Kevin Drum - February 2011

Evolution of the Crazy

| Fri Feb. 25, 2011 10:28 AM PST

Mild mannered Ron Brownstein writes today that Barack Obama faces a Republican Party more united, more right wing, and less compromising than at any time in the past:

In Washington, Obama is already colliding with a conservative GOP House majority determined to slash spending and regulation. But the president also faces multiplying conflicts with Republican governors. The breadth and intensity of these confrontations dwarfs the level of tension between Bill Clinton and a previous generation of conservative GOP governors in the 1990s. Indeed, it’s difficult to think of another president who faced as much resistance on as many fronts from governors in the opposite party as Obama is encountering today.

....Republican governors came out swinging against many of Obama’s initiatives at the opening bell....2009 economic-stimulus package....high-speed rail....carbon emissions....health care. Twenty-seven states—all but two of them boasting Republican governors and all but four GOP attorneys general—are suing to dismantle the law’s foundation....Put it together and it’s fair to say, without drawing any moral equivalence, that health care reform is facing more-extensive resistance from conservative states than any federal initiative since Brown v. Board of Education.

....American politics increasingly resembles a kind of total war in which each party mobilizes every conceivable asset at its disposal against the other. Most governors were once conscientious objectors in that struggle. No more.

Even after writing about this for most of the past decade, it's hard to fathom. When Ronald Reagan was elected, it seemed at the time like the ultimate triumph of hardcore right-wing politics. It was the Reagan Revolution! He was going to slash taxes, institute supply-side economics, bust the unions, appoint uncompromising judges, give the Christian right a seat at the table, and declare war on the welfare queens.

It couldn't get any worse, could it? Well, yes, it could: in the 90s we got the Republican Party of Newt Gingrich and Grover Norquist, and they made Reagan look like the jolly old man he's since been mythologized as. Taxes? They wanted a blood oath against ever raising them for any reason whatsoever. Gingrich gleefully led an assault on a Democratic Speaker of the House that destroyed his career, something no previous leader of either party had ever tried to do. The GOP flatly refused to negotiate on healthcare reform, they shut down the government in 1995, and then did their best to impeach Bill Clinton over a blow job. This was a take-no-prisoners party like we'd never seen.

But the Newt Gingrich of 1995 was, as Clinton said, still somebody you could deal with. He may have been right wing, but he cared about policy and he cared about getting things done. Today even that's gone. Obama got virtually zero support for a stimulus bill designed to help get us out of the worst recession since World War II, he got no support for rescuing GM and Chrysler, he got no support for healthcare reform, and he got no support for financial reform even after a decade in which big banks were so far out of control they nearly wrecked the entire global economy. He's been attacked from Day 1 as non-American, non-Christian, and non-patriotic. The filibuster became not just a tool of intense opposition to big legislation, but an everyday tool of obstruction. Tea partiers and Glenn Beck accused him of being a socialist for sure, maybe a Muslim too, and quite possibly a fifth columnist as well. Rush Limbaugh mocks his wife and prominent GOP leaders make jokes about whether he was born in Kenya. A government shutdown isn't just something that might happen if Obama and Congress can't find a workable compromise on the budget, it's actively viewed as a positive goal. And, as Brownstein says, governors are no longer on the sidelines, sometimes working with the president and sometimes not depending on what's best for their state. They're fully enrolled in the war against Obama.

I don't know how this turns out. A parliamentary system of government can operate this way, but not a presidential system. Somewhere, somehow, this wave has to crest and then break. But when? And how?

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Do Unions Advocate for the Greater Good?

| Fri Feb. 25, 2011 9:19 AM PST

The other day I linked to a post suggesting that states with higher union densities also had more progressive taxation. Via Ezra Klein, I see that University of Washington grad student Barry Pump took a look at the evidence and concluded this wasn't true. There's apparently no correlation at all. But how about social spending? That's a different story. It turns out there's a very strong correlation between union density and state spending on social programs, as the chart on the right shows. Pump comments:

While unions may be rather powerless to affect taxation, they may be able to influence where the tax revenues go. Unions generally support social welfare spending and a strong safety net, so greater union membership would result in more social welfare spending....It seems, based on the data above, that unions probably spend more time trying to influence where the taxes states do get ultimately go rather than from whom states receive that tax revenue.

