Kevin Drum

Here's What Democrats Got Out of the Cromnibus

| Fri Dec. 12, 2014 10:30 AM EST

The worst part of the "cromnibus" spending bill was the provision that guts a small piece of the Dodd-Frank financial reform bill and allows banks to get back into the custom swaps business. So why did Democratic negotiators agree to this? In a long tick-tock published yesterday, Politico tells us:

During [] negotiations with House Appropriations Chairman Hal Rogers (R-Ky.), Barbara Mikulski (D-Md.), his Senate counterpart, agreed to keep the provision in exchange for more funding for the Commodity Futures Trading Commission and the Securities and Exchange Commission, according to aides.

OK. Democrats have been ambivalent about this particular provision of Dodd-Frank from the start, and therefore they were willing to cut a deal that allowed Republicans to repeal it. But what about the rest of the spending bill? Republicans got a bunch of venal little favors inserted, but what did Democrats get? Here's retiring Rep. Jim Moran:

In 20 years of being on the appropriations bill, I haven’t seen a better compromise in terms of Democratic priorities. Implementing the Affordable Care Act, there’s a lot more money for early-childhood development — the only priority that got cut was the EPA but we gave them more money than the administration asked for....There were 26 riders that were extreme and would have devastated the Environmental Protection Agency in terms of the Clean Water and Clean Air Act administration; all of those were dropped. There were only two that were kept and they wouldn’t have been implemented this fiscal year. So, we got virtually everything that the Democrats tried to get.

And here is President Obama:

The Administration appreciates the bipartisan effort to include full-year appropriations legislation for most Government functions that allows for planning and provides certainty, while making progress toward appropriately investing in economic growth and opportunity, and adequately funding national security requirements. The Administration also appreciates the authorities and funding provided to enhance the U.S. Government’s response to the Ebola epidemic, and to implement the Administration’s strategy to counter the Islamic State of Iraq and the Levant, as well as investments for the President’s early education agenda, Pell Grants, the bipartisan Manufacturing Institutes initiative, and extension of the Trade Adjustment Assistance program.

What's the point of posting this laundry list? Curiosity. Last night a reader sent a tweet to me: "Honest question: what do progressives get out of this? 'Govt not shutting down' not enough." I was stumped. I really had no idea whether Democrats had gotten anything in this bill, or if they were just caving in to a whole bunch of obnoxious Republican demands merely in exchange for keeping the government funded.

But as it turns out, Democrats did get a bunch of stuff they wanted. And of course, that's in addition to getting the government funded before Republicans take over Congress in January, which is worthwhile all by itself. We can each decide for ourselves whether Democrats got enough, or if they should have held out for a better deal, but they weren't left empty-handed.

So what I'm curious about is this: why are virtually no Democrats talking about this? As near as I can tell, there was literally no attempt to sell this compromise to the base, or to anyone else. As a result, the general feeling among progressives is simple: this bill was an unqualified cave-in from gutless Democrats who, once again, refused to fight back against Republican hostage taking. And as usual, Republicans won.

I understand that trying to defend a messy, backroom bill that trades some dull but responsible victories for a bunch of horrible little giveaways isn't very appealing to anyone. And who knows? Maybe Democrats were afraid that if they crowed too much about the concessions they'd won it would just provoke the tea party wing of the Republican party and scuttle the bill. The tea partiers were already plenty pissed off about the cromnibus, after all.

Still, shouldn't someone have been in charge of quietly making the progressive case for this bill? It wouldn't have convinced everyone, but it might have reduced the grumbling within the base a little bit. Why was that not worth doing?

