Kevin Drum - January 2014

Hoboken Mayor: Christie Denied Me Sandy Relief Funds Unless I Played Ball

| Sat Jan. 18, 2014 6:52 PM EST

The mayor of Hoboken, who was apparently a big fan of Chris Christie for his first few years in office, went public today to say that Christie's office told her last year that Hoboken wouldn't get any Hurricane Sandy relief funds unless she approved a redevelopment project being managed by some pals of Christie:

The mayor, Dawn Zimmer, hasn’t approved the project, but she did request $127 million in hurricane relief for her city of Hoboken....[On May 10, 2013] Zimmer got a call from the Lieutenant Governor, Kim Guadagno, who wanted to come to town to do an event at a ShopRite to spotlight businesses that had recovered from the storm.

On May 13, Guadagno and Zimmer met at the Hoboken ShopRite. That is where, Zimmer said, Guadagno delivered the first message about the relief aide.

Zimmer shared this diary entry which she said she wrote later that day. “At the end of a big tour of ShopRite and meeting, she pulls me aside with no one else around and says that I need to move forward with the Rockefeller project. It is very important to the governor. The word is that you are against it and you need to move forward or we are not going to be able to help you. I know it’s not right — these things should not be connected — but they are, she says, and if you tell anyone, I will deny it.

The second warning, according to Zimmer, came four days later. She and Constable, who now led Christie’s department of community affairs, were seated together on stage for a for a NJTV public television special on Sandy Recovery.

Again, Zimmer provided this diary entry from May 17, which she said captured the incident.

“We are mic’ed up with other panelists all around us and probably the sound team is listening. And he says “I hear you are against the Rockefeller project”. I reply “I am not against the Rockefeller project; in fact I want more commercial development in Hoboken.” “Oh really? Everyone in the State House believes you are against it — the buzz is that you are against it. If you move that forward, the money would start flowing to you” he tells me.

Are Christie's Democratic enemies helping orchestrate this? Of course they are. Does that matter? Not even slightly. All that matters is whether it's true. If it is, I'd presume there should be two big pieces of evidence to support it:

  • Testimony from others confirming that Zimmer contemporaneously complained about the threats.
  • Records of how much Sandy aid Hoboken got, and how it compares to other comparably affected areas.

We'll have to wait and see about these two things. In the meantime, the chum is in the water and the sharks are circling Christie. He's obviously a guy who plays political hardball, and now that Bridgegate has weakened him, we can expect to see a lot more people telling stories like this one. In the past they wouldn't have hurt him too much thanks to his carefully manicured reputation for being tough (but fair!) with people in order to get things done in a state that desperately needs someone unafraid to kick all the right asses. But Christie isn't getting the benefit of the doubt anymore. If this story turns out to be true, it's just one more nail in the presidential coffin.

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Friday Cat Blogging - 17 January 2014

| Fri Jan. 17, 2014 4:00 PM EST

Today you get an exciting Domino movie! At first glance, you might think that she's begging for food. But no. This little song-and-dance routine has one and only one meaning: she wants me to come into the living room, get down on the floor, and rub her belly. So I do. This is an even more elaborately choreographed affair, and maybe someday I'll make a video of that too.

In other news, check out the handiwork of German design company Goldtatze, which can turn any room in your house into an arboreal cat playground. Very tastefully, too. "The cat-sized architectural additions seem like a year-round dose of summer camp for the curious pets." Uh huh.

Do We Write Too Much and Read Too Little?

| Fri Jan. 17, 2014 3:54 PM EST

I don't remember where I saw this yesterday—which might be a symptom of the very disease under discussion—but I wanted to pass along the following from Alan Jacobs:

One of the most reliable ways to sharpen your own thinking is to find out what other smart people have thought and said about the things you’re interested in — that is, to take the time to read. But the content-hungry world of online publishing creates strong disincentives for writers to take that time. Almost every entity that has an online presence wants to publish as frequently as possible — as long as the quality of the writing is adequate. And often “adequacy” is determined by purely stylistic criteria: a basic level of clarity and, when possible, some vividness of style.

