Kevin Drum

Shill, Baby, Shill

| Wed Mar. 31, 2010 12:24 PM EDT

Over at The Corner, Ilya Shapiro explains Barack Obama's U-turn on offshore drilling in terms that the conservative faithful can understand:

Recall that on the campaign trail in June 2008, candidate Obama declared that, “when I’m president, I intend to keep in place the moratorium here in Florida and around the country that prevents oil companies from drilling off Florida’s coasts.” (See video of that speech here.)

Today, however, President Obama announced plans to lift a 20-year moratorium on oil exploration and development in Atlantic coastal waters running from Virginia to Florida, as well as further activity off Florida’s Gulf Coast.

....To paraphrase John Maynard Keynes [...] the facts have been rammed down Obama’s throat and so he had the good sense to change his mind. Well done, Mr. President.

Jeez, are conservatives really this gullible? Yes, Obama opposed offshore drilling in the summer of 2008, but he then famously changed his tune just a few weeks later. I was there! I remember him doing it! I was even sort of annoyed at the time. In August he hinted at compromise and then, talking about energy strategy in September, he said, "And that means, yes, increasing domestic production and off-shore drilling." This comes via NBC's First Read, which also had to refresh its institutional memory on this subject.

Hey, we all cherry pick. I get it. But you can't claim that the Montgomery bus boycott was caused by the Civil Rights Act without getting laughed at, and you can't claim that "the facts have been rammed down Obama's throat" when his position was set 18 months ago and his interior secretary has been busily working on regs for the past year. Better spin, please.

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Preying on the Weak

| Wed Mar. 31, 2010 11:32 AM EDT

Over at the Washington Independent, Martha White has a good piece about tax preparers who prey on low-income filers by hard selling refund anticipation loans, which typically boast effective interest rates of anywhere from 50% to 1000%. The whole thing is worth reading, but here's an interesting tidbit:

The big appeal of these loans, the Woodstock Institute’s Rand points out, is the prospect of instant money. Already, taxpayers who e-file and elect to receive their refund via direct deposit generally get their returns within two weeks. If the IRS sped up its payments to taxpayers outside the mainstream banking system and allowed them to receive that money on a debit card similar to those used for other benefits, the appeal of RALs would be diminished. “These improvements the IRS could make would eliminate a need for refund anticipation loans,” Rand said.

Here's a guess: an awful lot of low-income taxpayer have simple returns that could be pre-filled out by the IRS. This isn't done today largely because of opposition from tax preparers, who don't want to lose any business. But guess what else they might lose: their RAL business. If you received a pre-prepared statement in the mail and could accept it with a simple phone call or e-filing, there's no reason the feds couldn't get refunds out within days. With no tax preparer pushing the loans, and refunds available quickly in any case, the entire shifty industry would be wiped out. And it would be wiped out by making government more efficient. Who could object to that?

Running to the Right

| Wed Mar. 31, 2010 10:51 AM EDT

As you may know, eBay zillionaire Meg Whitman is running for governor in California. She's been pretty assiduously avoiding reporters who might ask real questions, but she is running ads and giving speeches:

Whitman was asked by an attendee at a Redondo Beach campaign event whether as governor she would "force your attorney general to file suit" against the [healthcare] reforms, as more than a dozen attorneys general in other states have said they would.

"The answer to that is yes," said Whitman, drawing the most sustained, and loudest, applause of the hourlong event.

This is quite a campaign we're having. In a nutshell, nobody on the Democratic side really wants to run, so Jerry Brown is getting a free ride to an encore nomination. (Jerry Brown!) On the Republican side, we have two mega-rich candidates, Whitman and Steve Poizner, who, as near as I can tell, are basically fairly moderate conservatives. This, however, is completely unacceptable to California's GOP, so they've been spending tens of millions of dollars running ads with one purpose: to position themselves as heirs to Barry Goldwater and their opponent as more liberal than Nancy Pelosi. It's a pretty unedifying spectacle. And what makes it even worse is that despite the fact that they both have enormous trainloads of money to spend, they keep running the same damn ads over and over and over again. It's really boring.

