Kevin Drum - August 2009

Quote of the Day

| Mon Aug. 31, 2009 10:59 PM EDT

From former Treasury Secretary Henry Paulson, describing his favorite congressman:

This is a guy that’s got the intellect, he’s got the energy, he cares, and he wants to legislate, knows how to legislate. He’s interested in getting across the finish line.

The congressman in question is Barney Frank, as described in a series of interviews given to Todd Purdum in Vanity Fair.  Paulson, who comes across in these interviews as almost astonishingly naive about how Washington works, basically says that Frank was the only honest, straightforward guy on the entire Hill.  "I just wish he were a Republican," he said.

Paulson has nice things to say about Nancy Pelosi too (“She was engaged, she was decisive, and she was really willing to just get involved with all of her people on a hands-on basis”).  And Tim Geithner (“He understands Treasury. He’s an internationalist....He’s smooth, but there’s ... inside, he’s tough as steel”).  But his fellow Republicans?  Not so nice:

“It’s not enough to just sit there and say, ‘I’m right, the other guys are wrong,’ ” he told me at one point, explaining why it was often so difficult working with some of the more doctrinaire members of the White House staff. “It’s not that there’s anything wrong with ideology. I’ve got my ideology and my philosophy. But those that say, ‘I won’t compromise,’ to prove a point, and then ‘I’m going to point a finger afterwards and say, See, I was right ... ’ ”

Sounds like he and John DiIulio could have a very simpatico conversation about the Bush White House if they ever got together for a beer or three.

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The Public's Right to Know

| Mon Aug. 31, 2009 6:47 PM EDT

Today Adam Liptak gives us yet another reason to lament the financial meltdown in the newspaper industry.  In the past, it was most often newspapers that filed lawsuits demanding access to information that had been placed off limits for one reason or another.  But as their finances dwindle they can't afford to file these kinds of suits as often, and other types of publishers don't want to:

Consider the aftermath of a recent settlement in a lawsuit against Amtrak....As part of the settlement, the parties asked Judge Lawrence F. Stengel of Federal District Court in Philadelphia not only to vacate eight of his decisions in the case but also to “direct LexisNexis and Westlaw to remove the decisions” from “their respective legal research services/databases.”

The judge agreed, and the database companies complied.

“In the infrequent event that we are ordered by the court to remove a decision from Westlaw,” explained John Shaughnessy, a spokesman for the service, which is owned by ThomsonReuters, “we will comply with the order, deleting the text of the decision but keeping the title of the case and its docket number. We also publish the court’s order to remove so there’s a clear record of the action.”

In cases like this, newspapers have traditionally refused to cooperate.  What's more, they filed suits to keep this kind of information public not just out of concern for their business, but because their owners were genuinely obsessed with First Amendment rights.  Newer businesses, conversely, tend to either have reason to cooperate with the government, or else think of these suits strictly from a perspective of whether they're economically worth it.  We've still got the ACLU, of course, but they can't pick up all the slack.  In the great power struggle between government secrecy and the public's right to know, the demise of the newspaper industry is a victory for the bad guys.

The Coming War Over Climate

| Mon Aug. 31, 2009 1:20 PM EDT

Joe Romm is pretty unhappy with today's WaPo story about the fight over the climate bill, but I'm not sure he's right to be.  Here's the gist of David Fahrenthold's piece:

Next month, the Senate is expected to take up legislation that would cap greenhouse-gas emissions. That fight began in blazing earnest last week, with a blitz of TV ads and public events in the Midwest and Mountain West.

It seems that environmentalists are struggling in a fight they have spent years setting up. They are making slow progress adapting a movement built for other goals — building alarm over climate change, encouraging people to "green" their lives — into a political hammer, pushing a complex proposal the last mile through a skeptical Senate.

Even now, these groups differ on whether to scare the public with predictions of heat waves or woo it with promises of green jobs. And they are facing an opposition with tycoon money and a gift for political stagecraft.

Joe points to polls showing that there's still majority support for climate legislation, and he's right about that.  But they aren't big majorities, and they can get whittled away pretty quickly if — as Fahrenthold suggests — opponents start treating climate change the way they have healthcare reform.

