Kevin Drum - December 2011

Republicans Don't Care About the Deficit

| Tue Dec. 13, 2011 11:29 AM EST

Ezra Klein writes that Republicans are in the "odd" position of opposing a temporary middle-class payroll tax cut that would cost a hundred billion dollars or so while enthusiastically endorsing plans that would permanently slash taxes on the rich at a cost of trillions of dollars. Paul Krugman has the right response:

But it’s not odd at all, once you realize that the GOP is not now, and never has been (at least not since the 1970s) concerned about the deficit. All the fiscal posturing of the last couple of years has been about using the deficit as a club to smash the welfare state, with the secondary goal of frustrating any efforts on the part of the Obama administration to help the struggling economy.

The entire debate has been fake. If you don’t understand that, or can’t bring yourself to admit it, you’re missing the whole story.

Yep. Tax cuts for the rich, spending cuts for everyone else. The deficit is just a character actor in this little melodrama.

Advertise on MotherJones.com

Why We Should Care About Manufacturing

| Tue Dec. 13, 2011 1:28 AM EST

Matt Yglesias, who's unhappy with our "unfortunate bias against the food service industry," says that we make too much fuss over the difference between manufacturing and services:

To understand this problem, you need to start with the fact that if I build a factory where people take fresh peas and put them in cans that's a "manufacturing" facility full of manufacturing jobs and people who "make things." But if I build a facility where people take fresh peas, mix them with some basil and a touch of mint, plus olive oil, parmigiano reggiano, and pine nuts then purée them to serve you a delicious pea pesto that's a lowly service sector employment cite that couldn't possibly generate good jobs....It's really a gap between putting things in boxes and not putting them in boxes.

....None of this is to say that we should be complacent about the state of the American labor market! Wages for working class men have been stagnating forever, and over the past decade women and college graduates have been getting squeezed too. The employment:population ratio is pathetic. We have huge problems. But the problem is not, as such, that we need more boxes of dried pasta and cans of peas and fewer restaurants.

Actually, in a broad sense, that's exactly our problem. There really are some good reasons to care about manufacturing jobs. Here are three:

  • The manufacturing sector is generally more capital intensive than the service sector. Because of this, a pea canning factory can afford to pay higher wages for unskilled and semi-skilled labor than a restaurant can.
  • On a related note, manufacturing facilities are generally more scalable and more amenable to technological improvements. This improves productivity, and improved productivity is key to improved wages. By contrast, the restaurant business doesn't have a lot of scope for automation or productivity improvements.
  • Manufacturing is part of the tradable sector, while service industries generally aren't (though there are exceptions). A pea canning factory can ship its products overseas and help maintain our balance of payments. A restaurant can't.

There are good reasons that the food prep industry isn't held in high esteem, economically speaking. It's labor intensive, not especially productive, and not tradable. No country will ever get rich by employing armies of workers to flip burgers for each other. This doesn't mean that we have to have a huge manufacturing sector per se, but we certainly need industries that have a lot of the same qualities. Sectors that are capital intensive, scalable, and tradable are the future of any healthy economy.

Chart of the Day: The Gingrich Tax Plan

| Mon Dec. 12, 2011 6:10 PM EST

Via Matt Yglesias, I see that the Tax Policy Center has completed a preliminary analysis of Newt Gingrich's tax plan. You will be entirely non-shocked to learn that it's pretty much the same as every other Republican tax plan: it offers only modest cuts for poor and middle-class taxpayers but gigantic cuts for the well-off and the rich. In order to make sure that not a single person would even theoretically pay higher taxes under his plan, Newt uses the dodge pioneered by Rick Perry that allows taxpayers to choose between the current tax code and the Gingrich plan. However, he goes Perry one better by being even more brazenly pro-millionaire with an effective rate of 11.2% for anyone earning more than a million dollars per year.1 Take that, cowboy!

According to TPC, the Gingrich plan would lower federal tax revenue by $1.28 trillion in 2015 compared with current law, roughly a 35 percent cut in total projected revenue. I assume that Gingrich's plan to make up for this loss involves some handwaving about economic growth, but I don't have the energy to try and find the official explanation.

1The "current rate" numbers are based on the assumption that the Bush tax cuts expire as scheduled. They look a little different if you assume that the Bush cuts are extended. But as I said about the Perry Plan, why would anyone bother to extend the Bush tax cuts if you're going to pass a shiny new plan that just replaces the current code anyway?

Quote of the Day: the Durban Climate Agreement

| Mon Dec. 12, 2011 2:44 PM EST

From Kate Sheppard, explaining how the Durban climate conference managed to avoid catastrophe and forge a last-minute agreement:

In the end, it came down to a single turn of phrase: changing "legal outcome" in the earlier draft to "an agreed outcome with legal force under the convention applicable to all parties."

