Kevin Drum

Does GE Capital's Demise Mean Financial Reform Is Working?

| Sat Apr. 11, 2015 8:32 PM EDT

Interesting post today from Paul Krugman about the shadow banking system and GE's recent decision to get out of the finance biz:

GE Capital was a quintessential example of the rise of shadow banking. In most important respects it acted like a bank; it created systemic risks very much like a bank; but it was effectively unregulated, and had to be bailed out through ad hoc arrangements that understandably had many people furious about putting taxpayers on the hook for private irresponsibility.

Most economists, I think, believe that the rise of shadow banking had less to do with real advantages of such nonbank banks than it did with regulatory arbitrage — that is, institutions like GE Capital were all about exploiting the lack of adequate oversight....So Dodd-Frank tries to fix the bad incentives by subjecting systemically important financial institutions — SIFIs — to greater oversight, higher capital and liquidity requirements, etc.. And sure enough, what GE is in effect saying is that if we have to compete on a level playing field, if we can’t play the moral hazard game, it’s not worth being in this business. That’s a clear demonstration that reform is having a real effect.

Read the whole thing for more.

By the way: On the occasions when I come up for air and write blog posts, I'll probably mostly be doing stuff like this. That is, quick links to something interesting without much additional commentary.

The reason is fatigue, which is nearly everpresent these days. Physically, this is a nuisance, but not much more. Mentally, though, it's worse, because it leaves me without the—what's the right word? Cognitive will? Cognitive ability?—to really think hard about stuff. And without that, I can't blog much even though typing is, obviously, not a very physically demanding activity.

Still, I continue to keep up as best I can, and I really love to blog. I won't quite say that being unable to blog is the worst part of this whole chemotherapy thing, but it's close. I just hate having ideas about the stuff I read but being just a little too foggy to really be sure of my ability to say something useful and coherent about it. So I'll continue pointing out items that interest me, but mostly leaving it at that.

In case you're curious, I use crossword puzzles as a sort of rough guide to my mental fatigue level. This afternoon, for example, I finished one. Hooray! That means I'm at least moderately alert. However, it was a Thursday puzzle1 and it took me about three hours to finally get through it. That's not so great. But who knows? Maybe it was just unusually hard. I'll try another one tonight.

1For those of you who aren't into crossword puzzles, the New York Times puzzle gets harder as the week progresses. A Thursday puzzle is a bit of a challenge, but usually not a big one. Good solvers can finish them in 5-10 minutes. For me, it's usually 15-30 minutes. Three hours is well outside my usual range.2

2Hmmm. On the other hand, maybe this wasn't my fault. I just checked, and the name of the third baseman in Abbott & Costello's "Who's On First?" sketch is indeed "I don't know." I kept trying to fit that in somewhere, but the answer in the puzzle was "Tell me something." Where did that come from?3

3Meh. While I was falling asleep I figured out where I'd gone wrong. The full NYT answer was "Tell me something I don't know." Perfectly correct. I just wasn't alert enough to figure it out.

Advertise on MotherJones.com

Never Mind the Doubters: The Iran Deal Is Good Enough

| Sat Apr. 11, 2015 9:12 AM EDT
Iranian Foreign Minister Javad Zarif applauds after the conclusion of nuclear talks in Switzerland.

While Kevin Drum is focused on getting better, we've invited some of the remarkable writers and thinkers who have traded links and ideas with him from Blogosphere 1.0 to this day to contribute posts and keep the conversation going. Today we're honored to have Cheryl Rofer, who for 35 years worked as a chemist at Los Alamos National Laboratory. If you don't follow her already, be sure to check out her writing on national security, women's issues, science, and nuclear power and weapons at Nuclear Diner.

When I started blogging in November 2004, Kevin was already defining the field with short, topical posts and Friday Cat Blogging. The internet was a smaller place then, and most of us knew all the others, or at least knew of them. We argued. We linked to each other, hoping to boost our SEO. We shared each others' successes and mourned when Inkblot disappeared. Kevin has been a good companion over the years. His broad coverage of topics and to-the-point style are touchstones, even as I stray into the wonkier corners of the news.

Recently, I've been writing a lot about the recent negotiations with Iran. A few days past a deadline that had nuclear wonks on the edge of their seats, the talks between Tehran and officials from six other nations brought forth a plan for a plan.