....So writers tend to trust the first thoughts that come to them, rarely bothering to find out whether others have already considered their topic and written well about it — and in fact not wanting to know about earlier writing, because that might pre-empt their own writing, their publication — the “content” that editors want and that will keep readers’ Twitter feeds clicking and popping with links. In the current system everyone feels stimulated or productive or both. And hey, it’s only reading and thinking that go by the wayside.

Actually, in some circumstances it's best not to know what other people are saying and thinking. In particular, there are times when I keep myself deliberately in the dark in order to avoid groupthink.

But that's fairly rare. In general, I think Jacobs is right, and I've certainly found it to be a problem. When I'm in full-bore blogging mode, I just don't have time to read anything longer than a thousand words or so, even if it's something that I should read because it would inform my own thinking. Instead, I try to save it for later in the afternoon, which is when my writing pace slows down and I can spend more time reading longer pieces. But I'm only moderately successful at this, and in the end I find myself simply not reading enough these days. The pace of blogging interferes with my ability to slow down even when I'm not sitting at the desk and actively typing characters for a post.

Of course, there's nothing wrong with just chatting about stuff, and to a large extent that's what blogging and tweeting and tumblring is. Nor is it a crime to repeat something that's already been said. Some things are worth a lot of repetition. Finally, despite a lot of wailing to the contrary, it doesn't strike me that the rise of blogging and social media has actually hurt the production of books and long form journalism much. It's all still out there and it still gets read.

Still, this is something to be aware of. Ironically, it's also something that's been written about to death. But it doesn't hurt to write about it again.

Judge Strikes Down Pennsylvania Voter ID Law

| Fri Jan. 17, 2014 2:03 PM EST

In a victory for access to the polls, a state judge struck down Pennsylvania's voter ID law today. Rick Hasen tells us what it means:

This is a clear victory for opponents of voter id laws, with a finding that:

  • the implementation of the voter id law violated the law’s own promise of liberal access to voter id
  • the implementation exceeded the agency’s authority to administer the program
  • the voter education efforts were woefully inadequate
  • as a whole the Pa. voter id program violated the Pa. constitutional’s fundamental right to vote.

In this regard, it is important to note that the court rejected Pa’s argument that the law was aimed at preventing voter fraud. The judge found that the state presented no evidence the law was necessary either to prevent fraud or to keep public confidence in the fairness of the election process.

(Reformatting mine.) You should read the whole thing, including Hasen's big caveat: the judge didn't rule that voter ID was a violation of equal protection and did rule that the law wasn't motivated by an attempt to disenfranchise minorities or Democratic voters. Because of this, it's not clear if the Pennsylvania Supreme Court will affirm this decision.

President Obama Finally Releases His Surveillance Reform Plan, and It's Pretty Weak Tea

| Fri Jan. 17, 2014 1:10 PM EST

President Obama gave his big surveillance speech today, and it was pretty limited. Aside from some fairly vague promises about new oversight and greater transparency, here were his most important concrete proposals:

  1. The Director of National Intelligence will conduct an annual review of FISA court opinions with the aim of declassifying opinions that have "broad privacy concerns."
  2. Obama will ask Congress to create a "panel of advocates" that will represent the public's privacy interests in FISA cases.
  3. New restrictions will be placed on the use of "incidental" collection of surveillance of US persons in criminal cases.
  4. National Security Letters will remain secret, but secrecy won't be indefinite unless the government demonstrates a "real need" to a judge. Companies receiving NSLs will be allowed to release broad reports about the number of requests they get.
  5. Bulk telephone records will continue to be collected. However, in the future the database can be queried only after getting FISA approval. The NSA will be allowed to perform only 2-hop chaining rather than the current 3-hop standard. A new group will investigate alternative approaches to the government itself holding the telephone database.
  6. Within some unspecified limits, there will be no more bugging of foreign leaders.

This is fairly weak tea. Nonetheless, I'm pretty certain that we wouldn't have gotten even this much if it weren't for Edward Snowden. This is why I support Snowden's disclosures despite the fact that I'm not happy about every last thing he's disclosed. Obama's attempt to suggest that he would have done all this stuff even without Snowden's disclosures strikes me as laughable.

