Kevin Drum - June 2011

Quote of the Day: Greed Not So Good After All

| Mon Jun. 20, 2011 1:18 PM EDT

From Felix Salmon, after reading about executives at Skype getting fired so they won't get a full payout of their stock options when Skype's acquisition by Microsoft is finalized:

This does seem pretty evil.

And yet, says Felix, "I’m sure it makes financial sense." I'm sure it does too. Lots of crappy behavior does, after all.

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Bill Clinton on Getting People Back to Work

| Mon Jun. 20, 2011 1:08 PM EDT

Bill Clinton takes to the pages of Newsweek to propose 14 good ideas to boost employment. Here's one of them:

4. COPY THE EMPIRE STATE BUILDING

Just look at the Empire State Building—I can see it from my office window. Our climate-change people worked on their retrofit project. They cleared off a whole floor for a small factory to change the heating and air conditioning, put in new lighting and insulation, and cut energy-efficient glass for the windows. Johnson Controls, the energy-service company overseeing the project, guaranteed the building owners their electricity usage would go down 38 percent—a massive saving, which will enable the costs of the retrofits to be recovered through lower utility bills in less than five years. Meanwhile, the project created hundreds of jobs and cut greenhouse-gas emissions substantially. We could put a million people to work retrofitting buildings all over America.

Ideas 1, 2, 5, and 7 sound pretty good too. What's your favorite?

The Great Speedup

| Mon Jun. 20, 2011 12:16 PM EDT

Americans — those who still have jobs, anyway — are working harder than ever these days. More hours, more weekend email check-ins, and less vacation than just about anyone else in the world. Clara Jeffery and Monika Bauerlein write about all of this, including the vacation part, in "All Work and No Pay: The Great Speedup":

European companies face the same pressures that ours do—yet in Germany's vigorous economy, for example, six weeks of vacation are de rigueur, weekend work is a last resort, and companies' response to a downturn is not to fire everyone, but to institute Kurzarbeit — temporarily reducing hours and snapping back when things start looking up. Sure, they lag ever so slightly behind us in productivity. But ask yourself: Who does our No. 1 spot benefit?

A big part of this is cultural. Mother Jones, no capitalist taskmasters they, have a pretty generous vacation policy. And yet, I almost never take vacation anyway. I've been brainwashed! (Until Wednesday, that is, when I'm taking a week off.) The map below shows this starkly: the United States is virtually alone in not mandating any annual time off for employees, right along with such economic luminaries as Burma, Guyana, and Nepal. More charts on American overwork here.

The Great Tax Holiday Scam

| Mon Jun. 20, 2011 11:22 AM EDT

The New York Times reports that corporate lobbyists are renewing a push for a "one time" deal that allows them to bring foreign profits back into the U.S. at a low tax rate:

Under the proposal, known as a repatriation holiday, the federal income tax owed on such profits returned to the United States would fall to 5.25 percent for one year, from 35 percent. In the short term, the measure could generate tens of billions in tax revenues as companies transfer money that would otherwise remain abroad, and it could help ease the huge budget deficit.

Corporations and their lobbyists say the tax break could resuscitate the gasping recovery by inducing multinational corporations to inject $1 trillion or more into the economy, and they promoted the proposal as “the next stimulus” at a conference last Wednesday in Washington.

This is ridiculous: I know that "stimulus" is the excuse du jour for everything, but companies don't expand and hire more people because their corporate treasuries are flush. They expand and hire more people when they think demand for their goods and services is strong. Besides, corporate treasuries are already flush with cash that isn't being used to expand operations. So why would this make any difference?

Kudos, then, to reporter David Kocieniewski, who points this out in the very next paragraph:

But that’s not how it worked last time. Congress and the Bush administration offered companies a similar tax incentive, in 2005, in hopes of spurring domestic hiring and investment, and 800 took advantage. Though the tax break lured them into bringing $312 billion back to the United States, 92 percent of that money was returned to shareholders in the form of dividends and stock buybacks, according to a study by the nonpartisan National Bureau of Economic Research.

Indeed, 60 percent of the benefits went to just 15 of the largest United States multinational companies — many of which laid off domestic workers, closed plants and shifted even more of their profits and resources abroad in hopes of cashing in on the next repatriation holiday.

That money didn't go toward corporate expansion last time and it won't go toward corporate expansion this time. It will just fill up corporate treasuries and get distributed to shareholders, who are disproportionately well off and unlikely to use the money for increased consumption. The whole thing is just a scam.

America's corporate tax code needs an overhaul. The way we treat overseas income might need an overhaul too — though doing it properly would require some new regulations that corporations might not like so much. But without that overhaul, yet another tax holiday does nothing except to make the rich richer. It won't do a thing to get the economy moving again.

Kevin's Camera Gallery

| Sun Jun. 19, 2011 7:22 PM EDT

In the camera thread last night I mentioned that one of these days I'd take pictures of the entire Drum family camera collection, from 1935 onward. Well, why not now? However, since most of you aren't interested in this kind of thing, I've put it below the fold.

