Kevin Drum

Cantor on Healthcare

| Fri Sep. 25, 2009 11:53 AM PDT

Politico's Glenn Thrush talks to Republican congressman Eric Cantor about the lack of a GOP healthcare plan 100 days after they promised to provide one:

In my sit down with Cantor earlier this week, he pointed to a more nuanced approach — offering a "pretext" rather than a proposal — eschewing the kind of sweeping, vague alternative that earned the party such ridicule when they rolled out their alternative budget in March.

I think Cantor needs to look up "pretext" in the dictionary before he uses it again.  It's actually completely appropriate in this case, but probably not in the way he was hoping to get across.

Amusing cheap shops aside, Cantor's problem is obvious: He can't provide a full-scale Republican plan because it's simply not possible to provide universal coverage without the government taking a big role in things.  So he's stuck.  Ditto for things like climate change, which for some reason I was reminded about by this post from libertarian Matt Welch.  I mean, suppose you accepted that climate change was both real and catastrophic.  What options would you have if you insisted on sticking solely to free market principles?  Beats me.  Hell, it's hard enough to address even if you don't.  But that's where we are these days: an awful lot of our most pressing problems simply can't be solved unless you accept that the government has to be involved.  So conservatives are stuck.

Unless they can offer up a pretext, of course.

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Non-Shocking Iran News

| Fri Sep. 25, 2009 9:46 AM PDT

I'm just catching up on the news this morning, but apparently Iran is building a second nuclear enrichment facility:

White House officials said Western intelligence agencies have known about the facility for several years and believe that Iran acknowledged its existence Monday in an attempt to head off intense criticism that they knew was coming.

"We believe that the Iranians learned that the secrecy of the facility had been compromised," a senior White House official said Friday morning. "We've been aware of this facility for several years, building up a case so that we had very strong evidence."

Officials from the United States, France and Britain rushed to brief the IAEA in Vienna on Thursday on what they knew about the facility. U.S. officials said that detailed briefing was provided in an attempt to spark an immediate investigation by the international organization.

I don't have much to say about this except to note that all our previous intelligence estimates about Iran's capabilities obviously took this second plant into account, so presumably this doesn't change our forecasts about how far away they are from enriching enough material to build a bomb.

Hard to say exactly what's next.  Hillary Clinton noted dryly today that Mahmoud Ahmadinejad's recent statements "illustrate attitudes and approaches that are really at variance with almost universal principles and understanding of historical reality."  You can say that again.  He certainly seems to be doing everything he can to unite the world against him.  Quite a feat.

Shutting Down Guantanamo

| Fri Sep. 25, 2009 9:21 AM PDT

Marine Corps Maj. Gen. Michael Lehnert is obviously a starry-eyed liberal appeaser who wants to weaken America:

In late 2001, when the Pentagon decided to put detainees at the U.S. military base at Guantanamo Bay, Cuba, the task of setting up a camp and establishing its rules went to Marine Brig. Gen. Michael Lehnert.

....On Thursday, as the 58-year-old officer prepared to retire after 36 years in the Marine Corps, he expressed his deep disappointment about what happened at Guantanamo after he left. "I think we lost the moral high ground," Lehnert said. "For those who do not think much of the moral high ground, that is not that significant.

"But for those who think our standing in the international community is important, we need to stand for American values. You have to walk the walk, talk the talk."

Lehnert says he's fully in favor of shutting down Guantanamo.  "I think the information we're getting is not worth the international beating we're taking," he says.  Semper fi.

The Public Option Revisited

| Fri Sep. 25, 2009 8:50 AM PDT

Ezra Klein quotes Congress Daily on the cost of healthcare reform that includes a public option.  The estimates are from the CBO:

The original House bill required the public plan to pay providers 5 percent more than Medicare reimbursement rates. But as part of a package of concessions to Blue Dogs, the House Energy and Commerce Committee accepted an amendment that requires the HHS Secretary to negotiate rates with providers. That version of the plan will save only $25 billion.

In total, a public plan based on Medicare rates would save $110 billion over 10 years. That is $20 billion more than earlier estimates, a spokesman for House Speaker Pelosi said.

So a public option would save anywhere between $2 billion and $11 billion per year depending on whether or not it's based on Medicare rates.  That's savings to the government, and it's based on the fact that the public option would lower the cost of insurance and the feds would therefore have to pay lower subsidies to low-income households buying coverage under the individual mandate.  However, if the private plans lower their prices to compete with the public option, then everyone buying insurance would save money, not just low-income families, and the total cost savings to consumers would be much higher.

It's hard to say how significant this would be without seeing the actual CBO report, but in any case the point is clear: the public option saves money.  Supposed "fiscal conservatives" who oppose the public option are either poorly informed or simply hypocritical.  It's not only good for the public, it's something that's more fiscally responsible than a healthcare plan that's purely private.  That's why we need it.

Clinton on Gore

| Fri Sep. 25, 2009 2:00 AM PDT

It's Laura, back with a few frog-free potboilers from the rest of the crew:

1) The new Black Panthers and me: Obama's DOJ is under fire for dropping a controversial voter intimidation case. Our reporter caught the whole incident on camera.