Now, there's no telling if there's really any causation here. It could be that states with progressive politics simply tend to produce both strong union movements and higher social spending. But this is something that would be worth a followup. One of the arguments in favor of organized labor is that they advocate for broad social change even on issues that don't directly affect union members. (For example, national healthcare and high minimum wages. These don't really affect union members much since they've already negotiated health coverage and wages far higher than the minimum, but unions have consistently fought for them anyway.) This behavior is actually a little mysterious, since interest groups usually stick to fairly narrow parochial concerns, but there's a pretty broad consensus that unions have always acted this way, both in the U.S. and Europe. If Pump's correlation holds up, it's another piece of evidence that unions really do tend to produce more egalitarian social policies in general, not just policies that favor union members.

The Next Step in Union Busting

| Thu Feb. 24, 2011 11:37 PM PST

Today's Wisconsin-themed Twitter humor:

There's gotta be a million like this. Leave yours in comments.

The Politics of Envy

| Thu Feb. 24, 2011 4:57 PM PST

Ezra Klein reprints this chart from David Leonhardt, which shows that there's been no surge in government employment over the past two years (the short blip in 2010 is from temporary census hiring), and makes this comment:

But I also think the chart above speaks to what's driving the events in Wisconsin: a perception that people in the "real" economy have suffered greatly, while public workers have been cosseted by their union contracts, their lobbying might and stimulus dollars. And there's some truth to that. The public sector basically sat out the first year of the recession.

Unfortunately, Ezra is almost certainly right that this perception informs the way a lot of people think about economic downturns. It's an unfortunate example of the way we like to view recessions as morality plays rather than macroeconomic events to be dealt with as efficiently as possible.

Start with the private sector. Why did companies shed so many workers? Answer: not because their workers were slothful layabouts, but because business was bad. If your widget sales decline by 10%, you don't need as many sales people, you don't need to run as many shifts in the factory, and you don't need as many accounts receivable clerks. So you lay them off. You don't really have any choice if you want to stay in business, but it's still unfortunate since people without jobs don't buy widgets, which just makes your situation even worse. If you could manage it, it would be pretty helpful if no one got laid off at all.

Now how about the public sector? It's exactly the opposite because the public sector isn't in the business of selling things. If the economy tanks, that doesn't mean there are fewer fires, less crime, or a smaller number of kids in school. That's why cops, firefighters, and teachers don't get laid off. Not because they're a bunch of cosseted union goons, but because the demand for their services is just as high as it was before the recession. In some cases, in fact, it might be higher. There's actually more demand during recessions for clerks to handle unemployment applications or Medicaid reimbursements than there is during boom times.

And it's a good thing, too, since, as Ezra says, "The worst thing for an unemployed person is another unemployed person. It means more competition for job openings, lower wages and less job security." The best outcome for everyone would be for government to employ more people during recessions and to keep their wages high. This would reduce competition for jobs and help keep consumption from falling, which is why, in a perfect world, the federal government would be running big deficits in order to fund the ability of states to keep the lights on.

But the fact that this makes sense doesn't mean most people see it this way. We're biologically wired to be envious of anyone who has things better than us, and there's never any shortage of demagogues to stoke that envy. So we demand that if we're going to suffer, then everyone has to suffer. And guess what? That's exactly what happens.

