in consecutive elections was when the Republicans did it in 1978 (15 seat gain) and 1980 (34 seat gain). No party has made a net gain of 20 House seats in consecutive elections since the Republicans accomplished the feat in 1950 (28 seat gain) and 1952 (22 seat gain).

In the Senate, Democrats are poised to pick up anywhere from five to 10 seats. The last time the Senate saw movement like that was 1980, when Republicans picked up 12 seats and Ronald Reagan took the White House. CQ notes that the 19th century saw far more volatility in both chambers, but particularly the House. "It's less common today to see huge seat swings because of demographic shifts and a surgical precision in redrawing congressional district lines to create politically "safe" seats for both parties." Can you imagine what next Tuesday would look like if politicians couldn't gerrymander their way into near lifetime appointments?

Who's the Real Barack Obama?

| Fri Oct. 31, 2008 2:11 AM EDT

WHO'S THE REAL BARACK OBAMA?....Here's a little Friday morning game for everyone to play. Below are half a dozen desperate right wing luminaries calling Barack Obama half a dozen preposterous names:

McCain spokesman Michael Goldfarb: "Barack Obama has a long track record of being around anti-Semitic, anti-Israel, and anti-American rhetoric."

Former Republican House leader Tom DeLay: "I tagged him as a Marxist months ago."

Republican congresswoman Michele Bachmann: "I'm very concerned that he may have anti-American views. That's what the American people are concerned about."

Republican presidential candidate John McCain: "I think his plans are redistribution of the wealth. He said it himself: 'We need to spread the wealth around'....That's one of the tenets of socialism."

National Review contributing editor Stanley Kurtz: "The fact that Obama funded extremist Afrocentrists who shared Wright's anti-Americanism means that this is now a matter of public policy, and therefore an entirely legitimate issue in this campaign."

Republican vice presidential candidate Sarah Palin: "Our opponent though, is someone who sees America it seems as being so imperfect that he's palling around with terrorists who would target their own country."

So Obama is anti-Semitic, Marxist, anti-American, a socialist, an extremist Afrocentrist, and a terrorist sympathizer. And that's just off the top of my head.

So here's the game: what else has the McCain campaign and its surrogates called Obama? The only rule is that the name caller has to be someone with credentials: a campaign aide, a national politician, a major league pundit, etc. No obscure bloggers or commenters from Free Republic. What have you got for me?

Two Minute Drill

| Fri Oct. 31, 2008 12:32 AM EDT

TWO MINUTE DRILL....At the end of every administration, there's a rush to put in place new regulations and executive orders before the clock runs out. The famously disorderly Clinton administration did this in 2000, but was so late with many of their new regs that they hadn't taken legal effect by January 20th. Jeffrey Smith tells the tale of the tape:

Clinton's appointees wound up paying a heavy price for procrastination. Bush's team was able to withdraw 254 regulations that covered such matters as drug and airline safety, immigration and indoor air pollutants. After further review, many of the proposals were modified to reflect Republican policy ideals or scrapped altogether.

Needless to say, the Bushies don't want the same thing to happen to their regulations, so they're making sure to finish them up quickly and get them issued so they take effect before the next administration moves in to the West Wing. You will be unsurprised to learn that these new regs are pretty much all designed to screw consumers and the environment:

The new rules would...lift constraints on private industry, including power plants, mines and farms...clear obstacles to some commercial ocean-fishing activities, ease controls on emissions of pollutants that contribute to global warming, relax drinking-water standards and lift a key restriction on mountaintop coal mining.

....A rule put forward by the National Marine Fisheries Service and now under final review by the OMB would lift a requirement that environmental impact statements be prepared for certain fisheries-management decisions and would give review authority to regional councils dominated by commercial and recreational fishing interests.

....One rule, being pursued over some opposition within the Environmental Protection Agency, would allow current emissions at a power plant to match the highest levels produced by that plant, overturning a rule that more strictly limits such emission increases. According to the EPA's estimate, it would allow millions of tons of additional carbon dioxide into the atmosphere annually, worsening global warming.

A related regulation would ease limits on emissions from coal-fired power plants near national parks.

A third rule would allow increased emissions from oil refineries, chemical factories and other industrial plants with complex manufacturing operations.

