Kevin Drum - February 2010

Book Bleg Followup

| Thu Feb. 18, 2010 12:20 PM EST

Just a quick note to thank everyone who recommended books in my weekend Book Bleg. The response was great, and it's worth checking out if you're interested in some (mainly) fiction recommendations.

So which books did I decide to try? This is necessarily a fairly random thing when you get hundreds of recommendations, but I chose three. First is Hilary Mantel's Wolf Hall, which broke out of the pack based on sheer number of enthusiastic recommendations, plus the fact that so many people were convinced that it was a perfect Kevin book. (We'll see how well you guys know me!) Second is China Mieville's The City & The City. I've been vaguely meaning to read some Mieville forever and somehow I never have. So now I will. Third is Stieg Larsson's Millennium Trilogy, which got several recommendations and has the look of the kind of gratuitously convoluted plot line that I get a kick out of. Part 3 isn't available until May, though, so I'll read the others first.

Thanks again to everyone who pitched in. I'll probably dip back into that thread several more times before the year is out.

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Only in America

| Thu Feb. 18, 2010 12:05 PM EST

I just wrote a longish post about how income mobility in the United States is actually pretty anemic, but our blog software ate it and I don't feel like trying to recreate it. So here's the nickel summary: despite what Florida senate candidate Marco Rubio says, America isn't the only place where you can start a business in a spare bedroom. In fact, whenever you hear a politician say "only in America," it's an almost certain dead giveaway that they're blowing smoke. On the specific question of rags to riches stories, the fact is that America has less income mobility than most other rich countries, and that mobility has been declining for the past several decades.

There's a longer version of this, but you'll just have to pretend that I wrote it and you read it. In the meantime, take my word for it. Or, if you don't trust me, take David Frum's word for it.

The Rich and Their Taxes

| Thu Feb. 18, 2010 1:59 AM EST

Tax data is always a few years out of date, so today David Cay Johnston reports on how the rich did during the last of the boom years:

In 2007 the top 400 taxpayers had an average income of $344.8 million, up 31 percent from their average $263.3 million income in 2006, according to figures in a report that the IRS posted to its Web site....

Their effective income tax rate fell to 16.62 percent, down more than half a percentage point from 17.17 percent in 2006, the new data show. That rate is lower than the typical effective income tax rate paid by Americans with incomes in the low six figures....Payroll taxes did not add a significant burden to the top 400, not changing the rounding of rates by even one decimal. With payroll taxes taken into account, the effective tax rate of the top 400 would be 17.2 percent in 2006 and 16.6 percent in 2007, my analysis shows — the same as not counting payroll taxes. As a point of comparison, about two-thirds of Americans pay more in Social Security, Medicare, and unemployment taxes than in federal income taxes.

I don't know about you, but Johnston is certainly right about me: I make considerably less than $344 million a year and I pay considerably more than 16.6% in federal taxes. This, of course, is fair, because, um, the rich really hate paying taxes. So there.

Heads I Win....

| Wed Feb. 17, 2010 6:39 PM EST

Rich Lowry's "smart friend" just sent him an email warning that the economy is improving and conservatives need to prepare for this frightening possibility. How should they do this? By making sure that the media turns economic success into a narrative of liberal failure:

Republican candidates and conservative media commentators must prepare the American people for this phony boom with terrible long-term consequences. The news story here is: the revival of the economy by central bank money-printing and enormous government deficits to be paid for by our children.  Also, triumphalism about the weak economy should stop. Otherwise, Republican and conservative triumphalists will be sandbagged and look foolish in a mere six months, maybe sooner.

Since the economy and jobs are the central issues now, the focus must be on the Obama deficits, the Obama tax hikes on the middle class, and the Obama economic policy which makes government employees richer and the American working people poorer.

Well, at least we've been prepared. If the economy sucks, it's Obama's fault. If the economy prospers, it's a dangerous mirage brought about by Obama's failed policies. What do you think are the odds that the media will buy this?

The Taliban Fog

| Wed Feb. 17, 2010 1:49 PM EST

Matt Steinglass highlights a passage from the New York Times today about the capture of Mullah Abdul Ghani Baradar, the Taliban's top military commander. According to the Times, Baradar's capture "could come at the expense of the Afghan government of Hamid Karzai and complicate reconciliation efforts his government has begun":

An American intelligence official in Europe conceded as much, while also acknowledging Mullah Baradar’s key role in the reconciliation process. “I know that our people had been in touch with people around him and were negotiating with him,” the official said, speaking on the condition of anonymity because he was not authorized to discuss the issue.

....“He was the only person intent on or willing for peace negotiations,” said Hajji Agha Lalai, former head of the government-led reconciliation process in the city of Kandahar, who has dealt with members of the Taliban leadership council for several years.

He and other officials in Afghanistan who are familiar with the Taliban leadership said Mullah Baradar’s arrest by Pakistani intelligence, and his interrogation by Pakistani intelligence officers and American agents, could play out in two ways. Mullah Baradar might be able to persuade other Taliban to give up the fight. Or if he is perceived to be mistreated, that could end any hopes of wooing other Taliban.

Naturally, this is all completely opaque. Apparently Pakistan is miffed that they've been left out of negotiations with the Taliban, and they want back in. Getting Baradar out of the picture might have simply been a chess move on their part to eliminate someone they didn't have any control over.

