Kevin Drum

Big Ideas

| Mon Mar. 2, 2009 1:19 PM EST
Jon Chait defends Rush Limbaugh:

Rush Limbaugh is drawing some ridicule for saying, "One thing we can all do is stop assuming that the way to beat [the Democrats] is with better policy ideas." But I think he's basically right. Good ideas are meritorious. But being meritorious isn't what wins elections. Most voters have only the faintest idea what policy ideas candidates advocate when running or implement when in office. External conditions (such as the economy, but war and scandal matter also) have much more influence over which party wins.

I agree — up to a point.  I do think that the GOP needs to moderate some of the hardcore social positions that have alienated young voters in droves, but aside from that it's not shiny new ideas that will save them.  That's not what saved Democrats, after all.  National health care?  That's been on our wish list for about a century.  Fighting global warming?  Liberals  have been environmentalists since the 60s.  Fiscal stimulus?  Can you say "New Deal"?  Pulling out of Iraq?  Not exactly a milestone in progressive thought on foreign policy.

You can take this too far, of course.  Liberals might be longtime environmentalists, but global warming is a newish issue and a market-oriented cap-and-trade program is a newish way of dealing with it.  Our healthcare plans this time around are different (and frankly, more modest) than in the past.  Obama is pulling out of Iraq but getting us ever deeper into Aghanistan.

So: not new ideas, perhaps, but certainly different takes on classic ideas.  What's more, Dems have also backed down on social issues a bit over the past decade, sometimes in fact (gun control), sometimes only rhetorically (abortion).  This is likely to eventually be the road back for Republicans too.  Cut down on the gay bashing and the hellfire preachers who are too often seen as forces of intolerance, and then come up with newish ways of selling small government and lots of overseas wars.  It'll work someday.  Not anytime soon, but someday.

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Countercyclical Capping

| Sat Feb. 28, 2009 4:10 PM EST
A few days ago I suggested that although Barack Obama's revenue projections for his greenhouse gas cap-and-trade plan might be a little optimistic, they were "in the right ballpark."  Partly this is because the plan won't take effect until 2012, and I suspect that demand for energy will rise by then, increasing the auction revenue for permits enough to generate $80-100 billion per year.  Megan McArdle disagrees:

I doubt economy-driven demand will have recovered by 2012.  The major economies are crashing so hard that it will take years of growth to get demand back where it was, and the big developing countries that drove demand past capacity are in worse shape than we are....

[In addition] I think it is decidedly iffy whether congress actually passes any cap and trade system with teeth.  For a cap and trade system to work, it will have to make energy more expensive at a time when incomes are declining.  This will be very, very, very unpopular.

These are reasonable points, but my guess is that (a) demand will have largely recovered by 2012 and (b) the initial permit price will be low enough not to have a huge effect on the price of energy at first.  So it won't be all that unpopular.  Beyond that, though, there's another point buried here that's worth unpacking a bit.

In my magazine piece (which you should read!) I go into a little more detail about the difference between cap-and-trade and a carbon tax, but the nickel version is simple: Financial folks generally prefer a tax because it's predictable.  You know exactly how big the tax is now and how big it will be in the future, and that allows you to plan your investments.  Conversely, you don't really know what effect any particular tax rate will have on carbon emissions.  You have to take your best guess.

A cap-and-trade system is similar to a tax in the sense that you have to buy a permit for every ton of carbon you emit, but the predictability is exactly the opposite.  There's a firm cap, so you know exactly what effect the plan will have on carbon emissions, but you don't know for sure what the permit price will be at any given time.  If demand for energy rises, the price of permits gets bid up.  If demand goes down, the world is awash in permits and the price goes down.

There are pros and cons to both a carbon tax and cap-and-trade, but here's one of the pros of cap-and-trade: The price of permits is likely to go up in good times, when energy demand is high, and down in bad times, when energy demand drops.  In other words, it's countercyclical.  During recessions the effective tax rate goes down, and it does so automatically.  Macroeconomically speaking, that's good.  So that's a point in favor of cap-and-trade.

As for whether Congress will pass a plan with teeth?  Good question.  As with a tax, there are lots and lots of opportunities for special interest tinkering in a cap-and-trade plan.  Auctioning 100% of the permits, rather than giving some of them away to existing polluters, is the key issue to insist on, but there are others too (it's point #9 in my article).  Later this year we'll see if Obama can keep the sausage factory on the straight and narrow.

Huckamongering

| Sat Feb. 28, 2009 3:12 PM EST
Mike Huckabee says that Barack Obama is midwifing the birth of a "Union of American Socialist Republics" in his new budget.  "Lenin and Stalin would love this stuff."

