Kevin Drum

Does Obama Want to Cut Entitlements?

| Tue Feb. 15, 2011 12:24 PM EST

Andrew Sullivan is apoplectic about the cowardice of Obama's budget presentation yesterday:

I didn't spend eight years excoriating George "Deficits Don't Matter" Bush to provide excuses for Barack "Default Doesn't Matter" Obama. Like other fiscal conservatives, I'm just deeply disappointed by Obama's reprise of politics as usual - even as the fiscal crisis has worsened beyond measure in the last three years. My point is that actually being honest about the budget and what it will take to resolve its long-term crisis is not political suicide, as Chait says. It's statesmanship. It's what a president is for.

I'm just mystified here. Has any president, ever, used the annual budget as a springboard for a massive change to entitlement programs? Even if Obama wants such changes, this isn't the time or place he'd propose it. He'd propose it separately, as a major initiative completely divorced from the annual budgeting process.

Our budget deficit has skyrocketed over the past three years because of an unprecedented economic crisis. It will shrink as the economy starts to grow again, and it can be brought down to a nearly reasonable level merely by letting the Bush tax cuts expire. The rest will require changes to Medicare, since that's the source of nearly all our long-term problems. But last year's election campaign made it crystal clear that swinging changes to Medicare would be dead on arrival if Obama proposed them now, and deliberately setting forth a proposal doomed to failure would make future action less likely, not more.

I have no crystal ball. I don't know if Obama is truly interested in making historical changes to Medicare and/or Social Security later in his term. But if he is, he'd be a fool to propose them now. The annual budget is just an annual budget, and the process for getting it through the congressional committee process is laborious and well trod — and that laborious and well-trod path most definitely doesn't include the kind of big-time dealmaking necessary for some kind of grand bargain over taxes and entitlements. If you want entitlement reform to disappear without a trace, yesterday would have been a great time to propose it. If you want it for real, you'll wait.

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Is a Grand Bargain In Our Future?

| Mon Feb. 14, 2011 8:58 PM EST

Via Jon Chait, who's dubious about this since no one else breathed a word of it, here is Elizabeth Drew in the New York Review of Books claiming that underneath all the trash talk, Obama and the Republican leadership have already agreed to hammer out a bipartisan budget deal:

But despite all the confrontational rhetoric between the two parties about budget priorities, the White House and Republican congressional leaders, in private talks, have agreed on the need to try to reach a bipartisan “grand bargain” over the budget—a sweeping deal that could include entitlements and tax reforms as well as budget reduction. A Senate Republican leadership aide confirmed this, saying, “In fact, for anything to happen, it will require such a White House/congressional leadership bargain.” The preferred idea is that, just as they did late last year on the tax bill, they would reach an agreement and then unveil it to the public.

At the same time, a bipartisan group of leading senators have met in an effort to cut the deficit—which could become a part of the debt-reduction puzzle. The thinking is that the Tea Party allies might be brought along in the end, because their primary goal is to reduce the deficit. The details will be difficult, but a surprising sort of deficit-cutting fever has broken out on Capitol Hill, fueled in part by a fear that at some point the bond markets and foreign lenders will call in their loans, setting off a disastrous financial crisis. Right now, there’s a game of chicken going on over who will offer their proposals first, but this should be resolvable.

Another reason this is happening is that despite their occasional deference to Tea party demands, the Republican congressional leaders, Mitch McConnell, John Boehner, and Eric Cantor, are also realists. They may try to drive a hard bargain on the budget but they know that the issue must be resolved. Despite the baying of some Tea Party allies that the government should be shut down if the administration doesn’t offer enough concessions, these leaders understand that that would be a disastrous course for the Republicans—as it was when Newt Gingrich tried it in 1995.

Well, maybe. There's no telling who Drew's original source is for this, and her confirming source (a "Senate Republican leadership aide") isn't all that impressive. What's more, it ain't the case that the tea party movement's "primary goal" is reducing the deficit. Its primary goal is to reduce taxes and its secondary goal is to lift the intolerable burden of tyranny that Barack Obama has imposed on us. (Its tertiary goal is whatever bee happens to be up Glenn Beck's bonnet the week you ask them.) As for foreign lenders "calling in their loans," it's hard to parse what that's even supposed to mean.

So....I'm not sure about this. A "grand bargain" would, almost by definition, include tax increases, and my guess is that the GOP leadership's realism extends about as far as understanding that supporting a tax increase would pretty much spell the end of their political careers. Drew's report is interesting, but like Jon, I'll believe it when there's more than one reporter in all of Washington DC who's heard about this.