Is Wisconsin Really About the Kids?

| Thu Feb. 24, 2011 1:24 PM PST

Mike Konczal points to this as the most interesting passage from Wisconson Gov. Scott Walker's telephone conversation with the fake David Koch:

I had all my cabinet over to the residence for dinner. Talked about what we were going to do, how we were going to do it, we had already kind of doped plans up, but it was kind of a last hurrah, before we dropped the bomb and I stood up and I pulled out a, a picture of Ronald Reagan and I said you know this may seem a little melodramatic but ... when he fired the air traffic controllers and, I said, to me that moment was more important than just for labor relations and or even the federal budget, that was the first crack in the Berlin Wall and the fall of Communism because from that point forward the soviets and the communists knew that Ronald Regan wasn’t a pushover....

Mike comments:

When the true believers get together and talk openly, they don’t talk about this being about the budget, or getting innovative school practices in place, or whatever. It’s about showing their enemies that they mean business and aren’t pushovers. He believes that by smashing one you can smash them all. And he believes he is the first domino to move.

Quite so. Which brings to mind the pro-Walker argument currently making the rounds over at Modeled Behavior: namely that, as Karl Smith puts it, "to the extent public sector unions matter at all, it's because they stand in the way of educational reform." Adam Ozimek expands on this a bit:

Do I really have to run down the litany of bad policies unions have fought to keep, and good policies they’ve fought against in education reform? A clear indicator of how bad they’ve been is that the most anyone will say in their defense on education reform is that “well, some unions are embracing reform now in some places!”

I think I would have been more open to this argument a year or two ago, but I'm less sure now. First, because it's obvious that guys like Walker couldn't care less about ed reforms. As Mike says, in private Walker makes it clear that his union busting efforts are mostly designed to show that he's a tough guy, not to hasten ed reforms that will help Wisconsin's kids. 

More importantly, though, I've simply become less convinced about the value of all the ed reforms that periodically capture the hearts of the Beltway chattering classes. I'm generally in favor of things like charter schools and disciplinary reforms that make it slightly easier to fire bad teachers, but even if they're worthwhile on their own merits there's not an awful lot of evidence that these things actually improve the overall quality of the educational system. It's not that there's no evidence to support these kinds of reforms, just that the evidence is thin and contradictory every time I look at it. Test scores haven't dropped over the past 30 years. Other countries largely haven't leapfrogged us during the same period. High-stakes testing doesn't appear to have a big impact. Charter schools aren't unquestionably superior to equivalent public schools. Merit pay might work but it might not. The presence or absence of teachers unions doesn't seem to have much effect on educational outcomes. For more on this, try reading Joanne Barken's contrarian take on the ed reform community in the winter issue of Dissent.

I'm not trying to stake out some kind of maximal position here. There is some evidence in favor of some of these reforms, and I support the idea of experimenting to find out what works and what doesn't. I'd also like to see teachers unions lighten up on some of this stuff, so to some extent I agree with Karl and Adam. Still, the overall evidence that teachers unions are our biggest impediment to a nation of young geniuses is pretty weak. If that's your main reason to oppose public sector unions, I think you probably need a better case.

Did the Army Use Psy-Ops on Members of Congress?

| Thu Feb. 24, 2011 11:28 AM PST

Michael Hastings, the guy who General Stanley McChrystal talked to a little more freely than he should have last year, has another big story in Rolling Stone today. He reports that the officer in charge of psy-ops in Afghanistan was ordered to use his team to spin visiting American dignitaries instead of Afghan tribal leaders:

The orders came from the command of Lt. Gen. William Caldwell, a three-star general in charge of training Afghan troops — the linchpin of U.S. strategy in the war. Over a four-month period last year, a military cell devoted to what is known as "information operations" at Camp Eggers in Kabul was repeatedly pressured to target visiting senators and other VIPs who met with Caldwell. When the unit resisted the order, arguing that it violated U.S. laws prohibiting the use of propaganda against American citizens, it was subjected to a campaign of retaliation.

"My job in psy-ops is to play with people’s heads, to get the enemy to behave the way we want them to behave," says Lt. Colonel Michael Holmes, the leader of the IO unit, who received an official reprimand after bucking orders. "I’m prohibited from doing that to our own people. When you ask me to try to use these skills on senators and congressman, you’re crossing a line."