You can read a full copy of the presidential directive accompanying Obama's speech here.

UPDATE: I should be a little clearer about why I think this is weak tea. Of these items, only the first five concern domestic surveillance. #1 and #2 are pretty hazy, with the DNI apparently having full control over this new declassification regime and the public being represented in FISA cases only by a "panel of advocates," a phrase that somehow strikes me as a bit weaselly. But we'll see.

#3 is very important if the new restrictions are pretty tight. But that's not clear yet.

#4 is nice, but doesn't go very far. At a minimum, I'd like to see much tighter standards for issuing secret NSLs in the first place.

#5, if it's implemented well, could be a genuine improvement. Records retention per se is something the government often mandates, and as long as the records are truly kept away from the intelligence community, accessible only via court order with an advocate aggressively arguing the public's case, this is a useful reform.

Julian Sanchez tweets: "Initial verdict: A decent start, better than I expected, but we really need legislation to cement this, & the details will matter a lot." That's a little more optimistic than my initial verdict, but it's probably fair. We really won't be able to fully evaluate all this until we see what the detailed rules look like. Good intentions aren't enough.

Hey, Maybe Bank Regulation Is Working After All

| Fri Jan. 17, 2014 11:37 AM EST

Ben White wrote a piece in Politico yesterday suggesting that bank regulation has been more successful than most of us give it credit for. Goldman Sachs, he said, is a "shell of its former self," and other big Wall Street banks have been hemmed in by Dodd-Frank and other new trading rules too.

I was skeptical. Still, as I've said in the past, the real test is bank profitability. If it goes down, it means the new regulations are doing their job. And it's going down:

Wall Street’s earnings season has dashed hopes the sector would bounce back from its post-crisis doldrums, with Goldman Sachs posting weak results in fixed income trading and Citigroup missing analysts’ forecasts for the second consecutive quarter.

....There is still little confidence that trading revenues will return to previous levels. To try to prop up return on equity, a favourite gauge of profitability in the sector, banks are cutting bonuses. Goldman reduced its ratio of pay to revenue to 36.9 per cent, a percentage point lower than last year.

Returns are being limited by regulatory action, particularly new requirements to hold more capital. In the latest move, the Office of the Comptroller of the Currency said on Thursday it was raising the standards it expected for risk management at the largest banks.

It's still early days, so take this as tentative evidence only. The real evidence that bank regulation has been effective will be longer-term signs that we're truly seeing a de-financialization of the economy, with the finance industry making up a smaller share of GDP than it has in the past. We'll only know if that's happening once all the new regs have been in place for a while and the banks have had a good chance to figure out if they can game them. If they can't, and finance becomes permanently a smaller share of the economy, we'll be able to say that Dodd-Frank and Basel III were relatively successful. Until then, we'll have to wait and see.

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Everywhere in the World, Governments Heavily Regulate the Home Mortgage Business

| Fri Jan. 17, 2014 2:35 AM EST

Yesterday I wrote about problems with the mortgage finance market, which are mostly due to the fact that private lenders aren't interested in funding 30-year fixed-rate mortgages on their own. There's just too much risk. This means that if we want the mortgage market to revive, Fannie Mae and Freddie Mac need to start guaranteeing these mortgages again in the same volumes they used to.

One obvious response to this is that the 30-year fixed mortgage wasn't handed down on stone tablets from Mt. Sinai. It was an invention of the New Deal. Other countries get by just fine without them, and so can we. We should just get the government out of the mortgage market entirely and let banks make whatever kinds of loans they want.

We could do that. But it's well to keep in mind that although other countries might not have outfits like Fannie Mae and Freddie Mac, they do have plenty of government regulation of the mortgage loan market. If you're curious about how mortgages work outside the US, Michael Hiltzik provides a useful rundown of Canada here. Other countries work differently, but the principle is the same: there's always supervision of some kind. Getting rid of Fannie and Freddie is a defensible option, but that doesn't mean you're getting rid of government regulation. You'll just end up with different government regulation.