That's not nothing, although it sounds vague. Some vagueness is necessary to keep all sides happy—and that means that any description of the deal will sound vague. The United States and its partners in the P5+1 would like a neatly written-down to-do list (which they have sorta provided), and Iran's Supreme Leader has decreed that all must be written down just once—exactly when isn't yet clear. The results of negotiations must be spun by the sides to their very different bases.

In America, two consensuses are building. Most in the arms control community and a wide swath of foreign policy experts, including some conservatives, feel that the deal as described in that fact sheet is better than expected and should keep Iran from getting a nuclear weapon for the next decade or more. Not bad.

The more hawkish consensus ranges from bombing Iran now to leaving the talks in hopes of a better deal, which amounts to bombing Iran later. Why not, when you're confident it would take only a few days of air strikes? They say the deal is no good because it does not guarantee Iranian compliance for perpetuity and does not totally destroy Iran's enrichment and other nuclear capabilities. Israel's Benjamin Netanyahu is apoplectic, but what else is new?

The same hawks also assured us back in 2003 that the invasion of Iraq would be a cakewalk. Their arguments this time around are just as boneheaded. According to the fact sheet, Iran would enter into agreements with the International Atomic Energy Agency under the Nuclear Nonproliferation Treaty; that would be, as much in perpetuity as any international deal can be. Under that treaty, Iran is entitled to peaceful nuclear energy, and, like any other country with smart scientists, can figure out how to make nuclear weapons. Bombs can't change that.

The final deal remains to be negotiated. The fact sheet is only an outline, and some issues will be easier to solve than others. Still to be worked out: Sanctions, particularly the schedule on which they are to be lifted. A list of research and development activities that Iran is allowed to pursue may or may not have been drawn up in Lausanne. Details on how Iran's enriched uranium stockpile will be reduced and the redesign of the Arak reactor are missing.

The extent of Iran's past activity on nuclear weapons was relegated to the IAEA by the P5+1 throughout the negotiations, and is a lesser provision in the fact sheet. Do we have to know all Iran's dirty secrets to police a future agreement? Probably not.

The Supreme Leader issued a tweet stream that seems to give his blessing for a deal to go forward, but his words were unclear enough that domestic hardliners could seize on them in an attempt to scuttle the deal. Iran's President Rouhani has voiced his support. In Israel, even the general who bombed the Osirak reactor thinks it's a good deal.

Stateside, President Obama is doing what he can to move the agreement along, talking to Sen. Bob Corker (R-Tenn.), the author of the bill most likely to throw a wrench in the machinery. Democrats who once supported that bill are now reconsidering that stance. The President has given major interviews to Tom Friedman and NPR. Secretary of Energy Ernest Moniz, who was part of the negotiations, is talking to the press.

Yes, if the sanctions are lifted, Iran might be able to make other sorts of trouble in the Middle East. But it's doing that anyway. We won't know for some time whether an agreement can mellow Iran by opening it to the world and better economic conditions.

If an agreement can be negotiated to completion, Iran can't get the bomb for a decade or more. That's enough for now.

Bonus Friday Cat Blogging - 10 April 2015

| Fri Apr. 10, 2015 12:00 PM EDT

Quick health update: the stem cell collection went swimmingly this week. We now have loads and loads of fresh stem cells frozen and waiting for me when I go back for the final stage of chemotherapy. I got home yesterday, and at the moment I'm still fighting off some residual drowsiness from a week full of fairly powerful painkillers, but I've stopped taking them now and should be fine in a day or two. I hope.

The cats are fitting in nicely at my sister's house. Last night they woke her up at 3 am to play, which is certainly a good sign. We have two pictures of the furballs this week. On the top is Hilbert, caught in the act of knocking over (1) Big Ben and (2) the Eiffel Tower from the top of a bookcase. On the bottom, both Hopper and Hilbert are staring intently at the front door even though nothing is there. But you never know. There might be something there any second. Best to keep one's eyes peeled, no?