Or not. Maybe Baradar's capture means that Pakistan is getting serious about fighting the Taliban on their own soil, which has been the standard narrative up until now. There's no telling, really. But it's worthwhile at least keeping in mind that there are multiple, competing storylines here.

Healthcare Reform On the Edge

| Wed Feb. 17, 2010 12:50 PM EST

Chris Hayes calls this the "Most important piece of polling data I've seen in months." I don't know if I'd go that far, but politically it's pretty important. What it shows is about what you'd expect: opposition to healthcare reform comes overwhelmingly from people who would never consider voting for a Democrat in the first place. Among that group, opposition to HCR is 94%-1%, and obviously no Democrat risks losing any of their votes by passing healthcare reform.

But among those in the middle, those who might vote for a Democrat but aren't sure bets, support is about evenly split. These people are obviously persuadable, but they're only persuadable if Dems actually pass healthcare reform first and then campaign on it as if they actually believed in it. This is still a winnable campaign issue. Full poll results here.

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Quote of the Day: Iraq

| Wed Feb. 17, 2010 12:25 PM EST

From a "senior U.S. military official" in Iraq, commenting on the increased sectarian violence in Baghdad a few weeks before the upcoming election:

All we're doing is setting the clock back to 2005. The militias are fully armed, and al-Qaeda in Iraq is trying to move back from the west. These are the conditions now, and we're sitting back looking at PowerPoint slides and whitewashing.

I don't think there's any way to sugar coat this: this was always a possibility, no matter how long we stayed in Iraq. The Four S's (Surge, Sadr, Sectarian cleansing, Sunni awakening) gave Iraq a bit of breathing room, but they didn't change its culture overnight. We still have a bit of influence, and our troops are still available as backups, but at this point the future of Iraq is up to the Iraqis. Surge or no surge, there's no guarantee it will have a happy ending.

Crank Economics, Part 375

| Wed Feb. 17, 2010 12:02 PM EST

Greece problems would be a lot less severe if it still had its own currency. The exchange rate of the drachma would adjust, exports would get cheaper and imports dearer, and Greece's economy would stumble around a bit but then recover. Unfortunately, Greece is part of the eurozone, so they don't have this option. They don't control their own currency.

Now, if you were, say, a miscellaneous blogger who didn't know much of anything about how this stuff works, you might have an idea: why doesn't Greece leave the eurozone? Readopt the drachma, let it float, and watch as all their problems neatly sort themselves out. Then, later, when their economy has recovered, they can adopt the euro again. Problem solved.

If you wrote a post suggesting this, it would take about five minutes to get a dozen comments explaining why it's impossible. But hey — you're just a hypothetical blogger. Nobody expects you to know anything about this stuff. Live and learn.

But why does Martin Feldstein, one of the world's preeminent economists, seem to think this would be a good idea? And why does the Financial Times give him space to suggest it? Paul Krugman is — uncharacteristically — too polite to actually ask this, but he's pretty obviously shaking his head over it as well. What's the deal, FT?

Chart of the Day: The Stimulus

| Wed Feb. 17, 2010 11:16 AM EST

In the New York Times today, David Leonhardt writes what should be obvious: last year's stimulus bill, though not perfect, has been a smashing success:

Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.

....Around the world over the last century, the typical financial crisis caused the jobless rate to rise for almost five years, according to work by the economists Carmen Reinhart and Kenneth Rogoff. On that timeline, our rate would still be rising in early 2012. Even that may be optimistic, given that the recent crisis was so bad. As Ben Bernanke, Henry Paulson (Republicans both) and many others warned in 2008, this recession had the potential to become a depression.

For partisan political reasons, Republicans find it in their interest to insist that the stimulus was just a boondoggle that hasn't created a single job. The fact that this frequently gets reported with a straight face is a black mark for the press, which ought to insist on its sources being a wee bit more reality-based if they want to be quoted without being immediately debunked in the following paragraph.

The chart below from Organizing For America tells the real story. We still have a long way to go before job growth is back to normal, but the stimulus is getting us there a lot faster than we would have gotten there otherwise.

DADT and the Troops

| Tue Feb. 16, 2010 7:55 PM EST

McClatchy's Nancy Youssef reports that, for the most part, the issue of allowing gays to serve openly in the military mostly just elicits yawns from those who are actually in the military:

Navy Adm. Michael Mullen, the chairman of the Joint Chiefs of Staff, was nearing the end of a 25-minute question and answer session with troops serving here when he raised a topic of his own: "No one's asked me about 'Don't Ask, Don't Tell,'" he said....Air Force Chief Master Sgt. Darryl E. Robinson, who's the operations coordinator for defense attache's office at the U.S. Embassy here, explained why after the session. "The U.S. military was always at the forefront of social change," he said. "We didn't wait for laws to change."

....Indeed, since Mullen appeared on Capitol Hill earlier this month and told a stunned Congress that in his personal view, gays and lesbians should be allowed to serve, the response among members of the military has been little more than a shrug.

After Tuesday's question-and-answer session, Mullen told McClatchy that although he's held three town hall sessions with troops since his testimony, not a single service member has asked him about the issue.

Among the senior officer corps, which trends more conservative and comes from an older generation, there might still be a fair amount of anxiety about ending DADT. But among the enlisted troops, I'll bet that even those who say they oppose repeal of DADT don't really feel very strongly about it. They grew up in an environment where it's just not that big a deal anymore, and when DADT is finally repealed, it won't be that big a deal in the military either.