2) Did Clinton compare Gore to Mussolini? David Corn's favorite excerpts from the Clinton bio you can't read yet.

3) Meet the spy who loved Hamas. And Hezbollah. And Iran. Just who is ex-MI6 superstar Alastair Crooke working for, anyway?

4) Rare photos from inside a (completely macrame-free) Hamas summer camp for young Palestinian boys.

Laura McClure hosts weekly podcasts and is a writer and editor for Mother Jones. Read her recent investigative feature on lifehacking gurus here.

Picture of the Day

| Thu Sep. 24, 2009 10:46 PM PDT

This is a spectacular gold scabbard boss with inlaid garnets, circa 700 AD, part of a huge hoard of Anglo-Saxon gold and silver discovered recently in Staffordshire:

The first scraps of gold were found in July in a farm field by Terry Herbert, an amateur metal detector who lives alone in a council flat on disability benefit, who had never before found anything more valuable than a nice rare piece of Roman horse harness. The last pieces were removed from the earth by a small army of archaeologists a fortnight ago.

....Leslie Webster, former keeper of the department of prehistory at the British Museum, who led the team of experts and has spent months poring over metalwork, described the hoard as "absolutely the equivalent of finding a new Lindisfarne Gospels or Book of Kells".

....[Kevin] Leahy said he was not surprised at the find being in Staffordshire, the heartland of the "militarily aggressive and expansionist" 7th century kings of Mercia including Penda, Wulfhere and Æthelred. "This material could have been collected by any of these during their wars with Northumbria and East Anglia, or by someone whose name is lost to history. Here we are seeing history confirmed before our eyes."

More at the link.  Enjoy.

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Climate Change: Even Worse Than You Think

| Thu Sep. 24, 2009 9:11 PM PDT

Juliet Eilperin reports in the Washington Post:

Climate researchers now predict the planet will warm by 6.3 degrees Fahrenheit by the end of the century even if the world's leaders fulfill their most ambitious climate pledges, a much faster and broader scale of climate change than forecast just two years ago, according to a report released Thursday by the United Nations Environment Program.

That's odd.  This is 3.5 degrees Celsius.  A couple of hours ago that same story said 7.2 degrees Fahrenheit, or 4 degrees Celsius.  But if you click on the link and read the UN report, neither of those numbers appears.  At least, not that I can find.  What's going on?

Robert Corell, who chairs the Climate Action Initiative....collaborated with climate researchers at the Vermont-based Sustainability Institute, Massachusetts-based Ventana Systems and the Massachusetts Institute of Technology to do the analysis. The team has revised its estimates since the U.N. report went to press and has posted the most recent figures at ClimateInteractive.org.

The group took the upper-range targets of nearly 200 nations' climate policies — including U.S. cuts that would reduce domestic emissions 73 percent from 2005 levels by 2050, along with the European Union's pledge to reduce its emissions 80 percent from 1990 levels by 2050 — and found that even under that optimistic scenario, the average global temperature is likely to warm by 6.3 degrees.

Ah.  The number comes not from the UN report, but from Robert Corell.  And it's been updated, which presumably accounts for the Post story being updated.

Except that if you go to ClimateInteractive.org, their graph still says 4 degrees Celsius.  And it seems to be based on a model called C-ROADS, not the UN report.

So color me confused.  Except for one thing: both the UN report and Corell's analysis agree that climate change is much worse than we thought even a few years ago.  Virtually every measure of warming is increasing faster than our models predicted — something that regular readers of this blog already know.  From the first chapter of the UN study:

The climate forcing arriving sooner-than-expected includes faster sea-level rise, ocean acidification, melting of Arctic sea-ice cover, warming of polar land masses, freshening in ocean currents, and shifts in circulation patterns in the atmosphere and the oceans.

....In early 2008, a team of scientists published the first detailed investigation of vulnerable Earth System components that could contain tipping points. The team introduced the term ‘tipping element’ for these vulnerable systems and accepted a definition for tipping point as “...a critical threshold at which a tiny perturbation can qualitatively alter the state or development of a system...”

The nine tipping points are below.  Three of them could happen within ten years, and two more are possible within 50.  Time to quit mucking around, folks.

UPDATE: The ClimateInteractive folks now seem to have updated their graphs to show warming of 6.3°F/3.5°C.  Graphs are here.

Plain Vanilla

| Thu Sep. 24, 2009 3:47 PM PDT

I've been mulling this over ever since I first read it.  It's from a story about Barney Frank's decision to jettison one part of Obama's plan for a new Consumer Financial Protection Agency:

An Obama proposal that Mr. Frank rejected would have required banks and other financial services companies to offer so-called plain vanilla products, like 30-year fixed mortgages and low-interest, low-fee credit cards.

That proposal set off criticism by Democrats and Republicans, some with close ties to the banking industry, that it was the first step toward having government bureaucrats approve and disapprove an array of products.

The more I mull, the more pissed off I get.  Yes, this would be a very direct government intrusion into the financial market, but that's the whole point.  That's exactly why it might actually work and exactly why politicians "with close ties to the banking industry" don't like it.

