Kevin Drum

Still Listening

| Wed Jun. 17, 2009 12:27 AM EDT

James Risen and Eric Lichtblau report today that Congress is once again becoming concerned that the NSA is intercepting domestic email messages without a warrant:

Supporting that conclusion is the account of a former N.S.A. analyst who, in a series of interviews, described being trained in 2005 for a program in which the agency routinely examined large volumes of Americans’ e-mail messages without court warrants. Two intelligence officials confirmed that the program was still in operation.

....He said he and other analysts were trained to use a secret database, code-named Pinwale, in 2005 that archived foreign and domestic e-mail messages. He said Pinwale allowed N.S.A. analysts to read large volumes of e-mail messages to and from Americans as long as they fell within certain limits — no more than 30 percent of any database search, he recalled being told — and Americans were not explicitly singled out in the searches.

There's also this:

The N.S.A. is believed to have gone beyond legal boundaries designed to protect Americans in about 8 to 10 separate court orders issued by the Foreign Intelligence Surveillance Court, according to three intelligence officials who spoke anonymously because disclosing such information is illegal. Because each court order could single out hundreds or even thousands of phone numbers or e-mail addresses, the number of individual communications that were improperly collected could number in the millions, officials said.

....Overcollection on that scale could lead to a significant number of privacy invasions of American citizens, officials acknowledge, setting off the concerns among lawmakers and on the secret FISA court. “The court was not happy” when it learned of the overcollection, said an administration official involved in the matter.

Rep. Rush Holt (D–NJ), chairman of the House Select Intelligence Oversight Panel is investigating.  "Some actions are so flagrant that they can't be accidental," he says.

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Chart of the Day

| Tue Jun. 16, 2009 11:57 PM EDT

Josh Harkinson says the big new climate report released today by the Obama administration is no big deal because it's largely the same as the draft report that was released by the Bush administration last year.  Technically, maybe that's true.  But even though the report won't directly affect either legislation or agency rulemaking, surely it matters that we have an administration that actively and willingly releases a comprehensive report like this rather than one that fumes and delays and denies for four years before finally being forced to make it public with about the same enthusiasm that most of us reserve for getting a root canal?

Besides, even though it's primarily a review of existing literature, it's a pretty good review, covering everything from wildfires to rainfall to hurricanes to the fact that Illinois will look like Texas by 2100 (that's on p. 117).  Having a report this good, this comprehensive, and this authoritative may not save the planet, but it's still a pretty worthwhile data source to have around.

What's more, it's a gold mine of colorful charts!  And you know I'm a sucker for that kind of stuff. So here's your chart of the day: a 15-year history of electrical grid problems caused by increasingly extreme weather.  That's a new one on me, so maybe it's a new for you too.  The full report is here.

UPDATE: I picked this chart sort of randomly just because I'd never seen anything like it before.  Turns out there was a good reason for this: the increase in electrical grid problems is mostly the result of better reporting, not climate change.  Sorry about that.  Details here from Warren Meyer.

UPDATE 2: Evan Mills, who created this chart, emails to respond to Meyer's criticism.  He points out that (1) the caption specifically says this data doesn't demonstrate a cause-and-effect relationship, (2) the growth in weather-related incidents is not merely an artifact of better data collection, and (3) there was a larger increase in warm weather incidents than cold weather incidents.  However, regardless of whether climate change has caused any of the recent increase in grid disturbances, the data does show what may be in store for us in the future if climate change continues.  More here.

Permit, Permit, Who Gets the Permits?

| Tue Jun. 16, 2009 8:17 PM EDT

Does the Waxman-Markey energy bill really give away 85% of its emission permits to big polluters?  Dave Roberts says no: most of the permit allocations go to consumers, households, and green energy programs.  Only about 22% of the permits go to big industrials.  That's still about 22% too high, but it's a lot less than most press reports would lead you to believe.  Details here.

Actions Speak Louder Than Words

| Tue Jun. 16, 2009 4:23 PM EDT

Twitter was scheduled to go down for scheduled maintenance today, but it was postponed at the request of the State Department:

Confirmation that the U.S. government had contacted Twitter came as the Obama administration sought to avoid suggestions it was meddling in Iran's internal affairs as the Islamic Republic battled to control deadly street protests over the election result.

....Twitter Inc said in a blog post it delayed a planned upgrade because of its role as an "important communication tool in Iran." The hour-long maintenance was put back to 5 p.m. EDT/2100 GMT, which corresponds to 1:30 a.m. on Wednesday in Iran.

