Kevin Drum - June 2011

Quote of the Day: The Genius of Newt Gingrich

| Thu Jun. 16, 2011 11:37 AM EDT

From Joe DeSantis, one of the few Newt Gingrich advisors still working for him, on why the rest of his team quit en masse last week:

Those who left were more mechanical; they did not fit with the constant brainstorming culture within Gingrich’s inner circle 

Newt was just too smart for those dullards! That explains it.

Advertise on MotherJones.com

Global Unrest Good for Arms Business

| Thu Jun. 16, 2011 10:58 AM EDT

Maybe the rest of the economy is in the doldrums, but the LA Times reports that sales of U.S. military gear are on a record pace this year:

India signed a deal Wednesday for the purchase of 10 Boeing C-17 military cargo jets....The largest-ever U.S. foreign arms deal was announced last October, when Saudi Arabia ordered $60 billion in military hardware in a multiyear pact. The Saudis' laundry list of weaponry included Raytheon Co.'s 2,000-pound bunker-busting bombs, Boeing's F-15 fighter jets and Sikorsky Aircraft Corp.'s Black Hawk helicopters.

More deals are in the works. Australia wants two dozen Navy Seahawk helicopters valued at $1.6 billion. Saudi Arabia is eager to get $330 million in thermal-imaging and night-vision equipment. And Britain is looking to purchase $137 million in upgrades for its U.S.-made ship-mounted guns. Orders are also in from Morocco, Iraq and the United Arab Emirates.

Who says Obama isn't doing anything to boost the economy? And keep in mind, these are export dollars, so they're helping our trade deficit. Good job, military-industrial complex!

Greece Teetering Into Oblivion Once Again

| Thu Jun. 16, 2011 12:56 AM EDT

The temperature in Europe is once again getting dangerously high:

Greece's 18-month sovereign debt crisis brought the government to the brink of collapse as public fury over savage austerity measures erupted in pitched battles with riot police on the streets of Athens. The escalation of the Greek crisis had instant European and global impact, sending world stocks tumbling and exposing European Union paralysis over whether and how to launch a second attempt in a year to save Greece from insolvency.

....Following the fall of the Irish and Portuguese governments in recent months after driving their countries into bankruptcy, it appeared that the eurozone's worst crisis was claiming another scalp....The ECB warned that a Greek default could spark "contagion" across Europe, causing Greek banks to implode and inflicting major damage on the big banks in France and Germany.

....Berlin, backed by the Dutch, Austrians, and Finns, have been arguing for weeks that there can be no new bailout of Greece without the country's private creditors being forced to suffer losses on their loans. Otherwise, they argue, European taxpayers will be shouldering the costs while the international banks pocket the proceeds.

The ECB, the European Commission and other EU countries led by France argue that this could pave the way to disaster, with the financial markets decreeing the compulsory "haircuts" on private bondholders a Greek default, a "credit event" that could lay waste to the single currency.

Within Greece, it's the politicians vs. the people. The politicians want to make huge budget cuts in order to qualify for more aid, but the people are threatening revolution if they try it. Within the EU, it's the politicians vs. the central bankers. The politicians want to force the banks that own Greek bonds to share the pain of a Greek semi-default, but the ECB is absolutely, completely dead set against it. The reasons for the ECB's hard line on this are a little obscure, and theories range from the fairly ordinary (the ECB believes it would cause chaos and bank failures) to the outre (the ECB wants a crisis in order to force European governments into closer fiscal union).

In the end, I suppose this will work out. As usual, European governments will wait until the 11th hour to do anything, but when the clock is about to strike 12 they'll finally come up with some kind of can-kicking semi-solution that will hold things together for another few months. If they don't, though, this is just the kind of thing that could annihilate our already fragile recovery. So let's hope they find some spit and bailing wire once again.

Bush v. Cole

| Thu Jun. 16, 2011 12:41 AM EDT

Ah, this is just like the good old days. Today James Risen reports in the New York Times that the Bush administration spent some time a few years ago trying to dig up some dirt on Iraq war critic Juan Cole:

In an interview, Mr. Carle said his supervisor at the National Intelligence Council told him in 2005 that White House officials wanted “to get” Professor Cole, and made clear that he wanted Mr. Carle to collect information about him, an effort Mr. Carle rebuffed.

