I'm not sure if anyone still cares, but after noodling over this a bit I think I'm basically convinced by the Atrios/Salmon/Yglesias argument that there's some real benefit to government briefing sessions that don't allow direct quotes. Spin will be a big part of these sessions regardless, and if this rule allows government officials to talk like real people instead of worrying that the slightest misstep will produce some headline-worthy gaffe, then it's probably a useful thing. Felix makes the case pretty well here.

On the other hand, the argument for not being able to attribute your paraphrases to specific officials still seems pretty dodgy. On balance, then, I say: paraphrase rule yes, ID rule no.

Here's the latest on the overdraft front:

In a move that could bring an end to the $40 cup of coffee, Bank of America said on Tuesday that it was doing away with overdraft fees on purchases made with debit cards, a decision that could cost the bank tens of millions a year in revenue1 and put pressure on other banks to do the same.

....“What our customers kept telling me is ‘just don’t let me spend money that I don’t have,’ ” said Susan Faulkner, the bank’s deposit and card product executive, who said the overdraft changes were part of a broader push to build trust among its customers. “We wanted to help them avoid those unexpected overdraft fees.”

Well, that was a quick U-turn. As recently as last year it was "our customers are telling us not only that they want overdrafts covered, but they don't even want to be asked first and they're just fine with us fiddling with the order of payment even if it maximizes the number of overdraft fees they pay." Hell, Bank of America was famous for its unwillingness to ever allow anyone to opt out of overdraft protection no matter how compelling the argument. Now, suddenly, it's "our customers don't want overdraft protection at all."

I'm a little short on time right now, so I'm not sure what to think of this. On the surface, it's good news. If it's a choice between unlimited overdraft fees and no overdraft fees, then no overdraft fees is a clear winner. But then there's this:

“Consumers have shown a willingness to incur overdrafts if it’s covering mortgage payments or car payments, but not to cover a hot dog and a soda,” said Greg McBride, senior financial analyst at Bankrate.com and one of a handful of analysts and consumer advocates briefed by Bank of America on its new policy. “They don’t want to incur overdrafts on everyday purchases.”

So how hard would it be for BofA to give customers this choice: "please cover payments over, say, $200 but not anything below that amount"? Why no middle ground? I need some time to think this over, but something tells me there's more going on here than it seems.

But hey — maybe I'm just overly suspicious of the banking industry these days. Maybe.

1Tens of millions? For a bank the size of BofA, wouldn't the real number be somewhere in the billions?

Rep. Paul Ryan's tax and spending "roadmap" is a fascinating critter: conservatives all praise it to the skies but none of them want to actually commit to supporting it. The reason for their hesitation is obvious: Ryan's plan would cut spending dramatically, and supporting it would mean having to explain what, exactly, they'd cut. That would be electoral suicide and they know it. They much prefer their usual game of loudly denouncing "spending" without ever having to say what spending they're actually opposed to.

However, their reason for supporting Ryan's plan is also obvious: it would cut taxes on the rich dramatically, and there's nothing conservatives like better than cutting the tax bills of America's wealthy. But how much would it cut taxes on the rich? Citizens for Tax Justice has run the numbers and the answer is: a lot. The very richest of the rich would see their tax bills go down by an average of over $200,000, a whopping 15% of their income. Ka-ching! To make up for that, everyone with an income under $100,000 would have their taxes increased by about $2,000 per year.

It's a sweet deal for the rich. But even with all the tax increases on the middle class, Ryan's plan still raises less revenue than today's tax code. "It’s difficult to design a tax plan that will lose $2 trillion over a decade even while requiring 90 percent of taxpayers to pay more," says CTJ acerbically. "But Congressman Ryan has met that daunting challenge." Details are in the table below, where you can find out how much more you'd have to pay under Ryan's plan. Enjoy.

Last night I wondered what bloggers really thought about the off-the-record briefing they attended on Monday with several anonymous Treasury officials. Here's a smattering of response. Megan McArdle: "Tim Geithner is growing into his role; this was a much more relaxed and confident team than I saw a year ago....[These sessions] are useful for figuring out how administration officials are thinking about a problem." Matt Yglesias: "My two opportunities to speak with Tim Geithner have essentially driven home to me the extremely sharp limits of 'speak to Tim Geithner' as a strategy for figuring out what the Geithner Treasury Department is all about." Tim Fernholz: "The two newsiest things we learned: They're going to change HAMP....They Think Republicans Will Filibuster Regulatory Reform Efforts."1 Felix Salmon: "I came away with the impression that life at Treasury is not much fun, on a day-to-day basis, and that the stresses of trying to set economic policy in the face of strong opposition from both the banking lobby and the Republican party are wearing on the officials there."

