Kevin Drum - March 2013

Presidential Schmoozing Really Isn't the Issue Here, Folks

| Wed Mar. 13, 2013 8:24 AM PDT

Over at Politico, Jim VandeHei and Mike Allen spend a few hundred words telling us that President Obama blew it by first insisting on a tax increase in the fiscal cliff deal and then provoking Republicans even further by taking to the hustings to talk up a compromise sequester deal that included yet more tax hikes. But when you get to the tail end of the column, they finally tell us the real impediment to some kind of grand bargain that raises taxes and cuts entitlements:

Sen. Lindsey Graham (R-S.C.) says he can envision such a scenario if Democrats put specific entitlement cuts on the table. But, top House GOP officials tell us that is nuts. The prevailing view among House Republicans is that they have finally won the cuts they spent years fighting for and see little reason to tick off senior voters by cutting entitlements while also ticking off the base with new taxes. In truth, many Republicans aren’t very motivated themselves to start messing with entitlements if they don’t have to.

Right. Maybe Obama has been too aloof. Maybe Republicans in the House really are such delicate flowers that a couple of months of presidential speeches has them livid with rage. Anything is possible. But the real issue is far more concrete: Republicans don't want to raise taxes on the rich and they don't want to cut entitlements on their core base of pissed-off old people. The fact that they claim they want to cut entitlements is mostly just smoke. In reality, they're no more eager to do it than Democrats.

I see no harm in Obama's charm offensive. He's tried it before and it hasn't worked. He's tried negotiating behind the scenes and it hasn't worked. But I guess you have to keep trying something, so why not a bit of schmoozing?

Still, I don't think he's ever had any success negotiating with Republicans, no matter what approach he's taken. In his early days they opposed him nearly unanimously on everything, with just one or two defections. In the middle of his first term they opposed every possible grand bargain, agreeing only to a package of 100% spending cuts during the debt ceiling crisis. At the end of his first term, they accepted a small tax increase only because they literally had no choice: taxes would have gone up even more if they hadn't agreed. And now, at the start of his second term, they're once again refusing to make any kind of deal.

It's time to face facts: this is all due to political pressures and ideological preferences, not presidential sociability. That's just the way it is.

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There's More to the Economy Than Walmart

| Wed Mar. 13, 2013 7:52 AM PDT

Early last month, the blogging world was transfixed by a leaked set of emails from a Walmart executive complaining that the first week of sales in February was terrible. "February MTD sales are a total disaster," said Jerry Murray, Walmart's vice president of finance and logistics. "The worst start to a month I have seen in my ~7 years with the company."

I didn't bother reporting this when I first heard it, and I didn't bother a second time when it started making the rounds of the blogosphere. It was one week of sales! Turns out this was a good call:

Retail and food-service sales increased 1.1% to a seasonally adjusted $421.4 billion, the Commerce Department said Wednesday, marking the fourth straight monthly gain and biggest rise since September. The figure was up 4.6% from a year ago....Retail sales excluding gasoline, automobiles and building materials—a figure watched closely by economists who use it as a truer gauge of consumer behavior—was up 0.36% in February, the Commerce Department said.

The number for general merchandise stores like Walmart wasn't great, but it wasn't disastrous either. Overall, consumer spending was fairly strong last month, it just wasn't being directed Walmart's way.

The lesson is simple. It's silly to get too exercised about a single month's economic data. It's really silly to get too exercised about a single week's economic data. And it's silly beyond belief to get too exercised about a single week's economic data at a single store, even if it is Walmart. Live and learn.

BY THE WAY: The company refers to itself these days as Walmart, not Wal-Mart. Copy desks everywhere take note.

How to Write a Meaningless Law

| Tue Mar. 12, 2013 7:08 PM PDT

Currently, licensed firearms dealers are required to conduct a background check before they can sell you a gun. The FBI conducts the check but deletes its record of the inquiry within 24 hours. The only place that records are maintained longer than that is with the dealers themselves. Private transactions, often done at gun shows, don't require any background check at all.

You need to know this background to understand how ludicrous this report is:

Senators negotiating a bill mandating background checks for all gun buyers are privately expecting the National Rifle Association not to fight the measure — provided the legislation does not require private gun sellers to maintain records of the checks, NBC News has learned. If that requirement is met and key Republican negotiator Sen. Tom Coburn of Oklahoma signs on, the powerful gun lobby has signaled to lawmakers that they would not actively oppose the bill — and not count votes in favor of it as part of its highly influential NRA lawmaker ratings — according to Senate aides familiar with the stalled negotiations.