"If a prominent Democratic office holder, in 2005, delivered a speech referring to George W. Bush's agenda as 'fascism,' comparing his administration to totalitarian regimes, and casually throwing in a reference to Hitler," says Steve Benen, "that Democrat would have a very difficult time being taken seriously by the political establishment moving forward. Presidential ambitions would be largely out of the question."

"Why Huckabee thinks that federally funded research into determining which medical treatments are effective is similar to being a totalitarian mass-murderer is a bit beyond me" says Matt Yglesias.  "But it’s par for the course in the uglier corners of conservatism, they’re just not corners Huckabee’s been known for dwelling in."

"Either Huckabee is losing his ear or this is what you really have to say to get the Republican Presidential nomination in 2012," says Mark Kleiman. 

I'd say (a) yes, Huckabee really believes this stuff, (b) no, a Democrat couldn't get away with something like this, (c) yes, it's what you have to do to win the GOP nomination these days, and (d) no, nobody really cares because talk radio has inured us to this kind of stuff.  Boys will be boys.  He's just warming up the crowd.  Etc.

And the good news?  It demonstrates that things are going to get worse for Republicans before they get better.  "The party of Lincoln is now the Party of Limbaugh," says Paul Begala, and he's right.  Like most parties that have lost their way in the past, it's now clear that they'll spend at least four years insisting that what America really wants is an even more extreme version of what they voted against in 2008.  Cooler heads will eventually prevail, but not until 2016 at the earliest.  Maybe not until 2020.  Obama's really got some running room in front of him.

Epistemological Modesty

| Sat Feb. 28, 2009 2:39 PM EST
This is apropos of nothing in particular, but I'd just like to mention that the past year has been an intellectually humbling one for me.  As a general purpose blogger I'm accustomed to spouting off on topics I know only a little bit about, but all that spouting has become more difficult lately.  There's just too much stuff I'm really not sure what to think about.  For example: I don't know if we should send more troops to Afghanistan.  I don't know if fiscal stimulus will work.  I don't know what to do about Pakistan.  I don't who or what is really responsible for our financial meltdown.  I don't know if we need to nationalize some banks.  I don't know the best way to handle detainees at Guantanamo.  I don't know whether it's a good idea to bail out Detroit.  I don't have even the slightest clue how to pursue peace in the Middle East.

On the other hand, Social Security is still a minor problem, national healthcare would be better than our current jury rigged hodgepodge, torture is wrong, global warming is real, preventive war is a bad idea, gay marriage will have no ill effects on straight marriage, Sarah Palin is still an embarrassment, and Inkblot is still America's Cat1.  So there.

1Well, why not?  If the Dallas Cowboys can be America's Team and Rudy Giuliani can be America's Mayor, why can't Inkblot be America's Cat?

Friday Cat Blogging - 27 February 2009

| Fri Feb. 27, 2009 4:11 PM EST
Today is closeup day.  Everyone is outside enjoying the (sorta) sunshine and pondering Portuguese water dogs.  Hmmm.  Are there Portuguese water cats too?  Inquiring felines want to know.  If you have inside information, enlighten the rest of us in comments.  In the meantime, have a nice weekend, everyone.

The End of the War

| Fri Feb. 27, 2009 3:14 PM EST
Barack Obama explains his plan to withdraw from Iraq:

Let me say this as plainly as I can: by August 31, 2010, our combat mission in Iraq will end....We will retain a transitional force to carry out three distinct functions: training, equipping, and advising Iraqi Security Forces as long as they remain non-sectarian; conducting targeted counter-terrorism missions; and protecting our ongoing civilian and military efforts within Iraq. Initially, this force will likely be made up of 35-50,000 U.S. troops.

Through this period of transition, we will carry out further redeployments. And under the Status of Forces Agreement with the Iraqi government, I intend to remove all U.S. troops from Iraq by the end of 2011. We will complete this transition to Iraqi responsibility, and we will bring our troops home with the honor that they have earned.

There are some caveats, and Spencer Ackerman explains the details here.  But the bottom line is simple: all combat troops will be out within 18 months, and all troops will be out within 34 months.  That's probably not as quickly as I'd like to see it done, but it's probably about as quickly as it was ever likely to happen given the inherent instability of the political situation.  Keep your fingers crossed.

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Jindal's Katrina Story

| Fri Feb. 27, 2009 3:02 PM EST
I just finished writing a post about how clownish it was for Bobby Jindal to exaggerate the Hurricane Katrina story he told in his rebuttal speech on Tuesday, but then I erased it.  After reading Ben Smith's full account, including his update, Jindal's puffery strikes me as a misdemeanor at worst.  He shouldn't have done it, but honestly, it's just not that big a deal.

