President Obama's First Priorities, Cont'd.

| Mon Nov. 10, 2008 10:16 AM EST

Over the weekend, the Financial Times scored a short on-the-record interview with future Chief of Staff Rahm Emanuel, who pointed to a couple early priorities of the Obama administration that the Washington Post appears to have missed.

In the interview, Emanuel "brushed aside" concerns that Obama needs to start small and move incrementally. He suggested that Obama will act quickly on a stimulus package (if one is not passed in the lame-duck session), including a "$25bn emergency package for Detroit" to help struggling automakers. Emanuel said that the meltdown on Wall Street will not delay action on energy, healthcare and education, which he described as "crises you can no longer afford to postpone [addressing]." (Update: Emanuel mentions S-CHIP as an immediate priority in an interview with the WSJ.)

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President Obama's First Priorities

| Mon Nov. 10, 2008 10:06 AM EST

When Barack Obama gets in the White House, what are the first things he'll do? Sunday, the Washington Post put forward some ideas.

Transition advisers to President-elect Barack Obama have compiled a list of about 200 Bush administration actions and executive orders that could be swiftly undone...
A team of four dozen advisers, working for months in virtual solitude, set out to identify regulatory and policy changes Obama could implement soon after his inauguration. The team is now consulting with liberal advocacy groups, Capitol Hill staffers and potential agency chiefs to prioritize those they regard as the most onerous or ideologically offensive....

Specific areas include stem cells:

Section 382

| Mon Nov. 10, 2008 1:24 AM EST

SECTION 382....Today, Amit Paley of the Washington Post tells us the riveting story of Section 382 of the tax code, which the Treasury Department suddenly gutted (via a five-sentence notice) a few weeks ago while the rest of us were wrapped up in the drama of the bailout bill:

The change to Section 382 of the tax code — a provision that limited a kind of tax shelter arising in corporate mergers — came after a two-decade effort by conservative economists and Republican administration officials to eliminate or overhaul the law, which is so little-known that even influential tax experts sometimes draw a blank at its mention. Until the financial meltdown, its opponents thought it would be nearly impossible to revamp the section because this would look like a corporate giveaway, according to lobbyists.

The reason it looks like a corporate giveaway, apparently, is that it is a corporate giveaway — and it's going to cost the taxpayers something north of $100 billion. Plus, the notice was probably illegal. But no one wants to complain about it because it might put some big bank mergers in jeopardy:

"It was a shock to most of the tax law community. It was one of those things where it pops up on your screen and your jaw drops," said Candace A. Ridgway, a partner at Jones Day, a law firm that represents banks that could benefit from the notice. "I've been in tax law for 20 years, and I've never seen anything like this."

More than a dozen tax lawyers interviewed for this story — including several representing banks that stand to reap billions from the change — said the Treasury had no authority to issue the notice.

....Several [congressional] aides said they were still torn between their belief that the change is illegal and fear of further destabilizing the economy.

"None of us wants to be blamed for ruining these mergers and creating a new Great Depression," one said.

Some legal experts said these under-the-radar objections mirror the objections to the congressional resolution authorizing the war in Iraq.

"It's just like after September 11. Back then no one wanted to be seen as not patriotic, and now no one wants to be seen as not doing all they can to save the financial system," said Lee A. Sheppard, a tax attorney who is a contributing editor at the trade publication Tax Analysts. "We're left now with congressional Democrats that have spines like overcooked spaghetti. So who is going to stop the Treasury secretary from doing whatever he wants?"

I guess some things never change. On either side.

Ed Secretary Lotto

| Mon Nov. 10, 2008 12:52 AM EST

ED SECRETARY LOTTO....When most of us think about the Department of Education, we think of No Child Left Behind and its effect on K-12 schools. But Steven Teles says that much of DoE's responsibility is actually in higher education, and that means Barack Obama ought to pick a Secretary of Education who knows higher education issues intimately. He's got just the guy:

If the US is to maintain its status as a great power in this century, there is simply no question that we need to get more of our students into math, science and engineering. Despite programs throughout the federal government, fewer students today receive undergraduate degrees in math, science and engineering than they did forty years ago. The Secretary of Education needs to be familiar with the problem and have a high degree of sophistication about strategies for remedying it.

....There may be a number of people who fit these criteria, but at least one person I can think of is Freeman Hrabowski, the president of the University of Maryland-Baltimore County. Hrabowski has been president of the university for fifteen years, in which he dramatically increased the quality and reputation of the school — and turned down offers to be the president of much more prestigious institutions. He's been especially successful in producing African-American students who go on to receive advanced degrees in the sciences, and he has published two books on the subject (separating out the issues by gender). He is a really effective communicator, and he has a great story to tell — he's a black man from Alabama who marched for civil rights as a small child, and got a PhD at the age of 24. His life embodies the slogan of educational reformers, which is that education is the civil rights issue of our time.

Sounds like a name the transition team ought to be thinking about. He wouldn't even have to move very far.