American Schools Are Better Than 50 Years Ago

| Mon Feb. 14, 2011 7:18 PM EST

Via Jay Mathews via Bob Somerby, today's chart of the day1 demonstrates vividly the long, slow decline of American education. Except wait. It doesn't show that at all. These figures come from Brookings Institution scholar Tom Loveless, and they show how American kids have done on international math tests compared to kids from eleven other advanced countries. First, here's the raw data:

The circled numbers show how American students compared to the average of the entire dozen countries. In 1964, we were 0.35 standard deviations below the mean. In the most recent tests, we were only 0.06 and 0.18 standard deviations below the mean. In other words, our performance had improved. Here's Loveless on the notion that we once led the world in education and have since collapsed:

This is a myth. The United States never led the world. It was never number one and has never been close to number one on international math tests. Or on science tests, for that matter....[And] there has been no sharp decline—in either the short or long run. The United States performance on PISA has been flat to slightly up since the test’s inception, and it has improved on Trends in Mathematics and Science Study (TIMSS) since 1995.

Now, we're still below average among these dozen countries, so this is hardly a glorious result. But we aren't doing any worse than we did in the supposed glory days of the 50s and 60s. We're doing better. And as Mathews says, "If we have managed to be the world's most powerful country, politically, economically and militarily, for the last 47 years despite our less than impressive math and science scores, maybe that flaw is not as important as film documentaries and political party platforms claim. And if, after so many decades of being shown up by much of the rest of the developed world, we are improving, it might be time to be more supportive of what we already doing to fix our schools."

Maybe so. One thing that's pretty clear, though, is that America does a terrible job of educating low-income students. But even there, the comparative data is unclear (or at least, I've never seen clear data). Do our low-income kids score worse than other countries' low-income kids? Or do we simply have more low-income kids? Since income figures aren't routinely gathered for these tests, and international comparisons of income are problematic anyway, this isn't an easy question to answer.

I'm supportive of experimenting with education reforms. We'll never know for sure if there are better ways of educating our children unless we try lots of things and see what works. Still, the one metric that's always crystal clear, no matter who's doing the measuring, is that school performance plummets when the concentration of low-income kids gets above 50% or so. This suggests — though it doesn't prove — that the real problem is poverty, not terrible schools. Unfortunately, that's an even harder problem to solve than schools by themselves.

1Yes, yes, it's a table, not a chart. So sue me.

Winning the Future, Old School

| Mon Feb. 14, 2011 3:11 PM EST

Ezra Klein:

The military made out quite nicely in the 2012 budget proposal. The administration is cutting $78 billion from the Defense Department's budget — known as "security discretionary spending" — over the next 10 years. That's a bit of a blow, but compare it to the $400 billion they're cutting from domestic discretionary spending — that's education, income security, food safety, environmental protection, etc. — over the next 10 years. And keep in mind that the domestic discretionary budget is only half as large as the military's budget. So if there were equal cuts, the military would be losing $800 billion.

Put another way, Obama has proposed cuts of about 1% from a defense budget that's already the largest in the world, versus cuts of about 10% from a domestic budget that's already one of the stingiest in the world. And that's moderate compared to what Republicans want to do. As Ezra says, this puts a little different spin on "winning" the future, doesn't it?

This is hardly our only option, though. Adam Weinstein has more on the defense budget here.

Don't Blame Facebook

| Mon Feb. 14, 2011 2:21 PM EST

David Carr echoes a familiar lament today: we write the content, but it's the owners of social networks who are raking in the bucks:

Facebook, Twitter, Tumblr and Quora have been positioned as social networks, but each of them hosts timely content that can also be a backdrop for advertising, which makes them much more like a media company than, say, a phone utility.

....Perhaps content will remain bifurcated into professional and amateur streams, but as social networks eat away at media mindshare and the advertising base, I’m not so sure. If it happens, I’ll have no one but myself to blame. Last time I checked, I had written or shared over 11,000 items on Twitter. It’s a nice collection of short-form work, and I’ve been rewarded with lot of followers ... and exactly no money. If and when the folks at Twitter cash out, some tiny fraction of that value will have been created by me.