....Mr. Carle said that sometime that year, he was approached by his supervisor, David Low, about Professor Cole. Mr. Low and Mr. Carle have starkly different recollections of what happened. According to Mr. Carle, Mr. Low returned from a White House meeting one day and inquired who Juan Cole was, making clear that he wanted Mr. Carle to gather information on him. Mr. Carle recalled his boss saying, “The White House wants to get him.”

“ ‘What do you think we might know about him, or could find out that could discredit him?’ ” Mr. Low continued, according to Mr. Carle.

Mr. Carle said that he warned that it would be illegal to spy on Americans and refused to get involved, but that Mr. Low seemed to ignore him.

“But what might we know about him?” he said Mr. Low asked. “Does he drink? What are his views? Is he married?”

On the one hand, this sure sounds like exactly the kind of thing the OVP liked to do. On the other hand, it's almost too stupid to believe: Juan Cole was never even the remotest kind of threat to the Bush administration's prosecution of the war. On the third hand, despite the official denials, there are an awful lot of people in this story who admit to being "curious" about Cole or who acknowledge that the White House "did ask" about Cole at one time or another. That's a bit suspicious sounding, isn't it?

So who knows? It all sounds pretty dumb, but there was an awful lot of dumb stuff going on in those days. I certainly wouldn't be surprised if it all turned out to be true.

CEOs and their Little Perks

| Wed Jun. 15, 2011 11:23 PM EDT

A while back the Wall Street Journal filed a Freedom of Information request for the records of every private aircraft flight recorded in the FAA's air-traffic system from 2007 through 2010. They've been having fun ever since (and you can too, using their online database), and today they report on the remarkable number of corporate flights that just happen to go to and from resort locations:

A Wall Street Journal review of FAA flight records found that dozens of jets operated by publicly traded corporations made 30% or more of their trips to or from resort destinations, sometimes more than 50%. Often, these were places where their top executives own homes....The high percentage of trips to vacation destinations in a few cases suggests some companies' jets are frequently used by executives to make personal trips.

Yes, I suppose it does suggest that. How many clients can you possibly have in Aspen and Jackson Hole, after all? What's most fun about the article, though, is the variety of excuses for this behavior.

There's this: "Stewart Reifler, an attorney at Vedder Price in New York who represents executives in negotiating pay packages, said [...] it is hard to distinguish a CEO's work time from his leisure time. 'Even if they go to a resort,' he said, 'they're still reviewing papers, looking at their BlackBerrys and talking on the phone. You just can't compartmentalize these guys' lives.' "

And this: "Yum Brands Inc., which owns Kentucky Fried Chicken and Taco Bell, said in regulatory filings that CEO David Novak and his wife are required to use company aircraft for personal and business travel in part because 'Mr. Novak has been physically assaulted while traveling.' "

And this: "A Comcast spokesman said use of the planes 'significantly enhances the efficiency of our executives' conduct of business.' "

And this: "A Nabors spokesman said the company has offices in [Palm Beach and Martha's Vineyard], at Mr. Isenberg's homes. 'He works out of those locations a lot,' said the spokesman, Denny Smith."

And this: "Jarden Corp., a consumer-products concern in Rye, N.Y., that markets K2 and Volkl skis....The busiest destination for Jarden's jet, after its New York base, was Aspen, Colo....Ian Ashken, Jarden's chief financial officer, said...that Jarden, as a leading ski maker, sometimes entertains customers in Aspen and has an office there with 'no more than two people.' "

If that's all there were to it, it would be amusing but otherwise harmless. However, the Journal has amassed a fair amount of evidence that corporations don't come even close to disclosing the value of these trips as required by law. For example: "EMC pegged the cost to shareholders of Mr. Tucci's personal flying at $664,079 over the four-year period....The Journal's estimate of the cost of EMC's flights to or from just the airports near the CEO's homes was closer to $3.1 million."

