Kevin Drum

Kathleen Sebelius

| Wed Apr. 29, 2009 11:16 AM EDT

Matt Yglesias ruminates on the meaning of yesterday's vote to (finally) confirm a Secretary of Health and Human Services:

It seems to me that if you can only get 65 votes for what should be an uncontroversial HHS appointment, then the odds of a broad bipartisan coalition for big picture health care reform are not so good.

....The prevailing spirit within the GOP is clearly that Obama is a very bad president and so they should vote “no” on his initiatives. Which is fine. But it means that if Obama wants to deliver on his campaign pledges, he needs to use every legal means at his disposal to just pass things over the objections of the minority that opposes him.

I had sort of the same thought yesterday.  I mean, I understand the political/fundraising motivations for voting no on Sebelius as a sop to the pro-life contingent in the GOP, but everyone knew there was no way it would ever make a difference.  It's not as if Obama would have turned around and nominated a pro-lifer to HHS, after all.  It's ridiculous.  But nearly the entire Republican caucus voted against her anyway, which means that their desire to work with Obama even at the most basic level of allowing a president to choose his own cabinet is less important than their desire to prove their absolute fealty to the conservative base.

Not a good sign — although I suppose there's an alternate reading that's less dire: if you know that Sebelius is going to be confirmed anyway, voting no is something of a freebie.  So maybe this doesn't really mean too much after all.  On balance, though, I think I'm with Matt.

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Economic Update

| Wed Apr. 29, 2009 10:56 AM EDT

So how's the economy doing?  Let's take a look!

New York Times: U.S. GDP shrank by 6.1% in the first quarter, far worse than the "consensus" prediction of 4.7%.

Bloomberg: A full third of the country's biggest banks need additional capital, according to leaked preliminary results of the Treasury's stress tests.

RGE Monitor: According to a government report leaked to Sueddeutsche Zeitung, bad assets in the German banking system total slightly over a trillion dollars.  Over half of bad assets worldwide are in the European banking system, which has done much less to recognize them than we have in the U.S.

Wall Street Journal: Business fixed investment in the U.S. was down a whopping 37.8% last quarter.

Want some good news to go with that?  Sorry!  Apparently personal consumption was up 2.2%, which is probably a mixed blessing, and home prices were down 18% compared to last year, but didn't quite fall at a record rate.  That's the best I can do.  Ed Yardeni tries to do better, but one of the green shoots on his list of reasons to feel optimistic is the fact that Portfolio magazine has shut down.  Put me down as unconvinced.

Green Shoots

| Tue Apr. 28, 2009 5:21 PM EDT

Tapped glosses an EPI report on green jobs:

Most notable is its pronouncement that a "green" investment is one of the most stimulative forms of government spending, providing a 1.6:1 return-to-investment ratio. This is greater than generic infrastructure investment (1.59), temporary tax cuts (1.03), and corporate tax cuts (0.3)....Now for the less-than-rosy projection: men would be disproportionately advantaged by this spending, accounting for 75 percent of the total employment gains.

Actually, that's not as bad as it sounds — at least in the short run.  As CAP's Heather Boushey points out, men have absorbed 75% of all job losses during the current recession, so a stimulus program that targets them disproportionately makes some sense.  After all, it's either that or let them stay home grinding their teeth and taking cues from Fox News about who to blame for all this.  And we don't want that, do we?

Overall, EPI's model projects that $100 billion in green investments would generate 750,000 jobs and raise wages of non-college educated workers by about half a percent per year.  Plus it would help prevent us from turning the planet into a cinder.  So that would be another bonus.  The whole paper is here.

Specter and EFCA

| Tue Apr. 28, 2009 4:39 PM EDT

A few weeks ago Arlen Specter announced that he would oppose the Employee Free Choice Act (aka "card check"), labor's top legislative priority.  But now that he's a Democrat, what will he do?  Jon Chait speculates:

Specter says he’ll still oppose EFCA, but I have trouble seeing him really maintain that stance. He has to make it through a Democratic primary now. That’s very hard to do in Pennsylvania when the AFL-CIO is out for your blood.