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Torture Is Not a Hard Concept

| Thu Dec. 11, 2014 11:06 PM EST

Like all of us, I've had to spend the past several days listening to a procession of stony-faced men—some of them defiant, others obviously nervous—grimly trying to defend the indefensible, and I'm not sure how much more I can take. How hard is this, after all? Following 9/11, we created an extensive and cold-blooded program designed to inflict severe pain on prisoners in order to break them and get them to talk. That's torture. It always has been, and even a ten-year-old recognizes that legalistic rationalizations about enemy combatants, "serious" physical injury, and organ failure are transparent sophistry. Of course we inflicted severe pain. Moderate pain would hardly induce anyone to talk, would it? And taking care not to leave permanent marks doesn't mean it's not torture, it just means you're trying to make sure you don't get caught.

Christ almighty. Either you think that state-sanctioned torture of prisoners is beyond the pale for a civilized country or you don't. No cavils. No resorts to textual parsing. And no exceptions for "we were scared." This isn't a gray area. You can choose to stand with history's torturers or you can choose to stand with human decency. Pick a side.

Here's the Ugly Side of Bipartisanship

| Thu Dec. 11, 2014 2:36 PM EST

Dylan Matthews, after running down all the obnoxious amendments to the omnibus spending bill currently wending its way through Congress, wonders aloud if it's still worth supporting:

If you're Barack Obama, or a liberal Democrat generally, most of these riders are setbacks, in some cases significant ones. Indeed, Obama's condemned the Dodd-Frank and campaign finance provisions. He could, in theory, reject the deal and demand that Congress send him a bill without changes to Dodd-Frank, or one that doesn't meddle in DC's affairs, etc. And yet he has come out in favor of House passage of the bill.

Is he making a massive mistake?

This is one of those things that demonstrates the chasm between political activists and analysts on the one side, and working politicians on the other. If you take a look at the bill, it does indeed have a bunch of objectionable features. People like me, with nothing really at stake, can bitch and moan about them endlessly. But you know what? For all the interminable whining we do about the death of bipartisanship in Washington, this is what bipartisanship looks like. It always has. It's messy, it's ugly, and it's petty. Little favors get inserted into bills to win votes. Other favors get inserted as payback for the initial favors. Special interests get stroked. Party whips get a workout.

That's politics. The fact that it's happening right now is, in a weird sense, actually good news. It means that, for a few days at least, politics is working normally again.

I understand that this sounds very Slatepitchy. But it's true. Even at its best, politics is lubricated by venality, ego, and mutual backscratching. And you know what? By the normal standards of this kind of stuff, the obnoxious riders in the current spending bill are pretty mild. Really. The only one that rises above the level of a political misdemeanor is the provision that allows banks to get back into the custom swaps business, and even that's hardly the end of the world. Swaps may have provided a tailwind to the 2008 financial collapse, but they were far from its core cause.

So should working politicians avert their gaze from the muck and vote to keep the government functioning? Of course they should. Government shutdowns are immensely costly in their own right, after all. This kind of crass calculus sucks, but that's human nature for you. All things considered, I'd say we all got off fairly easy this time around.

Things Are Finally Looking Up For the American Economy

| Thu Dec. 11, 2014 10:53 AM EST

Neil Irwin says the American economy is now firing on all cylinders:

Total retail sales rose 0.7 percent in November, as holiday shopping began, and that came despite a sharp tumble in gasoline prices that reduced the dollar value of sales at gas stations by 0.8 percent. Analysts had expected a rise of only 0.4 percent.

....The November retail sales number could well be a fluke. But only 11 days into December, here is a partial list of readings on the economy that have handily beat already-strong analyst forecasts: Institute for Supply Management’s survey of manufacturing firms; its survey of nonmanufacturing firms; motor vehicle sales; construction spending; job growth; wage growth; and now retail sales. The only major piece of data that has been disappointing was a negative report this week on factory orders, a volatile series of data.

I'm not quite as excited by the wage growth number as Irwin, but it's true that recent economic news has been distinctively more positive than in the past. As usual, my biggest worry is whether weakness in Europe and China is going to derail things, and it's too early to tell just how serious a concern that is. For now, though, things are finally looking up. Huzzah.

