Spending is Up!

Surprisingly, consumer spending increased in January.  Not by much, mind you: it came to about a 0.2% rise when adjusted for inflation.  But that's still better than nothing.

Or is it?  The Wall Street Journal rounds up reaction:

Do not be fooled by the rise in incomes and consumption this month.....It would be a huge mistake to assume that the January rise in consumer spending represents anything more than statistical noise....Rising unemployment and continued economic weakness makes it unlikely that spending will improve much if any in the months immediately ahead....Consumption will remain in the doldrums for some time yet....The trend in real consumption, however, remains downwards, and the further decline in consumers’ sentiment signals continued declines....The January monthly changes in income and spending paint a completely misleading picture of economic activity at the start of the first quarter.

On the bright side, there was this from Wachovia's analyst: "While this up-tick does not likely signal the start of a string of increases, we will take any good news on the economy these days."  Me too.  But it turns out that January's increase was mostly related to automatic cost-of-living adjustments in things like Social Security checks, so it's nothing to get very excited about.

Food Politics

Ezra Klein glosses a story from Haaretz:

Israel, it seems, has been denying shipments of pasta headed for Gaza. Senator John Kerry, who'd been visiting Israel, heard about the idle trucks filled with food aid and asked around. "Israel does not define pasta as part of humanitarian aid," he was told. "Only rice shipments." A call Kerry made to Ehud Barak quickly got the pasta added to the list of acceptable humanitarian aid. Comments from Representative Brian Laird helped lentils onto the list of officially allowed foods. American politicians do not like seeing starvation used to change electoral outcomes.

Of course, there's another way we could guarantee that food gets through to Gaza: tell the Sixth Fleet to escort UN aid ships into Gaza.  It'll never happen, but it would work, wouldn't it?

Big Ideas

Jon Chait defends Rush Limbaugh:

Rush Limbaugh is drawing some ridicule for saying, "One thing we can all do is stop assuming that the way to beat [the Democrats] is with better policy ideas." But I think he's basically right. Good ideas are meritorious. But being meritorious isn't what wins elections. Most voters have only the faintest idea what policy ideas candidates advocate when running or implement when in office. External conditions (such as the economy, but war and scandal matter also) have much more influence over which party wins.

I agree — up to a point.  I do think that the GOP needs to moderate some of the hardcore social positions that have alienated young voters in droves, but aside from that it's not shiny new ideas that will save them.  That's not what saved Democrats, after all.  National health care?  That's been on our wish list for about a century.  Fighting global warming?  Liberals  have been environmentalists since the 60s.  Fiscal stimulus?  Can you say "New Deal"?  Pulling out of Iraq?  Not exactly a milestone in progressive thought on foreign policy.

You can take this too far, of course.  Liberals might be longtime environmentalists, but global warming is a newish issue and a market-oriented cap-and-trade program is a newish way of dealing with it.  Our healthcare plans this time around are different (and frankly, more modest) than in the past.  Obama is pulling out of Iraq but getting us ever deeper into Aghanistan.

So: not new ideas, perhaps, but certainly different takes on classic ideas.  What's more, Dems have also backed down on social issues a bit over the past decade, sometimes in fact (gun control), sometimes only rhetorically (abortion).  This is likely to eventually be the road back for Republicans too.  Cut down on the gay bashing and the hellfire preachers who are too often seen as forces of intolerance, and then come up with newish ways of selling small government and lots of overseas wars.  It'll work someday.  Not anytime soon, but someday.

Michael Jackson's Creepy Art Collection

Around the corner from our office are a couple of antique stores that sell what I can only describe as the world's worst kitsch. A specialty is giant garden statuary of prepubescent children doing idyllic things that no kid has done since 1897, like playing leap-frog or fishin' with a branch. I figured the stores, which are always packed to the rafters, were some kind of money-laundering front. Now I know better. They were supplying Michael Jackson.

If you have a few minutes, go check out the auction catalogs for Jackson's Neverland Ranch. The King of Pop, in desperate need of cash, is selling off 2,000 of his possessions. What's up for sale is an awesomely horrible glimpse into the world of the man-child who blew his money on jaw droppingly bizarro figurines like this, which even Abe Lincoln seems disturbed by. More examples after the jump.

President Obama, Appoint Carl Malamud!

Carl Malamud is a badass. If you are a techie or a transparency geek, you probably already know who he is. If you've never heard of him, he is an internet pioneer who has worked for decades, at times using renegade means, to make government information public. He fought to make the information in the SEC's "EDGAR" database free and public (which it now is) and is currently leading a similar fight over the court records database PACER.