But that's what it takes to win the admiration of California Republicans these days: faux pandering on idiotic questions like repealing healthcare reform, which Whitman knows perfectly well she can't do and wouldn't work even if she did. I can't wait for Poizner's response, which will probably try to paint her as a sellout for not demanding that California secede from the union if healthcare reform isn't repealed. It's only March, but the silly season is already well underway here.

Obama Opens Up the Coast

| Wed Mar. 31, 2010 12:38 AM EDT

Drill, baby, drill:

The Obama administration is proposing to open vast expanses of water along the Atlantic coastline, the eastern Gulf of Mexico and the north coast of Alaska to oil and natural gas drilling, much of it for the first time, officials said Tuesday.

....The proposal is intended to reduce dependence on oil imports, generate revenue from the sale of offshore leases and help win political support for comprehensive energy and climate legislation.

I guess this makes me a bad environmentalist, but I've never really had a big problem with opening up these offshore tracts as long as (a) the affected states are OK with it and (b) oil companies don't get sweetheart deals. But here's what I don't get. When it comes to energy, conservatives are crazy about two things: nuclear power and offshore drilling. Now Obama has agreed to both. But does he seriously think this will "help win political support for comprehensive energy and climate legislation"? Wouldn't he be better off holding this stuff in reserve and negotiating it away in return for actual support, not just hoped-for support? What am I missing here?

Quote of the Day: The Afghan Narco State

| Tue Mar. 30, 2010 10:02 PM EDT

From Alfred McCoy, on the fact that opium farming generates 50% of Afghanistan's GDP and supports 20% of its population:

To understand the Afghan War, one basic point must be grasped: in poor nations with weak state services, agriculture is the foundation for all politics, binding villagers to the government or warlords or rebels. The ultimate aim of counterinsurgency strategy is always to establish the state's authority. When the economy is illicit and by definition beyond government control, this task becomes monumental. If the insurgents capture that illicit economy, as the Taliban have done, then the task becomes little short of insurmountable.

That's from "The Opium Wars in Afghanistan," a brief history of the three Afghan wars of the past three decades.

Can Hilda Solis Revive the Labor Department?

| Tue Mar. 30, 2010 8:15 PM EDT

Nice piece by Esther Kaplan in The Nation about how Hilda Solis and her team are turning things around at the Department of Labor after nearly a decade of pro-business neglect:

Solis and her able deputies have inherited a Department of Labor in tatters. By the time they arrived in Washington, health and safety compliance had become all but voluntary, as had minimum wage and overtime pay. Within two months of taking office, Bush and his labor secretary, Elaine Chao, had rammed through Congress the repeal of a new ergonomics regulation that had been a decade in the making. "It was almost like PATCO [the Professional Air Traffic Controllers Organization] in terms of its symbolic importance," says NYCOSH director Joel Shufro, referring to Ronald Reagan's crushing of the union in 1981. "That sent employers a huge message." After that, the DoL didn't issue a single new regulation unless it was forced to by Congress or the courts.

....Facing badly depleted enforcement ranks, Solis hired 710 additional enforcement staff, including 130 at OSHA and 250 for the crucial wage-and-hour division, upping inspectors by more than a third. Another hundred will come on next year to staff a crackdown on the misclassification of millions of employees as "independent contractors" — a dodge to avoid paying taxes and benefits — a move that has set off enormous buzz on business blogs.

....[Labor Solicitor Patricia Smith is] known especially for her insight that, as Retail union organizer Jeff Eichler, who worked closely with Smith in New York, says, "to impact an entire sector had to involve working with groups outside the bureau." She used labor unions, churches and immigrant groups as her eyes and ears on the ground; they organized plaintiffs, served as liaisons with state investigators and translated big enforcement fines into long-term gains for workers by means of union contracts or sector-wide employer manuals.

