Kevin Drum - January 2009

Mirror, Mirror

| Tue Jan. 27, 2009 9:23 PM EST

MIRROR, MIRROR....Carbon tax or cap-and-trade? Over at Gristmill, David Roberts writes that he's had a few off-the-record conversations in DC lately and has some blunt news for progressive advocates of a carbon tax:

The 111th U.S. Congress is not going to pass a carbon tax. Calls for a carbon tax, to the extent they have any effect, will complicate and possibly derail passage of carbon legislation.

It's possible that a carbon tax (and/or cap-and-dividend) bill will be introduced. One or both might even make it to a full vote, though I doubt it. But they won't pass. If you want carbon pricing out of this Congress, cap-and-trade is what you're getting. It follows that your energies are best spent ensuring that cap-and-trade legislation is as strong as possible.

Them's the facts.

I'm inclined to agree. Aside from technical issues, an awful lot of the pro-tax argument revolves around the political difficulty of getting a "clean" cap-and-trade bill. But while this is absolutely a reasonable concern (see Gar Lipow's comment to David's post for more), it's every bit as much a concern for a carbon tax bill. In fact, my guess is that it's more of a concern for a tax bill. After all, if there's anything Congress knows how to do after being in business for two centuries, it's how to muck up tax legislation for the benefit of favored industry groups.

Beyond that, though, the political picture is a little muddier. I think David is basically right: no matter what they say, conservatives are dead set against a carbon tax. But there's a wild card here. As Jonathan Adler points out, last year's decision in Massachusetts v. EPA requires the EPA to start regulating greenhouse gases under the Clean Air Act. So if nothing passes this year, that's the default machinery that will be brought to bear:

This creates an interesting conundrum for those (like me) who think regulating greenhouse gases under the existing Clean Air Act would be a colossal mistake....I'd gladly take a revenue-neutral carbon tax in exchange for exempting greenhouse gases from the Clean Air Act. I suspect others may disagree. Yet what those who oppose a carbon tax (or cap-and-trade or whatever) need to recognize is that support for the status quo is support for regulating greenhouse gases under the existing Clean Air Act — and I doubt that's an alternative many carbon tax or cap-and-trade opponents would find more agreeable.

Politically, I'm not sure how this will play out. One possibility is that once tax-phobic conservatives finally figure this out they'll (reluctantly) jump on the cap-and-trade bandwagon, figuring that its market-based mechanism is a lesser evil than letting the EPA run wild. Alternatively, they might decide that taxes aren't as bad as either the Clean Air Act or a bureaucratic cap-and-trade program, and make common cause with progressive carbon tax advocates. Or they might stick their heads in the sand and pretend that the whole thing will go away if they just refuse to support anything.

I'm not sure, though I'd guess the majority will stick to their anti-tax ways and eventually accept Door #1 if there's a strong enough push for cap-and-trade. And there's one other thing to add to the mix: If (like me) you think that Obama takes his campaign pledges seriously, then sometime this year he's going to invest a huge chunk of political capital in getting a clean cap-and-trade bill passed. After all, that's what he said he'd do. If that happens, and progressives get into a circular firing squad with themselves over it, then it means that Ann Coulter is right and liberals are idiots. Just a little something to keep in mind.

POSTSCRIPT: Just for the record, here's the nickel argument for cap-and-trade vs. a carbon tax: (1) It sets firm limits on GHG emissions, (2) Europe is already committed to it, (3) the machinery was tested during the 90s and worked well to reduce acid rain, (4) the public will view a cap more favorably than a punitive "make 'em pay!" tax, (5) it's politically more palatable than a tax, (6) Barack Obama supports it.

POSTSCRIPT 2: By request, here's the nickel argument in favor of a carbon tax: (1) a tax is economically more efficient than cap-and-trade (details here), (2) it requires much less bureaucracy, (3) it can be implemented more quickly, (4) it sets a predictable price for carbon, which encourages investment in green technology, (5) it's easier to harmonize across borders under current trade agreements.

There are also two other arguments that are widespread: (1) taxes are more transparent and less open to manipulation by special interests, and (2) taxes can be made non-regressive via rebates and dividend payment schemes. Neither of these arguments really holds water, though. Taxes are obviously open to enormous amounts of manipulation, and cap-and-trade can rebate revenues back to taxpayers the same way a tax can. On both of these scores, the two approaches are a wash.

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Just When You Thought It Was Safe To Go Back In the Water

| Tue Jan. 27, 2009 6:14 PM EST

JUST WHEN YOU THOUGHT IT WAS SAFE TO GO BACK IN THE WATER....She's b-a-a-a-a-ck! And she wants you to know that she's not just a smarmy, pathetically ignorant right-wing attack dog whose 15 minutes expired three months ago. In fact:

Gov. Sarah Palin believes all Americans must work together for the future, regardless of their party affiliation. Gov. Palin is the official chair of SarahPac, and its supporters are Republicans, Democrats, Independents, and those unaffiliated with any political party.