Hillary Clinton Is Focusing on the Middle Class—And That's a Good Thing

| Fri Apr. 10, 2015 11:30 AM EDT

Matt Yglesias takes a look at an economic blueprint from the Center for American Progress and suggests it's a useful proxy for Hillary Clinton's upcoming presidential campaign:

In some ways, it defies stereotypes of the Clintons as standard-bearers for neoliberal centrism by endorsing fiscal stimulus and a strong pro-labor union agenda while downplaying the strong education-reform streak of the Obama administration. But it's also notable for the Obama-era liberal ambitions it pushes aside. In the main recommendations for the United States, there's no cap-and-trade or carbon tax in here, no public option for health care, and no effort to break up or shrink the largest banks. Nor is there an ambitious agenda to tackle poverty.

Instead, you get a multi-pronged push to boost middle-class incomes. After an extended period in which Democratic Party politics has been dominated by health care for the poor, environmental regulation, and internecine fights about Wall Street, Hillarynomics looks like back-to-basics middle-class populism. It should in many ways further infuriate Clinton's left-wing intellectual critics — and then further infuriate them by turning out to be an agenda that makes the party's voting base perfectly happy.

....The report is especially striking for its endorsement of labor market regulations not normally associated with the Summers wing of Democratic thinking....On the non-wage front, inclusive growth calls for paid (gender-neutral) parental leave, expanded Family and Medical Leave Act eligibility, and universal paid sick days and paid vacation days — all loosely under the banner of increasing women's labor force participation. Clinton has, in the past, field-tested feminist frames as a means of selling big government.

None of this should come as a surprise. The Great Recession spawned a great deal of government help to the poor from the Obama administration but not a lot for the middle class, and politically the biggest problem Democrats now face is offering concrete programs for the middle class to compete with yet another round of tax cut proposals from the Republican field.

But the truth is that this helps the poor too, in the long run. Middle-class workers with stagnant incomes have become less and less willing to support more spending on the poor. That's just human nature. But if Hillary can successfully get the economy into a higher gear and funnel some of that money to the middle class, eventually things will ease up and it will become easier to win support for higher benefits to the poor.

I don't know if Hillary's proposals will go far enough, but they're the right thing to do. For the time being at least, Washington needs to focus on the middle class for a while.

Even If Walter Scott's Family Wins in Court, the Cop Won't Pay a Dime

| Fri Apr. 10, 2015 9:45 AM EDT
Anthony Scott holds a photo of himself, center, and his brothers Walter Scott, left, and Rodney Scott, right, at his home near North Charleston, S.C., April 8, 2015.

The family of Walter Scott, the man who died on Saturday after being shot eight times by North Charleston police officer Michael Slager, has decided to sue Slager, the city of North Charleston, and its police department. The civil lawsuit, which will seek damages for wrongful death and civil rights violations, follows murder charges already filed against the now-dismised officer.

Scott's family is hardly the first to seek civil damages after a police killing. In recent months, relatives of Mike Brown, Tamir Rice, and Eric Garner have all pursued civil court claims, where success isn't contingent on a criminal ruling against any police officer. But in the event that the Scott family wins a settlement, it's highly unlikely that Slager himself will have to pay. As I reported in January:

Instead, taxpayers will shoulder the cost. Between 2006 and 2011, New York City paid out $348 million in settlements or judgments in cases pertaining to civil rights violations by police, according to a UCLA study published in June 2014. Those nearly 7,000 misconduct cases included allegations of excessive use of force, sexual assault, unreasonable searches, and false arrests. More than 99 percent of the payouts came from the city's municipal budget, which has a line item dedicated to settlements and judgments each year. (The city did require police to pay a tiny fraction of the total damages, with officers personally contributing in less than 1 percent of the cases for a total of $114,000.)

This scenario is typical of police departments across the country, says the study's author Joanna Schwartz, who analyzed records from 81 law enforcement agencies employing 20 percent of the nation's approximately 765,000 police officers. (The NYPD, which is responsible for three-quarters of the cases in the study, employs just over 36,000 officers.) Out of the more than $735 million paid out by cities and counties for police misconduct between 2006 and 2011, government budgets paid more than 99 percent. Local laws indemnifying officers from responsibility for such damages vary, but "there is little variation in the outcome," Schwartz wrote. "Officers almost never pay."