In fact, it was these efforts to use community groups as a force multiplier that triggered a furious campaign by business front groups to block her nomination. Senator Enzi obtained reams of e-mails to produce an alarmist forty-page report about one small pilot program Smith had launched, Wage Watch, which trained community members to report wage violations. Conservative groups such as the Heritage Foundation and Americans for Limited Government piled on, the latter issuing an alert that if her concept went national, "it could turn tens of thousands of 'community organizers' into raving vigilantes." Nonetheless, at the new DoL, community partnerships are fast becoming standard operating procedure.

Actually, I sort of like the idea of roving bands of vigilantes turning in employers who mistreat their employees. Sounds like Solis and Smith are on the right track here.

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Immigration Reform and the Wingers

| Tue Mar. 30, 2010 4:04 PM EDT

Earlier this morning I mentioned that political issues usually stay fairly subdued until something happens to make them salient. Only a few wonks care about Social Security until the president proposes to privatize it. Healthcare stays on the back burner until the president proposes to reform it. Etc.

The hook for that post was immigration reform, and over at the Boston Phoenix David Bernstein says there's more to it:

I would add to that, that in today's conservative marketplace the rhetoric and anger boil up when it pays. Health care reform is a great example. Drum is only half-right when he writes that "Opposition to healthcare reform was mild until 2009, when Barack Obama turned it into an active issue." In fact, I would argue, opposition remained mild well after Obama started actively pushing it, and even as it moved well on its way toward nearly becoming law last summer.

Truth is, it's really not a core money-maker for the right. A year ago, or two years ago, conservative organizations couldn't raise a dime off it, and conservative radio shows couldn't keep listeners by talking about it — even when it became "active" last spring. But eventually they found ways to make it pay; the first to find a way to do it was Dick Morris, in his June bestseller Catastrophe, with the argument that Obama's health care plan would inevitably lead to rationing, meaning bureaucrats deciding which old people to let die; Sarah Palin then coined "death panels" and a thousand direct-mail solicitations were launched. Dick Armey and others swooped in for their piece of the profit, leading to the summer recess Townhall Meetings, and the ball was rolling.

Unlike healthcare reform, immigration/nativism always pays in the conservative marketplace — although Drum is quite right, that it doesn't pay nearly as well when there's nothing in the news about it. Nevertheless, last summer when I asked the head of a conservative direct-mail-funded organization what topics were money-makers for him and others in the business, his top answers were the old stand-bys of amnesty and English as the official language.

Among the hard core right-wingers, this is probably true — though they sure seem able to pivot mighty fast to pretty much any topic at all when they put their minds to it. But yeah: some topics are basically always on tap, just waiting for any old nudge to put them back into the fundraising rotation.

David then goes a bit further and suggests that this explains why Rahm Emanuel and Chuck Schumer plan to introduce immigration reform this year even though it has no chance of passing. Basically, they want to drive the tea party right crazy, thus helping to turn out lots of Hispanics in November to vote for Democrats. Very Machiavellian! And plausible, too.

Plastic Bags and Econ 101

| Tue Mar. 30, 2010 3:21 PM EDT

Via Matt Yglesias, WeLoveDC reports on the results of the District's new tax on plastic bags:

The District’s 5-cent bag tax, which started in January 2010, netted approximately $150,000 during its first month of enactment. According to the D.C. Office of Tax and Revenue, only 3 million bags were issued in the month of January compared to 2009’s 22.5 million bags per month average, and it appears that the new law DC shoppers has been successful in altering shopping bag habits faster than was expected.

Impressive! So why has a small charge been so effective? The actual amount of money involved is pretty tiny, after all. Some guesses:

  1. There's excellent substitutability here, since it's easy to reuse plastic bags a few times or switch to infinitely reusable cloth bags.
  2. People respond disproportionately to being charged for things they've been conditioned to think of as free.
  3. Green agitprop has put lots of people right on the knife edge of switching to resusable bags already, so a tiny nudge is all that was needed.
  4. There's a bit of an optical illusion here: Customers are still using plastic bags, but insisting that they be filled to bursting so they use fewer of them.
  5. Something else.
  6. All of the above.

A question for DCers: how does this tax work? That is, how does the cashier know how many bags to charge you for before all your groceries are bagged? Do they have to wait to finish ringing you up to see how many bags the bagger uses? Does that slow things down? Is that another incentive to bring your own bags?

