Kevin Drum - February 2010

Healthcare's PR Battle

| Mon Feb. 8, 2010 12:09 PM EST

As regular readers know, I'm skeptical of Barack Obama's continued insistence that the way forward on healthcare is to keep talking with Republicans in the hopes that eventually they'll start cooperating. But hey — maybe his political instincts are the right ones. Maybe he understands better than me that the public needs to see graphically that Democrats did everything they could to work with the GOP and were completely rebuffed. Maybe.

In any case, he's proposed yet another meeting with Republicans later this month to chew the fat over healthcare reform and incorporate the very best ideas they have to offer. The problem, as Ezra Klein points out in detail this morning, is that the current Senate bill actually incorporates most of the four big ideas that Republicans have put on the table: buying insurance across state lines, allowing small businesses to pool together to buy insurance, allowing states more autonomy to implement their own ideas, and tort reform:

On Sunday, John Boehner and Mitch McConnell responded to Barack Obama's summit invitation by demanding Obama scrap the health-care reform bill entirely. This is the context for that demand. What they want isn't a bill that incorporates their ideas. They've already got that. What they want is no bill at all. And that's a hard position for the White House to compromise with.

Now, as Ezra explains, Republicans didn't get 100% of what they wanted. There's no real tort reform in the Democratic bills, at least not the kind that Republicans want, and the other three items are more limited than the original Republican proposals. Still, with the exception of tort reform, I think it's fair to say that GOP negotiators extracted quite a few concessions during the Gang of Six negotiations with Max Baucus. Certainly as much as any party should expect that controls only 40% of Congress.

Barack Obama wants a chance to make that clear to the country on national television. Republicans, understandably, are rejecting his invitation to meet because they're scared silly that he might succeed. But if they refuse to meet at all, they play into his hands as well.

I'm still not convinced this is the right way to go, but there's no question that Obama has put the GOP into a tough position. And since it's basically a PR move, it's largely going to succeed or fail based on how well Democrats and Republicans are able to make their case in the media. Stay tuned.

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Who Do You Trust?

| Mon Feb. 8, 2010 11:46 AM EST

AdAge reports that Edelman's "Trust Barometer" has grim news: we don't trust much of anybody anymore when it comes to product and company recommendations. But for a lucky few, there's also some good news:

Conversely, CEOs — who have of late been trotted out as public faces of their companies in times of stress, such as General Motors CEO Ed Whitacre — saw the biggest year-over-year increase from 17% in 2009 to 26% this year. Other groups seeing increases in the level of consumer trust were government officials (22% vs. 27%), a financial/industry analyst (46% vs. 52%)....

In some cases, social networks themselves may be contributing to the decline in trust. Platforms such as Facebook and Twitter have allowed people to maintain larger circles of casual associates, which may be diluting the credibility of peer-to-peer networks. In short, the more acquaintances a person has, the harder it can be to trust him or her. Mr. Edelman believes the Facebook component has "absolutely" played a role in diluting trust levels.

If this is really true, it's beyond bizarre. Consumers trust each other less but trust CEOs, government officials, and financial analysts more? In other words, they trust the very people who were most responsible for our recent financial collapse? WTF?

FBI Procedure 101

| Mon Feb. 8, 2010 11:08 AM EST

White House counterterrorism chief John Brennan, apparently a little tired of Republican grandstanding over the fact that the Christmas bomber was taken into custody by the FBI, told Meet the Press yesterday that he had personally briefed the GOP leadership about this the day after Christmas and nobody had complained about it. Spencer Ackerman reports their response:

Sure enough, Sen. Chris Bond (R-Mo.) and Rep. Pete Hoekstra (R-Mich.), the ranking Republicans on the congressional intelligence committees, insisted that Brennan never specifically told them the FBI would Mirandize Abdulmutallab. “If he had I would [have] told him the Administration was making a mistake,” Bond said. The entire Republican leadership, including fact-averse Sen. Mitch McConnell (R-Ky.) and House GOP leader John Boehner (R-Ohio) echoed Bond’s claims in one form or another. Apparently these men, who claim leadership on national security, know less about FBI procedure than the average movie-goer. Obviously the FBI Mirandizes suspects in their custody.