....What Caldwell was looking for was more than the usual background briefings on senators. According to Holmes, the general wanted the IO team to provide a "deeper analysis of pressure points we could use to leverage the delegation for more funds." The general’s chief of staff also asked Holmes how Caldwell could secretly manipulate the U.S. lawmakers without their knowledge. "How do we get these guys to give us more people?" he demanded. "What do I have to plant inside their heads?"

According to experts on intelligence policy, asking a psy-ops team to direct its expertise against visiting dignitaries would be like the president asking the CIA to put together background dossiers on congressional opponents. Holmes was even expected to sit in on Caldwell’s meetings with the senators and take notes, without divulging his background. "Putting your propaganda people in a room with senators doesn’t look good," says John Pike, a leading military analyst. "It doesn’t pass the smell test. Any decent propaganda operator would tell you that."

....Under duress, Holmes and his team provided Caldwell with background assessments on the visiting senators, and helped prep the general for his high-profile encounters....In March 2010, [Col. Gregory] Breazile issued a written order that "directly tasked" Holmes to conduct an IO campaign against "all DV visits" — short for "distinguished visitor."...On March 23rd, Holmes emailed the JAG lawyer who handled information operations, saying that the order made him "nervous." The lawyer, Capt. John Scott, agreed with Holmes. "The short answer is that IO doesn’t do that," Scott replied in an email. "[Public affairs] works on the hearts and minds of our own citizens and IO works on the hearts and minds of the citizens of other nations. While the twain do occasionally intersect, such intersections, like violent contact during a soccer game, should be unintentional."

It's worth noting that this story is essentially single-sourced to Holmes, who was later investigated and reprimanded for "going off base in civilian clothes without permission, improperly using his position to start a private business, consuming alcohol, using Facebook too much, and having an 'inappropriate' relationship with one of his subordinates." Holmes says the reprimand was retaliation for refusing to break rules, but there's no independent verification of that. There's always the mirror-image possibility that Caldwell did nothing wrong and Holmes is merely trying to get back at him for the reprimand.

That said, Holmes's story sounds pretty plausible. More to come on this, I'm sure.

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Healthcare Ping Pong for the Poor

| Thu Feb. 24, 2011 10:55 AM PST

Harold Pollack reports today on an issue with the healthcare reform law that seems trivial at first but turns out to be anything but on closer inspection. The problem is this: a certain number of poor and working class families have highly variable incomes, which means they might be eligible for Medicaid one month but healthcare exchanges the next. So do they ping pong back and forth between the two? Or what?

At first this might not seem like a big deal. How many of these kinds of families can there be? The answer, it turns out, is a lot. Nearly a third of all families have incomes less than 200% of the federal poverty level, and Benjamin Sommers and Sara Rosenbaum, using longitudinal survey data, conclude that a whole lot of them have highly variable incomes:

We estimate that within six months, more than 35 percent of all adults with family incomes below 200 percent of the federal poverty level will experience a shift in eligibility from Medicaid to an insurance exchange, or the reverse; within a year, 50 percent, or 28 million, will.

Harold comments:

States need to account for this in their design health insurance exchanges, and to allow a more permeable boundary between the new exchanges and Medicaid. Sommers and Rosenbaum provide some pretty sensible policy suggestions. I’ll let you read their take and decide for yourself.

The Affordable Care Act is pretty silent about how these issues should be handled. For all the juvenile criticisms of passing a many-paged bill, a few-thousand pages provides only a basic structure and roadmap for health reform. Much of the hard work resides in the yet-to-be-written administrative and regulatory Midrash that goes along with it.

The policy suggestions Harold alludes to are behind a paywall, so I can't comment on them at the moment. But I don't doubt that they're pretty sensible. Hopefully state-level administrators will start thinking about this, even if their political masters are busy covering their ears, shouting "la la la," and trying to pretend that the healthcare reform law doesn't exist and will never go into effect. It will, and this is a problem every state will need to address.