Don't Count Out Rick Perry. He's a Better Candidate Than He Was in 2012.

| Thu Dec. 11, 2014 10:32 AM EST

From Rick Perry, asked if he's smart enough to occupy the Oval Office:

Running for the presidency’s not an IQ test.

Boy howdy, we've proven that quite a few times, haven't we? In any case, I'm genuinely interested in Perry's candidacy. Back in 2012, when he first got into the race and was being lauded as practically unbeatable, I wrote a post listing the top ten reasons that Perry was weaker than everyone thought. For reference, here's the nickel version of the list:

  1. Everyone looks good before they get into the race.
  2. He's too Texan.
  3. He's too mean.
  4. He's too dumb.
  5. He's too smarmy.
  6. He's too overtly religious.
  7. Policywise, he's too radical, even for Republicans.
  8. Despite conventional wisdom, about half of the GOP rank-and-file aren't tea party sympathizers.
  9. Perry's campaign is going to be heavily based on the "Texas miracle."
  10. Republicans want to beat Obama. They really, really want to beat Obama. Romney is still their best chance.

Obviously #1 is no longer a factor. Perry has run before, and expectations this time around are suitably modest. And #10 doesn't apply this year. Of the remaining eight, I'd say he's rather noticeably working to soften #2, #3, #4, #6 (maybe), and #7. And this in turn also means he's trying to reach out beyond his tea party base (#8). In other words, he seems to be keenly aware of the weaknesses that got my attention in 2012 and is explicitly trying to overcome them.

Does this mean he can win this time around? Not at all, and for various reasons I'd still bet against him. But despite the fact that his star has waned compared to 2012, I'd say his chances are actually better this time around. After all, he's still a very savvy politician—and although I don't know how high his IQ is, it's high enough. If he's got the self-discipline to stick to his reinvented self and not make any dumb mistakes, he could be formidable in the Republican primaries next year.

It's a Miracle! Spending Bill Contains Virgin Birth Provision.

| Wed Dec. 10, 2014 5:32 PM EST

Our new $1 trillion spending bill1 contains a provision that allows donors to give ten times more money to political parties than in the past. This may or may not be a good thing. Jonathan Bernstein, for example, tells us that some experts on campaign finance consider formal party organizations (as opposed to independent Super PACs) to be "a force for pragmatism and against extremism." So more money flowing in that direction might be a net benefit.

Fair enough. But check out the third paragraph of the Washington Post's writeup:

Neither party’s leaders in Congress would claim responsibility for inserting the new provision, which was tucked into the final pages of the more than 1,600-page spending bill on Tuesday evening.

The bare minimum we should expect in an alleged democracy is to know where our laws come from and who sponsored them. Instead, our two major parties, which are normally at each others' throats like rabid dogs, regularly connive to produce the legislative version of a virgin birth whenever the subject is something that benefits politicians themselves. This happens again and again, and it's ridiculous. If Mitch McConnell is truly dedicated to a transparent Senate, how about putting a stop to this nonsense when he takes over next year?

1In case you've been vacationing on Mars, this bill is affectionately known as the Cromnibus, a mashup of CR (continuing resolution) and omnibus. That's because it's an omnibus spending bill that funds lots of agencies in one swoop, but for one particular agency it's merely a short-term continuing resolution. That one agency is Homeland Security, and they get only a CR for now because Republicans consider this a kind of revenge against President Obama for his recent executive order on immigration. Welcome to kindergarten.

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Here's a Bipartisan Victory For Better Health Care

| Wed Dec. 10, 2014 1:17 PM EST

One of the biggest problems with modern medical research is the way that clinical studies are publicly reported by pharmaceutical companies. Basically, if a study shows a positive result, they publish it. If it shows a null or negative result, they often just file it away and no one ever hears about it.

Here's what this means. If, say, a pharmaceutical company publishes two clinical studies showing that its new drug works better than any previous drug, no one has any idea what this means. Did they do two studies, and they were both positive? Or did they do ten studies, and two were positive compared to eight that were negative? If it's the latter, then the new drug is probably not so great. But you have no way to know. No one knows.

