Kevin Drum - May 2011

Chart of the Day: New Unemployment Claims

| Thu May 5, 2011 1:41 PM EDT

From the Wall Street Journal: "New claims for jobless benefits unexpectedly surged last week to their highest level since last summer, according to data giving another sign of the economy's struggle in creating jobs. Separately, U.S. productivity slowed in the first quarter as the economic recovery stumbled and labor costs started to rise again."

Not good news. Chart below, modified from this.

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The Revival of GM

| Thu May 5, 2011 12:09 PM EDT

Jon Cohn turns his attention to Detroit:

Will the voters will ever give President Obama credit for rescuing the American auto industry? I have no idea. But it looks more and more like they should. On Thursday General Motors announced that, for the fifth consecutive quarter, it had made a profit. And not just a measly one, either. The $3.2 billion was higher than experts had predicted and more than three times the profit of the same quarter in 2010, when the company was still struggling to emerge from its bankruptcy.

...."Reducing excess capacity" is a Wall Street euphemism for eliminating jobs. A lot of people suffered, and still are suffering, because they lost their livelihoods. Still, if not for the Obama Administration's intervention, the entire American auto industry might very well have collapsed and taken the Midwest with it. Instead, the industry is on the rebound, at least for now.

Back in 2009, when the rescue of GM and Chrysler was up in the air, I remember that my main thought was, "I'm sure glad I don't have to make this decision." Philosophically, after all, a bankrupt company ought to be allowed to die. The government just shouldn't be in the business of rescuing badly run industrial behemoths, especially in an industry with the kind of massive global excess capacity that the auto industry has.

At the same time, would you want to be the guy who lets GM shut down at the height of the biggest recession in 50 years, potentially losing a million jobs and sending the economy into an even bigger tailspin? Not really. It was just a classic rock and a hard place.

In the end, though, Obama almost certainly made the right call. We don't know for sure what the impact of letting GM and Chrysler fail would have been, but it quite likely would have been grim. And in the end, despite the endless yowling about "Government Motors" and Obama's "secret socialist agenda," the fact is that his team rammed through a pretty good deal, GM has recovered, Obama was fastidious about letting GM's managers run the company,1 and taxpayers will likely take only a modest loss. It's not something anyone wants to repeat — and GM's board better understand that it's unlikely it ever will be — but under the circumstances it was the best we could do. And Jon is right: voters ought to give Obama more credit for it than they have.

1Why? Because Barack Obama is actually a boring, gray-flannel-suit, garden variety American capitalist pig. Like just about everyone else in the country, he has no interest in controlling the means of production and wants only to regulate capitalism's excesses, not replace it with socialism. But you knew that already.

Yes, Congress Sucks Worse Than It Used To

| Thu May 5, 2011 11:22 AM EDT

Is Congress really more gridlocked than it used to be? Or is it just our imaginations? Don Taylor points us to a new paper by Craig Volden and Alan Wiseman that, among other things, codes every single one of the 119,040 bills introduced into the U.S. House of Representatives from 1973-2002 by type of bill. This is an impressive demonstration of either (a) massive OCD or (b) massive maltreatment of grad students. I'm not sure which. But code them they have, and when they strip out all the trivial/symbolic/post office naming kinds of bills, they come to two conclusions:

  • There really has been a secular decline in the number of bills passed over the past couple of decades.
  • Health bills have always had a harder time passing than other kinds of bills, so it's hardly surprising that Obamacare was such a close run thing.

Taking a look at all bill types, it turns out that health bills were among the hardest to pass. What else is hard to pass? Social welfare, housing, labor, and civil liberties legislation. Liberals just have a tough time all around. More details at the link.

GOP Throws Ryan Under the Bus

| Thu May 5, 2011 12:54 AM EDT

Paul Ryan's proposal to gut Medicare sure didn't last long:

Senior Republicans conceded Wednesday that a deal is unlikely on a contentious plan to overhaul Medicare and offered to open budget talks with the White House by focusing on areas where both parties can agree, such as cutting farm subsidies.

On the eve of debt-reduction talks led by Vice President Biden, House Majority Leader Eric Cantor (Va.) said Republicans remain convinced that reining in federal retirement programs is the key to stabilizing the nation’s finances over the long term. But he said Republicans recognize they may need to look elsewhere to achieve consensus after President Obama “excoriated us” for a proposal to privatize Medicare.

Um, yeah, it was Obama's fire breathing stemwinders that turned the tide. It had nothing to do with the fact that constituents hated the idea and Republicans would have lost 50 seats in the next election if they'd stuck with it. Nothing at all.

I Still Think the Photos Should Be Released

| Wed May 4, 2011 4:58 PM EDT

I'm going to double down on my belief that photos of Osama bin Laden's body should be released now that I've read President Obama's justification for holding them back:

President Obama decided Wednesday not to release photos of Osama bin Laden’s body, saying such images could incite violence and be interpreted as displaying “trophies” of his death, the White House said. “It’s important for us to make sure that very graphic photos of somebody who was shot in the head are not floating around as an incitement to additional violence or as a propaganda tool,” Obama said in an interview with CBS’s “60 Minutes” program.

Sorry. That's not good enough. There are specific reasons for keeping things classified, and the fact that something "could" incite violence or might be used in a way that makes life more difficult for the White House isn't one of them. That's little more than an all-purpose excuse that can be used for keeping anything classified.

Bottom line: distasteful or not, there's a clear and obvious public interest in the killing of the mastermind of 9/11. Unless releasing the photos would compromise operational details of the raid, the American public has as much right to see them as Obama does.