Schwartz's study did not include North Charleston or any other law enforcement agency in South Carolina. But if other jurisdictions serve as any indication, Slager likely won't pay a dime, even if a jury finds him guilty of murdering Scott. Out of the 7,000 cases of police misconduct Schwartz studied, only 700 officers were convicted of a criminal charge. And only 40 officers ever contributed to a civil settlement out of their own pocket.

Finally, a Candidate for People Who Think Jeb Bush Isn't WASPy Enough

| Thu Apr. 9, 2015 1:56 PM EDT
Tanned. Tested. Ready. Chafee.

Last week it was Ted Cruz. On Wednesday it was Rand Paul. And now, meet your newest presidential candidate: former Rhode Island Republican senator turned former Rhode Island Democratic governor Lincoln Chafee! Bet you didn't see that one coming.

Rhode Island Public Radio reported the news this morning:

Chafee said the launch of his exploratory committee will be made via videos posted on his website, Chafee2016.com.

"Throughout my career, I exercised good judgment on a wide range of high-pressure decisions, decisions that require level-headedness and careful foresight," said Chafee. "Often these decisions came in the face of political adversity. During the next weeks and months I look forward to sharing with you my thoughts about the future of our great country."

Lincoln Chafee, of the Rhode Island Chafees, won't be the next president, although he does enter the Democratic primary with strong name recognition among people who use "summer" as a verb. Chafee's father, great-great grandfather, and great-great uncle all previously served as governor of the state. Lincoln ran for the family seat only after losing his spot in the Senate in 2006 to Sheldon Whitehouse (of the Rhode Island Whitehouses), whose father had roomed with Chafee's father at some college in New Haven before entering the diplomatic corps (like his father before him).

But there is something worth highlighting in his announcement interview:

Chafee said his focus will be on building a strong middle class coupled with environmental stewardship. Chafee, who voted against former President George W. Bush's Iraq War, noted that Mrs. Clinton voted for it. He said he aims to send a clear message that "unilateral military intervention has damaged American interests around the world."

Did you catch that? It's easy to forget now that she's the email-destroying, dictator-courting villain of Benghazi, but there was a time when Hillary Clinton's biggest weakness was something else entirely: Iraq. Clinton's support for that war (and her inability to assuage its opponents) was the fuel for Sen. Barack Obama's rise in the polls in 2007. Eight years later, the issue has been all but erased from the political debate.

Don't bet on Chafee being the man who brings it back.

Advertise on MotherJones.com

These Maps Show Why We Keep Electing Climate Change Deniers

| Thu Apr. 9, 2015 5:45 AM EDT
Sen. James Inhofe (R-Okla.) uses a snowball to disprove global warming.

One of the most significant obstacles to addressing climate change is the fact that huge numbers of US politicians reject the overwhelming scientific consensus that humans are warming the planet. Why does the situation persist? How can a senator who (literally) holds up a snowball as evidence that global warming is a hoax keep winning reelection? How can someone who declares himself a climate "skeptic" be a front-runner for the GOP presidential nomination? As newly released research from the Yale Project on Climate Change Communication makes painfully clear, GOP climate deniers actually hold views that are quite similar to those of the voters who elect them.

The Yale research is based on data from more than 13,000 survey responses since 2008. It estimates that nationwide, just 48 percent of people agree with the scientific consensus that global warming is caused "mostly" by humans. While other recent polls have found a somewhat higher percentage who say they believe humans are causing the planet to warm, Yale's numbers are not a good sign for those—like billionaire activist Tom Steyer—who are trying to turn climate change denial into a disqualifying political position.

Things look even more discouraging when you use the researchers' snazzy interactive maps to break down the estimates by congressional district. The blue districts on the map below are places where the researchers' statistical model predicts that fewer than half of respondents believe that humans are primarily responsible for climate change. Yellow/orange districts are places where at least half of respondents accept the scientific consensus. As you can see, there's an awful lot of blue—according to the data, 58 percent of US congressional districts have majorities that don't accept the climate science.

congressional districts
Yale Project on Climate Change Communication

The margin of error on the data makes it impossible to rank with certainty the districts with the most climate denial. Still, the two darker blue portions on the map are noteworthy—these are the only congressional districts in the country in which under 40 percent of residents are estimated to accept the scientific consensus. Texas' 1st District (where 38 percent believe the science) is represented by Louie Gohmert, a Republican who thinks that the world "may be cooling" and that the rising level of carbon dioxide is a good thing because it will mean "more plants." Alabama's 4th District (39 percent believe climate science) is represented by Republican Robert Aderholt, who has argued that "Earth is currently in a natural warming cycle rather than a man-made climate change." And it's hard to see on the map, but California's 12th District has the highest percentage of residents projected to believe that humans are causing climate change—65 percent. That district is in San Francisco, and it's represented by House Democratic Leader Nancy Pelosi.