Which they will.  There are two basic parts to their opposition.  The first is the big picture, and everyone knows what that's going to be.  Just as warnings of a "government takeover" were the core of the anti-healthcare pitch, "cap-and-tax" is the core of the anti-climate pitch.  It's simple and effective, and it works because there's a kernel of truth to it.  Cap-and-trade will increase energy prices modestly, and that means electric bills and gasoline prices will go up for some people1.  And as the poll accompanying Fahrenthold's piece shows, electric bills don't have to go up much for majority support to crumble.  At $10 per month nearly 60% favor cap-and-trade.  At $25 per month, 60% oppose it.

Now, do you think the same people who were responsible for all those townhall shoutfests this month will have any trouble convincing people that $25 is the right number?  Or $100?  I didn't think so.

Are we ready for that?  I'm not sure.  But we'd better be, because the second part of the opposition's message will be the little picture.  In healthcare that turned out to be death panels and abortion funding and illegal immigrants.  For the climate bill it will be — who knows?  But it's a long bill and there's plenty to choose from.  Maybe it will be scare talk about Wall Street getting rich by trading emission permits.  Maybe it will be scare talk about China taking over the world because they get to keep polluting as much as they want.  Maybe it will be culture war talk about how Midwesterners are paying a bigger price to clean up the atmosphere than all those chi chi Californians.

I don't know.  But there will be plenty of it, and it's going to flow through the same Fox/Drudge/talk radio channels as the healthcare stuff did.  Are we ready for the street brawl to come on this?

1Yes, it's complicated, because some people will get rebates and see their net energy costs go down.  But that's the whole problem: it's complicated.  Fox and Drudge and Rush aren't likely to dwell on these nuances, are they?

The News and Us

| Mon Aug. 31, 2009 12:16 PM EDT

Paul Krugman muses about why news outlets tend to cover the politics and horserace aspects of things like healthcare far more than they cover the policy substance:

The WaPo ombudsman hits on a pet peeve of mine from way back: reporting that focuses on how policy proposals are supposedly playing, rather than what’s actually in them. Back in 2004 I looked at TV reports on health care plans, and found not a single segment actually explaining the candidates’ plans. This time the WaPo ombud looks at his own paper’s reporting, and it’s not much better.

Why does this happen? I suspect several reasons.

1. It’s easier to research horse-race stuff....2. It’s easier to write horse-race stuff....3. It’s safer to cover the race.

I suspect there at least two other reasons as well.  First, news operations, by definition, report news.  And horserace stuff changes all the time.  There's always something new to report.

But that's not so for the policy stuff.  You can write a big piece comparing the various healthcare proposals out there, and once you've done it, you're done.  You're not going to run another piece a week later covering the exact same ground.  You need to find a new angle.  But policy doesn't change all that much, and there are only just so many fresh angles on this stuff.  So if you're dedicated to reporting on new stuff, you're going to have a tough time writing lots of policy primers.

Second, let's face it: most people fall asleep when they come across stuff like this.  Even here in the blogosphere most readers have only a limited appetite for wonkery, and as Krugman mentions, trying to make this stuff interesting is next to impossible.  "I’ve spent years trying to learn the craft," he says, "and it still often comes out way too dry."  And that's despite the fact that he has the advantage of writing for the most educated, politically engaged audience you can imagine.

This is only going to get worse.  I don't think mainstream news outlets have ever been all that good at explaining policy, but they've probably gotten worse over the years as attention spans have shortened and the media environment has gotten ever louder and more ubiquitous.  You really can't explain healthcare reform in two minutes, but fewer and fewer people are willing to sit around for much longer than that.

The fault, in other words, lies not in the media, but in ourselves.  The mainstream media may have written ten times as much about the townhalls as they did about the actual substance of the healthcare proposals on the table, but the blogosphere only did a little better.  Even here in wonkland, the outrage of the day is a much more tempting blog topic than reimbursement rates for Medicare.

Checking in on the Bailout

| Mon Aug. 31, 2009 11:46 AM EDT

Good news!  We're making money so far on our bank bailouts:

The profits, collected from eight of the biggest banks that have fully repaid their obligations to the government, come to about $4 billion, or the equivalent of about 15 percent annually, according to calculations compiled for The New York Times.