Under these conditions there would be no way to enforce the law. If you suspected someone of selling a gun privately without conducting a background check, they'd simply tell you that they did, but they didn't keep the record. The FBI wouldn't be of any help, since they're required to destroy all their records. And that would be that.

So there you have it. This is apparently the compromise that Republicans are offering: they'll support the background check bill only if it's written so that it's literally meaningless. And keep in mind: this is the least controversial piece of true gun legislation on the table right now. It's the one supported by 90 percent of the public, the one everybody figured Obama would settle for because he knew he'd never get a ban on assault weapons or high-capacity magazines.

Welcome to post-Sandy Hook Washington DC. Seems an awful lot like pre-Sandy Hook Washington DC, doesn't it?

Glenn Kessler Makes a Reasonable Point About What's Serious and What's Not

| Tue Mar. 12, 2013 2:42 PM PDT

Glenn Kessler, the Washington Post's fact checker, wrote a column yesterday that tried to judge whether President Obama's proposal to replace the sequester was truly a serious plan. Brendan Nyhan, in the course of criticizing Kessler for addressing a matter of opinion like this, points out that Kessler makes a distinction between two kinds of plans:

The first is whether each side has created a specific budget proposal that includes enough new revenue and/or budget cuts to avoid sequestration. The second is whether each side has acted in good faith to create and promote a compromise proposal that has a realistic chance of becoming law.

....Kessler wants to define “plan” using the second, more subjective definition above. In particular, he defines Obama’s plan, bizarrely, as “not really a plan” because it appears on the White House website but Obama has, to his mind, failed to make sufficient efforts to promote it.

Actually, I think this distinction is one worth making. When I criticized David Brooks a couple of weeks ago for not realizing that Obama has a sequester plan, I think that was legitimate. I expect columnists and pundits to do the minimal amount of research necessary to know the actual state of play on both sides regarding competing budget proposals.

At the same time, it really is true that Obama hasn't exactly been jumping up and down to make sure everyone knows about his plan. Overall, Kessler's criticism strikes me as pretty reasonable:

Obama has made passing reference to some of these spending-cut proposals in news conferences, but he has never made them the centerpiece of a high-profile speech. By contrast, he repeatedly—and very publicly—has stressed his interest in raising taxes on the wealthy. That’s why his ideas on entitlements remain a mystery to many Republicans—but they all know he wants to raise revenues.

The president’s outreach to Republican rank-and-file in the past week is a sign of seriousness, in that he is beginning to explain his ideas directly to the opposition.

However, the president has not directly taken on members of his own party; he also has not made the case for overhauling entitlement programs to the American people. Democratic lawmakers know that if the ideas just remain on a Web site, with little or no high-profile presidential push, they don’t have to take these ideas any more seriously than Republicans.

We judge people's actual priorities all the time by assessing how strongly they promote them. That's perfectly sensible, and it's especially sensible when you're dealing with politicians. Obama really does have a sequester plan, but it's hardly surprising that few people think he's very serious about it when he barely ever even mentions its details.

On a related note, though, I think Brendan makes a good point about whether something like this really belongs in a "fact checking" column. Kessler made it clear in his column that he agrees this isn't a classic kind of fact check ("We try not to fact check opinions, and that seemed to be the core of the debate between Boehner and Sperling about what constitutes a 'plan'"), and he didn't award it any Pinocchios or gold stars or anything like that. Still, Brendan asks, "why not give him a separate column for punditry and preserve The Fact Checker column for, well, facts?" That sounds pretty sensible too.

UPDATE: The White House disagrees, pointing out to me that Obama has talked about his plan in three weekly addresses and one press conference recently, and press secretary Jay Carney has also done a press briefing on the plan.

Fair enough. But here's the way Obama described his sequester replacement in one of the weekly addresses: "I believe we should do it in a balanced way — with smart spending cuts, entitlement reform, and tax reform. That’s my plan." This is his usual formulation, and he doesn't often go much beyond that. That's kind of thin, no? Obviously I agree with Obama that Republican refusal to accept even a dime of new revenue is the real deal breaker here, but I still think Kessler has a point.

Paul Ryan Does Not Accept the Tax Increases in the Fiscal Cliff Deal. Not At All.

| Tue Mar. 12, 2013 12:09 PM PDT

Why does everyone keep asking Paul Ryan why his 2014 budget accepts the fiscal cliff tax increases instead of trying to repeal them? I mean, sure, technically he's working off a baseline that includes the increases, but here's his tax plan:

Substantially lower tax rates for individuals, with a goal of achieving a top individual rate of 25 percent.

