Jindal's Katrina Story

I just finished writing a post about how clownish it was for Bobby Jindal to exaggerate the Hurricane Katrina story he told in his rebuttal speech on Tuesday, but then I erased it.  After reading Ben Smith's full account, including his update, Jindal's puffery strikes me as a misdemeanor at worst.  He shouldn't have done it, but honestly, it's just not that big a deal.

Trying to Decipher Newt's Appeal at CPAC

Newt Gingrich just spoke here at CPAC. If there is anyone who embodies CPAC's hardline, outsider's identity (much time here is spent bashing the congressional GOP for being too willing to compromise), it's Newt. No wonder, then, that Newt entered a packed ballroom State of the Union-style, walking through the back doors and shaking hundreds of grasping hands as he moved up the aisles toward the stage, all while Eye of the Tiger pounded through the speaker system.

As David Corn discussed in a recent magazine article for Mother Jones, Newt is back in a big way. As conservatives try to figure out which national figure is best fit to lead them back to power, they are increasingly turning to a guy who had no role in the failures of the last eight years and was responsible (as he is ready to remind you) for the party's last major success, the 1994 takeover of Congress.

But I've had trouble understanding Newt's appeal. His ideas and theories are sometimes bizarre. ("There is a gay and secular fascism in this country that wants to impose its will on the rest of us," he told Bill O'Reilly.) When he does find an idea that sounds serious, it often doesn't hold up to scrutiny. He argued today, for example, that jobs would flourish and "virtually every American with savings would immediately be better off" if the capital gains tax was reduced to zero. Anyone with a working muscle in their head knows that such a plan, if enacted, would primarily benefit the wealthy investor class. It would essentially be a payday for people who make substantial amounts of money through their investments. That's the rich, not everyday Americans. And there are about a million better ways to create workaday jobs than giving a massive tax cut to the rich.

Obama Hearts the EPA

Boy, what a reversal of fortune for the Environmental Protection Agency. After suffering years of neglect, staff cuts, and intimidation, it now stands to see its budget increased by 34 percent--among the largest bump for any federal agency in percentage terms. Much of the increase would fund clean water projects and restore the Superfund Tax, which expired in 1995, raising an estimated $6.6 billion by 2014 for hazardous waste cleanup. As if to underscore the EPA's return to favored agency status, Michelle Obama spoke at agency HQ while her husband was unveiling his budget yesterday. "Your work will not only save our planet and clean up our environment," she said. "It's going to transform our economy and create millions of well-paying jobs." Her optimism reminds me of Bush's love for his faith-based initiatives, but at least this time around there's a bit more evidence behind the hope.

A Few Raindrops on the Rich

Andrew Sullivan says that Obama has played the budget and spending game pretty shrewdly:

Look at how Obama has framed the debate since the election. Every single symbolic act has been inclusive and sober. From that speech in Grant Park to the eschewal of euphoria on Inauguration Day; from the George Will dinner invite to the Rick Warren invocation....And now, after presenting such a centrist, bi-partisan, moderate and personally trustworthy front, he gets to unveil a radical long-term agenda that really will soak the very rich and invest in the poor. Given the crisis, he has seized this moment for more radicalism than might have seemed possible only a couple of months ago.

Italics mine.  I think Andrew's basic point is correct: by getting the centrist optics right, Obama has been able to move more boldly than he otherwise could have.  Republicans who paint him as the second coming of Karl Marx just look like idiots these days.  At the same time, let's not go overboard.  Here's how Obama is "soaking the very rich":

If Obama's tax plan is approved, a family making $500,000 a year would see its annual tax bill rise to nearly $132,000 from about $120,000, a 10 percent increase, said Clint Stretch, managing principal of tax policy at Deloitte Tax.

Over the past three decades, these families have seen their incomes double and triple while the rest of the country stagnated.  Now Obama proposes to increase their tax bill by $12,000 — not even enough to get them back to the rates they were paying when Ronald Reagan left office.  This is a very, very modest nod toward fiscal fair play, very much in keeping with Obama's modest optics.  You'd have to drink several pitchers of Rush Limbaugh's Kool-Aid to think this counts as soaking the rich.

Another Stimulus?

This is pretty remarkable.  National Journal asked a bunch of "congressional insiders" if another stimulus bill would be needed sometime in the near future, and you can see the results on the right.  65% of Democrats said yes, which might not be a big surprise, but so did 63% of Republicans.  Their reasons were a little bit different (Dems: a big recession requires a big stimulus; Republicans: the first stimulus was a crock), but it's still remarkable that even two-thirds of Republicans apparently think we'll need more stimulus in a few months.

What's more, this question was asked before this morning's dismal GDP revisions came out.  If you asked again today, I wonder if the number would be even higher?