Cutting the Fat in Healthcare

| Thu Feb. 24, 2011 10:08 AM PST

Matt Yglesias is basically right about the overall shape of the river when it comes to healthcare spending:

I think there’s a lot of waste in our health care sector. That said, I think discussion of health care costs sometimes ignore the fact that something has to go up as a share of GDP. Americans are getting richer, agriculture is becoming more efficient, apparel is increasingly made by Bangladeshis or robots, etc. At the same time, computers and other electronic gadgets are getting cheaper in real terms. And if some things shrink as a share of our income, other things need to grow. The biggest of those things has been health care. And that makes perfect sense.

As GDP goes up, and we have more collective income to spend on things other than the basics, we're going to spend that extra income on whatever we most value. And for a lot of us, that something is healthcare. Put simply, as GDP per capita goes up, we'd expect healthcare spending not just to go up, but to go up even as a percentage of GDP.

However, there's evidence that the U.S. is an outlier even when you take this into account. You'd expect America to spend a higher percentage of GDP of healthcare than most countries because America is richer than most countries. But if McKinsey Consulting is to be believed, that number probably ought to be about $5,000 per person, not the $7,000 per person we actually spend. Put another way, you'd expect a country as rich as the U.S. to spend 13-14% of GDP on healthcare, but in reality we spend more like 17-18%. You can read the McKinsey conclusions here, or you can read Aaron Carroll's multipart blog series explaining it here. (Note that these are 2006 numbers. They've gone up a bit since then.)

Why do we spend so much? Some is pure waste, some is because our system is so inefficient, and some is because the healthcare industry is far more profitable in the U.S. than in most other countries. Somebody has to pay for those country club memberships, after all.

But keep in mind that this is actually good news if you look at things from a certain point of view. If our healthcare sector were super efficient, there wouldn't be much scope for reducing its size. But if there's lots of fat in it, there is. It won't be easy, since one man's fat is another man's dividend check, but at least there's fat to cut.

Down the Drain With the Tea Party

| Thu Feb. 24, 2011 9:28 AM PST

Here's the latest from those well-known socialists at 85 Broad Street:

Spending cuts approved by House Republicans would act as a drag on the U.S. economy, according to a Wall Street analysis that put new pressure on the political debate in Washington. The report by the investment firm Goldman Sachs said the cuts would reduce the growth in gross domestic product by up to 2 percentage points this year, essentially cutting in half the nation's projected economic growth for 2011.

....A spokesman for House Speaker John A. Boehner of Ohio said the Goldman Sachs report represented "the same outdated Washington mind-set," comparing it to the thinking behind the 2009 Recovery Act that released federal funds to counter the effects of the recession.

I don't know about Goldman, but Boehner sure seems to have the traditional GOP mindset down pat: if inconvenient evidence is at hand, pretend it doesn't exist.

In fairness, I have to say that two percentage points seems pretty high to me for $100 billion in budget cuts. Still, even Douglas Holtz-Eakin, who sold his soul for the cause years ago, agrees that the tea party-inspired cuts in the House bill would cut 0.2 percentage points off of GDP growth. That's probably too low, but it almost doesn't matter: if even Republican house economists agree that the cuts would slow economic growth at all, tell me again why Republicans are insisting on them?
 

Quote of the Day: Shutting Down the Government

| Wed Feb. 23, 2011 12:51 PM PST

From Jamelle Bouie, writing about the possibility of a tea party-inspired government shutdown next month:

Compared to 1995, today's GOP is far more anti-government and far more ideological than it was under Gingrich.

For anyone who live through that era, this is hard to believe. But it's true. It's also true, as Jamelle says, that a shutdown would pretty quickly lead to real consequences for real people: "This was damaging enough in 1995, when the economy was in the middle of an unprecedented expansion. Today, with slow growth and double-digit unemployment, it would be catastrophic." Yes it would. See David Leonhardt about the austerity programs in Germany and Britain for more about that.