Roger that. I'm sure there are just loads of Democrats who are signing up to support Sarah. I can't wait to see the list.

Via ThinkProgress.

The Real Obama

| Tue Jan. 27, 2009 5:48 PM EST

THE REAL OBAMA....Bruce Falconer notes today that Predator attacks over Pakistani territory are continuing unabated:

Obama approved a continuation of the strikes last Friday at his first meeting of the National Security Council. That same day, a missile fired from a drone in Waziristan killed at least 20 people — powerful evidence indeed of Obama's decision.

Given the new president's quick break with many of his predecessor's policies, Obama's decision represents a rare point of continuity — and comes not without criticism. UAV attacks in the region, numbering at least 30 according to a Reuters estimate, have ignited protest from the government of Afghan President Hamid Karzai and provided a handy propaganda tool and recruiting engine for insurgents. Indeed, for all of the top leaders reportedly killed in air strikes over the years, Al Qaeda and the Taliban have only grown stronger.

This is yet another case of Obama doing what he said he'd do during the campaign, and it's what I meant a few days ago when I said that he seemed to be taking campaign promises unusually seriously "both for good and ill." Some progressives may not like the continued bombing campaign over Pakistan, but it's not as if we weren't warned. Likewise, on an issue like nuclear power plants, where he waffled, we should expect that he'll probably continue to take something of a mixed position.

Real life will make Obama's life much more difficult before long, when speeches and executive orders are no longer enough. Still, when all's said and done, I suspect his administration will turn out to be almost eerily foreshadowed by what he said on the campaign trail in 2008. At this point, anyone who claims not to know what Obama "really" believes just hasn't been paying attention.

The Future of CFLs

| Tue Jan. 27, 2009 3:57 PM EST

THE FUTURE OF CFLs....A couple of years ago I went on a binge and replaced a whole bunch of incandescent bulbs in our house with CFLs. Unfortunately, I discovered that their burnout rate was surprisingly high. Out of 20 bulbs or so, I think I had to replace four or five within 18 months. CFL expert Michael Siminovitch confirms that my experience wasn't just a fluke:

Consumers have an expectation that compact fluorescents will last a very long time — significantly longer than the incandescents that they're replacing. This is technically achievable. Compact fluorescents can last a very long time. Unfortunately, I think we've compromised greatly on quality with many compact fluorescents and these things are not lasting quite as long as consumers have been led to believe. This is an issue.

He says that color and dimming issues with CFLs (which I was aware of before I bought mine) can also be addressed, but only with tighter standards and higher prices. If we got serious about it, though, economies of scale would drive down the price of high-quality bulbs fairly quickly. More here.

Obama Reaches Out

| Tue Jan. 27, 2009 2:17 PM EST

OBAMA REACHES OUT....Al Arabiya conducted a very friendly interview with Barack Obama today, and among other things he made it clear that he's not part of the bandwagon that's given up on a two-state solution in the Middle East:

Q: There are many Palestinians and Israelis who are very frustrated now with the current conditions and they are losing hope, they are disillusioned, and they believe that time is running out on the two-state solution because — mainly because of the settlement activities in Palestinian-occupied territories.

Will it still be possible to see a Palestinian state — and you know the contours of it — within the first Obama administration?

THE PRESIDENT: I think it is possible for us to see a Palestinian state — I'm not going to put a time frame on it — that is contiguous, that allows freedom of movement for its people, that allows for trade with other countries, that allows the creation of businesses and commerce so that people have a better life.

Contiguous? Including Gaza? That's pretty ambitious. But the interview was a short one and interviewer Hisham Melhem didn't press the issue. Overall, Obama kept things mainly at the level of symbolism ("I have Muslim members of my family. I have lived in Muslim countries.") and scored some integrity points for supporting Israel in front of an Arab audience ("Israel is a strong ally of the United States. They will not stop being a strong ally of the United States."). He didn't otherwise say much of substance, but he did confirm that he'd be making a major speech from a Muslim capital sometime in the next few months. I vote for Tehran, just for the sheer spectacle of the thing.

The full transcript of the interview is here.

UPDATE: More here from Marc Lynch, who's extremely pleased with Obama's performance.

House Election Finale

| Tue Jan. 27, 2009 1:34 PM EST

HOUSE ELECTION FINALE....Via Open Left, the unofficial final vote counts for the 2008 congressional election are here. Here's how the House race turned out:

  • Two-party popular vote: Democrats 55.5%, Republicans 44.5%.

  • House seats won: Democrats 59%, Republicans 41%.

Bottom line: Dems won the two-party vote by 11 percentage points, but won the race for congressional seats by 18 percentage points. That's a pretty big divergence by recent historical standards. I wonder if Democrats can hold on to it?