Fair enough. But what about the utility of the ground rules: no names and no quotes. Bloggers were allowed to paraphrase what the officials said, but they couldn't quote directly and they couldn't name names. This is the kind of thing bloggers used to denounce routinely, but Matt Yglesias and Atrios take a crack at defending it. First Matt:

I do think anonymity has some value in that by preventing journalists from doing sensationalist stories based around a single direct quote it forces you to focus on the big picture of what the officials in question are trying to say. For example, if you looked through a transcript of yesterday’s conversation with bloggers with an unscrupulous eye, you could probably find a Tim Geithner quote about California or Greece or something that, sexed-up with a juicy headline, would constitute “news.” But since we’re not allowed to quote directly, only characterize in general terms what was said, and I can convey to you that Geithner talked a bit about both California and Greece and was sensible but didn’t have any earth-shattering insights into the situation.

And Atrios in a similar vein:

Generally I think group deep background experiences are more edifying than fully on the record ones, and much less prone to abuse by the political actors than anonymous "leaks" precisely because there are a bunch of people in the room. More problematic are the single source to single reporter leaks which are clearly orchestrated but in which anonymity either provides cover for no good reason or conveys — wrongly — that the anonymous source is doing something brave by speaking to reporters when in fact they're just doing what they are told.

I'm not sure if I buy this or not. It has a pretty obvious whiff of special pleading to it, but again, it's easy for me to take a self-righteous stand on this kind of thing since I'm not in Washington and never have a chance to go to these briefings. (Or, more germanely I suppose, to turn down invitations to them.) It's true, as Atrios says, that a briefing like this one has less chance for mischief than one-on-one leaks, which allow officials to slag their enemies without ever being held responsible for it. Still, I can't help but think that everyone involved underestimates the possibility of the same thing happening here. It's an obvious opportunity for administration (or other) officials to curry favor with bloggers by implying that they secretly believe X without really being held accountable for it. After all, it's a lot easier to walk back an anonymous paraphrase than it is a direct quote, as Felix Salmon demonstrates here.

In any case, I realize that all this kvetching just marks me as a rube, since background briefings are a way of life in Washington and everyone accepts that. Except, as Tim Fernholz points out, it's not quite the longtime practice I made it out to be:

This isn't an ancient Washington tradition; the SAO insistence is actually a legacy of recent partisanship. I've met veteran Washington reporters who used to walk in to Clinton administration Defense Secretary Bill Cohen's office on a Saturday morning just to say hey and see what was going on. But in today's political and media environment, the kinds of things that people do when having a regular conversation — tell jokes, air hypotheticals, misspeak, think aloud — are more likely to be printed by reporters and more likely to be used to attack the speaker. The incentives aren't there for officials to share real insight with reporters outside of settings like this one.

Nickel summary: count me as still on the fence. I continue to think that routine anonymity like this is more corrosive than people give it credit for. On the other hand, "sources say" really is an ancient tradition, hardly an innovation of modern journalism, and sometimes it really is the only way to get news out. On the third hand, when bloggers start getting invested in this tradition, it gets harder to say just what the value of blogging is versus traditional journalism. More and more, though, that's a distinction without a difference anyway, so maybe it doesn't really matter. Stay tuned.

1I gotta say, though, the filibuster thing doesn't seem like news. Was there ever any serious chance that Republicans wouldn't filibuster regulatory reform?

Terry McDermott takes a look at Fox News and notes the obvious: they don't tend to have a lot of Democratic guests:

This appears to be politically motivated, but that could be just an artifact — the content seems political but the primary aim is much more likely commercial. Cable news is not literally a broadcast business, but a narrowcast. At any given moment, there are a relative handful of people (in peak hours less than five million and in non-prime hours half that, out of the U.S. population of 320 million) watching all of these networks combined. American Idol, in contrast, routinely draws 30 million. Although cable news is a comparatively small market, it is a small market with a much larger mindshare, mainly because the media are self-reflective, creating a kind of virtual echo chamber.

....[Roger] Ailes’s most valuable insight was that sharp opinions do not necessarily chase an audience away. In fact, they seem to have created one. There is no worry of offending a broad audience, because there is no broad audience to start with anymore.

I think McDermott's suggestion that this might not be politically motivated is a little silly, something that he pretty much concedes in the rest of his piece. Still, the main point of this paragraph can hardly be emphasized enough: hardly anyone watches cable news. Even in prime time, Fox has a couple million viewers — that's about 1% of American adults — and the other operations have a million or so. Cable news is a molehill that gets routinely turned into a mountain range because they happen to be talking about the most self-obsessed bunch of gossip hounds in the country: politicians.

But the reality is that almost no one is watching. Take away the echo chamber and Glenn Beck would be about as important as a guy on a soapbox in Central Park. Which is basically what he is.

After the Citizens United decision opened the floodgates for corporate spending in political campaigns, supporters of the decision offered up several pushbacks against the doomsayers. One of them was simple: most big corporations don't really want their customers to view them as explicitly political, and this will rein in the amount of money they're willing to spend financing campaigns.