Infrastructure and Carbon

| Mon Nov. 10, 2008 12:26 AM EST

INFRASTRUCTURE AND CARBON....Robert Reich says the best way to stimulate the economy is through massive spending on infrastructure:

So the crucial questions become (1) how much will the government have to spend to get the economy back on track? and (2) what sort of spending will have the biggest impact on jobs and incomes?

The answer to the first question is "a lot."....The answer to the second question is mostly "infrastructure" — repairing roads and bridges, levees and ports; investing in light rail, electrical grids, new sources of energy, more energy conservation. Even conservative economists like Harvard's Martin Feldstein are calling for government to stimulate the economy through infrastructure spending. Infrastructure projects like these pack a double-whammy: they create lots of jobs, and they make the economy work better in the future.

This is actually something that conservatives should be relatively happy with. Entitlement programs never go away once they're enacted, but infrastructure projects do. Spending a trillion dollars on bridges and electrical grids may be a lot of money, but it's a well-defined lot of money that isn't likely to continue indefinitely. What's more, conservatives aren't actually opposed to bridges and electrical grids on principle, so from their perspective the money is also being pretty well spent. (Or at least, not too badly spent.) All in all, it should get a fair amount of support.

Here's another way to make it even better. One of the problems with running a big deficit is that we want it to be temporary. Infrastructure helps with the spending side of that, since it's not likely to go on forever. But how about on the revenue side?

A pretty good answer might be found in Barack Obama's energy plan, which includes a cap-and-trade proposal to reduce carbon emissions. One of the details of his plan is that it includes full auction of carbon permits, with the revenue from the auction going to the federal government. But that money won't start rolling in immediately. If a cap-and-trade plan were passed in 2009, it would probably take effect in 2012 or so, and the revenue stream would start small the next year and then grow every year after that. That's perfect timing. We don't want to raise taxes right now, but a program that guaranteed a growing revenue stream starting a few years from now would help convince investors that the current budget deficit won't last forever.

That's not the main reason to pass a cap-and-trade bill, of course. The main reason is to start reducing carbon emissions. But an infrastructure program that makes the country more productive in the future but automatically winds down, combined with a revenue program that automatically winds up in the out years, is a pretty fiscally conservative plan. That doesn't mean conservatives will support it, of course, but they should.

The Maldives Swap

| Sun Nov. 9, 2008 11:59 PM EST

THE MALDIVES SWAP....The Maldives — average elevation: 150 cm above sea level — wants to buy some land in another country as an insurance policy against global warming:

[Newly elected president Mohamed Nasheed] said Sri Lanka and India were targets because they had similar cultures, cuisines and climates. Australia was also being considered because of the amount of unoccupied land available.

"We do not want to leave the Maldives, but we also do not want to be climate refugees living in tents for decades," he said.

Instead of setting up a sovereign wealth fund to purchase the land, perhaps Nasheed should just buy a credit default swap that pays off if the Maldives are inundated. Since Republicans don't believe that global warming exists, they should be eager buyers for the other end of the swap.

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The Gender Gap

| Sun Nov. 9, 2008 5:38 PM EST

THE GENDER GAP....Ruth Rosen writes today that women "sealed the deal" for Obama:

For the last two years, I've been writing and telling anyone who would listen that American women could elect the next president, if only they voted.

Well, this time they did, and there is no doubt that women were a decisive factor in the election of Barack Obama.

....Just take a serious look at the numbers. As the data in the Week in Review in the New York Times reveals, women constituted 53% of the electorate, while only 47% of men voted. Among those who voted for Obama, 56% were women and 43% were men. Among unmarried women, a whopping 70% voted for Obama.

Is this true? Remember, Obama's overall national swing was 9 percentage points compared to John Kerry in 2004. So women only made an outsize difference if they swung by substantially more than 9 points.

But they didn't. The swing among women was 10 points. That's actually smaller than the swing among men, who switched to Obama by 12 points. There's some slop in these numbers thanks to sampling error and so forth, but it's unlikely that women played an unusually large role in this election. The gender gap this year was pretty much the same as it was four years ago.

On the other hand, it is true that unmarried women swung hard for Obama. Kerry carried this group by 25 points in 2004, while Obama carried them by 41 points this year. That's a swing of 16 points, nearly double the national trend. I don't know exactly what it was about his character or his policies that did it, but there's certainly a story of some kind there.

The Problem with Sarah

| Sun Nov. 9, 2008 2:17 PM EST

THE PROBLEM WITH SARAH....James Joyner explains why he soured on Sarah Palin even if she probably does know that Africa is a continent:

Bill's right that it's inconceivable that she got elected and re-elected to so many offices over the years, culminating with a state governorship, by being an airhead....I saw little evidence, though, that she's very interested in foreign policy or most issues of American domestic policy. That doesn't make her a bad person — she's in the same boat as most Americans on that score — but it made her a bad choice for the vice presidency.