I suppose facts don't really matter in this case, since Republicans have decided that yammering about Obama being soft on airplane bombers is a winning strategy and they don't plan to stop no matter what. Still, just for the record, it would be nice if the FBI could tell us if it Mirandized all the terrorist suspects it held during the Bush administration. I'm pretty sure the answer is yes, and I'm pretty sure no Republicans ever complained about it then.

Deficit Fever

| Mon Feb. 8, 2010 1:11 AM EST

Paul Krugman wonders why everyone is suddenly panicked over the long-term deficit:

The main difference between last summer, when we were mostly (and appropriately) taking deficits in stride, and the current sense of panic is that deficit fear-mongering has become a key part of Republican political strategy, doing double duty: it damages President Obama’s image even as it cripples his policy agenda. And if the hypocrisy is breathtaking — politicians who voted for budget-busting tax cuts posing as apostles of fiscal rectitude, politicians demonizing attempts to rein in Medicare costs one day (death panels!), then denouncing excessive government spending the next — well, what else is new?

It's more than that, of course. Guys like David Walker and Pete Peterson have been banging the deficit drum for years and were mostly dismissed as tedious cranks. Editors would barely grant them a squib on A16 for their speeches and PowerPoint presentations. Likewise, the long-term problems of Medicare and Social Security have been common knowledge for a long time and haven't changed a whit in the past year. The other causes of the deficit — Bush-era tax cuts, Bush-era war spending, Bush-era Medicare expansion, and a Bush-era recession — are also common knowledge. And the global recession makes short-term deficits far more defensible than they ever were under Bush.

Given all this, the fact that Republicans think deficit mongering is a handy political tool isn't enough to explain the sea change in media attention. Reporters are all properly cynical about political opportunism, after all. The far more important cause of the change is conservative media. Despite the fact that the operation of the noise machine is hardly a secret, reporters and editors remain curiously obtuse about the effect it has on them. But when the machine goes into overdrive, as it has with the deficit, its memes take on a life of their own. The fact that "regular people" are talking about the deficit is what makes it news, but of course they're only talking about it because every conservative outlet in the country suddenly contracted deficit fever last year on January 20th. And to appropriate a saying, when the Drudge/Fox/Rush axis catches a fever, the rest of the media catches pneumonia. So more people talk about it. And the media pays even more attention to it. Nice work if you can get it.

Climate Change and its Discontents

| Sun Feb. 7, 2010 11:04 PM EST

I haven't been following in detail the various recent disputes about specific global warming claims, but if Walter Russell Mead is to be believed, there are more than I thought:

The former head of IPCC has publicly said the IPCC risks losing all credibility if it can’t clean up its act.  The head of the largest British funder of environmental research has joined the head of Greenpeace UK in criticizing the IPCC.  (At Greenpeace, they want Pachauri to resign.)  The Dutch government has demanded that the IPCC correct its erroneous assertion that half of the Netherlands is below sea level.  Actually, it’s only about a quarter.  A prediction about the impact of sea level increases on people living in the Nile Delta was taken from an unpublished student dissertation.  The report contained inaccurate data about generating energy from waves and about the cost of nuclear power (this information was apparently taken without being checked directly from a website supported by the nuclear power industry). The deeply environmentalist Guardian carries a story documenting the decline in both public and Conservative Party confidence in need to address global warming.

....When the IPCC has its former chief, the Guardian newspaper and the Dutch government demanding change, something has got to give.

This is in addition to the CRU emails, the Himalayan glacier debacle, the Chinese weather station controversy, and a problem with claims about north African crop reductions. Apparently, when it rains, it pours.

But as I said, I haven't been following this stuff closely. The CRU emails mostly seemed overblown to me, and taken by themselves they'd probably have blown over pretty quickly. But start adding all this other stuff — even if none of it really affects the core claims of climate change — and the public is going to tune out even more than it already has unless the climate community either provides some explanations post haste or else makes credible commitments to clean up its act in the very near future.

For now, though, since I haven't spent a lot of time digging into these disputes myself, I'm just posting this in order to generate comments and responses. Is there anything to them? Or just a whole bunch of mud being thrown on the walls by the usual suspects?