And finally, there's this:

Many companies prefer to keep their aircraft movements hidden, using an FAA-approved program that allows plane owners to "block" their flights from websites that display air traffic....The Obama administration in late May announced it would sharply curtail the FAA program starting in August, saying that privacy concerns don't outweigh the public's right to know about the use of public airspace. It would exempt aircraft owners who could show a "valid security threat." Congress is considering a measure that would stop the change.

I'll just bet they are. Hell, this might finally explain why Wall Street is so pissed off at Obama even though he not only rescued their entire industry, but then paid them handsomely for the privilege of doing so. It's not because of Dodd-Frank, which bank executives know perfectly well is a pretty modest measure. And it's not because he called them "fat cats" once. They can handle that. But this is different. Obama apparently doesn't get the fact that corporate princelings should not be required to follow the same rules as the grubby masses. He wants to take away their special invisibility privileges, and that's inexcusable.

Plus there's the higher taxes, of course. That's inexcusable too.

Obama: Libya War Too Small to Count

| Wed Jun. 15, 2011 3:50 PM EDT

Guess what? Unlike every other president since Richard Nixon, Barack Obama apparently thinks the War Powers Act is perfectly reasonable. He just doesn't think it happens to apply to Libya:

“We are acting lawfully,” said Harold Koh, the State Department legal adviser, who expanded on the administration’s reasoning in a joint interview with White House Counsel Robert Bauer....“We are not saying the president can take the country into war on his own,” Mr. Koh said. “We are not saying the War Powers Resolution is unconstitutional or should be scrapped, or that we can refuse to consult Congress. We are saying the limited nature of this particular mission is not the kind of ‘hostilities’ envisioned by the War Powers Resolution.”

I guess this is progress of a sort. But it's always something, isn't it? We can fight a war in Libya because we're just a junior partner. We can fight a war in Yemen because it's sort of vaguely related to 9/11 if you squint hard enough. We can fight a war in Pakistan because it's right across the border from Afghanistan.

But to paraphrase a misquote of Everett Dirksen, a little fighting here and a little fighting there, and pretty soon you're talking about real war. Somehow, one way or another, American presidents just keep finding ways to get us into wars without bothering to get congressional approval. And Congress does nothing about it. It's almost as if they'd just as soon not have any responsibility for this stuff.

Reality being what it is, naked partisanship is probably the only way to bring this to a head. Republicans would never challenge a Republican president, and Democrats are reluctant to challenge a Democratic president. But who knows? Maybe House Republicans will decide there's some kind of cynical advantage to be gained by challenging Obama on this. It's better than nothing, I guess.

Advertise on MotherJones.com

Yet More Healthcare Nonsense Debunked

| Wed Jun. 15, 2011 2:01 PM EDT

No, healthcare reform will not cost America 800,000 jobs. (Link.) What's next up to bat? Oh yes: the claim that the Chicago thugs in the White House are engaged in naked corruption by granting waivers from the law to organizations friendly to the Democratic Party. Take it away, Suzy:

Now an audit by the Government Accountability Office—the investigative watchdog of Congress—has blown the GOP attack out of the water....According to the GAO, the Obama administration granted waivers if following the new health-care regulations would raise premiums for employers by more than 10 percent. It generally rejected applications if the premiums would rise by 6 percent or less. Overall, the Obama administration "approved 1,347—more than 95 percent—of the applications in their entirety, while rejecting 25 in part and 40 in whole," The Hill reports.

What's more, "according to the GAO's data, the majority of denials were for plans that covered union employees," the House Energy and Commerce Democrats pointed out on Tuesday. Such evidence further deflates the GOP accusation that unions were getting a disproportionate number of waivers because of their political ties to the Democratic Party.

This stuff is never going to stop, of course. The party that brought you death panels is unlikely to let facts get in their way, after all. By this time next year we'll probably be hearing that Obamacare deliberately favors illegal immigrants over hardworking white people, leading to thousands of deaths of people who probably would have voted against The One in November. Brace yourselves.