This is not merely a bug in the system. It's pretty much flat out corruption and scientific malpractice. Nor is it purely an academic concern. A few years ago, Irving Kirsch of Hull University used the Freedom of Information Act to demand full trial data about antidepressants from the FDA. This gave him access to all the relevant clinical studies, not just the ones that pharmaceutical companies had chosen to make public. And when his team examined them all, it turned out that the average effectiveness of several popular antidepressants was close to zero. For patients with moderate depression, the drugs were essentially no better than a placebo.

So I was delighted to learn this weekend about one doctor's campaign to change this. And even more delighted to learn from Vox's Julia Belluz that Deborah Zarin's efforts are finally bearing fruit:

For over a decade, Dr. Zarin, a Harvard-trained MD, [...] has earned a reputation as a crusader for open data, quietly presiding over the world's largest database of clinical trials, ClinicalTrials.gov. Established in 2000, and operated by the NIH, it now holds information from more than 180,000 studies in humans in over 180 countries.

The idea underlying ClinicalTrials.gov's creation was a public record about which trials are going on as soon as they are started. That should, in theory, make it more difficult for researchers to hide trials that didn't produce the results they wanted. The database also makes it easier for patients to know about studies being done, should they require access to an experimental drug, for example.

But there was still a problem: ClinicalTrials.gov, up until now, hasn't required researchers to report the outcomes of their trials — only the fact they're happening. Under a new plan, proposed by Health and Human Services last month, researchers who run clinical trials would be made to not only register them on the database within three weeks of signing up the first study participant, but also report a summary of results — no matter the outcome. This will vastly expand the trove of data on the site.

It turns out there are some exceptions in the new rules, so there are still some studies that won't be reported. But this is nonetheless a huge step forward and should go a long way toward improving the quality of pharmaceutical research. It's the kind of regulatory change that doesn't get as much attention as it deserves, and for fans of functional government, it's also an example of the kind of bipartisan cooperation that's become rarer and rarer these days. The new rules were authorized by the Food and Drug Administration Amendments Act of 2007, which was passed nearly unanimously in both the House and Senate and signed into law by George Bush. It was then implemented by the Obama administration.

And it's good news for all of us. Don't you wish we could do more stuff like this?

Is It Only Torture When Other People Do It?

| Wed Dec. 10, 2014 11:22 AM EST

I know I shouldn't spend my time responding to stuff like this. I know it. But I just can't stand it. Here is torture advocate Andrew McCarthy writing at National Review:

Here is a thought experiment I have been using for many years as we’ve debated this topic....If you take everyone in America who is serving a minor jail sentence of say, 6 to 18 months, and you [ask] them whether they’d rather serve the rest of their time or be waterboarded....how many would choose waterboarding? I am guessing, conservatively, that over 95 percent would choose waterboarding.

....So ignore the blather about how enhanced interrogation is “not who we are.”

Give him credit: there's no legalistic blather here. Just straight up advocacy of torturing enemy combatants. Full stop.

But here's a thought experiment for McCarthy. Suppose any other country in the world did what we did. Waterboarding. Sleep deprivation. Physical abuse. Stress positions. Rectal feeding. Nudity. Extreme heat and cold. All for months or years in an effort to turn prisoners into broken husks. Let's say that it was Putin's Russia or Khamenei's Iran, and the victims were American captives. What would you call it then? Enhanced interrogation?

I doubt it. You'd call it torture, and you'd loudly insist that it was barbaric and an act of war. And you'd be right. Or am I missing something?

Rich People Cheer As Republicans Cut IRS Budget

| Wed Dec. 10, 2014 10:11 AM EST

Steve Benen points me to the last paragraph of today's Washington Post story about our shiny new $1 trillion spending package:

At domestic agencies, the EPA’s budget would be cut by $60 million, and the IRS would lose $345.6 million. The nation’s tax agency also would be banned from targeting organizations seeking tax-exempt status based on their ideological beliefs.