Fascinating.  The original upgrade schedule would have cut service in the middle of the day in Tehran.

Via Sullivan, of course.

Wall Street Breathes a Sigh of Relief

| Tue Jun. 16, 2009 4:07 PM EDT

It's still good advice to say that we should wait until tomorrow, when the administration's new financial regulations are formally unveiled, before we start taking potshots at them.  But if Binyamin Appelbaum's report in the Washington Post is on target — well, we might as well get started today after all.

Let's see.  The SEC will expand its database of securities and will "encourage" the adoption of standardized contract language.  Yippee.  Credit rating agencies will be required to make "a clear distinction" between the ratings assigned to asset-backed securities and other forms of debt such as corporate bonds.  This is about #287 on the list of regulatory problems we need to solve.  And then there's this:

Sales of asset-backed securities provided the bulk of funding for mortgages and other consumer lending during the economic boom, as investors spent trillions of dollars buying what was often advertised as a safe, more lucrative alternative to ordinary bonds....The administration concluded that securitization encouraged looser lending standards, because companies that sold loans to investors had little reason to care whether borrowers could repay those loans.

....The administration's proposal is not just an attempt to clean up the securitization market. The goal is also to help revive that market, which has seen almost no activity in the last year....The final component addresses financial incentives, for instance requiring firms to retain a [5%] stake in each security. The plan also would prohibit firms from hedging that risk, meaning that they could not make an offsetting investment.

Are they kidding?  First, how do you prevent banks from hedging risk?  There are just too many clever ways to do it.  The SEC will never be able to keep up with this.  Second, 5%?  Seriously?  What's the point?  There are lots and lots of recklessly constructed securities that are enormously profitable even if you know to a near certainty that you're likely to lose 5% of the value sometime down the road.  That's not nearly enough to rein in the bubbling endorphins and giddy short-term greed that drives credit bubbles.  And it's especially not enough if Wall Street continues paying its traders and executives based on how much money they earned in the past 365 days.

Look: I'll wait until tomorrow, and then listen to what smart people have to say about the full regulatory package.  But if this is the starting point of negotiations as this package heads off to Congress, things are really, really not looking good.

Controlling Healthcare Costs

| Tue Jun. 16, 2009 2:37 PM EDT

Can Barack Obama and congressional Democrats control healthcare costs?  Megan McArdle doubts it:

I'd say we have substantial empirical evidence that we are not going to control the health care cost inflation which is busting Medicare's budget, much less the new costs the administration is planning to add.  We have been trying to control health care costs since the 1970s made it clear that Medicare was going to get really, really expensive.  And any idea that you care to name, from comparative effectiveness research to healthcare IT to preventive medicine . . . these have all been on the table for more than thirty years, under one name or another.  They haven't happened.

The answer that those promising magical cost reductions need to ask is "Why haven't they happened?" and "What has changed to make them feasible now?"  But when I ask this question, I get angry demands that I put forward my plan for cost control, rather than merely critiquing everyone else's.  This seems rather like demanding that I put forward my design for a perpetual motion machine before I am allowed to point out problems in the US energy market.

This is an entirely reasonable position.  But I suspect the answer to cost containment lies less in technical arguments about healthcare policy than it does in arguments about taxation.  Right now, not only is America is rich enough to afford expensive healthcare, but the cost of that care is largely hidden.  For seniors, it comes via Medicare, and Medicare taxes haven't gone up much recently.  Its problems are still largely in the future.  The rest of us mostly get healthcare from our employers, and the only cost increases we see are higher copays — which are painful, but not quite painful enough to spur us to do much about them.

So what will spur us to get serious about cost containment?  My guess is: universal healthcare, paid for out of taxes.  A taxpayer funded system actually makes healthcare costs more visible than our current system, and a universal system is much bigger than Medicare alone.  A universal public system will, eventually, require painful tax increases, and that's the point at which the public will finally be willing to accept cost containment measures.

And if it doesn't?  Then it means, via revealed preferences, that Americans want expensive, unlimited healthcare even when the costs are fully and completely known to them.  That's not my preferred outcome — I think a lot of that money could be far better used on other things — but if that's what taxpayers turn out to want, then that's what taxpayers turn out to want.  That's how market democracies work.  My guess, though, is that it's not what they want.  They just don't know it yet because they're too far removed from the costs of the current system.  National healthcare will change that.