This is good news, but I'm not sure it's worth blaring all over the front page just yet.  Here's the fourth paragraph of the story:

The government still faces potentially huge long-term losses from its bailouts of the insurance giant American International Group, the mortgage finance companies Fannie Mae and Freddie Mac, and the automakers General Motors and Chrysler. The Treasury Department could also take a hit from its guarantees on billions of dollars of toxic mortgages.

The money that's being paid back first comes from the very strongest banks — mostly the ones that really didn't need capital injections in the first place.  They were always the ones who were likely to cash out first, cash out completely, and therefore provide the government with its highest rate of return.  In other words, looking at the results of TARP so far is as distorted as if you tried to get a sense of how an election was going by polling only your own guy's strongest precincts.  You'd just be kidding yourself.

TARP won't end up costing $700 billion.  But these early paybacks account for only about 10% of the total and really don't provide a very good sense of how the program as a whole is likely to turn out.  It's more like an absolute upper bound.

Metrics for Afghanistan

| Mon Aug. 31, 2009 1:10 AM EDT

From the LA Times:

The Obama administration is racing to demonstrate visible headway in the faltering war in Afghanistan, convinced it has only until next summer to slow a hemorrhage in U.S. support and win more time for the military and diplomatic strategy it hopes can rescue the 8-year-old effort.

...."We need a fundamental new approach," said one officer, a senior advisor to Army Gen. Stanley A. McChrystal, the newly appointed top commander in Afghanistan....Officers in Afghanistan consider much of the effort of the last eight years wasted, with too few troops deployed, many in the wrong regions and given the wrong orders.

And how are we going to know if this fundamental new approach is working? Metrics!

Both the House and Senate versions of the pending 2010 defense spending bill include metrics and reporting requirements for the administration. Obama's strategy is "still a work in progress," said Sen. Robert Menendez (D-N.J.), who co-sponsored an amendment in the legislation setting conditions on aid to Pakistan.

In the absence of strict guidelines from the administration, Menendez said in an interview, "we are definitely moving to a set of metrics that can give us benchmarks as to how we are proceeding" and whether Obama's strategy "is pursuing our national security interests."

The White House hopes to preempt Congress with its own metrics. The document currently being fine-tuned, called the Strategic Implementation Plan, will include separate "indicators" of progress under nine broad "objectives" to be measured quarterly, according to an administration official involved in the process. Some of the about 50 indicators will apply to U.S. performance, but most will measure Afghan and Pakistani efforts.

I've got nothing against metrics, but 50 sounds like about 45 too many.  Internally, they can have a thousand metrics if they need them — and they probably do — but for public consumption four or five key things are enough to tell us whether things are turning around.  I'd much rather have that than a long laundry list that leaves the military with enough scope to conclude just about anything it feels like concluding.

In any case, September 24 is when we get to hear about our new Afghanistan strategy.  In Iraq, we took advantage of a few indigenous movements and then dumped a ton of soldiers into Baghdad, working on the assumption that Baghdad was so crucial that if it could be stabilized the rest of the country would follow.  In Afghanistan, we don't really have anything local to take advantage of, and Kabul doesn't have anywhere near the importance that Baghdad does in Iraq (and besides, it's practically the only place in Afghanistan that isn't a problem).  So our experience in Iraq really won't help us much — which means this new strategy is pretty much starting from scratch.  I can't wait to see it.

POSTSCRIPT: Plus, as Matt says, I'd like to know what the plan is if the metrics look bad a year from now.  Will we withdraw?  Create new metrics?  Fire the old commanders and put new ones in again?  Or what?

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The Recession Doldrums

| Mon Aug. 31, 2009 12:08 AM EDT

The Wall Street Journal asks a question today:

Can Rally Run Without Revenue?
Investors Wonder Whether Profits Based on Cost Cutting Can Long Endure

No, they can't.  Beyond the very shortest of short terms, you need rising revenue to generate rising earnings, and for that you need higher consumer spending.