There is, literally, no further detail about this in his 91-page document, but that's still clear enough. The fiscal cliff deal increased top marginal rates from 36 percent to 39.6 percent. Ryan's plan is based on reducing top rates to 25 percent. In other words, not only does he want to get rid of the 39.6 percent rate, he wants to make it even lower than it was before the fiscal cliff deal. He doesn't accept the fiscal cliff increases at all.

Right? What am I missing here?

UPDATE: OK, I guess I get it. In last year's plan, Ryan's revenue target was 18.7 percent of GDP by 2022. In this year's plan, his target is 19.1 percent of GDP by 2023. So he's accepting higher revenues, which, it turns out, is actually the main way that he achieves a balanced budget within ten years.

Nonetheless, he rather decidedly doesn't accept the higher rates in the fiscal cliff plan, and doesn't provide any details about how he intends to meet his revenue target with a top rate of 25 percent.

We Seem to be Losing the Race Against Superbugs

| Tue Mar. 12, 2013 10:46 AM PDT

There have been a spate of headlines recently—and not for the first time—about outbreaks of diseases that are completely resistant to all known antibiotics. The basic reason for this, of course, is that we've used antibiotics with abandon ever since they were discovered, and diseases have mutated to resist them. We're now at the point where there are a few diseases that have mutated enough that pretty much no antibiotic known will kill them.

So why not develop new antibiotics? Partly because there's not a lot of money in it. But Megan McArdle points us to medicinal chemist Derek Lowe, who points out that although killing bacteria is hard, it's not that hard. The problem is killing bacteria without killing everything else at the same time. The virtue of penicillin wasn't that it was the first antibiotic ever discovered, but that it was the first nontoxic antibiotic. Put it in a human being, and it killed bacteria without killing the human too. Lowe says that this, more than money, is what makes it so hard to figure out how to kill the new strains of superbugs:

I realised after my first exposure to antibiotic drug discovery that I’d never had any problem generating cytotoxic compounds against mammalian cells. Happened all the time — not that I wanted it to, of course. But killing bacteria, especially fully armed wild-type bacteria? That was a major event. And even then, most of the compounds you find that can accomplish that will do the same thing to your own cells, which is definitely not the idea.

And that brings up another question about those bacterial targets, the ones that are so orthogonal to human cellular pathways. A disturbing number of them have already been the subject of screening efforts and optimisation attempts — without success. They also seem to be a bit orthogonal to the kinds of structures that medicinal chemists make. There are antibiotics with reasonable-looking structures, but they’re outnumbered by natural-product-derived beasts, complex structures no one would have gotten around to synthetically for another few hundred years otherwise. Perhaps these kinds of things are needed to get in through the bacterial membranes, or needed to avoid being pumped right back out, but it does complicate one’s research.

This all means, it’s sad to say, that the limiting factor in antibiotic drug discovery probably isn’t the amount of money to be made at it. That’s too bad. Money’s a factor that could be adjusted by regulatory agencies, governments, and foundations. But no amount of cash will keep resistant bacteria from being the hard targets they are.

More money would probably still help, of course. Too bad about all those sequester cutbacks at NIH, isn't it? It also might help if we didn't medicate every farm animal in the world to within an inch of its life. Drug-resistant diseases are going to develop no matter what we do, but they'll develop faster the more drugs we use. So maybe we should cut back a bit?

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Good Loans, Bad Loans

| Tue Mar. 12, 2013 8:59 AM PDT

Tesla Motors, the Silicon Valley company that builds expensive, sporty electric cars, plans to pay back its government loans five years early. Steve Benen comments:

The political part kicks in, however, when we look back at the 2012 presidential election. I read the transcript of just about every speech and interview Mitt Romney did last year, and I seem to recall the Republican condemning Obama's loan to Tesla all the time. In the final months of the race, it was a standard line of attack: the president was recklessly using our money, Romney said, to "pick losers." Obama was so irresponsible, he even invested in Tesla Motors.

Romney was so fond of the criticism, he even brought it up during one of the debates. Paul Ryan joined in on the fun, condemning Tesla's loan on the stump as well. I'm curious, given these new developments, whether the GOP still considers the administration's loan an outrageous abuse worthy of public scorn.

Wait a second. Steve read the transcript of every single speech and interview Mitt Romney gave last year? Holy cats. I'm not sure whether to be impressed or appalled.

But on to the question of government loans. In my ongoing efforts to spend at least 5 percent of each week not being a partisan hack, I'll defend Romney here. Sort of. The truth is that in most cases, the fact that a loan does or doesn't get paid off probably isn't a good measure of whether it was a good idea. To figure that out, you need to assess the evidence at the time the loan was made, not just label every performing loan as a good idea and every nonperforming one as a bad idea.