Obama's Inner Circle

| Sun Feb. 7, 2010 10:14 PM EST

If you hate Rahm Emanuel — and I know lots of you do — you're going to love Edward Luce's Financial Times piece that blames Barack Obama's reliance on a small inner circle of aides for his first-year growing pains:

In dozens of interviews with his closest allies and friends in Washington — most of them given unattributably in order to protect their access to the Oval Office — each observes that the president draws on the advice of a very tight circle. The inner core consists of just four people — Rahm Emanuel, the pugnacious chief of staff; David Axelrod and Valerie Jarrett, his senior advisers; and Robert Gibbs, his communications chief.

....Administration insiders say the famously irascible Mr Emanuel treats cabinet principals like minions. “I am not sure the president realises how much he is humiliating some of the big figures he spent so much trouble recruiting into his cabinet,” says the head of a presidential advisory board who visits the Oval Office frequently. “If you want people to trust you, you must first place trust in them.”

In addition to hurling frequent profanities at people within the administration, Mr Emanuel has alienated many of Mr Obama’s closest outside supporters. At a meeting of Democratic groups last August, Mr Emanuel described liberals as “f***ing retards” after one suggested they mobilise resources on healthcare reform.

“We are treated as though we are children,” says the head of a large organisation that raised millions of dollars for Mr Obama’s campaign. “Our advice is never sought. We are only told: ‘This is the message, please get it out.’ I am not sure whether the president fully realises that when the chief of staff speaks, people assume he is speaking for the president.”

This comes via Steve Clemons, who says Luce's observations aren't getting as much currency as they should:

This Luce piece is unavoidably, accurately hard-hitting, and while many of the nation's top news anchors and editors are sending emails back and forth (I have been sent three such emails in confidence) on what a spot-on piece Luce wrought on the administration, they fear that the "four horsepersons of the Obama White House" will shut down and cut off access to those who give the essay 'legs.'

....President Obama needs to take stock quickly. Read the Luce piece. Be honest about what is happening. Read Plouffe's smart book again. Send Rahm Emanuel back to the House in a senior role. Make Valerie Jarrett an important Ambassador. Keep Axelrod — but balance him with someone like Plouffe, and get back to putting good policy before short term politics.

Noted without comment, since I don't really know if Luce and Clemons have it right. But both pieces are worth a look, and anyway, I figure there's a good audience out there for a bit of good anti-Rahm porn. Enjoy.

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Is Greece the Next Shoe?

| Sun Feb. 7, 2010 7:32 PM EST

Simon Johnson is following the economic crisis that's mounting daily in Greece — and in Spain, Portugal, Ireland, and Italy — and is deeply pessimistic:

The IMF cannot help in any meaningful way.  And the stronger EU countries are not willing to help — in part because they want to be tough, but also because they do not have effective mechanisms for providing assistance-with-strings.  Unconditional bailouts are simple — just send a check.  Structuring a rescue package that will garner support among the German electorate — whose current and future taxes will be on the line — is considerably more complicated.

The financial markets know all this and last week sharpened their swords.  As we move into this week, expect more selling pressure across a wide range of European assets. 

As this pressure mounts, we’ll see cracks appear also in the private sector.  Significant banks and large hedge funds have been selling insurance against default by European sovereigns.  As countries lose creditworthiness — and, under sufficient pressure, very few government credit ratings will hold up — these financial institutions will need to come up with cash to post increasing amounts of collateral against their derivative obligations (yes, the same credit default swaps that triggered the collapse last time).

I can't pretend to have any kind of deep knowledge about this. But ever since the 2008 bank bailout I've had a persistent buzz in my head telling me that another shoe is likely to drop somewhere. I thought it might be Eastern Europe, channeled through Austria, or maybe something in Asia. The Dubai default seemed like a canary in the coal mine. Or even some kind of shock in the U.S. related to ARM resets. But now it looks like it might be Greece.

Hopefully Johnson is just being overly pessimistic. But one of the key lessons of the 2008 crash was how fast things can go south when markets lose confidence. If Greece fails, it won't just slowly slide into default, it will get pushed there by opportunistic investors who suddenly decide to place huge bets on its failure, aided by panicked investors who see what's happening and all try to head for the exits at once. If and when that happens, Europe or the IMF or the United States will have only a few days to act to prevent it from becoming a continent-wide rout.