UPDATE: I'd add that although photos obviously wouldn't change the minds of all the conspiracy theorists who think the whole thing was faked, it would change some of them. That's pretty worthwhile.

Is the Taliban Now Ready to Deal?

| Wed May 4, 2011 4:41 PM EDT

Rajiv Chandrasekaran reports that the White House believes the killing of Osama bin Laden will help us on two fronts:

The Obama administration is seeking to use the killing of Osama bin Laden to accelerate a negotiated settlement with the Taliban and hasten the end of the Afghanistan war, according to U.S. officials involved in war policy.

“Bin Laden’s death is the beginning of the endgame in Afghanistan,” said a senior administration official who, like others interviewed for this article, spoke on the condition of anonymity to discuss internal policy deliberations. “It changes everything.” Another senior official involved in Afghanistan policy said the killing “presents an opportunity for reconciliation that didn’t exist before.” Those officials and others have engaged in urgent discussions and strategy sessions over the past two days about how to leverage the death into a spark that ignites peace talks.

....U.S. officials expressed hope on Tuesday that Pakistan’s failure to find bin Laden — or its possible complicity in sheltering him — could lead Islamabad to adopt a softer position on Afghan reconciliation. They think that Pakistani officials, who have interfered with peace efforts in the past, have an opportunity to play a more constructive role. “Our hope is that they are so embarrassed by this that they try to save face by trying to help their neighbor,” one U.S. official said.

It's hard to tell if this is wishful thinking or not. If you'd asked me point blank, I would have guessed that in the short term bin Laden's death would motivate the Taliban to fight even more furiously and motivate the Pakistanis to redouble their support and pull away from the United States. Embarrassment doesn't usually cause people to back down, and in any case, Pakistan's primary goal of keeping Afghanistan out of the orbit of India hasn't changed a whit. If anything, it might seem even more urgent now.

But this is just a wild guess. Hopefully Obama's foreign policy boffins have a better read on this than I do.

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Federalize Medicaid!

| Wed May 4, 2011 1:11 PM EDT

Back in 2009, Congress provided additional Medicaid funding to states on the condition that they keep eligibility requirements steady. This is called Maintenance of Effort, and as Suzy Khimm reports, Republicans want to do away with it:

The State Flexibility Act would not go as far as the Ryan plan, which proposes a massive overhaul of the Medicaid funding structure. But it would allow states to take a knife, if not a hatchet, to the program....Having already made steep cuts to provider payments and benefits, "some states will certainly make eligibility cuts," says Edwin Park, VP for health policy at the Center for Budget and Policy Priorities.

Moreover, by introducing new procedural hurdles—Mississippi, for instance, has made it harder for people to renew coverage—states could deter more-vulnerable residents from signing up, says Park. Similar proposals put forward in California would have reduced enrollment by 500,000, he adds.

This is, obviously, one way to cut healthcare expenditures: just provide healthcare to fewer people. Preferably the poorest and sickest, since they don't contribute to political campaigns and aren't very reliable voters.

On a less cynical policy level, it's also worth noting that although there are lots of programs that are best handled at the state and local level because local officials understand local conditions better, healthcare really isn't one of them. Sick is sick, and treatment for chronic diabetes doesn't change much from California to Mississippi. What's more, Medicaid expenses always rise during recessions (more poor people = more Medicaid), which is also when state revenues crater and cutbacks are inevitable. This not only hurts sick people with low incomes, it makes economic turndowns even worse than they have to be.

So let's just federalize Medicaid. Medicare works fine on a national level, after all, and during a recession the federal government can fund higher Medicaid expenses automatically by running a bigger deficit. It's a nice automatic stabilizer that not only helps the poor and the sick but helps the economy too. What's not to like?

Who is Osama?

| Wed May 4, 2011 12:11 PM EDT

So it seems as if a goodly number of teenagers don't know who Osama bin Laden is. Gadzooks! But let's put this into a little perspective.

We're talking about 16-year-olds here. I was 16 years old in 1974. So let's try to think of someone who was quite famous in the late 60s but who had largely dropped off the front page from 1970-74. How about Daniel Ellsberg? Or William Calley? Maybe Moshe Dayan?

None of these are perfect subsititutes. But how shocked would you be if I told you that I hadn't heard of William Calley until some teacher of mine mentioned him in a class in 1974? Probably not very. I was only 12 when he was most famous and not paying much attention to the news. And it's not as if no teens under the age of 17 have ever heard of bin Laden. Just some of them. Probably the same ones who haven't heard of much of anyone outside the usual teen circle of pop stars and TV celebrities. This isn't exactly a feather in the cap of American teendom, but it's not a sign of the Apocalypse either. It's just kids not knowing or caring about some of the things their elders take for granted. Nothing much new about that.

Public Records Should be.....Public

| Wed May 4, 2011 11:43 AM EDT

Should the White House release photos of Osama bin Laden that were taken after he was shot during Sunday's raid? I'm surprised this is even being debated. Of course they should. These are public records of a very public operation against public enemy #1, and like it or not the public should have access to them. The only reason to withhold them would be for reasons of operational security, and I don't think that applies here. Security issues are probably legitimate when it comes to releasing real-time video of the actual raid, but not to still photos of bin Laden himself.

Release the photos. And the video of his burial at sea, for that matter. These are public records, folks.

Quote of the Day: Lying About the Budget

| Wed May 4, 2011 11:31 AM EDT

Jonathan Cohn:

It’s becoming pretty clear how Republicans plan to defend their budget. They’re going to lie about it. 

Yep. Sadly, that seems to be a pretty good strategy in today's media environment.