Just a little something extra to remember the Bush administration by. Especially if you live near a power plant, oil refinery, or chemical factory. And double especially if you love the smell of napalm in the morning.

Transitions

| Thu Oct. 30, 2008 9:24 PM EDT

TRANSITIONS....From the Financial Times:

The best-kept secret in Washington is that Barack Obama has the largest and most disciplined presidential transition team anyone can recall. Headed by John Podesta, former chief of staff in Bill Clinton's White House, it started work well before the financial meltdown hit in September but has been swamped by its implications ever since.

....The Democratic nominee has already reached an agreement with Harry Reid, the Democratic Senate majority leader, to speed up the often painstakingly slow Senate confirmation process for the hundreds of appointees who would populate an Obama administration. Many of Mr Clinton's appointments were still to be confirmed a year after he took office.

...."The level of detail that the Obama transition team is getting into is extraordinary — they are leaving no stone unturned," said a senior former Clinton administration official who has been consulted. "I have been getting calls that you'd expect in previous transitions to get maybe in December or never at all."

The article also notes that transition team insiders "are under strict orders from the Obama campaign not to talk to the media to avoid giving the impression Mr Obama thinks he has won already." Good advice. Apparently not all of them are taking it, though. Here's more from John Heilemann:

With the help of some 50 old Washington hands, Podesta and his people are drafting a book-length transition blueprint, with agency-by-agency policy agendas, including day-one, day-100, and year-one objectives, too. Résumés are already being collected. Daily conference calls and meetings occur. Of Obama's pre-transition planning — and, in fact, of McCain's as well — Clay Johnson has said, "The amount of work being done before the election, formal and informal, is the most ever."

....Almost certain to come first, perhaps within days, will be his economic and national-security teams. And with those choices, they say, he will want to send a message of centrism and bi-partisanship. It's conceivable that Obama will ask Bob Gates to stay on as Defense secretary; Chuck Hagel, too, might find a place high in the administration. But although there has been chatter that Obama might also retain Hank Paulson at the Treasury, the inside betting is on a Larry Summers encore. "They're gonna want somebody who knows the building, knows the economy, has been confirmed before and been advising them on economics," says the former Clinton aide. "I'd be flabbergasted if they chose somebody else."

Via Taegan Goddard.

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The War Against Gore....Continued

| Thu Oct. 30, 2008 9:01 PM EDT

THE WAR AGAINST GORE....CONTINUED....Bob Somerby replies today to my question about whether liberals should spend more time complaining about media treatment of Al Gore during the 2000 campaign (and more generally, of media treatment of the Clintons during the 90s). My take is that I don't think it would do us any good to harp on this; Bob thinks we're a million light years from "harping" on it and should at least mention it on a regular basis:

Last week, Naomi Judd began telling voters that no one has ever been trashed like Palin. Quite naturally, voters tend to believe such claims, because they've never heard anything different...."Liberal bias" is a powerful card, a card they've spent fifty years perfecting. They play this card because it works; it keeps working because our side has refused to debunk it. As we've long said, we refuse to tell the public the truth about the press corps' recent conduct. One side keeps saying things which are bogus. And one side won't say what is true.

I'd say the difference here is that Judd was complaining about the treatment of Sarah Palin right now. That's news. People care about it. Conversely, complaining about the media treatment of Al Gore a decade ago would cause audiences to yawn and turn the channel. Maybe that's not fair, but the world is what it is.

It's certainly true that liberals should have complained more about media treatment of Gore back when it happened (I think Bob has convinced everybody of that), but what good would it do to bring it up regularly now? It would be like conservatives continually kvetching about media treatment of Dan Quayle or Richard Nixon (who at least arguably lost the 1960 election because he got worse press treatment than JFK). Occasional passing references are fine, but anything more and audiences today will just tune out.

Much better, I think, to do what conservatives do: complain about today's media misconduct loudly and aggressively when we think we see it. Liberals might still not be as good at media grievance mongering as conservatives, but we've made up a lot ground since the 2000 election. And at this stage of the game, I just don't see how amping up our complaints about press treatment of Al Gore in the previous century will help us make up the rest of the distance.