Adding elected officials' party affiliations to the Yale data makes it clear that these aren't simply one-off examples: In the average district with a Democratic member of Congress, 54 percent of adults believe humans are largely responsible for global warming; in the average GOP-controlled district, less than 46 percent agree.

Similar patterns exist at the state level:

state map
Yale Project on Climate Change Communication

In Oklahoma—home to snowball-wielding climate denier Sen. James Inhofe—just 44 percent of residents believe humans cause global warming, according to the researchers' estimates. The same is true in Kentucky, which is represented in the Senate by Republican presidential hopeful Rand Paul. Paul has said that he's "not sure anybody exactly knows why" the climate is changing.

One final note: Take a look at the early presidential primary and caucus states—Iowa, New Hampshire, South Carolina, and Nevada. According to the Yale data, none of these states have majorities that accept the scientific consensus. (Nevada, at 50 percent, is the best of the four.) And when you consider that Republican primary voters are far more hostile to climate science than the general population, there seems to be very little incentive for GOP presidential candidates to embrace the truth about global warming.

The GOP's Campaign to Make You Hate The IRS Is Kind of Genius

| Wed Apr. 8, 2015 3:46 PM EDT

People hate the IRS. Of course they do! When Pew Research asked people earlier this year how they feel about various parts of the government, every agency received positive marks—except the IRS. And last month, Rasmussen found that a scant 31 percent of voters trust the tax agency to fairly enforce the law. Let's face it: the agency tasked with taking money out of paychecks is never going to be popular.

But people have even more reason to despise encounters with the agency these days, thanks to a concerted effort by Republicans in Congress to slash the tax collector's budget. From the front page of today's Washington Post:

Since 2010, Republicans on Capitol Hill have slashed the IRS budget by $1.2 billion, or about 17 percent, adjusting for inflation. Just this fiscal year, $346 million was cut.

By contrast, cuts across the rest of the government have been far more modest and concentrated. Between 2012 and 2014, automatic spending reductions shrank non-defense spending, as adjusted for inflation, by 1.3 percent, while IRS spending was chopped 5.6 percent, according to Scott Lilly, a budget expert at the Center for American Progress.

Those budget cuts have made dealing with the IRS this tax season a true pain in the ass. As the Washington Post details, just four in ten callers to the IRS's help line are actually able to get assistance from a real human, while the number of unintentional hang-ups from an overworked phone system have ballooned. And the cuts are actually costing the government: thanks to a 5,000-person reduction in the agency's staff over the past four years, tax cheats can more easily skate by.

Attacking the IRS is one of the simplest lines a politician can roll out. It's a favorite rhetorical turn for presidential candidate and senator Ted Cruz, who's said he'd like to "abolish the IRS, take all 125,000 IRS agents and put them on our southern border," to applause at this year's CPAC.

Meanwhile, Democrats are wary about offering an equally vocal defense of the IRS, hesitant to be tarred as just typical tax-and-spenders. Sure, President Obama has included increases for the agency in his congressional budget requests, but it's never been a major issue that he'd consider wielding his veto pen over. But without a more robust defense, the IRS could wither away and replace the DMV as a punch line for why government doesn't work.

Let the 2016 Presidential Poster Wars Commence!

| Wed Apr. 8, 2015 9:20 AM EDT
Michael Mechanic

Is this the first salvo in the 2016 presidential campaign poster wars? This past week, somebody plastered this poster—guerilla style—at well-trod locations around San Francisco.

What was the artist thinking? Was this a subtle jab at Cruz's hubris or a bona fide attempt to promote the guy—or just a cool design? I could see it psyching up the GOP base in Kevin's Orange County stomping grounds. But in San Francisco? Only 13 percent of this city voted for Romney. A Ted Cruz fan hoping to boost the Texas senator's presidential hopes would be wasting his time posting these around here—even if they are pretty cool looking.