Whatever it takes, I guess. In the end, the Durbanites agreed to "launch a process to develop a protocol, another legal instrument or an agreed outcome with legal force." So that's that. A process will be started. The outcome will be a protocol, or maybe a legal instrument, or maybe an agreed outcome with legal force. Hopefully this outcome will happen by 2015. And then everyone will sign on by 2020.

This doesn't strike me as an especially cheering result, but, as usual, it's better than a complete meltdown, I suppose. For more details, Michael Levi has a fairly discouraging take here ("It is distressing to see how much attention has become devoted to form rather than function") while David Roberts has a slightly more upbeat take here (the agreement may be mostly symbolic, but it's also "a marker and a serious concession").

Yet Another Press-Driven Feeding Frenzy

| Mon Dec. 12, 2011 1:39 PM EST

Ladies and gentlemen, I give you politics in America:

Former Massachusetts governor Mitt Romney’s baffling decision to propose a $10,000 bet with Texas Gov. Rick Perry over a disagreement on health care policy during Saturday night’s Republican presidential debate dominated the after-action analysis of the event.

....The bet then could have a similar effect to Sen. John Kerry (D-Mass.) ordering swiss cheese on his cheesesteak or Martha Coakley suggesting Curt Schilling was a Yankees fan — crystallizing for voters that Romney just isn’t one of them.

“The question for voters is will they see it as a trivial moment in a debate, or does the willingness to bet $10,000 show he’s not like middle class people,” said Republican consultant Dan Hazelwood.

I am willing to bet $10,000 that ordinary viewers barely even noticed Romney's bet until the punditocracy decided to make it the defining moment of the debate. This whole thing is just a ridiculous media concoction.

No, wait! I didn't mean that. I meant that I'd bet $10. Honest. I'm just one of the 99%, like all the rest of you. I probably couldn't scrape up $10,000 even if I sold the log cabin I live in and threw in both the cats. Seriously. Would you like to hear some stories about my deprivations growing up? I've got 'em! I had to share a bedroom with my brother. Three of us kids shared a single bathroom. It was like living in the third world, I tell you. But I persevered and look where I am now.

Jeebus. I can't believe we still have another 11 months of this nonsense to put up with.

Newt Gingrich, Intellectual

| Mon Dec. 12, 2011 12:39 PM EST

Why are Republicans so thrilled with Newt Gingrich? The obvious answer, of course, is that they aren't. They just don't like Mitt Romney much, and after speed-dating Donald Trump, Michele Bachmann, Rick Perry, and Herman Cain and finding them all wanting, Gingrich is all that's left.

But that's an uninteresting answer. There must be something about Gingrich, after all, something more than just being the last guy standing. But what? Once again, there's an obvious answer: Whatever his faults, Gingrich has a vast reservoir of goodwill among movement conservatives for ushering in the Republican Revolution of 1994 and toppling 50 years of Democratic dominance of Congress.

Okay, fine. But what else? That was two decades ago. There has to be something about Gingrich himself, something about his personality or his temperament right now today that conservatives find appealing. So what is it? Paul Waldman picks up on the same trait that I think is probably Gingrich's key strength:

Many conservatives are positively obsessed with the idea that contrary to all appearances, Barack Obama is kind of a dolt. There's lots of talk about how Obama only got into Columbia and Harvard Law School because of affirmative action (you may remember noted highbrow intellectual Donald Trump making this claim), and endless jokes about Obama overusing teleprompters, with the idea that he's too dumb to give an extemporaneous speech sometimes implied and sometimes stated outright.

So many conservatives have a fantasy that if they nominate their own smart guy, he'll show the world that they've been right all along, that Obama is really a numbskull whom people only believe is smart because the liberal media sing his praises.

A week ago one of Andrew Sullivan's readers provided the sound bite version of this theory:

As much as the commentariat likes to talk about electability, the just-regular-folks I spent the holidays with talked only about how Newt would "hammer" the President during debates. "Can you imagine," my sister said, her eyes as lit-up as a child's on Christmas morning. "When Obama starts that smartest-guy-in-the-room shit, Newt'll shut him up." No one talked about policy or even politics. This is a mob storming the Bastille, cheering the guillotine, and Gingrich is their most likely Robespierre.

In this view of things, Bachmann and Perry and Cain are the girls you want to have a fling with, but Gingrich is the girl you want to marry. No matter how many dumb teleprompter jokes they make—and this has been a staggeringly hardy laugh line among the right-wing for the past two years—in reality conservatives are intimidated by Obama's obvious intelligence. Deep in their hearts, they really don't want to nominate a moron like Perry or a clown like Cain or a kook like Bachmann because they're afraid Obama will tear them apart.