Specter’s most likely play is to stay formally opposed to EFCA, but support a compromise along the lines of what some moderate Democrats might favor. He certainly can’t risk being the decisive anti-EFCA vote. Democrats in the Senate may be offering him institutional support in the primary, but primaries tend to be low-turnout operations, and Specter is going to have to work his way into the favor of the partisan Democratic base.

I think that's probably right.  Specter won't completely flip-flop, but there was some wiggle room in his statement announcing opposition to EFCA.  Even without changing his position on secret ballots, then, I could see him working with a few conservative Dems and moderate Republicans to construct a compromise bill that pretty effectively boosts his labor bona fides.  After all, the current version of EFCA is almost certainly dead in the water (and was likely dead before Specter announced his oppostion), so gaining support for even a watered down version would allow him to position himself as the guy who rescued EFCA and got half a loaf where there was nothing previously.

It might not work, of course, but it's probably worth a try for him.  I wouldn't be surprised to see him give it a go.

The Photo Op

| Tue Apr. 28, 2009 3:02 PM EDT

I know it's Arlen Specter 24/7 most places, but I'm still curious: what was the "photo-op" that the White House staged with Air Force One over the streets of Manhattan yesterday?  The Washington Post explains:

The event was intended to update a stock photo of the presidential plane that is used for distribution to media and others, according to a person familiar with the matter who was spoke on condition of anonymity because he was not authorized to speak publicly. The photo, featuring the Statue of Liberty, is to replace one of the aircraft flying near Mount Rushmore, the person said.

Jeebus.  They had to provide this explanation on background?  I know it's embarrassing, but can't they just fess up to the whole thing in public?

Quote of the Day - 2.28.09

| Tue Apr. 28, 2009 2:47 PM EDT

From Family Research Council President Tony Perkins:

What do sick pigs have to do with widespread, taxpayer-funded abortion? More than you might think.

Click the link if you dare.  Or you can just jam burning bamboo shoots under your fingernails instead.  Your choice.

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Chart of the Day - 4.28.2009

| Tue Apr. 28, 2009 1:27 PM EDT

Today's chart come from the long-term trends section of the NAEP, the "nation's report card."  It shows — surprise! — long-term trends on the NAEP's reading and math tests, and the results are shockingly humdrum.  (Can something be shockingly humdrum?  I say yes!)

Did American education go completely to hell in the 70s and 80s?  It sure doesn't look like it.  Both reading and math scores stayed almost rock steady during the entire "Nation at Risk" period.  Did things improve with the passage of NCLB and the advent of massive high-stakes testing?  Scores for 9-year-olds have gone up a bit, but past evidence suggests that gains among young children usually wash out by the time they're 17.  There might be a bit of progress over the past eight years, but the evidence is very thin and very tentative.  Overall, among 17-year-olds, the average reading score during the past four decades has gone from 285 to 286 and the average math score has gone from 304 to 306.  There's hardly cause for either alarm or excitement.

Obviously there are lots of details when you look at this stuff.  NCLB mostly focuses on lower grades, and most of those kids haven't yet gone on to high school.  So maybe it just needs more time.  There are racial and gender gaps to look at, differences between public and private schools, and the effects of concentrated poverty.  Still, I think it's useful sometimes to take a look at the bottom line: plain old average scores over the past four decades among 17-year-olds.  And despite all the changes during that period in demography, testing, pedagogy, and popular culture, there just hasn't been much change.  I'll leave it as an exercise for the reader whether that's good news or bad.

The Road to 60

| Tue Apr. 28, 2009 12:30 PM EDT

Fascinating news out of Pennsylvania today:

Pennsylvania Sen. Arlen Specter will switch his party affiliation from Republican to Democrat and announced today that he will run in 2010 as a Democrat, according to a statement he released this morning.