Maybe the message was meant to reach rich tech libertarians who have moved north from Silicon Valley and might be game to donate. You know, the crew who admire Ron and Rand Paul and seem to have forgotten that the tech industry was built on massive government funding. Then again, given Cruz's head-scratching position against net neutrality—he's called it "the biggest regulatory threat to the internet"—he's not likely to get much love from the tech world. Even the Obama-haters on Cruz's Facebook page had to ridicule his position.

My favorite Cruz poster to date went up last March around Beverly Hills, where Cruz was slated to appear at the annual dinner of the conservative Claremont Institute. (The artists, being artists, got the hotel wrong.) But Cruz was indeed, as the poster joked, "loving it." Here's what he tweeted:

I just hope Bernie Sanders, the left's favorite bomb thrower, decides to run. I'm dying to see what street artists will make of him. 

Arkansas Will Force Doctors to Tell Women Abortions Can Be "Reversed"

| Tue Apr. 7, 2015 4:37 PM EDT

As conservative lawmakers pass a record number of anti-abortion laws, it is staggering to consider how many require doctors to tell patients information that has no basis in science. Five states now require abortion providers to inform women about a bogus link between abortion and breast cancer. Several states mandate that doctors say ending a pregnancy can lead to mental health conditions like clinical depression—another falsehood, in the eyes of most mainstream medical groups.

Now there's a new crop of legislation to add this list: laws forcing doctors to tell women planning to take abortion-inducing drugs that they may be able to change their minds mid-treatment.

On Monday, Arkansas became the second state to pass such a law, just over a week after Arizona's Republican governor signed a similar measure. A spokeswoman for Americans United for Life, the legal arm of the anti-abortion movement, confirmed that both laws are based on the group's model legislation.

Critics have slammed these bills as propagating a lie based on "junk science." According to the American College of Obstetricians and Gynecologists (ACOG), "Claims of medication abortion reversal are not supported by the body of scientific evidence."

Americans United for Life has not only backed the bills, but has enthusiastically endorsed a new procedure pioneered by George Delgado, a pro-life doctor who claims to have reversed abortions.

Most drug-induced abortions require two pills taken a few days apart. The initial dose, of mifepristone, blocks the progesterone hormones that help sustain the pregnancy. The second dose, of misopristol, causes contractions that flush out the pregnancy. Delgado says he's stopped abortions by injecting supplemental progesterone between the two rounds of medicine. The evidence backing his discovery, however, is incredibly thin. As Olga Khazan writes for The Atlantic:

Women who only take the first pill already have a 30 to 50 percent chance of continuing their pregnancy normally, according to ACOG. The progesterone advice is based on a study by Delgado in which he analyzed six case studies of patients who regretted their abortions and were given progesterone. Four out of the six patients went on to deliver healthy infants. In other words, the limited evidence we have suggests that taking progesterone does not appear to improve the odds of fetal survival by much. The abortion pill binds more tightly to progesterone receptors than progesterone itself does, one reproductive researcher told Iowa Public Radio, and thus the hormone surge is unlikely to do much of anything.

As Cheryl Chastine, an abortion provider at South Wind Women's Center in Kansas, put it recently, "Even if these doctors were to offer a large dose of purple Skittles, they'd appear to have 'worked' to 'save' the pregnancy about half the time."

That's why, on the small chance that a woman does regret her abortion midway through, ACOG-affiliated doctors say they would simply tell her not to take the second pill.

The injections might not only be useless—large doses of progesterone can actually be dangerous: "There can be cardiovascular side effects, glucose tolerance issues, it can cause problems with depression in people who already had it," Ilana Addis, a gynecologist who opposed the Arizona measure, told The Atlantic. "And there are more annoying things, like bloating, fatigue, that kind of stuff. It's an unpleasant drug to take."

The new Arkansas law requires the state's health department to write up information on abortion reversal for doctors to make available to patients, and it's not yet clear if the health department will promote Delgado's specific method. Meanwhile, Arkansas Right to Life is already promoting the services of doctors who are "trained to effectively reverse" abortions, and more than 200 physicians around the country have told pro-life groups that they are willing to conduct the procedure.