A Few Raindrops on the Rich

| Fri Feb. 27, 2009 2:18 PM EST
Andrew Sullivan says that Obama has played the budget and spending game pretty shrewdly:

Look at how Obama has framed the debate since the election. Every single symbolic act has been inclusive and sober. From that speech in Grant Park to the eschewal of euphoria on Inauguration Day; from the George Will dinner invite to the Rick Warren invocation....And now, after presenting such a centrist, bi-partisan, moderate and personally trustworthy front, he gets to unveil a radical long-term agenda that really will soak the very rich and invest in the poor. Given the crisis, he has seized this moment for more radicalism than might have seemed possible only a couple of months ago.

Italics mine.  I think Andrew's basic point is correct: by getting the centrist optics right, Obama has been able to move more boldly than he otherwise could have.  Republicans who paint him as the second coming of Karl Marx just look like idiots these days.  At the same time, let's not go overboard.  Here's how Obama is "soaking the very rich":

If Obama's tax plan is approved, a family making $500,000 a year would see its annual tax bill rise to nearly $132,000 from about $120,000, a 10 percent increase, said Clint Stretch, managing principal of tax policy at Deloitte Tax.

Over the past three decades, these families have seen their incomes double and triple while the rest of the country stagnated.  Now Obama proposes to increase their tax bill by $12,000 — not even enough to get them back to the rates they were paying when Ronald Reagan left office.  This is a very, very modest nod toward fiscal fair play, very much in keeping with Obama's modest optics.  You'd have to drink several pitchers of Rush Limbaugh's Kool-Aid to think this counts as soaking the rich.

Another Stimulus?

| Fri Feb. 27, 2009 1:27 PM EST
This is pretty remarkable.  National Journal asked a bunch of "congressional insiders" if another stimulus bill would be needed sometime in the near future, and you can see the results on the right.  65% of Democrats said yes, which might not be a big surprise, but so did 63% of Republicans.  Their reasons were a little bit different (Dems: a big recession requires a big stimulus; Republicans: the first stimulus was a crock), but it's still remarkable that even two-thirds of Republicans apparently think we'll need more stimulus in a few months.

What's more, this question was asked before this morning's dismal GDP revisions came out.  If you asked again today, I wonder if the number would be even higher?

Free Markets vs. "Free" Markets

| Fri Feb. 27, 2009 12:59 PM EST
Should the federal government provide loans to college students?  Or should it let the private sector make the loans but agree to guarantee them because otherwise the private sector wouldn't be interested?  Rep. Howard McKeon (R–Ca) thinks the latter.  Matt Yglesias, who's apparently on a first name basis with the distinguished congressman, comments:

The interesting thing here is not just the particulars of the policy, but the bizarre view of the role of government that Howard is espousing. Rather than a debate between progressives who want the government to provide a public service and conservatives who want the service to exist just insofar as it can be supported by the private market, we have a debate where both sides agree that the service ought to exist but the right thinks it’s important that it be done in a less efficient more costly manner....You have essentially the same debate over Medicare Advantage between Democrats who want the government to provide seniors with costly medical services and Republicans who want Democrats to provide seniors with an even more costly version of those services by bringing private insurance companies in as middlemen. It’s ludicrous.

This really does highlight the right's frequently bizarre notion of "free markets."  The only reason that private lenders are part of the college loan program in the first place is because the program was started in the 60s, and at the time banks were really the only institutions set up to make widescale loans.  The government didn't have much choice except to use them as their origination arm and provide guarantees as a carrot to get them to participate.

The revolution in finance during the 70s and 80s changed all that, of course.  The government doesn't need to pay banks to originate its loans any more than it needs to make the loans using gold bullion.  But Republicans are convinced that having Uncle Sugar subsidize loans so that Sallie Mae can make outsize profits is somehow ordained by natural law.  It must be more efficient because Sallie Mae is a private organization!  And everyone knows that federal programs are cesspools of waste and inefficiency.

But it ain't true, and it ain't true of Medicare Advantage either.  Sometimes the private sector does things better than the government, and sometimes it doesn't.  In particular, when the main job at hand is cutting checks, the government is actually pretty damn efficient.  There's not much to it these days, and with no middleman to get in the way the feds can provide money at a much lower cost than private lenders.

Bill Clinton tried to get rid of the private component of the college loan program, but he met a lot of resistance and didn't try all that hard.  Hopefully Obama will try harder.  After all, taxpayers deserve to have their money spent as efficiently as possible, right?