But there's no sign of that.  This isn't an ordinary inventory cycle recession, which goes away when inventories tighten back up, or a Fed-induced inflation-fighting recession, which goes away when the Fed eases up on interest rates.  It's a massive deleveraging recession, and it won't go away until consumers and businesses pay down their crushing debt loads and start spending money again.

But how?  There are only a few ways for consumers to spend more money, and none of them are anywhere on the horizon.  Wages aren't going up, employment isn't going up, the glory days of credit card debt and home equity loans are over, and no one is drawing down their savings to buy bedroom sets these days.  Just the opposite, in fact.

So with consumers actively reducing their consumption in order to pay off debt, what's going to keep this recovery going?  A few hundred billion dollars in stimulus money?  Not likely.  Unfortunately, with no second stimulus likely to get serious consideration, we're stuck in the doldrums until deleveraging has run its course.  That's probably going to take another couple of years.

The Lesson of the Town Halls

| Sun Aug. 30, 2009 2:22 PM EDT

Is there any reason for optimism on healthcare reform?  In a weird sort of way there is.

Think about this: It turns out that heathcare reform is so fundamentally popular that the only way Republicans have been able to have any impact at all on the debate is via a campaign of demagoguery so egregious and brazen that Huey Long himself probably would have hesitated a moment or two before jumping in.  For the first six months of the year nothing else had made a dent, so finally they had to resort to a full month of silly season frenzy about death panels and secret White House enemies lists and "healthcare racism" and benefits for illegal immigrants.  The only thing missing was sharks with laser beams attached to their heads.

It's been a helluva show.  But here's the weird fact: despite all this, public support for healthcare reform has declined only modestly.  In fact, less than you'd expect even without the August freak show we've just gone through.  Generally speaking, people still approve of Obama, still approve of his healthcare plan, still prefer Democrats to Republicans on the issue, and still support giving people the choice of being covered by either a public or a private plan. Fox News and FreedomWorks have managed to spin their audiences into a hysterical lather about fascism and socialism and pulling the plug on grandma, but in the end the shrieking crowds who showed up at the townhalls were tiny in number.

So that's the optimistic view: the Fox/FreedomWorks crowd has created some great political theater, but underneath it all not a lot has changed.  If Democrats can just take a deep breath after the trauma of being yelled at all summer, they'll realize that the loons at their townhalls represented about one percent of their constituency; that the public still wants reform and will reward success; that the plans currently on the table are already pretty modest affairs; and then they'll stick together as a caucus and vote for them.  And that will be that.

Unfortunately, that's also the reason for pessimism: can Democrats still think straight about all this?  When Chuck Grassley announces dolefully that maybe healthcare needs to be rethought now that the people have spoken, he says it like he really means it.  And even some Dems fall for it.  So success depends on the Democratic caucus seeing through the "heartland uprising" charade and showing some backbone.  The odds might not be so great on that.

Back to Basics

| Sat Aug. 29, 2009 11:35 AM EDT

Let's recap: the United States spends about twice as much on healthcare as any other developed nation in the world and in return receives just about the worst care.  Can someone remind me again why there's even a debate about whether we should put up with this?

Friday Cat Vlogging - 28 August 2009

| Fri Aug. 28, 2009 3:03 PM EDT

Today you get more than boring old catblogging.  You get a cat movie.  Or a short feature, anyway.

OK, fine: it's 26 seconds long.

Its star is Domino as she plonked down the stairs this morning to check out the kibble situation.  You'll notice that she has sort of a weird gait coming down the stairs, not at all like the panther-esque stride that a normal cat would display.  (Like, say, Inkblot.)  (No, really.  When he comes down the stairs you better get out of the way.)  We're not sure why this is, but she's been this way ever since we got her, and it seems to be due to some kind of abnormality in her front legs.  Nothing serious, and she gets around just fine.  She's just not very lithe about it.

Anyway, as the ending shows, this dramatic production is clearly a tragedy: there's no food in the food bowl after Domino makes the long trek downstairs.  But worry not: as soon as the cameraman was done, he filled up the bowl and Domino was there at the head of the line.  Everyone walked away happy from this movie.