Free Markets vs. "Free" Markets

Should the federal government provide loans to college students?  Or should it let the private sector make the loans but agree to guarantee them because otherwise the private sector wouldn't be interested?  Rep. Howard McKeon (R–Ca) thinks the latter.  Matt Yglesias, who's apparently on a first name basis with the distinguished congressman, comments:

The interesting thing here is not just the particulars of the policy, but the bizarre view of the role of government that Howard is espousing. Rather than a debate between progressives who want the government to provide a public service and conservatives who want the service to exist just insofar as it can be supported by the private market, we have a debate where both sides agree that the service ought to exist but the right thinks it’s important that it be done in a less efficient more costly manner....You have essentially the same debate over Medicare Advantage between Democrats who want the government to provide seniors with costly medical services and Republicans who want Democrats to provide seniors with an even more costly version of those services by bringing private insurance companies in as middlemen. It’s ludicrous.

This really does highlight the right's frequently bizarre notion of "free markets."  The only reason that private lenders are part of the college loan program in the first place is because the program was started in the 60s, and at the time banks were really the only institutions set up to make widescale loans.  The government didn't have much choice except to use them as their origination arm and provide guarantees as a carrot to get them to participate.

The revolution in finance during the 70s and 80s changed all that, of course.  The government doesn't need to pay banks to originate its loans any more than it needs to make the loans using gold bullion.  But Republicans are convinced that having Uncle Sugar subsidize loans so that Sallie Mae can make outsize profits is somehow ordained by natural law.  It must be more efficient because Sallie Mae is a private organization!  And everyone knows that federal programs are cesspools of waste and inefficiency.

But it ain't true, and it ain't true of Medicare Advantage either.  Sometimes the private sector does things better than the government, and sometimes it doesn't.  In particular, when the main job at hand is cutting checks, the government is actually pretty damn efficient.  There's not much to it these days, and with no middleman to get in the way the feds can provide money at a much lower cost than private lenders.

Bill Clinton tried to get rid of the private component of the college loan program, but he met a lot of resistance and didn't try all that hard.  Hopefully Obama will try harder.  After all, taxpayers deserve to have their money spent as efficiently as possible, right?

Quote of the Day - 02.27.09

From an AP story about Los Alamitos mayor Dean Grose, who sent out an email picture depicting the White House lawn planted with watermelons under the title "No Easter egg hunt this year":

Grose says he accepts that the e-mail was in poor taste and has affected his ability to lead the city. Grose said he didn't mean to offend anyone and claimed he was unaware of the racial stereotype linking black people with eating watermelons.

Uh huh.  He just happened to pick watermelons randomly.  What a dick.

GDP Meltdown

Now we know why the economy feels a whole lot worse than the official statistics suggest — and it's not because our feelings are off kilter:

The economy at the end of last year contracted at a far faster rate than initially estimated, a government report released Friday said.

....Output fell 6.2 percent at an annualized rate in the fourth quarter of 2008, revised downward from a previous estimate of a 3.8 percent decline. The drop was even steeper than many economists had feared — the consensus estimate had been a 5.4 percent decline — and was much lower than the 0.5 percent contraction from the previous quarter.

That's an enormous revision.  I wonder how Commerce screwed up so badly?

Apparently the answer is that they miscounted business inventories.  No telling how.  But the good news, such as it is, is that this means inventories are lower than we thought.  And since inventory overhang keeps businesses from ordering more stuff, the lower number means that maybe things will pick up slightly more than we expect this quarter.  Maybe.

CPAC: Bumper Stickers from the Far Side

The Conservative Political Action Conference, the nation's largest annual meeting of conservative activists, brings together right-wingers of different backgrounds, viewpoints, and levels of respectability. A good way to get a sense of the milieu at the conference, which is going on now in Washington DC, is to walk the exhibition hall, where exhibitors try to convince passers-by that the gays, the immigrants, the baby-killers, the UN, the Muslims, Al Gore, and/or Barack Obama are trying to ruin America. Below, a collection of bumper stickers, fliers, and handouts gathered from the hall.

Cap and Trade Revenue

This is from the budget outline released by the Obama administration on Thursday:

After enactment of the Budget, the Administration will work expeditiously with key stakeholders and Congress to develop an economy-wide emissions reduction program to reduce greenhouse gas emissions approximately 14 percent below 2005 levels by 2020....

I wonder what their economic assumptions are here?  Here's the revenue timeline, starting in 2012:

At first glance, this strikes me as odd.  With only slight variations, it assumes $80 billion in revenue every year between 2012 and 2019.  But that doesn't really make sense.  What you normally expect with a carbon trading program is that you begin with a high cap (carbon emissions in 2012 will probably start out 10% higher than 2005 emissions) and then ratchet the cap down every year after that.  As the cap goes down, the price of permits goes up.  It's true that the number of permits goes down at the same time, but this shouldn't be enough to make up for the higher permit price.  Overall, until the green technology buildout hits a critical mass, the revenue from the program should go up considerably over time.

But not in this one.  I wonder why?