This is what Palinophiles — and, to be fair, some Palinophobes too — don't seem to get. Palin's problem isn't that she's a social conservative, or that she's an airhead, or that she's inexperienced. Her big problem is that prior to August 29, 2008, she quite plainly didn't have the slightest interest in national or international policy issues of any sort. And no matter how much prepping she gets over the next four years, no matter how much better she gets at dealing with the press, no matter how much she does or doesn't smooth off the rough edges of her social views, conservatives have to ask themselves this question: do we really want our standard bearer to be someone who didn't become seriously interested in either domestic policy or foreign affairs until the age of 44? What does that say about how seriously we ourselves take this stuff?

In the end, I don't imagine many of them will ask that question. But they should.

UPDATE: Well, Mark Lilla is asking, at least. In the Wall Street Journal this weekend he wonders how conservative intellectuals could "promote a candidate like Sarah Palin, whose ignorance, provinciality and populist demagoguery represent everything older conservative thinkers once stood against?" It all began in the 80s, he says, when the same conservative intellectuals who had powered the movement for three decades decided to throw in their lot with know-nothingism:

Over the next 25 years there grew up a new generation of conservative writers who cultivated none of their elders' intellectual virtues — indeed, who saw themselves as counter-intellectuals. Most are well-educated and many have attended Ivy League universities; in fact, one of the masterminds of the Palin nomination was once a Harvard professor. But their function within the conservative movement is no longer to educate and ennoble a populist political tendency, it is to defend that tendency against the supposedly monolithic and uniformly hostile educated classes. They mock the advice of Nobel Prize-winning economists and praise the financial acumen of plumbers and builders. They ridicule ambassadors and diplomats while promoting jingoistic journalists who have never lived abroad and speak no foreign languages. And with the rise of shock radio and television, they have found a large, popular audience that eagerly absorbs their contempt for intellectual elites. They hoped to shape that audience, but the truth is that their audience has now shaped them.

For a movement that decided long ago that slogans and shibboleths mattered while serious policy discourse was merely a distraction, a candidate who showed no interest in domestic policy before the age of 44 is the perfect public face. But is that really the face they want to adopt permanently?

Full Speed Ahead

| Sun Nov. 9, 2008 1:48 PM EST

FULL SPEED AHEAD....As regular readers know, I consider Fareed Zakaria an extremely reliable indicator of trends in mainstream Beltway thinking. So if he says Barack Obama should damn the fiscal torpedoes and move full speed ahead with his legislative agenda, that probably means most of Washington is starting to come around to that idea too.

Well, guess what? That's what Zakaria says. It's yet another piece of evidence that the battleship of state is turning before our eyes.

Big Spender

| Sun Nov. 9, 2008 1:21 PM EST

BIG SPENDER....National Review editor Rich Lowry addresses the party faithful today about the reason Republicans got trounced so badly this year:

One temptation will be to say that if only Republicans had stayed truer to the faith, especially on fiscal discipline, none of this would have happened. Earmarks unquestionably contributed to the culture of corruption that has so bedeviled Republicans in recent years. But fighting them became an overriding obsession of some conservatives and of McCain, as if opposing earmarks alone — 1 percent of federal spending — would constitute a winning economic agenda.

As for Bush, he didn't run as a strict fiscal conservative when he was elected in 2000, and he wasn't any more profligate in his second term, when he was roundly rejected by the public, than in his first term, when he was on his way to reelection.

Lowry is right, but it's actually even worse than that. Bush's big spending ways have been overdramatized by the right, but it's true that domestic spending went up during his first three years in office. So did earmarks. And his big Medicare bill was passed in 2003. Did conservatives revolt over this? It sure doesn't look like it. The next year Bush rode a triumphant conservative coalition to reelection and Republicans picked up four seats in the Senate.

But then, starting in 2004, Bush got fairly stingy with his domestic budgets. Result: Republicans took a shellacking in 2006, and two years later took yet another shellacking. This is not exactly great evidence for a nationwide rebellion over profligate spending. In fact, you might even conclude that Americans like profligate spending. Conservatives don't seem to mind it that much either: their rebellion against Bush mostly started after 2005, three years after the 2003 budget was put in place and lower spending had become the order of the day in the Bush White House.

As for earmarks, can we get real here? Lowry is right that they represent a tiny portion of federal spending, but even at that he doesn't tell the whole story. Earmarks merely redirect spending, they don't add spending to the budget. If we got rid of earmarks completely, we'd still spend the same amount of money. It would just get allocated a little differently.

Bottom line (so to speak): Reining in spending and cutting back earmarks might be good things to do from a conservative perspective. But was it spending and earmarks that turned the American public against the Republican Party? Not a chance. My guess is that the answer is pretty much the obvious one: a combination of policy incompetence, an unpopular war, economic dogma that didn't even pretend to take middle class wage stagnation seriously, and an increasingly hard-edged social conservatism that turned off Latinos, seculars, and the young. But big spending? Not so much.