But there's more than one way to skin a cat, and there's more than one way to spend money. Tom Hamburger reports today in the LA Times on the growing clout of the Chamber of Commerce:

The U.S. Chamber of Commerce is building a large-scale grass-roots political operation that has begun to rival those of the major political parties, funded by record-setting amounts of money raised from corporations and wealthy individuals.

....What makes the initiative possible is a swelling tide of money. The chamber spent more than $144 million on lobbying and grass-roots organizing last year, a 60% increase over 2008, and well beyond the spending of individual labor unions or the Democratic or Republican national committees. The chamber is expected to substantially exceed that spending level in 2010.

....The recent Supreme Court ruling that corporations have a free-speech right to spend money to help elect or defeat candidates not only struck down a century of laws limiting such spending, but it also made many business executives feel more comfortable about using corporate money for political purposes.

I think this is a good insight. Obviously a group like the Chamber of Commerce is likely to raise more money when Democrats are in power and corporations are afraid of increased regulation. But corporate contributions depend on a lot of things, and one of them is just historical norms and traditions. Combine a Democratic administration with a ruling like Citizens United, and suddenly a lot of corporate executives are both more motivated to give and more comfortable with the idea of large-scale corporate influence on political campaigns. It's impossible to say how big a factor this is, but it's certainly floating around in the background somewhere.

In any case, this is just a toe in the water. Once big corporations get more comfortable with increased spending on groups like the Chamber, they'll start to get more comfortable with direct spending too. We may or may not see a lot of direct contributions to political campaigns this year, but it's probably just a matter of time. This is just a start.

How the Scam Works

The Financial Times reports today on derivative deals gone bad in little Italian villages. Their poster child is Baschi, population 2,800, but it goes way beyond that:

Between 2001 and 2008, 525 Italian local authorities entered into almost 1,000 interest rate swaps with an aggregate value of €35bn, according to Italy’s audit office and the central bank....Scores of these deals are now turning sour, dragging Italian banks such as BNL and global institutions such as Merrill Lynch, UBS, Deutsche Bank and JPMorgan into court.

This is embarrassing for Italy, as the state is widely considered to have failed to control the deals involving cities as large as Milan to a tiny Order of Capuchin Friars near Genoa. It is also extremely embarrassing for investment banks. Investigations by Italy’s finance police have led to raids, the seizure of assets and bankers being named in criminal cases. One prosecutor in south Italy has asked that Merrill Lynch be banned from doing business with municipalities for two years.

Hey, Merrill Lynch! I remember them. That's the company that entered into a whole bunch of derivative deals with my hometown of Orange County in the early 90s and drove us into bankruptcy. I guess you can take the investment bank out of the hustle, but you can't take the hustle out of the investment bank. Or something.

This comes via Felix Salmon, who notes that "municipalities around the world have been ripped off by fast-talking derivatives salesmen for years, and the whole business really is very sleazy." As it happens, there was a bit of sleaze on both sides, probably, as these small towns were all hoping to get something for nothing and figuring that if a piper needed to eventually be paid, some future mayor would have to pay him. But the whole piece is worth reading. It's a nice look into the incredibly complex deals that these banks put together and sold to plainly unqualified buyers.

Shelby Loses Again

A couple of weeks ago Sen. Richard Shelby (R–Alabama) threw a temper tantrum over the fact that an Air Force contract that would have brought jobs to Alabama was being held up. To register his displeasure he placed a blanket hold over all of Barack Obama's nominees who need Senate confirmation.

Well, he must be plenty pissed now:

Northrop Grumman Corp. said Monday that it was dropping out of the race for a $35-billion Pentagon contract to build 179 aerial refueling tankers, leaving its rival Boeing Co. as the sole bidder for one of the largest military contracts in U.S. history.

....But it also represents a huge blow to California's struggling aerospace industry. Northrop had said the contract award would have created more than 7,500 local jobs, even though the plane would have been assembled in Alabama. Follow-on contracts could involve building 300 to 400 additional tankers valued at more than $100 billion over several decades.

Yep, that was the contract. And now it's gone because, says Northrup, the Pentagon's new specifications "dramatically favors" Boeing's smaller refueling tanker over Northrop's offering. I wonder what Shelby will do for an encore?

In the Wall Street Journal today, health economist David Cutler takes a look at the cost savings measures in the current healthcare bill and gives it full marks in six areas: forming insurance exchanges, reforming Medicare Advantage, value-based payment for Medicare, creating an independent Medicare advisory board, fighting Medicare fraud, and investing in IT. Not bad! And there's partial credit for three more: prevention programs, a tax on high-value insurance plans, and malpractice reform. He gives no credit for only one thing: creating a public option.