Today, Malamud has another campaign. He wants to become the Public Printer of the United States, i.e. the head of the Government Printing Office (GPO). In today's world, the GPO probably ought to be renamed the Government Publishing Office, because its responsibility to print hard copies of thousands of documents is complimented by publishing just as many files in electronic formats. Malamud realizes he could do incredible things if he were the man who made government information public. He's laid out a platform at yeswescan.org. (His home on the web is here.) The coolest bit from the platform:

6. Rebooting .Gov. There is no reason why the U.S. Government should not be one of the top 10 destinations on the Internet! GPO should work with the rest of the U.S. Government to radically change how we present information on the Internet. Some of the initiatives would include installing a cloud for .gov to use, enshrining principles of bulk data distribution into legislation, and a massive upgrade in the government's video capabilities.

Remember when the Bush Administration would do things like put a guy who believed in the abolition of the Department of Energy in charge of the Department of Energy? Putting a government transparency advocate in charge of the GPO would be like that, except the exact opposite. You can read more about Malamud's plans for animating the .Gov empire here. You can read more about his broader platform here. Appointing Malamud would be one of the most progressive things President Obama could do to support open government. Let's hope it happens.

Blackwater's Prince Abdicates

First Blackwater lost its big State Department contract to do security work in Iraq. Then it changed its name to Xe. Now the controversial firm is replacing its head man. On Monday, Erik Prince, who founded the company, announced that he was bailing out as chief executive office and was appointing a new CEO and a new president. From AP:

The management shake up, he said, was part of the company's "continued reorganization and self-improvement."

Prince founded Blackwater in 1997 and last month the company changed its name to Xe, pronounced like the letter "z," in an effort to repair its severely tarnished name and reputation.

The company has had a contract to protect U.S. diplomats in Iraq, but the State Department announced it would not rehire Blackwater after its current contract with the company expires in May. The company has one other major security contract, details of which are classified.

A report by a House committee in October 2007 called Blackwater an out-of-control outfit indifferent to Iraqi civilian casualties. It said that Blackwater had been involved in nearly 200 shooting incidents since 2005.

In January, five Blackwater security guards pleaded not guilty to federal manslaughter and gun charges. A federal judge in Washington on Feb. 17 denied motions to dismiss the case against the guards, accused in a September 2007 shooting that left 17 Iraqis dead and another 20 wounded in a Baghdad's busy Nisoor Square.

Could it be that by renaming the company and removing himself as its frontman, Prince is hoping to keep the firm-formerly-known-as-Blackwater afloat and in line for big-ticket US government contracts? That might explain all these changes. But Blackwater's baggage is so heavy that these moves still might not allow it to escape its past.

But there's a more important question: who will do Blackwater's work once it is gone from Iraq? That has not yet been announced by the State Department. There are some obvious candidates, other private security firms. But one former CIA officer now working in Iraq in a private capacity tells me that these companies may not be up to the task and that a precipitous shift from Blackwater could cause problems of its own. In other words, in the Blackwater tale, there still may be no good exit strategy.

Support Senate Disclosure Parity, Again

A little less than a year ago, I asked you to support the Senate Campaign Disclosure Parity Act, calling it "no-brainer legislation." The bill, introduced repeatedly by Senator Russ Feingold (D-WI) over the last several years to little effect, would modernize the way in which Senate candidates file their campaign fundraising disclosures (and bring Senate candidates into line with House candidates and presidential candidates).

Well, the bill has been reintroduced and has more support than ever. This may be the year (finally!) that the Senate puts transparency over secrecy on the key issue of campaign contributions. If one of your senators is on this list of cosponsors -- Akaka, Alexander, Bennett, Bingaman, Brown, Cardin, Chambliss, Cochran, Dodd, Durbin, Feinstein, Grassley, Harkin, Isakson, Kerry, Leahy, Levin, Lieberman, Lugar, McCain, Nelson (NE), Reed, Reid, Rockefeller, and Schumer -- don't bother making any phone calls to them. But if you don't see your senators here, consider picking up the phone and letting them know how you feel. When an industry's interests are at stake in a bill, there are always lobbyists buzzing around Capitol Hill telling lawmakers how to vote. But when it comes to transparency, and bills that protect the public interest, there is no one to voice an opinion but you.