Chart of the Day: Tim Pawlenty's Millionaire Tax Plan

| Wed Jun. 15, 2011 1:22 PM EDT

Tim Pawlenty might not have made a great impression during Monday's debate, but actions speak louder than words. And Pawlenty's actions on the tax front are loud indeed. Just to refresh your memory, here's his plan:

We should cut the business tax rate by more than half. I propose reducing the current rate from 35% to 15%....On the individual rates we need a simpler, fairer and flatter tax system overall. I propose just two rates, 10% and 25%. Under my plan, those who currently pay no income tax would stay at a zero rate. After that, the first fifty-thousand dollars of income or one-hundred thousand for married couples would be taxed at 10%. Everything above that would be taxed at 25%. That’s it....In addition, we should eliminate all together the capital gains tax, interest income tax, dividends tax and the death tax.

The Tax Policy Center has done its best to turn this into hard numbers, and the chart on the right shows the results. As usual, a bone is thrown to us schmoes making 50 grand or so: our after-tax incomes would go up about 5%. Let's all go to Disneyland! But the real action is at the high end: income increases of 15-20% for the wealthy. Party time! And the super-rich millionaire class? It's Katy bar the door: they'll see their after-tax income go up by a walloping 33%. Time to buy that second yacht!

Say what you want about how boring Pawlenty is, but he knows his audience: scraps for the middle class who aren't in on the con while the wealthy who understand exactly what's going on rake in billions. Is that cynical behavior from this son of a milk truck driver? Sure. But hardly a surprise from anyone who knows the Republican Party's real power base. Pawlenty obviously knows it better than most.

Map of the Day: Falling Life Expectancies

| Wed Jun. 15, 2011 12:25 PM EDT

In lots of place in the United States, women are living shorter lives than they used to:

In 737 U.S. counties out of more than 3,000, life expectancies for women declined between 1997 and 2007. For life expectancy to decline in a developed nation is rare. Setbacks on this scale have not been seen in the U.S. since the Spanish influenza epidemic of 1918, according to demographers.

"There are just lots of places where things are getting worse," said Dr. Christopher Murray, director of the Institute for Health Metrics and Evaluation at the University of Washington, which conducted the research. "We're not keeping up."

....A key finding of the data is that "inequality appears to be growing in the U.S.," said Eileen Crimmins, a gerontologist at USC who also co-chaired the 2011 National Academies panel on life expectancies. "We are different than other countries."

The map is below.

Is the Huffington Post Unfair to Labor?

| Wed Jun. 15, 2011 12:15 PM EDT

Erik Loomis brings our attention to a virtual picket line:

As some but by no means all progressives know, the Newspapers Guild and the National Writers Union have called a boycott against Huffington Post for refusing to pay its writers. Unlike unionized workplaces like the New York Times, Huffington Post exploits laborers desperate to get in print by offering them a byline without compensation while Ariana Huffington makes millions. The unions want the writers to get paid and to have greater editorial control over their content.

....Like higher education with its hordes of PhDs with no job prospects, there is a huge supply of writers who want to make a living in journalism. HuffPo offers the promise of gaining valuable experience and readership so that someday, maybe, you can make it big.

It's been a long time since I've had a picket line not to cross (I think the Southern California supermarket strike eight years ago was the last one around here), and it would be great to have another one — especially since I'm a unionized writer myself. But I have my doubts about this one. However, my doubts turn on an empirical question: is Loomis right that most of HuffPo's unpaid bloggers have been lured in by "the promise of gaining valuable experience and readership so that someday, maybe, you can make it big"?

This is a real question. My sense is that there are three basic kinds of writers who put up free blog posts at HuffPo:

  1. Big name folks like Robert Reich who write opinion stuff for free all the time.
  2. Hollywood stars that Arianna has provided yet another platform to.
  3. Little guys.

Obviously it's only the little guys that we're concerned about here. But I doubt that very many of them are posting at HuffPo in hopes of breaking into big-time journalism. Rather, they're more like people who write letters to the editor: they like the idea of their opinions being read by a big audience and have never really dreamed of any serious career in journalism. They just want to be seen and heard.

So that's the question: are HuffPo's little-guy bloggers more like letter writers, who have never been compensated, or are they mostly folks who desperately want to break into the opinion biz and have been deluded into thinking that blogging for HuffPo is a good way to do that? If it's the latter, then I think the Guild has a point. If you read HuffPo more regularly than me — or, better yet, if you blog for HuffPo on a freebie basis — let me know what you think in comments.