...."I have decided to run for re-election in 2010 in the Democratic primary," said Specter in a statement....He added: "Since my election in 1980, as part of the Reagan Big Tent, the Republican Party has moved far to the right. Last year, more than 200,000 Republicans in Pennsylvania changed their registration to become Democrats. I now find my political philosophy more in line with Democrats than Republicans."

That's surprisingly forthright wording, isn't it?  It's hard to avoid the conclusion that Specter finds his views more in line with Democrats these days solely because there are 200,000 more of them in Pennsylvania than there used to be.  Points for honesty, I guess.

Of course, if he's really serious about this, he could switch parties now.  And maybe announce his support for a few Democratic initiatives while he's at it.  Interesting days.

UPDATE: Obama is "thrilled" by the news.  And who can blame him?

UPDATE 2: I think I may have misunderstood Specter's statement.  Apparently he does plan to begin caucusing with the Democrats immediately.  I think.  Press reports seem oddly fuzzy on this point, though.

UPDATE 3: In 1950, Specter participated in the National Debate Tournament, which addressed itself to the following topic: "Resolved: That the United States should nationalize the basic nonagricultural industries."  How newly relevant!  My father beat him, 969-964.  Take that, Ivy League.

Redefining History

| Tue Apr. 28, 2009 12:16 PM EDT

The new owners of the Century Plaza Hotel in Los Angeles want to tear it down and replace it with a pair of 50-story towers containing condos, offices, shops and a smaller luxury hotel.  But not everyone is thrilled:

The Los Angeles Conservancy is determined to stop them. To bolster its campaign, it has enlisted the National Trust for Historic Preservation, which today put the 726-room Hyatt Regency Century Plaza hotel on its annual list of America's 11 most endangered historic places.

"By naming this structure to the list, the National Trust is demonstrating that the preservation of recent past and modern buildings is as important to our cultural record as preserving architecture that's from the Victorian period or Art Deco era," said Christine Madrid French, director of the trust's nascent Modernism + Recent Past Initiative.

This is lunacy.  I don't care one way or another whether Michael Rosenfeld gets to build his new complex, but it makes a mockery of historic preservation to pretend that this building deserves to be protected for the rest of time.  It was built in 1966.  Its architect, Minoru Yamasaki, is prominent, but he's not a native Angeleno and this wasn't a pivotal work in his career.  The building itself is a fine example of 60s-era modernism, but that's just another way of saying that it's also a fairly typical example of 60s-era corporate hotel design.  In its heyday, which lasted for perhaps two decades at most, the Century Plaza attracted plenty of VIP guests, but it never became an iconic structure because of that.  The Los Angeles Conservancy's page about the hotel is here, and they pretty obviously struggled to figure out a way to make it seem even moderately noteworthy.

The Century Plaza Hotel is a recent building of genuine but modest distinction.  But it escapes me how that qualifies it as a national historic place.  Pretending otherwise does a disservice to genuine history.

Stress Test Update

| Tue Apr. 28, 2009 11:29 AM EDT

Stress test results are starting to leak:

Regulators have told Bank of America Corp. and Citigroup Inc. that the banks may need to raise more capital based on early results of the government's so-called stress tests of lenders, according to people familiar with the situation.

....Bank of America's capital hole as measured by the regulators is in the billions, said people close to the company....It isn't clear how big a capital deficit Citigroup faces.

Well, I'll bet that Citi's capital requirements are "in the billions" too.  What else would they be in, after all?

In any case, there's no way that either bank can raise private capital, and the Treasury has stated flatly that it won't allow them to fail.  That means either another big capital injection from the feds or else some kind of guarantee to private investors.  The former would almost certainly have to be at market rates (I doubt there's any appetite for more sweetheart deals) and the latter would be such a thin veneer that it's almost certainly impossible to pull off.  Especially in the case of Citi, then, it's hard to see how the government ends up anything other than a majority owner of the bank once this is all over.  Tim Geithner can call this anything he wants, but that's nationalization whether he likes it or not.