This Holiday Season, Brick-and-Mortar Stores Had Fewer Customers But Bigger Sales

| Fri Jan. 17, 2014 1:03 AM EST

The Wall Street Journal reports that foot traffic in retail outlets plummeted this holiday season:

A long-term change in shopper habits has reduced store traffic—perhaps permanently—and shifted pricing power away from malls and big-box retailers.

....Traffic to U.S. retailers was hurt during the financial crisis and recession, when job losses soared and shoppers kept a tight grip on their dollars. But nearly five years into the recovery, it appears many of those shoppers may never be coming back....Shoppers don't seem to be using physical stores to browse as much, either. Instead, they seem to be figuring out what they want online then making targeted trips to pick it up from retailers that offer the best price.

This is actually not quite the tale of woe that it sounds like. It's more interesting than that. In the past, brick-and-mortar outlets complained about shoppers coming to stores to check out the merchandise but then buying online. Now the tables have turned: shoppers are going online to check out prices and products, and then making a quick trip to pick up their goods instead of driving around town to a bunch of stores to do comparison shopping.

The result is that foot traffic is down, but sales are up: holiday spending increased 2.7 percent in 2013 compared to 2012. That's not a great number, and obviously profits have taken a big hit as stores try to compete with low internet prices. Still, if sales are up 2.7 percent and foot traffic is down 14 percent, that means your staffing cost per dollar of sales is down. This is not unalloyed bad news for physical stores.

I'm not trying to be Pollyanna-ish here. Obviously brick-and-mortar stores have big challenges. Still, they might be able to thrive if they can learn to adapt to an environment in which there's less casual browsing and more serious, targeted shopping. Anybody who's worked in retail knows that you treat these kinds of shoppers differently, and perhaps the brick-and-mortar world needs to transition to a model in which they treat their customers by default as targeted shoppers. After all, there are still plenty of us who don't believe everything we read online and still want to see things with our own eyes before we buy them.

Mother Jones Goes Old School. Really Old School.

| Thu Jan. 16, 2014 7:57 PM EST

And now for something completely different. A friend of mine has taken up stained glass as a hobby (you can see more here), and he recently made me a stained glass version of the banner at the top of my blog. It arrived yesterday, and it's now hanging above my desk. Are you jealous yet? He even got a discount on the raw glass when the folks in the store found out what it was for. Turns out they're fans of Mother Jones. All I need now to go along with it is an illuminated manuscript version of the blog itself.

We're About to Find Out If the Senate Is Working Again

| Thu Jan. 16, 2014 6:55 PM EST

Now that Democrats have done away with the filibuster for nominations, how are we doing on getting vacancies filled? Jonathan Bernstein is tentatively optimistic:

There's some movement on judges today, with the Senate Judiciary Committee sending 29 nominations, including five appeals court picks, to the full Senate....We’ll see, when the Senate returns in February, just how committed Republicans are to delaying and obstructing these future judges....Cloture procedures, which can eat up plenty of Senate floor time, are still in place for both judicial and the even more numerous executive-branch nominations.

Republicans are not “shutting down” the Senate; for example, they aren’t insisting that bills be read aloud. They did, however, drag out nominations back in December after Senate Majority Leader Harry Reid went nuclear, which meant that while Democrats were able to power through high-profile positions, lower-priority ones were held over to this year. It’s still not clear to what extent Republicans will continue to obstruct; as Twitter-based nominations maven @Mansfield2016 points out, we’ll know more after Reid tries to confirm some low-level executive-branch nominations through unanimous consent later today.

If Republicans insist on cloture for every nominee, it will tie the Senate in knots since it eats up a few days of time to work through each cloture vote. Democrats will win them eventually now that it only takes 51 votes, but they can't afford to spend two months of floor time in order to confirm 29 nominees. So if Republicans play hardball, they could still block most of Obama's nominees.

It only takes one senator to demand cloture, so who knows what will happen? But my guess is that Republicans will let most of the nominations through. If they demand cloture votes, all that will happen is that Democrats will go ahead and confirm the nominees that conservatives hate the worst and let the others slide. That's a net loss. Besides, a Republican will be president someday. At this point, with the initial outrage over the rules change mostly spent, they might prefer to just go along with the new precedent. We'll see.