Apropos of my reason #3, it didn't take much to get me to switch. About a year ago my local Gelson's started giving away cloth bags now and again and the checkers always ask if you have them before they start bagging. It was a tiny thing, but it was just enough to put it at the top of my mind and get me to bring my cloth bags with me when I went shopping. Sometimes a nudge is all you need.

Why Terrorists Fight

| Tue Mar. 30, 2010 1:30 PM EDT

This feels like a bit of a chestnut, but guess what? It turns out that conservatives are still yammering on about how Muslim jihadists hate us for our freedoms. And it's true, of course, that Sayyid Qutb was famously influential in the Arab world with his dire warnings about Western degeneracy — based largely on his visit to the lewd-n-lascivious America of the late 1940s. Oddly, though, jihadists remained pretty quiet for the next few decades anyway. Daniel Larison:

In fact, attacks on Americans and American installations began after we inserted ourselves into the region’s conflicts and began establishing a military presence there. Hegemonists can obsess over the writings of Qutb all they want, but it will not change the reality that anti-American jihadist violence did not occur until the misguided 1982-83 intervention in Lebanon. U.S. and Israeli military operations and policies of occupation provoke much broader, more intense resentment among Muslims than any general dissatisfaction with the decadence of Western culture and its deleterious effects on their own societies.

....The recent Moscow subway bombings are instructive on this point. The bombings are outrageous atrocities for which there is no excuse or justification, but one would have to be a blind fool to say that Chechen grievances, which outside jihadists have been exploiting for the last decade, are based in morally offensive Russian pop culture. It is acceptable for hegemonists to acknowledge this when Russia is the target of terrorist attacks, but when it comes to acknowledging U.S. and allied policies as important contributing factors we are treated instead to these sweeping cultural arguments and close readings of Sayyid Qutb.

Like I said, this is sort of a blast from the past. But worth being reminded of now and again.

Loopholes Are Forever

| Tue Mar. 30, 2010 12:22 PM EDT

On Saturday the Wall Street Journal editorial page loudly moaned about a provision of the healthcare bill that, they said, was prompting a "wave" of announcements of corporate losses. "This wholesale destruction of wealth and capital came with more than ample warning," they wrote ominously. "Turning over every couch cushion to make their new entitlement look affordable under Beltway accounting rules, Democrats decided to raise taxes on companies that do the public service of offering prescription drug benefits to their retirees instead of dumping them into Medicare." I linked to this briefly the other day, but it's worth a little bit of explication.

It's true: there has been a wave of press releases announcing multi-million dollar writedowns from some of America's biggest corporations. In fact, as Igor Volsky points out, these press releases seem downright coordinated. So what's going on? It all goes back to George Bush's expansion of Medicare prescription drug benefits:

The Medicare Part D legislation gives subsidizes of about $1,300 per retiree per year to businesses that provide prescription drugs to their retirees and permits companies to deduct the value of credit....The new health care law, however, pays for itself by eliminating waste in the system and it closes this particular double dipping provision. Companies would still receive the tax-free subsidy, but they’ll no longer be able to deduct it. And they’re angry.

Well, who wouldn't be angry? Getting a government subsidy and being able to deduct it from your tax bill is a helluva juicy deal. I sure wish I could do something like that. But I'm not a giant corporation, so I can't.

Anyway, it turns out that corporations who qualify for this sweetheart deal accounted for it as a future addition to their earnings stream. Now the stream is gone — after 2013, anyway — so they have to reverse that accounting charge. It's very sad. Still, there's no actual money involved. No one has to write a check to anyone else. Corporations just have to add a footnote to their next quarterly report saying that the government has come to its senses and will no longer allow them to write off an expense that the government is paying for in the first place.

As a friend once said, you could spend your whole life correcting the Journal's editorial mendacity once you let yourself get sucked down that particular rabbit hole. But this one is likely to become a common talking point, and it's arcane enough that hardly anyone understands what's so bogus about it. Now you do, and you can pass it along to your friends the next time you hear it.