Look: the finance lobby would prefer that this bill — and especially the CFPA — simply go away.  Failing that, they'd like the CFPA's writ to be so circumscribed and its rules so intricately written that they can figure out easy ways to ignore it.  As we know all too well, they're pretty good at that.  The only way to keep this from happening is to write some very plain, very clear regulations that simply can't be evaded.

And why shouldn't we?  Forty years ago Congress passed the Truth in Lending Act which, among many other things, limited consumer liability for stolen credit cards to $50.  That was a pretty direct intrusion into the financial market, but it worked: it was a plain and simple requirement with no wiggle room and no loopholes.  If you offer credit cards to consumers, you're responsible for all losses above $50.  And guess what?  The credit card industry seems to have done pretty well for itself despite having the TILA jackboot on its throat all this time.  And consumers have been saved billions of dollars.

(Plus there's this bonus: because banks are responsible for losses over $50, they've put a ton of time and energy into figuring out how to limit losses.  They make sure their customers have fast and easy access to 800 numbers to report stolen cards.  They have sophisticated transaction monitoring software and they call you proactively if they see spending patterns that suggest fraud.  They have reward programs for merchants who confiscate cards.  Etc.  Do you think they would have done any of this if you were on the hook for bogus charges?  Nope.  Instead, they would have spent the past four decades claiming that stuff like this simply wasn't economically feasible and consumers needed to be more careful with their credit cards.)

The "plain vanilla" requirement would accomplish something the financial industry hates: it would make it easy for consumers to compare products.  Even if you're planning to buy something non-vanilla, the price of the vanilla product provides a baseline that makes it easier to compare companies to each other and easier to see exactly how much you're paying (and what extra terms you're agreeing to) for the more complex products.  That's good for consumers.

And it's something we wouldn't have been afraid to insist on 40 years ago.  So why are we now?  Felix Salmon answers: "There’s no good reason for this capitulation, except for the financial lobby has so effectively captured Congress that no reform would be able to get through with such a common-sense provision in place....I fear that by the time Congress is done, the Consumer Financial Protection Agency won’t be able to protect consumers at all — and that’s assuming it’ll even exist."

UPDATE: A eulogy here from Rortybomb.  Worth a quick read.

Quote of the Day

| Thu Sep. 24, 2009 11:13 AM PDT

From Eric Kolchinsky, a former analyst at Moody's, a ratings agency, on why he's testifying before Congress today about abuses of the ratings process:

I was part of the process that did all this damage, and I feel I should try to do something now to make sure it doesn't happen again.

That's refreshing.  If you read the linked story, Kolchinsky basically says that it's business as usual at Moody's: they're giving high ratings to insanely complex debt instruments even when they know the underlying assets aren't really in very good shape.  It's yet another data point suggesting that Wall Street is already piling back into all the same practices that caused last year's meltdown.  And why not?  Unlike Kolchinsky, none of these guys really seem to believe they did anything wrong in the first place.  Hooray for bailouts!

Bernanke and Punchbowlism

| Thu Sep. 24, 2009 10:46 AM PDT

Legendary Fed chair William McChesney Martin joked that the Fed's job was "to take away the punch bowl just as the party gets going."  Translated, he meant that whenever the economy started to really get going, the Fed was obligated to raise interest rates and slam on the brakes before inflation got out of hand.  This also killed growth and caused recessions, but he figured it was the only choice he had.

Brad DeLong is afraid that this sentiment will make a comeback:

Central banks would prefer an effective system of regulation, but due to capture of legislatures by the banking sector they are unlikely to get it. Thus they are going to be driven to be always wondering whether they should be putting extra downward pressure on asset prices — with implications for employment and possibly growth.

The fact that "Punchbowlism" can be implemented by central banks by themselves makes it the default option.

"Central banks would prefer an effective system of regulation"?  You could have fooled me.  It strikes me that the Fed has been captured by the banking sector every bit as thoroughly as Congress has.  The Fed, after all, still has considerable influence.  If Ben Bernanke pulled out his shiniest, sharpest pitchfork and took to the podium with a really full-throated, sky-is-falling warning that we needed serious new financial regulations and then demanded that CONGRESS. MUST. ACT. NOW — well, Congress would probably act.  Not completely.  It's still Congress, after all.  But if Bernanke really put his back into it, he'd make some pretty serious waves.

But I have not, to put things delicately, noticed him doing any such thing.  On the contrary, he seems far more interested in protecting the Fed's turf, offering up weak-tea compensation proposals, slow rolling increased consumer protections, and pretending that a brand new committee devoted to "systemic risk" will somehow do what the Fed has never done before.  These are not the actions of a revolutionary who wants to remake the regulatory system.

I'm a Bernanke skeptic, so I guess my crankiness here can be discounted.  But I simply haven't seen any sign that he's really dedicated to root-and-branch regulatory reform.  I also rather doubt that he's very dedicated to "punchbowlism," frankly.  In fact, as near as I can tell, he's basically dedicated to getting us out of our current crisis (which is good!) and then tweaking the system just enough so that things can go back to the way they've always been (not so good).  I hope he proves me wrong.