On the other hand, Greece's sale of treasury bonds last week went pretty well. So maybe things aren't as bad as we think. That's what I keep telling myself, anyway.

UPDATE: More here: "The EU's refusal to offer Greece anything beyond stern words and a one-month deadline for harsher austerity — while admirable in one sense — is to misjudge how fast confidence is ebbing. Greece's drama has already metastasised into a wider systemic crisis. The world risks a replay of the Lehman collapse if this runs unchecked, this time involving sovereign dominoes."

More on the Sugar Lobby

| Sun Feb. 7, 2010 4:47 PM EST

Earlier this morning I posted a chart showing how much money had been spent lobbying against a tax on sugared beverages by Pepsi, Coke, and the American Beverage Association. I just want to make one more point about it.

Assuming the LA Times did its sums correctly,1 this is one of the clearest examples you'll ever see of how much money can be spent lobbying on one specific piece of legislation. Usually that's hard to figure out, since industries spend a lot of money lobbying all the time, and it's hard to say how much is spent on one issue vs. another. But for six straight years, these three companies spent about $3 million on lobbying activities. Then in 2009 that suddenly jumped to $37 million. Since there wasn't much else going on that would have seriously affected them, that means they spent $34 million just to defeat the sugar tax.

For comparison, that's nearly as much as the entire aerospace industry spends on lobbying for the entire defense budget each year. It's five times more than the sugar lobby itself spends lobbying on all sugar-related issues each year. It's about as much as organized labor spends on all lobbying activities for everything.

That's the kind of muscle that the business community can bring to bear when it cares to. As much as the entire annual lobbying budget of organized labor or the aerospace industry, all for one single piece of legislation that never really had a ton of support in the first place. That's a lot of leverage.

1The caveat here is that the Times used CRP figures for 2003-08 but its own research for 2009. So it's possible that the comparison isn't apples-to-apples due to different methodologies.

Photo of the Day: Cheat Sheet Edition

| Sun Feb. 7, 2010 12:39 PM EST

Sarah Palin is a PR genius. The same way that Madonna is a PR genius or Al Sharpton is a PR genius. No matter how tired we get of them, somehow they always figure out a way to keep themselves in the public eye.

Yesterday Palin delivered a routine stemwinder to a medium sized crowd and managed to get a ton of publicity for it. But that's not all! It turns out that last night's speculation was right: she really did have a cheat sheet on the palm of her hand that she consulted during the softball Q&A after the speech. Just like your average seventh grader taking an algebra test. Has any politician in history ever done this before?

And even the notes themselves are fascinating. Here's what she wrote down:

Energy

Budget Tax Cuts

Lift American Spirits

The most obvious question is: why would anyone need to write this stuff down? It's not like she's trying to remember the quadratic equation or anything. For someone who swims in the seas that Palin swims in, this is about the equivalent of writing down a note to remember your birthday.

But enough mockery. At this blog we prefer a more high-minded, policy-oriented critique of our major politicians. So here it is: it turns out that Sarah Palin doesn't believe in budget cuts. In fact, she went to the trouble of deliberately crossing it out. Just like every other garden variety faux fiscally conservative Republican, she doesn't really want to cut the budget because that runs the risk of annoying some interest group or another. She only wants to cut taxes. Normally, though, we don't have graphological proof of this. With Palin, now we do.

Quote/Chart of the Day: The Sugar Lobby

| Sun Feb. 7, 2010 12:03 PM EST

Today's all purpose post begins with the quote of the day. It comes from the LA Times:

From the beginning, fast food and beverage company executives were uneasy about President Obama. He and his wife were known advocates of healthy eating.

That is scary! Advocates of healthy eating could pose a real problem. The industry's response is our chart of the day:

The entire story is worth reading. As a policy matter I'm not sure whether I support a tax on sugared beverages or not, but in the end it really doesn't matter. What matters is that the food industry doesn't want it, they're willing to spend a lot of money to make sure it never happens, and both interest groups and politicians are unwilling to risk losing their support. So, no tax.