POSTSCRIPT: I've gotten more than a few emails asking why I care about this. The reason is that despite his endlessly irritating and over-the-top attacks on me and others in the liberal blogosphere, I still read Bob every day. I do that because he has interesting things to say — most of which, unfortunately, get drowned out by his Gore obsession. If he'd forget about Gore, tighten up his prose, cut the snark levels down to a dull roar, and spend his time in the present, he seems like he'd be a more effective media critic. And we could use that.

Got Another Planet?

| Thu Oct. 30, 2008 8:23 PM EDT

599px-The_Earth_seen_from_Apollo_17.jpg The planet is headed for an ecological credit crunch that will make Wall Street's convulsions look positively jolly. In fact at the rate we're going we'll need two planets by 2030. That's because more than three quarters of the human population now live in countries where consumption outstrips environmental renewal, reports the BBC. This makes them ecological debtors—drawing or overdrawing on land, forests, seas, and resources of other countries.

The Living Planet Report is the work of WWF, the Zoological Society of London and the Global Footprint Network. According to the latter: Our demand on nature, just as with the economy, is reaching a critical tipping point. Two years ago, their data showed humanity on track to reach the two-planet mark by 2050. Now we've accelerated our obsessive borrowing and should be there at around the time children born today are entering the workforce. . . Happy birthday, babies.

The countries with the biggest impact on the planet are the US and China, together accounting for 40% of the global footprint. The US also shares the limelight with the United Arab Emirates as the two nations with the largest ecological footprint per person. Malawi and Afghanistan have the smallest.

Totally Mandatory First Impressions of Best American Non-Required Reading 2008

| Thu Oct. 30, 2008 7:31 PM EDT

mojo-photo-banrr.jpgCover looks like: African Q*Bert

One word to describe the reactions of Judy Blume to the sometimes non-sequitous interview questions in the introduction: Baffled

Three words to describe the reactions of Judy Blume to the sometimes non-sequitous interview questions in the introduction: Kind of dull

Number of high schoolers who helped edit the book: 18

How much do I wish I had been able to help edit a book when I was a kid: A lot

Terrible comic vs. tolerably cute comic ratio: 1-1

How surprised I am when year-end collections somehow manage to pick New Yorker articles that, despite my diligent attempts to read every issue, I apparently missed: Pretty, but getting less so

Band names they got wrong in the section on "Best American New Band Names": "Crystle Castles" (I guess they mean Crystal Castles), "J.U.S.T.I.C.E." (Justice have a song called "D.A.N.C.E."), "Lights Down Low" (I think they must mean the club night)

Best way to look at Dave Eggers-associated publications' attempts to discuss music: with a gentle, bemused chuckle

Stories about the end of the world within the first 120 pages: 2

How many times better the Nonrequired Reading books are than the rest of the Best American series, especially these days since the short story collections seem to be filled with weepy, self-consciously international mini-movies-of-the-week: at least 7

O's For Obama: Because Change Is Coming

| Thu Oct. 30, 2008 7:14 PM EDT

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Last Friday evening Sami Saud, an exchange student from Jordan who had been in the US for about three months, stood smoking a cigarette outside of the doors at 1015 Folsom, a dance club in San Francisco's SoMa neighborhood. "I want to see how people come together for this guy," Saud explained.

"This guy," was Barack Obama. The event Saud waited to attend? An all-night fundraiser, the highlight of which was a "guided breath-gasm experience" put on by O' s for Obama. Tagline: "Because change is coming."

O's was the creation of San Francisco-based Obama supporter and "certified somatic sexologist" Destin Gerek. The 30-year-old Gerek, who calls himself the Erotic Rockstar, said that the goal of the event was "to lead the world through a large scale orgasmic breathing experience culminating in a simultaneous group energetic breath-gasm."

Deep techno music played in the main room while guests bought drinks at the bar. At the tables next to the bathrooms, one group sold Obama paraphernalia (proceeds went to the Obama campaign) while another group distributed Proposition K literature (the women at the second table hastened to explain that the junior senator from Illinois was unaffiliated with their group). The techno was occasionally interspersed with taped clips from Obama's speeches. The cue for 200 people to enter the largest room of the club for a simulated orgasm guided by Gerek was this Obama phrase: