Kevin Drum

Pricing Carbon

| Sat Jan. 24, 2009 3:05 PM EST

PRICING CARBON....A few days ago I linked to post by Sean Casten about the implied cost of CO2 reduction in the Illinois legislature's recent deal to subsidize a "clean coal" plant in Taylorville. It came to about $400 per ton of CO2, which is fantastically higher than anyone would pay if it were done openly, rather than as part of a byzantine maze of corporate giveaways.

Sean is back today with another interesting post that looks at the cost of CO2 reduction implied in the hodgepodege of tax credits and loan guarantees that are scattered around the legislative landscape right now. Depending on who you are and what's on offer, it turns out that your reward for getting a ton of CO2 out of the atmosphere ranges anywhere from $15 to $253. This, of course, is nuts, and Sean asks:

What might a world look like that did provide a consistent policy signal on CO2? One, we would deploy a host of technologies that are cheaper and more diverse than those we currently deploy in the name of CO2 reduction. Two, we would deploy a host of technologies that cannot possibly be contemplated by those who's knowledge of possibilities is limited to those possibilities we are currently deploying. In other words, all of us.

It's all well and good to have programs that motivate people to develop and deploy technologies that reduce greenhouse gases, and carbon pricing can be an effective part of a broad regulatory program to do that. But if we're going to use carbon pricing as part of our toolkit, we're way better off simply setting a price and letting people figure out for themselves which technologies to develop, rather than having the government pick and choose for us. Not only would that get rid of absurdities like subsidizing ethanol at a higher rate than wind (it ought to be just the opposite), but it would open up the playing field to anyone who can come up with a bright idea for reducing greenhouse gases, not just those who have a big enough lobbying presence to get a break for their particular industry. The result would almost certainly be cheaper and more efficient than a patchwork of targeted tax breaks, and would also promote the development of technologies that no one is even thinking about today. It's time to start.

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Dancing

| Sat Jan. 24, 2009 2:01 PM EST

DANCING....Joe Nocera writes today that the original idea behind TARP was right all along: the government needs to buy up toxic assets from distressed banks if we want to get the banking system working again. This idea has gained so much currency in so much of the financial community, he says, "It's pretty much unanimous."

But then, a thousand words into his piece, he suddenly says that the S&L crisis of the 80s is the right model to emulate:

The S.& L.'s were — no question about it — nationalized. The bad assets were stripped out, and handed over to the Resolution Trust Corporation, which was charged with selling them off....What is particularly appealing about an R.T.C.-type approach is that the government doesn't have to value the assets right away, which has always been the sticking point with the toxic assets on the banks' books. It can simply take control of them, and then figure out ways to sell them off over time....But to carry out this kind of program, the government has to be in control of insolvent banks. This also has to be faced squarely.

What a bait and switch! This isn't TARP. This is Swedish-style nationalization. Nocera just wants to erect a massive rhetorical edifice around the idea to make it sound like that's only a minor side effect.

Come on, Joe. If the defining characteristic of all the good plans for dealing with the banking crisis is, as you say, that "they don't dance around the issue," then don't dance. The headline on your column shouldn't have been, "First Bailout Formula Had It Right." It should have been, "Time to Nationalize."

*Friday Cat Blogging - 23 January 2009

| Fri Jan. 23, 2009 4:07 PM EST

FRIDAY CATBLOGGING....Poor Inkblot! After two weeks of warm, sunny weather, winter has reasserted itself. It's raining outside, and that means he'd have to get his delicate little paws wet if he wanted to go outside. That was not to be, of course, so after a few minutes convincing himself that the rain was here to stay, he decided discretion was the better part of valor and deposited himself on the bed for a nice midmorning snooze.

And why not? It's been a busy week, hasn't it? I think I might need a little snooze myself. Coming up next week: guest catblogging! I'll bet you can hardly wait.

"I Won"

| Fri Jan. 23, 2009 3:49 PM EST

"I WON"....Jonathan Weisman reports on today's bipartisan stimulus meeting at the White House:

Challenged by one Republican senator over the contents of the package, the new president, according to participants, replied: "I won."

The statement was prompted by Senate Minority Whip Jon Kyl of Arizona , who challenged the president and the Democratic leaders over the balance between the package's spending and tax cuts, bringing up the traditional Republican notion that a tax credit for people who do not earn enough to pay income taxes is not a tax cut but a government check.

Obama noted that such workers pay Social Security and Medicare taxes, property taxes and sales taxes. The issue was widely debated during the presidential campaign, when Sen. John McCain, the Republican nominee, challenged Obama's tax plan as "welfare."

Good. Obama's efforts to maintain good relationships across the aisle may mean that he's wiser than me in these matters, but I still don't think it's going to work and I hope he doesn't waste too much energy on it. This is the right response for something that's already been hashed out a hundred times before.

Is Wikipedia Eating the World?

| Fri Jan. 23, 2009 2:51 PM EST

IS WIKIPEDIA EATING THE WORLD?....Three years ago, Nick Carr did a Google search for ten topics off the top of his head. He found that Wikipedia entries were the #1 hit in two cases and among the top ten hits in all the others. Today he did the same searches again and found that Wikipedia was the #1 hit for all ten. This leads him to say this:

What we seem to have here is evidence of a fundamental failure of the Web as an information-delivery service. Three things have happened, in a blink of history's eye: (1) a single medium, the Web, has come to dominate the storage and supply of information, (2) a single search engine, Google, has come to dominate the navigation of that medium, and (3) a single information source, Wikipedia, has come to dominate the results served up by that search engine. Even if you adore the Web, Google, and Wikipedia — and I admit there's much to adore — you have to wonder if the transformation of the Net from a radically heterogeneous information source to a radically homogeneous one is a good thing. Is culture best served by an information triumvirate?

When I first saw this passage over at Andrew Sullivan's blog, I dismissed it. Wikipedia doesn't seem to dominate the searches I do. Quite the contrary, in fact. Usually they're only barely in the top ten.

But then I clicked the link and read Carr's search results. Apparently, for searches of standard topics, Wikipedia is far more prevalent than it is for the kinds of searches I do, which tend to be fairly random assemblages of search terms. What's more, my Google default is set up to return 50 hits per page, so even if Wikipedia is at or near the top, it's only one of many hits. But if you use the standard Google search page, it's one of ten. And if you routinely use the "I'm Feeling Lucky" button to go straight to the top hit, then Wikipedia rules. Carr, it turns out, has a more penetrating point than I thought. (On the other hand, he also has a vested interest in making this point since he's on the board of editorial advisors of Encyclopedia Britannica.)

I'm still not sure what to think about this, but my guess is that way more people use Google his way than mine. And although I'm a big fan (and defender) of Wikipedia, which I think is a miraculously useful reference tool considering how it's put together, I'm not quite sure how I feel if its hegemony in the search universe is really as complete as Carr suggests. So for now, I'm just passing this along.

Public Diplomacy

| Fri Jan. 23, 2009 2:06 PM EST

PUBLIC DIPLOMACY....Public diplomacy cheerleader Marc Lynch is unhappy over the news that Hillary Clinton may be about to choose an undersecretary of state for public diplomacy whose roots are in marketing, not statecraft. I won't pretend that this propsect gives me the same heartburn that it gives Marc, but I certainly agree with his basic criticism:

I don't know Judith McHale at all, and obviously have nothing against her personally. But the position of Under-Secretary for Public Diplomacy and Public Affairs should go to someone with experience in and a vision for public diplomacy, and who will be in a position to effectively integrate public diplomacy concerns into the policy-making process. Appointing someone with no experience in public diplomacy but with a resume which "involves selling a message" has already been tried: the first post-9/11 Under-Secretary of State for Public Diplomacy Charlotte Beers, whose tenure lasted only 17 months (October 2001-March 2003), focused on "branding" America through television advertising showing happy Muslim-Americans, and is generally considered to be an utter failure.

Actually, I think Marc is being too nice here. It hasn't just been tried once, it's been tried three times. After Charlotte Beers left, the position was briefly given to Margaret Tutwiler, who at least had a bit of diplomatic experience, but for the past four years it's been held first by Bush pal Karen Hughes, who was famously clueless about anything beyond the borders of the United States, and then by James Glassman, who was only marginally more qualified. Neither one of them had any serious overseas experience at all.

Maybe Judith McHale will be brilliant at the job. Who knows? We'll have to learn more about her. But it would sure be nice to get someone for this job who speaks a few languages, has spent a lot of time overseas, and doesn't think of the job as merely a branding exercise. Stay tuned.

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Infrastructure

| Fri Jan. 23, 2009 1:20 PM EST

INFRASTRUCTURE....Conservative wunderkind pollster Frank Luntz says he's amazed: Americans really, really want more spending on infrastructure, even if it means higher taxes:

Last month, I conducted a national survey of 800 registered voters on their attitudes toward infrastructure investment....The survey's findings were unlike any other issue I have polled in more than a decade.

....Fully 84% of the public wants more money spent by the federal government — and 83% wants more spent by state governments — to improve America's infrastructure. And here's the kicker: 81% of Americans are personally prepared to pay 1% more in taxes for the cause. It's not uncommon for people to say they'd pay more to get more, but when you ask them to respond to a specific amount, support evaporates.

....And Americans understand that infrastructure is not just roads, bridges and rails. In fact, they rated fixing energy facilities as their highest priority. Roads and highways scored second, and clean-water treatment facilities third.

And what impresses Luntz the most about all this? That even 74% of Republicans are willing to pay higher taxes to improve infrastructure.

The lesson here is one that won't be new to blog readers: economic stimulus is all well and good, but infrastructure is mainly a long-term commitment. It's fine to get it kick started in the current legislation — even at the risk of bits of it being a "muddled mixture" — but Obama should make it clear that this is something that will be properly planned, properly funded, and properly prioritized in the out years. That means fewer roads, but more transit, more electrical grids, and more wind farms. Right?

Stimulating China

| Fri Jan. 23, 2009 12:36 PM EST

STIMULATING CHINA....Ezra Klein explains why the Chinese government is setting up a universal healthcare plan:

The Chinese have a high savings rate — indeed, an absurdly high savings rate, between 30 percent and 40 percent of income — and one of the reasons is fear of medical expenses. China lacks a safety net, and so people spend less because they need to plan for catastrophe. And if catastrophe doesn't befall, then they've simply spent less. Which is a problem when you're facing down a potentially long recession. And so China is trying to make it safe for its citizens to spend, which means making future expenses more predictable, which means offering health care coverage.

That's certainly a unique reason for backing national healthcare, isn't it? But that's indeed what the linked NYT article says. I wonder if it will work?

Ledbetter Act Passes

| Fri Jan. 23, 2009 3:09 AM EST

LEDBETTER ACT PASSES....Good news on the pay discrimination front:

The Senate approved landmark worker rights legislation on Thursday that will make it easier for those who think they've endured pay discrimination to seek legal help. The vote was 61-36.

....The legislation overrides a May 2007 Supreme Court ruling that [Lilly] Ledbetter, a Goodyear Tire and Rubber Company employee in Gadsden, Ala., couldn't sue her employer for pay discrimination because she didn't file suit within 180 days of the alleged discriminatory act.

McClatchy, naturally, doesn't bother to tell its readers the party breakdown of the vote, but it's actually an interesting one: all 56 voting Democrats supported the bill, and five Republicans joined in. Which ones? Arlen Specter plus all four of the women in the GOP caucus. Imagine that.

A Day at the Office

| Thu Jan. 22, 2009 10:44 PM EST

A DAY AT THE OFFICE....When I read that Merrill Lynch CEO John Thain had spent $1.2 million redecorating his office, my first thought wasn't, "What a moron." (That was second.) It was, "How can you spend that much on one room? Solid gold wall sconces? Ashtrays carved out of moon rocks? What?" Luckily for me, Charlie Gasparino has the answer:

The biggest piece of the spending spree: $800,000 to hire famed celebrity designer Michael Smith, who is currently redesigning the White House for the Obama family for just $100,000.

The other big ticket items Thain purchased include: $87,000 for an area rug in Thain's conference room and another area rug for $44,000; a "mahogany pedestal table" for $25,000; a "19th Century Credenza" in Thain's office for $68,000; a sofa for $15,000; four pairs of curtains for $28,000; a pair of guest chairs for $87,000; a "George IV Desk" for $18,000; six wall sconces for $2,700; six chairs in his private dining room for $37,000; a mirror in his private dining room for $5,000; a chandelier in the private dining room for $13,000; fabric for a "Roman Shade" for $11,000; a "custom coffee table" for $16,000; something called a "commode on legs" for $35,000; a "Regency Chairs" for $24,000; "40 yards of fabric for wall panels," for $5,000 and a "parchment waste can" for $1,400.

Impressive! But it doesn't add up to $1.2 million. It adds up to $1.3 million just for these 19 items alone, and there were probably plenty of smaller ticket nicknacks too. Plus labor — unless that's included in Smith's fee. Probably not, I suppose, which means this monument to American capitalism must have run at least a couple million bucks. The Sun King would have been proud.

And my third question? That's easy: "Who leaked this?" Most probable answer: BofA chief Ken Lewis, the guy who fired Thain, in an effort to keep attention focused on his scapegoat of the hour. Good luck with that, Ken.