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Yet More Climate Change Bad News

| Tue Jan. 27, 2009 1:14 PM EST

YET MORE CLIMATE CHANGE BAD NEWS....Today brings yet more news that global warming is worse than we think it is:

Even if by some miracle the nations of the world could bring carbon dioxide levels back to those of the pre-industrial era, it would still take 1,000 years or longer for the climate changes already triggered to be reversed, scientists said Monday.

....Over the long haul, the warming will melt the polar icecaps more than had previously been estimated, raising ocean levels substantially, the report said.

And changes in rainfall patterns will bring droughts to the American Southwest, southern Europe, northern Africa and western Australia comparable to those that caused the 1930s Dust Bowl in the U.S.

...."The policy relevance is clear: We need to act sooner, even if there is some doubt about exactly what will happen, because by the time the public and policymakers really realize the changes are here, it is far too late to do anything about it," [said Kevin Trenberth, head of climate analysis at the National Center for Atmospheric Research].

James Inhofe and Rush Limbaugh say this is all just a big hoax. But they'll be dead before the worst of the changes hit, so I guess they don't really have to care, do they?

Honeymoon Politics

| Tue Jan. 27, 2009 12:32 PM EST

HONEYMOON POLITICS....Matt Yglesias comments on the likelihood that Democrats are going to drop contraceptive funding from the stimulus bill:

As with a lot of Democratic concessions on the bill thus far, what seems to be missing is the "pro quo." Where are the members of the House saying "yesterday I was inclined to vote 'no' on this, but thanks to this change I'm voting 'yes.'" Bargaining is smart. I even think magnanimity on the part of a new majority is smart. But when you bargain, you get something. And I don't see what Obama's gotten for his business tax cuts nor do I see what he's getting for selling out low-income women's access to contraceptives.

I guess there's no telling on this. Maybe Obama will surprise us and get his 80 votes in the Senate after all. Or maybe the "concessions" Democrats have made so far have been things they didn't really care much about in the first place. And I guess there could also be some political benefit in making a bunch of compromises, getting no Republican support, and then being able to sell a story to the media about how the GOP caucus is still just a bunch of Rove-era dinosaurs hopelessly stuck in the hyperpartisan past. We did everything we could, but they just wouldn't budge. Very sad.

At least, I hope one or more of these things is true, since it would mean there's at least some thinking going on about this stuff. My real guess, though, is that Obama and the Dems are still living in a fantasy world. "How long do you think Obama's honeymoon will last?" Marian asked me last night. "Honeymoon?" I shook my head. "I don't think he ever had one." At least, that's pretty much how it looks to me.

CBO Scores the Stimulus Bill

| Tue Jan. 27, 2009 2:45 AM EST

CBO SCORES THE STIMULUS BILL....So what does the Congressional Budget Office really think about the stimulus bill currently wending its way through Congress? Answer:

CBO anticipates that implementation of H.R. 1 would have a noticeable impact on economic growth and employment in the next few years.

Specifically, they estimate that in the spending portion of the bill, $477 billion out of $604 billion would be disbursed either this fiscal year or in the next two fiscal years. That's 79% of the total.

I guess opinions can vary on this, but that strikes me as pretty good. What's more, most of the spending that comes in FY2012 or later is either for projects that simply take more than two years to complete (highways, school repairs) or infrastructure improvements that have long-term paybacks (renewable energy programs). There are a few other items in the out years that are more arguable, but they add up to a pretty small portion of the bill.

Overall, then, it looks like the spending part of the bill is maybe 90% clean as short-term stimulus. And on the supply side, nearly 100% of the tax cuts are allocated during the next 18 months. Given the realities of the appropriations process, I'm not sure the White House could have done much better than this. Looks like pretty good work from the economics team.

Stimulus Pills

| Mon Jan. 26, 2009 3:24 PM EST

STIMULUS PILLS?....Conservatives are pretty good at picking tiny pieces out of big bills and making hay with them (remember midnight basketball?), and it was in that spirit that John Boehner spent the weekend complaining that the $800 billion stimulus bill includes $200 million in spending on contraceptives. Today Steve Benen provides the details of what's really in the bill, and concludes:

It's likely that Boehner, Drudge, and others hope that they can simply say, "Democrats want to spend $200 million of your money on contraceptives" and the howls will be so loud, the money will be stripped from the spending bill. As is too often the case, they're assuming the public won't hear, or care about, the details.

True, but I suspect this is mostly just a base play. Most of the public probably won't ever hear about this, but you can bet that every religious right newsletter in the country will get the news out to their readers. And they'll know that John Boehner is working to keep family values safe.

Whatever. But here's the funny thing: culture war issues aside, this is probably pretty good stimulus. If you eliminate the requirement for states to get Medicaid waivers in order to fund family planning, lots of low-income women will take advantage of it, and they'll probably take advantage of it pretty quickly. That's a boon for the contraceptive industry and all the fine people who work in it. Just be sure to buy American!