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Waterboarding Update

| Tue Jun. 16, 2009 1:59 PM EDT

Torture apologists are fond of telling us that "only" three prisoners have ever been waterboarded.  Two of those three were Abu Zubaida and Khalid Sheik Mohammed.  Today, documents released in response to an ACLU lawsuit shed some new light on both of them:

An al-Qaeda associate captured by the CIA and subjected to harsh interrogation techniques said his jailers later told him they had mistakenly thought he was the No. 3 man in the organization's hierarchy and a partner of Osama bin Laden, according to newly released excerpts from a 2007 hearing.

"They told me, 'Sorry, we discover that you are not Number 3, not a partner, not even a fighter,' " said Abu Zubaida, speaking in broken English, according to the new transcript of a Combatant Status Review Tribunal held at the U.S. military prison in Guantanamo Bay, Cuba.

....Mohammed, who was waterboarded 183 times [...] said he lied in response to questions about bin Laden's location.

"Where is he? I don't know," Mohammed said. "Then he torture me. Then I said yes, he is in this area."

I'm exaggerating when I say that this is really "new" information, but it is more extensive information than we've had before.  And it's not exactly a great advertisement for either the efficacy or the morality of waterboarding.  Adam Serwer has more here.

The VAT in the Hat

| Tue Jun. 16, 2009 12:48 PM EDT

The New York Times reports that House Democrats are considering a value added tax as a way of financing healthcare reform. A VAT is one of those things that economists and think tankers all love, but it's also one of those things that's never had any real chance of being adopted in the United States.  So it surprised me that Dems were even seriously talking about it.

But Tyler Cowen has a take on this that I hadn't thought of:

From my distant perch out here in Fairfax (and Arlington), I believe this means health care reform is falling apart.  It means the unions won't let them tax health insurance benefits and the CBO won't let them punt on the issue of finance.

Hmmm. That sounds unduly pessimistic.  But given the fact that congressional approval of a VAT is vanishingly unlikely without years of preparing the ground first, the fact that it's being discussed suggests that pretty much all the likely sources of revenue have already been ruled out.  That's not a heartening thought.

The reference in the Times was made almost in passing, and maybe it doesn't mean anything.  I certainly wouldn't make too big a deal out of it at this point.  But I figure it's worth a brief mention as a possible canary in the coal mine.

The GOP vs. the Troops

| Tue Jun. 16, 2009 12:09 PM EDT

Via Matt Yglesias, I see that the GOP has decided that supporting the troops is so last week:

House Republicans are preparing to vote en bloc against the $106 billion war-spending bill, a position once unthinkable for the party that characterized the money as support for the troops.

....Republicans say this year is different. Democrats have included a $5 billion increase for the International Monetary Fund (IMF) to help aid nations affected by the global financial crisis. Republicans say that is reason enough to vote against the entire $106 billion spending bill and are certain voters will understand.

“Once the American people learn that the Democrats are using a war-funding bill for a global bailout, they’ll know what to do,” House Republican Conference Chairman Mike Pence (Ind.) told The Hill. “We’ll take the message to the floor and to the American people, and I expect we’ll win this fight.”

Hypocrisy is overrated as a vice, but this is still pretty stunning.  I mean, they're doing this over $5 billion in net IMF contributions to help out with the global financial meltdown?  Seriously?  That's about .1% of the federal budget, and one of these days it might help prevent a collapse that spreads across the ocean and sends Wall Street into yet another tailspin.  That's what Republicans are going to the mat for these days?  Crikey.

Responding to Iran

| Tue Jun. 16, 2009 11:44 AM EDT

Jonah Goldberg on Obama's response to the mass protests in Iran:

Reportedly, you are biding your time, waiting to see what happens, as if it is a great mystery. Your campaign lived and breathed YouTube. Check it now, check it often. You and your team promised "soft power" and "smart power." Well, let's see some of that. Because by not clearly picking a side, it appears you have chosen the wrong side.

Do you fear antagonizing the powers-that-be in Iran? That ship has sailed. Though I am sure they're grateful for your eagerness not to roil the seas around them. Is it because you think "leader of the free world" is just another of those Cold War relics best mothballed in favor of a more cosmopolitan and universal awe at your own story?

"Enough about those people bleeding in the street. What do you think of me?" Is that how it is to be?

Obama really drives conservatives to the loony bin, doesn't he?  I mean, the story here is pretty simple: if the Great Satan forcefully intervenes on Mousavi's side, it gives the clerics just the excuse they need to brand him a foreign stooge and really crack down.  Goldberg can't possibly not know this, can he?  Obama, so far, is doing exactly the right thing: deploring the violence but otherwise staying in the background until and unless Mousavi and the protesters themselves ask for more.  He's doing his best not to make it about him, but about them.