Kevin Drum

Bailouts and Justice

| Wed Dec. 23, 2009 1:14 PM EST

Daniel Gross interviews Treasury Secretary Tim Geithner, who complains that raging populism has made his job harder:

So you don't think the bailouts were too friendly to Wall Street?
The idea that the strategy was unfair and has principally benefited a small number of institutions in New York is a mischaracterization of the design and result of the strategy. I thought people would have understood this after the failure of Lehman Brothers. But when you do too little and you leave the system with real fear that everything is going to fall apart, like any financial crisis, it hurts the poorest most. A just and fair strategy, even if it is politically hardest to explain and justify, is to use well-designed but massive force to stabilize the system.

You know, Geithner really didn't have to go that far.  It's one thing to defend the bailout as an ugly but necessary response to a crisis, but it's quite another to call it a "just and fair strategy."  Basically, the banking system held a gun to our collective heads and forced us to transfer a huge amount of wealth to them, and has spent the entire time since then working feverishly to make sure they pay no price for this and are in no way prevented from ever doing it again. Maybe we didn't have a choice, but there was nothing just about it. I wish Geithner could at least acknowledge that much.

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Celebrities and Illness

| Wed Dec. 23, 2009 12:13 PM EST

Via Dave Munger, an article today in USA Today about celebrity idiocy on the medical front:

Doctors and public health groups say they struggle over the best way to respond to celebrity claims.

At Every Child By Two, an immunization campaign co-founded by former first lady Rosalynn Carter, board members were initially inclined to ignore celebrities who question vaccine safety, says executive director Amy Pisani. Now, the group spends 80% of its time explaining why vaccines are still critical.

"We were poised to start working in Africa," Pisani says. "But we were forced to pull back just to re-educate people here in the United States."

I practically go into spasms these days whenever Jenny McCarthy shows up on TV. The damage she's done to millions of kids is almost incalculable. However, as the article says, celebrities can also have quite positive effects when they go public with illnesses that are underacknowledged for one reason or another. So it's not all bad.

Housekeeping Note

| Wed Dec. 23, 2009 2:23 AM EST

I now have 999 Twitter followers.  If you're quick, you can be the 1,000th. Hurry! @kdrum.

(See? I'm taking this new media stuff seriously.  Honest.  Another 700 followers and I'll be ahead of Mickey Kaus.  You don't want me to be behind Mickey, do you?)

UPDATE: Congrats to @eugenephotoblog (Eugene from Atlanta), lucky #1,000! But keep 'em coming. I'm still trying to catch up with Mickey.

Quote of the Day: Conservative Values

| Wed Dec. 23, 2009 12:23 AM EST

From Mike Potemra, over at National Review Online:

I have over the past couple of months been watching DVDs of Star Trek: The Next Generation, a show I missed completely in its run of 1987 to 1994; and I confess myself amazed that so many conservatives are fond of it. Its messages are unabashedly liberal ones of the early post-Cold War era — peace, tolerance, due process, progress....

You know, conservatives don't usually confess straight up to finding peace, tolerance, due process, and progress so disagreeable.  But I guess they slip up every once in a while.

China's Diplomatic Triumph

| Tue Dec. 22, 2009 7:08 PM EST

Mark Lynas writes in the Guardian today about the final chaotic day of the Copenhagen conference:

Copenhagen was a disaster. That much is agreed. But the truth about what actually happened is in danger of being lost amid the spin and inevitable mutual recriminations. The truth is this: China wrecked the talks, intentionally humiliated Barack Obama, and insisted on an awful "deal" so western leaders would walk away carrying the blame. How do I know this? Because I was in the room and saw it happen.

....Even George Monbiot, writing in yesterday's Guardian, made the mistake of singly blaming Obama. But I saw Obama fighting desperately to salvage a deal, and the Chinese delegate saying "no", over and over again....Here's what actually went on late last Friday night, as heads of state from two dozen countries met behind closed doors....

The whole piece is worth reading. It's certainly arguable that Western leaders pursued a poor strategy at Copenhagen, but most of the evidence suggests that Lynas is right: the key stumbling block was China, which simply had no intention of agreeing to anything measurable and significant. Nothing Obama or the others did would have changed that.

By itself, that's not too surprising. What I have found surprising is that China has largely gotten away with this. There's been a bit of criticism of their obstructionism, but it's been almost completely drowned out by attacks on world leaders who were far more willing to do a deal than they were. And just to make China's victory complete, those same leaders have been largely (though not completely) unwilling to call them out on this. It's a pretty sweet deal for Beijing.

Insurance Companies and Healthcare Reform

| Tue Dec. 22, 2009 4:39 PM EST

AP ran a story today noting that after Democrats proved Sunday night that they had 60 votes to pass healthcare reform, stocks in health insurance companies rose. This suggests that investors think the Senate healthcare bill is a huge boon for insurers, and Nate Silver quantifies that boon here.

Fair enough. Healthcare reform does guarantee a considerable amount of new business for the insurance industry. But be careful.  Here's a chart showing a basket of insurance company stocks over the past six months, and as you can see they've been rising pretty steadily the entire time.1 What's more, the most recent surge began on December 3rd, well before passage of healthcare reform was assured.  And Monday's spike in the first hour of trading, though impressive, was probably pretty speculative and has lost some of its steam already. Generally speaking, you should always be wary of people attributing broad-based market rises to specific events, and this seems like a pretty good example. I'm not sure I'd read all that much into a very short-term market reaction here.