But Newt! He's the perfect candidate. He's (a) not Romney, (b) a sharp debater, and (c) has a very showy applause-line contempt for all the same things that movement conservatives have contempt for. What's not to like? He's apologized for the extra wives and the palling around with Nancy Pelosi, so why not let bygones be bygones?

The next couple of months should be pretty fascinating. I continue to believe that, in the end, there are still lots of non-tea partiers voting in the Republican primaries, and eventually they'll come to their senses and power Romney to victory. But I'm a lot less confident of that than I used to be. Romney just flatly can't seem to break through his 25 percent poll ceiling, and although Gingrich may have a lot of baggage, his strategy of simply admitting he was wrong about that baggage and claiming that he's now learned his lesson is disarmingly simple and—so far—devastatingly effective. If he's actually learned enough self-discipline to keep from imploding, he seems to have a real chance. The Obama campaign team must be licking their chops.

Advertise on MotherJones.com

What Me Worry?

| Mon Dec. 12, 2011 11:33 AM EST

Nick Baumann is in Germany and has spent the last week talking with German journalists. Across the political spectrum, he says, they all share a similar view on the euro crisis: rote opposition to both inflation and the idea that German taxpayers might have to pay to cover Spanish or Italian deficits:

Perhaps this isn't surprising. But what was shocking to me was the total absence of any recognition that there might be an alternate view. When I mentioned the idea that the euro's problems might not be entirely due to government irresponsibility on the periphery, but rather a balance-of-payments issue (see Matt Yglesias or our own Kevin Drum for more on that idea), people looked at me like I was from space. The fact that German and French banks are holding the bag for Spain and Italy's debt never came up, and no one seemed to have any doubts that the European Stability Mechanism, the fund the eurozone countries are setting up for emergencies, would be sufficiently large to deal with the situation. 

....It's possible, of course, that my sample of journalists was oddly skewed and that German media are talking about this sort of stuff. But if Germans really are taking the "worry" side of the story seriously, it's a fringe thing. I spoke to reporters or editors from most of the country's largest papers and broadcasters, and they all seemed unconcerned. What's hard to convey remotely is the general mood: a kind of serenity, an almost utter confidence that everything will turn out fine. I hope they're right. But I'm not so sure.

I'm not so sure either. But if the confidence fairy has any power at all, I guess it's good to know that the German press has so much confidence that everything's going to turn out OK.

Why Italy Is Broke

| Fri Dec. 9, 2011 8:30 PM EST

The Guardian reports today on Tommaso, the world's richest cat. We've seen stories like this before, so it's all a bit ho hum. But check this out:

In a handwritten will, signed on 26 November, 2009, Tommaso's mistress—the childless widow of a successful builder—gave her lawyers the task of identifying "the animal welfare body or association to which to leave the inheritance and the task of looking after the cat Tommaso". One of the lawyers, Anna Orecchioni, told the Rome daily Il Messaggero they considered several organisations without getting adequate guarantees of the cat's future comfort and welfare.

Seriously? Tommaso's owner left an inheritance of 10 million euros. You could build a cat-sized Taj Mahal with a permanent staff and still have 9 million euros left over. Are Italian animal welfare associations so bulging with cash that they can afford to turn down 10 million euros just because they don't feel like guaranteeing posh treatment for a single cat?

Friday Cat Blogging - 9 December 2011

| Fri Dec. 9, 2011 2:14 PM EST

I may have been under the weather this week, but luckily Marian wasn't, which means catblogging goes on as usual. Today, Inkblot investigates the unusual sounds/odors/crinkling noises emanating from the shopping bag he's sitting next to. Can you guess how this turned out?

Elizabeth Warren, Wall Street Shill

| Fri Dec. 9, 2011 1:27 PM EST

I see that Karl Rove's PAC unveiled a preposterously deceptive ad yesterday claiming that Elizabeth Warren is unfit for the Senate because she's....wait for it....too close to Wall Street. Yes, you read that right. Here on Earth Prime, of course, Warren is perhaps one of the financial industry's most loathed figures. Saying she's too close to Wall Street is sort of like saying Ralph Nader is too close to General Motors because, you know, he spent a whole year researching a book about the car industry.

So why choose such a comically outlandish attack? Well, keep in mind that Rove is famous for believing that you should always attack your opponent's strongest points, not just their weakest. And obviously Warren's whole reputation is based on being the Scourge of Wall Street™. So something had to be done about that.

Will it work? It seems a little too farfetched to me, even if Rove's people do have the resources to saturate the airwaves with this stuff. Even Warren's critics will have a hard time picking up the ball on this and running with it, and without a groundswell of echo chamber goodness it won't have legs.

Still, it's an interesting test of Rove's thesis. If he can get away with this, it's pretty good evidence that you can get away with anything.