Isn't that great? Republicans loathe the EPA as an engine of economic destruction that's dedicated to destroying the coal industry, shredding the Fifth Amendment, and regulating American corporations into bankruptcy. But even at that, they only lost $60 million. The IRS, by contrast, lost six times as much.

I'm sure the public justification is punishment for the IRS's supposed targeting of conservative tea party organizations. But in fact, this is business as usual. After being decimated for years following the Roth hearing witch hunts of the 90s, the IRS managed to slowly but steadily rebuild its enforcement staff during the aughts. Things had gotten bad enough that even George Bush was on board. Then Republicans took over Congress after the 2010 elections, and enforcement was once again targeted for cuts. In every year since then, the IRS budget has declined, enforcement staff has been cut, and audit coverage has gone down.

Why? It's simple: If the IRS budget gets cut, it means fewer audits of corporations and rich people. Any other questions?

It's Only Taken Us 5 Years to Forget the Single Biggest Lesson of the Financial Meltdown

| Tue Dec. 9, 2014 7:24 PM EST

Yesterday the Federal Housing Finance Agency issued new underwriting guidelines that allow some home buyers to take out mortgages with down payments as small as 3 percent. Dean Baker brings down the hammer:

The NYT misled readers about the relative risk from low down payment loans in an article on the decision by the government to allow Fannie Mae and Freddie Mac to purchase loans with just 3 percent down payments. The piece cited several commentators saying that the risk of defaults would not increase substantially by lowering down payment requirements.

A study by the Center for Responsible Lending found that the default rate for loans with down payments of between 3 to 10 percent was nearly 9 percent [correction: 6.8 percent]. This is more than 80 percent [45 percent] higher than the default rate it found for mortgages with down payments of 10 percent or more.

....It is dubious housing policy to encourage moderate income people to take out mortgages on which they are likely to default....I think it's great to help low and moderate income people get good housing. But this policy is about helping banks get their bad mortgages insured by taxpayers.

This decision by the FHFA is almost criminally myopic. After all, the go-go years that produced a towering housing bubble and then ended in an epic global financial meltdown are less than a decade in the past. Have we really forgotten so soon the primary lesson of these years?

For the record, here it is: If there was a single primary culprit in the collapse of the global economy, it was excessive leverage. It was embedded in exotic financial instruments. It was encouraged by weak banking regulations. It was exploited by traders and executives who all knew they could make a quick buck as long as the music kept playing. In the end, though, it turned Wall Street into a house of cards that didn't have the strength to withstand meaningful losses. When those losses finally, inevitably, materialized, the financial system collapsed.

But it's not just bank leverage that's a problem. Wall Street's most dangerous debt all originated with consumers, who had been relentlessly encouraged to take on ever more debt and ever more leverage for nearly a decade—mostly in the form of risky mortgages that were almost designed for failure thanks to down payment requirements that got steadily weaker as the housing bubble steadily inflated. If you make a 20 percent down payment, your leverage is 4:1. That's fine. If things go south, your house can lose a lot of value and you're still OK. (And so is your bank.) With a 10 percent down payment, your leverage is 9:1. That's more dangerous. But a 3 percent down payment? Now we're talking about leverage of 32:1. That's crazytown territory. Even a moderate setback can wipe you out completely. Put enough loans like that together and then lash them into leverage-soaked financial derivatives that no one truly understands, and a moderate setback can wipe out the entire financial system.

The FHFA's justification, of course, is that this 3 percent deal is only being offered to people with strong credit histories. But that's always how it starts, isn't it? The question is, where does it end?

Nowhere good. The single biggest lesson of the 2008 meltdown is that a strong financial system is built on a foundation of limited leverage. Limited leverage for everyone. Anything else is a foundation of sand. How can we have forgotten that so soon?