1This chart includes both accident and health insurers, but if you take a look at individual health insurance companies you see pretty much the same trend.

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Quote of the Day: The Conservative Temperament

| Tue Dec. 22, 2009 4:02 PM EST

From Mike Konczal on the political climate in conservo-land:

Visiting home for the holidays, it’s amazing to me how certain groups of friends, who I mostly considered in the generic Republicans/conservatives camp, have been wading deeper into the Ron Paul territory. “Abolish the Fed” is one thing, but what surprised me the most was when I was at a Christmas party several people mentioned, fairly out of nowhere, how bad FDIC is for the economy....When I tried to point out how if there wasn’t FDIC and millions of savings accounts were getting wiped out in ordinary bank runs we’d almost certainly have a wave of turn-of-the-last-century style violence that is hard for us to even imagine now — think bomb throwing anarchist violence — they seemed to be ok with that.

Golly.  I wonder what could possibly account for generic conservatives increasingly being OK with bomb throwing anarchist violence? Let me think.....

Political Turncoats

| Tue Dec. 22, 2009 3:40 PM EST

Ezra Klein on today's big political news:

If any other vulnerable Democrats were thinking of following Rep. Parker Griffith's example and switching over to the Republican side, they'll probably think again after Griffith's reception today. Both Red State and the Club for Growth have greeted him with thinly-veiled threats. "We can pick this guy off and get a real Republican in that seat," says Red State's Erick Erickson. "This party switch signals Griffith's nervousness, but it doesn't signal that his incumbency is safe," concurs the Club for Growth.

If Democrats have a silver lining going into 2010, it's that Republicans seem to have forgotten how to let themselves win.

Actually, that seems pretty similar to Arlen Specter's reception from liberal activists when he switched parties.  And why not? Just as Dems feel pretty sure they can win the Pennsylvania Senate seat next year regardless of who they nominate, Republicans probably feel the same way about the Alabama 5th. So why not go for the most conservative candidate possible?

What's Wrong With Budget Targets?

| Tue Dec. 22, 2009 2:50 PM EST

There are plenty of legitimate objections to the Senate healthcare bill, but some of them are just getting crazy.  Here's Megan McArdle:

[My biggest procedural objection] is that I am beginning to believe that in order to get this bill passed, the Democrats basically gutted the CBO.  Not because they were working with the CBO to get estimates — that's the CBO's job, to provide Congress with a cost.  But rather, because this bill was something novel in the history of legislation.  Previous congresses wrote bills, and then trimmed them to get a better CBO score: witness the Bush tax cut sunsets.  But the Congressional Democrats started out with a CBO score they wanted, and worked backward to the bill.  They've been pretty explicit about the fact that no one wants this actual bill; rather, the plan is to pass basically anything, and then go and totally rewrite it when the budget spotlight is off.  I'm not aware of any other piece of legislation that was passed this way.

Essentially, the Democrats have finished the process of gaming the CBO scores.  They're now meaningless.  You don't pass a piece of legislation that bears any resemblance to what you intend to end up with; you pass a piece of legislation that gets a good CBO score, and then go and alter it piece by piece.

I don't even understand this.  Why is it OK to trim a bill to meet some kind of budget target but not OK to have a budget target in the first place? What's the difference?

I'm equally mystified about how any of this amounts to "gaming" the CBO process.  Politicians routinely pass half a loaf if they can't get everything they want, and then keep trying down the road to get the rest. Sometimes they succeed, sometimes they don't. It depends on whether they can round up the votes for it — and PAYGO rules apply regardless of whether they do it this year or next. As for "totally rewriting" the bill once the budget spotlight is off, actual Democratic leaders don't seem to have any intention at all of doing this (to the dismay of some bloggers and pundits). At least, none of them have said so. Where does this come from?

Weird stuff.  But then again, Sarah Palin is already reprising her greatest hits, tweeting, "R death panels back in?" I think the answer is no, but perhaps it's one of the things Harry Reid plans to slide back in as soon as the budget spotlight is off. Better go tell grandma.

Republicans Bag a Convert

| Tue Dec. 22, 2009 1:59 PM EST

Apparently some congressman from Alabama named Parker Griffith has decided to switch from the Democratic Party to the Republican.  At first that seemed a little odd.  Yeah, he's pretty conservative for a Democrat, but despite all the pulling of hair and gnashing of these teeth these days, there's really not much chance of Republicans regaining control of the House next November. So why switch to a minority party?

My guess is that Wikipedia tells us pretty much all we need to know:

[The Alabama 5th district] last supported a Democrat for president in 1976, and George W. Bush won the district by double-digit margins in 2000 and 2004.

Due to these trends, most forecasters rated the district as a toss-up. CQ Politics forecasted the race as 'No Clear Favorite', The Cook Political Report ranked it 'Democratic Toss Up', and The Rothenberg Political Report rated it 'Pure Toss-Up'.

Griffith defeated [Wayne] Parker in a sweeping upheaval, taking 52 percent of the vote to Parker's 48 percent.

52% is a "sweeping upheaval"? Sounds more like a squeaker to me.  Most likely then, Griffith is just a reverse Arlen Specter: an ideological centrist who figured that he'd most likely lose reelection in a tough midterm environment if he didn't switch. So he switched.