Quote of the Day: Manufacturing Misinformation

| Sun Jun. 19, 2011 12:46 PM EDT

From Jon Stewart, responding to Chris Wallace's (undoubtedly accurate) observation that Fox News viewers are pretty happy with Fox News:

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New Camera Blogging

| Sun Jun. 19, 2011 1:49 AM EDT

So I went out and bought a new camera today. Because — um, because I heard that the economy needed stimulating, and as a patriotic American I figured I should do my part. Besides, ever since cameras became electronic gadgets, their useful lives are officially measured in months, not years. And catblogging deserves only the very best, no?

So here you go. A nice, soothing picture of some kind of plant at sunset. The vibration reduction really works well, doesn't it?

Obama, Libya, and the OLC

| Sat Jun. 18, 2011 1:51 PM EDT

Charlie Savage reports in the New York Times that the White House decided earlier this year to overrule official Department of Justice advice on whether the War Powers Act applies to Libya:

President Obama rejected the views of top lawyers at the Pentagon and the Justice Department when he decided that he had the legal authority to continue American military participation in the air war in Libya without Congressional authorization, according to officials familiar with internal administration deliberations.

Jeh C. Johnson, the Pentagon general counsel, and Caroline D. Krass, the acting head of the Justice Department’s Office of Legal Counsel, had told the White House that they believed that the United States military’s activities in the NATO-led air war amounted to “hostilities.” Under the War Powers Resolution, that would have required Mr. Obama to terminate or scale back the mission after May 20.

So how often do presidents overrule the OLC? John Elwood:

As the article also notes, it is “extraordinarily rare” for that to happen. When Senator Whitehouse asked me after a hearing in 2008 for an example, the only one that came to mind was from the Roosevelt Administration. (There must be others, but I’m still drawing a blank.) If press accounts are correct, together with the D.C. voting rights bill, we now have two recent examples.

Hmmm. I think we should make that three recent examples. George Bush's overrule of the OLC on the legality of the NSA eavesdropping program wasn't that long ago, after all. As I recall, we liberals got pretty hot under the collar over that. Just as we got pretty hot under the collar over the obvious politicization of the OLC when it approved the use of torture against detainees at Guantanamo.

The DC voting bill example doesn't bother me much. It was all done out in the open, there was plenty of opportunity to discuss its constitutionality, and everyone knew it would have gone to the Supreme Court if it had passed. The OLC's opinion just wasn't that decisive. But unilateral executive actions done against OLC advice are entirely different. There's no public debate, there's no need to round up votes, and the Supreme Court quite likely will never have a chance to get involved. And they're especially different when the president overrules the OLC based on a reading of the law that's as transparently absurd as Obama's claim that our operation in Libya isn't important enough to count as "hostilities."

Look: either we believe that the OLC should be both independent and authoritative or we don't. In the past, I think most liberals — including Barack Obama — believed both. It's disgraceful that apparently he no longer does.

Nonfiction Favorites

| Sat Jun. 18, 2011 1:15 PM EDT

Inspired by the Guardian's list of the 100 best nonfiction books of all time, the New York Times asked a bunch of its staff writers to pick their five favorites. There was a four-way tie for first place, and the reason for the tie is more interesting than the names of the books themselves:

Of the 33 lists submitted, each of those books appeared three times. (Yes, I know that is a completely unscientific basis for deeming them our picks as the best of all time, but what did I say about rigor?)

That's sort of remarkable. Out of 33 lists, not a single book was mentioned by more than three people. And unless I missed something, only four books out of a total of 167 (two staffers imperiously listed six books instead of five) were written before the 20th century. What's interesting is that this is such a dramatic demonstration of how atomized we are these days: we all read wildly different things, and even within a group of fairly similar people there's not a whole lot of crossover. Not only are there no classics that we've all read and treasured, but even among modern books there's precious little that we all have in common.

But this is a hard exercise. I'll make it easier by listing my ten favorite nonfiction books, but honestly, if you asked me again next week it would probably be a different list. (With the exception of #1, which would show up every time.) That said, here's this week's list:

  1. The Power Broker, by Robert Caro
  2. The Jungle, by Upton Sinclair
    [Embarrassing update: this is, of course, a work of fiction. I sort of forgot that.]
  3. Fear and Loathing: on the Campaign Trail '72, by Hunter S. Thompson
  4. Guns, Germs, and Steel, by Jared Diamond
  5. Before the Storm, by Rick Perlstein
  6. Postwar, by Tony Judt
  7. Against the Gods, by Peter Bernstein
  8. Plagues and Peoples, by William McNeill
  9. In Search of Schrödinger's Cat, by John Gribbin
  10. How the Mind Works, by Steven Pinker

So many books left out! Even though I did the more traditional list of ten. Sigh.

Quote of the Day: Obama's Plan to Ruin Medicare

| Sat Jun. 18, 2011 11:58 AM EDT

From Michele Bachmann, explaining President Obama's plan to kill off Medicare:

I think very likely what the president intends is that Medicare will go broke and ultimately that answer will be Obamacare for senior citizens.

Well, that would certainly explain why Obama pushed so hard for a healthcare reform bill that, according to Medicare's actuaries, had the following effect: "The financial status of the HI trust fund is substantially improved by the lower expenditures and additional tax revenues instituted by the affordable Care Act. These changes are estimated to postpone the exhaustion of HI trust fund assets from 2017 under the prior law to 2029 under current law."

The fiend!