So reform gets full credit on six of the 10 ideas, partial credit on three others, and no credit on one. The area of no credit (a public option) is because Republicans opposed the idea. One area receives only partial credit because of Democratic opposition (malpractice reform) and two other areas reflect general hesitancy to increase taxes (taxing Cadillac plans and taxing drivers of obesity).

Why is reform viewed so negatively? In part, it may reflect the perfect being the enemy of the good. If the only passing grade is 10 out of 10, then reform clearly fails. But given where the Republican Party is on a public option, no reform will get a passing grade. If both parties were willing to raise taxes and Republicans negotiated malpractice reform for their overall support, we could probably get a nine out of 10.

I'll add two things. First, surely the idea of price transparency and larger copays for certain kinds of healthcare ought to be on the list? It's true that conservatives have turned this into something of an idée fixe, making claims for it way out of proportion to what it can accomplish. And there's no doubt that it would have to implemented carefully. Still, I think there's fairly broad agreement that this could have some impact on cost containment, and it's nowhere to be found either in the current bill1 or on Cutler's list. Even if you think it's a bad idea, it deserves at least a mention.

Second, Cutler is, of course, dead wrong about why reform is viewed so negatively. That's because he's an academic and has to be polite in public. The real reason is that the Republican Party has no interest in reining in healthcare costs and no interest in reforming healthcare. Their only interest is in wielding the biggest partisan cudgel they can find. So they call the Medicare advisory board a "death panel" and insist that exchanges and a public option are the road to Stalinism. Say this often enough and loudly enough and eventually plenty of people believe you. And even the ones who don't will eventually become uncertain enough that they decide they might as well oppose whatever the Democrats are doing. After all, healthcare reform doesn't provide much benefit for the vast majority of people, so why take chances?

If Republicans were genuinely interested in controlling healthcare costs, the political dynamic of reform would be entirely different and the bills going through Congress would look entirely different. Better in some ways and worse in others, but the product of genuine negotiation. But Republicans aren't interested in negotiation, just demonization. That's why reform is viewed so negatively.

1UPDATE: Michael Russo of CALPIRG emails to correct me. In fact, in the Manager's Amendment to the Senate bill, Sec. 2718(e) provides that "Each hospital operating within the United States shall for each year establish (and update) and make public (in accordance with guidelines developed by the Secretary) a list of the hospital’s standard charges for items and services provided by the hospital, including for diagnosis-related groups established under section 1886(d)(4) of the Social Security Act."  Says Russo: "Obviously it’ll take some strong regs to make the rubber hit the road on this so patients really do know what things cost, but as written this is a big step forward, and very helpful to consumer advocates moving forward."

Assuming those strong regs are written and implemented, this is good news.

The Anonymous SAO

Felix Salmon attended an off-the-record briefing at the Treasury Department today:

Treasury had its second big blogger meeting today, where Tim Geithner and other Senior Administration Officials (sorry, ground rules) fielded questions from a group of bloggers* which tilted heavily towards the newsier end of the spectrum. The Center for American Progress was there in force, as were the Atlantic and the Huffington Post.....

*Daniel Indiviglio, Megan McArdle, Matthew Yglesias, Patrick Garofalo, Amanda Terkel, John Aravosis, Faiz Shakir, John Amato, James Kwak, Duncan Black, Sam Stein, Shahien Nasiripour, Ryan Grim, David Kurtz, Tim Fernholz, and me.

Having read a few posts from the bloggers in question, what I want to know is: Did they really learn anything? Did Geithner and the anonymous SAOs say anything interesting that they wouldn't have said on the record? Or was it just a pure spin session? Felix gives a clue at the end of his post:

I came away with the impression that life at Treasury is not much fun, on a day-to-day basis, and that the stresses of trying to set economic policy in the face of strong opposition from both the banking lobby and the Republican party are wearing on the officials there. And I also came away with a photocopy of John Cassidy's piece on Geithner in this week's New Yorker: each of us got given it as some kind of Treasury party favor.

Josh Green has a big Geithner profile too, and now Treasury was inviting us bloggers in, and then there was that Vogue piece — there does seem to be some kind of PR offensive going on. But I'm not nearly enough of a Washington insider to hazard a guess as to who's responsible, or why they might be doing it. But I'm sure it's going to be a topic of conversation at the post-meeting dinner.

I've always felt that these kinds of anonymous sessions do more harm than good to the cause of good journalism, allowing government officials a chance to peddle their spin in person without really being held accountable for what they say. But that's a cheap position for me to take since I'm out in California and never get invited to them anyway. So I'm genuinely curious: now that bloggers are going to these kinds of things, and what with blogging being so much more informal and conversational than regulation journalism, what do they really think? Did the Treasury folks say anything they couldn't have said with their names attached? Was it genuinely interesting, or just a bunch of the same-old-same-old? What's the verdict on this ancient Washington tradition?