My rough take, for example, is that the Tesla loan was probably a poor use of taxpayer money. Tesla isn't a company likely to make any important breakthroughs. It's a company whose business plan relies on making money by selling really expensive cars to rich people. Why should U.S. taxpayers subsidize that?

Conversely—and here's where this week's 5 percent ends—Solyndra was probably a good use of taxpayer money. In the end it didn't pay off, but it had a reasonable chance of producing an important breakthrough. That's the kind of thing taxpayers should be willing to take a gamble on. If a quarter of the gambles fail, chances are you're still ahead of the game.

So there you have it: a good loan that was probably a bad idea and a bad loan that was probably a good idea. Life is complicated.

However, I would still like to own a Tesla. Are there any Obama giveaway programs to heavily subsidize electric car purchases for friendly bloggers? There must be. Rush Limbaugh talks about them all the time. So where's my loot?

Paul Ryan's "New" Plan: Squeeze the Poor, Boost the Rich

| Tue Mar. 12, 2013 7:33 AM PDT

Oh Lord. I almost forgot that today is Paul Ryan Day, even though I wrote about it just yesterday. So what's in the 2014 version of the Ryan budget? Let's see:

  • Repeal of Obamacare (though we keep Obamacare's cuts to Medicare, as well as its new taxes).
  • Medicare would be converted into a voucher system.
  • Big cuts to Medicaid.
  • Big cuts to other domestic programs.
  • Repeal of the sequester cuts in the Pentagon budget.
  • A "simplified" income tax system with only two brackets, 10 percent and 25 percent.
  • A reduction in the corporate tax from 35 percent to 25 percent.

I'll dive into the details later. Maybe. But basically this is the same old same old. Big tax cuts on the rich, big tax cuts for corporations, and big spending increases for the military. For the poor, the middle class, and the elderly, we have big spending cuts and—though Ryan doesn't admit it—the almost mathematical certainty of big tax increases.

At this point, I honestly have only one wish for all this: that the press finally wises up and refuses to call this a "deficit reduction" plan. It's not. It's a plan to dramatically cut domestic spending, full stop, mostly on the poor, the middle class, and the elderly. Every other component of the plan increases the deficit.

Remembrance of the Ghost of Christmas Past. Wait. That's Not Right, Is It?

| Tue Mar. 12, 2013 7:14 AM PDT

Tyler Cowen has some reading advice for the digital age:

Everyone should have a long book on their Kindle that they otherwise would never read. Then, when you don’t feel like starting a whole new book on your Kindle, you dig into a small piece of your long book. And stop. As the years pass, you may eventually finish your long book (or not).

After three years, he's about 18 percent finished with John Calvin’s The Institutes of the Christian Religion, which I assume has the virtue of being free in e-book form.

In any case, this sounds like good advice except for one thing: what if you have a bad memory? I have trouble remembering the first part of a book by the time I'm reading the last chapter, and that's for books that I finish in a week. If I took years to read a book, it would be like reading random chapters completely divorced from the main narrative.

But maybe that's a whole new way of reading? If I had to choose a long book, it would be something like Remembrance of Things Past (or whatever they call it these days, ever since they decided the old translation of the title was no good). Perhaps reading it in the normal sequence, but with each chapter completely divorced from its narrative context, would provide a whole new take on Proust? I could think of it as Forgetfulness of Things Past. But what if I cheated and reread the Cliff Notes summaries before each chapter to refresh my memory of what was going on? This is all trickier than it sounds.

TSA's Devious Pocketknife Feint

| Mon Mar. 11, 2013 5:12 PM PDT

TSA's decision to allow small pocketknives on airplanes isn't the most important news around, but Jonathan Bernstein has an interesting followup to my post complaining about Chuck Schumer's demand that TSA reverse itself on this. He points out that it's really hard to relax safety restrictions, because everyone knows that eventually something bad will happen and whoever did the relaxing will catch hell over it. So how is it that TSA worked up the courage to relax the rules on pocketknives? Bernstein gets Machiavellian on us:

So what I've wondering is whoever is making this happen over at TSA is actually really smart about that, and added "knives" to a collection of innocuous stuff to draw fire away from everything else. Not that I'm saying small knives should be banned, or even that TSA thinks they should be banned. Just that it's probably a viable bureaucratic strategy to toss in one item on the list that politicians can go after, thus allowing everything else to go into effect.

This is....weirdly plausible. If everyone gets riled up over the knives, maybe they'll forget all about the golf clubs and tiny baseball bats. It's hard to imagine anyone at TSA actually having this conversation, since there would be too much risk of it leaking out, but who knows? Maybe those guys are more devious than we think.