Mapping Stimulus Funds vs. Unemployment

ProPublica used a neat data visualization tool called Many Eyes to create the two maps below, which I've chopped up a bit so I could fit them on our blog. The top map displays unemployment numbers by state. The bottom map shows stimulus funds by state. As Oregon, Wyoming, and a number of other states illustrate, there is essentially no connection. The amount of stimulus funds a state will get depends on a number of things, not least among them the seniority and committee assignments of that state's representatives. Apparently "need" isn't at the top of the list.

Countercyclical Capping

A few days ago I suggested that although Barack Obama's revenue projections for his greenhouse gas cap-and-trade plan might be a little optimistic, they were "in the right ballpark."  Partly this is because the plan won't take effect until 2012, and I suspect that demand for energy will rise by then, increasing the auction revenue for permits enough to generate $80-100 billion per year.  Megan McArdle disagrees:

I doubt economy-driven demand will have recovered by 2012.  The major economies are crashing so hard that it will take years of growth to get demand back where it was, and the big developing countries that drove demand past capacity are in worse shape than we are....

[In addition] I think it is decidedly iffy whether congress actually passes any cap and trade system with teeth.  For a cap and trade system to work, it will have to make energy more expensive at a time when incomes are declining.  This will be very, very, very unpopular.

These are reasonable points, but my guess is that (a) demand will have largely recovered by 2012 and (b) the initial permit price will be low enough not to have a huge effect on the price of energy at first.  So it won't be all that unpopular.  Beyond that, though, there's another point buried here that's worth unpacking a bit.

In my magazine piece (which you should read!) I go into a little more detail about the difference between cap-and-trade and a carbon tax, but the nickel version is simple: Financial folks generally prefer a tax because it's predictable.  You know exactly how big the tax is now and how big it will be in the future, and that allows you to plan your investments.  Conversely, you don't really know what effect any particular tax rate will have on carbon emissions.  You have to take your best guess.

A cap-and-trade system is similar to a tax in the sense that you have to buy a permit for every ton of carbon you emit, but the predictability is exactly the opposite.  There's a firm cap, so you know exactly what effect the plan will have on carbon emissions, but you don't know for sure what the permit price will be at any given time.  If demand for energy rises, the price of permits gets bid up.  If demand goes down, the world is awash in permits and the price goes down.

There are pros and cons to both a carbon tax and cap-and-trade, but here's one of the pros of cap-and-trade: The price of permits is likely to go up in good times, when energy demand is high, and down in bad times, when energy demand drops.  In other words, it's countercyclical.  During recessions the effective tax rate goes down, and it does so automatically.  Macroeconomically speaking, that's good.  So that's a point in favor of cap-and-trade.

As for whether Congress will pass a plan with teeth?  Good question.  As with a tax, there are lots and lots of opportunities for special interest tinkering in a cap-and-trade plan.  Auctioning 100% of the permits, rather than giving some of them away to existing polluters, is the key issue to insist on, but there are others too (it's point #9 in my article).  Later this year we'll see if Obama can keep the sausage factory on the straight and narrow.

Huckamongering

Mike Huckabee says that Barack Obama is midwifing the birth of a "Union of American Socialist Republics" in his new budget.  "Lenin and Stalin would love this stuff."

"If a prominent Democratic office holder, in 2005, delivered a speech referring to George W. Bush's agenda as 'fascism,' comparing his administration to totalitarian regimes, and casually throwing in a reference to Hitler," says Steve Benen, "that Democrat would have a very difficult time being taken seriously by the political establishment moving forward. Presidential ambitions would be largely out of the question."

"Why Huckabee thinks that federally funded research into determining which medical treatments are effective is similar to being a totalitarian mass-murderer is a bit beyond me" says Matt Yglesias.  "But it’s par for the course in the uglier corners of conservatism, they’re just not corners Huckabee’s been known for dwelling in."

"Either Huckabee is losing his ear or this is what you really have to say to get the Republican Presidential nomination in 2012," says Mark Kleiman. 

I'd say (a) yes, Huckabee really believes this stuff, (b) no, a Democrat couldn't get away with something like this, (c) yes, it's what you have to do to win the GOP nomination these days, and (d) no, nobody really cares because talk radio has inured us to this kind of stuff.  Boys will be boys.  He's just warming up the crowd.  Etc.

And the good news?  It demonstrates that things are going to get worse for Republicans before they get better.  "The party of Lincoln is now the Party of Limbaugh," says Paul Begala, and he's right.  Like most parties that have lost their way in the past, it's now clear that they'll spend at least four years insisting that what America really wants is an even more extreme version of what they voted against in 2008.  Cooler heads will eventually prevail, but not until 2016 at the earliest.  Maybe not until 2020.  Obama's really got some running room in front of him.