Actually, no, I think Facebook and Twitter are still more like phone companies than media companies. The phone company allows people to talk to each other, and charges a monthly fee for doing so. Each little conversation creates some tiny fraction of their value. In our modern age we've decided that actually paying overtly for such services is somehow unfair, so instead companies that facilitate conversation make their money via advertising and other related schemes. But they're still more like utilities than anything else. It's not advertising that makes a media company a media company, after all: Movies and books are media without advertising and billboards and direct mail are advertising without media.

All the kvetching about social media and people willing to write for nothing misses the point. Sure, blogs and Facebook and so forth provide free content. But there's always been free and nearly-free content around. The reason non-free content exists is because it's better than the amateur stuff: journalists dig up news better, La Scala presents opera better, and Broadway puts on shows better than your local community theater. As long as it stays better, people will still pay for it. Period.

Journalism isn't shrinking because of social networking, it's shrinking because the internet has made every news outlet available to everyone. American news operations don't have much in the way of foreign bureaus anymore, but that's because on a day-to-day basis they don't provide better content than we can already get from news media actually in foreign countries. Want to know what's happening in Britain? Surf over to the Guardian or the Telegraph. The Middle East? There's al-Jazeera. Ditto for just about every other place in the world, which has media of its own that can be mined for information a lot more cheaply than sending an American over to do it in person.

Likewise, American newspapers have declined because, really, how many newspapers do you need? You need one for local news, but for national and international news? Why bother? There are half a dozen really good sources available on the internet now, and that's all anyone needs. Why read the AP dispatches in the Detroit Free Press if you can just power up your browser and read the New York Times and McClatchy and the Wall Street Journal instead?

So blame the internet, which has made competition from other professionals far stiffer than in the past. But the amateurs chattering away on Facebook? Not so much.

Good Boehner, Bad Boehner

| Mon Feb. 14, 2011 1:03 PM EST

What to think about John Boehner? On Meet the Press yesterday, David Gregory asked him about birthers who insist that Barack Obama wasn't born in the U.S.:

"As speaker of the House, as a leader, do you not think it's your responsibility to speak out against that kind of ignorance?" asked the host, David Gregory. "It's not my job to tell the American people what to think," Boehner said. "The American people have the right to think what they want to think."

Crikey. This is tea party pandering of the worst kind. But then Gregory asked him about Egypt:

House Speaker John A. Boehner said Sunday he thought the Obama administration handled "a very difficult situation" in Egypt about as well as possible, undercutting potential Republican presidential candidates who have charged that President Obama botched the U.S. response to a popular revolt against a key ally....The situation "surprised everyone," he said.

I have to say, that's pretty refreshing considering the mountains of transparently absurd criticism that Republicans have been heaping on Obama at CPAC and elsewhere. The fact is that Obama steered a middle course on Egypt that was pretty close to the best he could have done, and what's more, was probably nearly identical to the course George Bush would have followed if he'd been in office.

The hypocrisy and opportunism from conservative critics of Obama's handling of Egypt have been pretty far off the charts even by normal political standards. Obama's response was cautious but basically correct, he worked behind the scenes reasonably effectively considering the modest amount of leverage we had, and he largely avoided giving anyone an excuse to pretend that the protesters were just American stooges. There's stuff to criticize there if you're minded to, but it's stuff on the edges. There's just a limited amount that the United States can do in these circumstances and everyone is well aware of it. But you'd hardly know it from the apocalyptic rhetoric coming from Republicans over the past few days.

So good for Boehner for stating the obvious. Now about that birther stuff.....

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It's Budget Day!

| Mon Feb. 14, 2011 12:28 PM EST

Today is budget day, so we're going to be hearing a lot about the budget deficit. Probably from me, too. But here's really all you need to know:

80% of the federal budget goes to Social Security, Medicare, Medicaid, the Pentagon, and interest on the national debt. So where are we trying to find cuts? The other 20%, naturally.

This is doomed to failure, and everyone knows it. But we'll continue with the kabuki show anyway.

Also this: if we simply let the Bush tax cuts expire in 2012 — all of them — and went back to the Clinton tax rates of the 90s, our medium-term deficit problem would be reduced to 3% of GDP in a stroke. That's pretty manageable. And we could do it, too: it's not as if the 90s were a hellscape of jackbooted IRS thugs confiscating all your money and driving the economy into the ditch, after all.

Beyond that, we should do something sensible about reining in the growth of Social Security and Medicare.

In other words, the things we should do are precisely the things that are completely off the table. This is called "listening to the will of the people." Welcome to America.

UPDATE: Letting the Bush tax cuts expire would reduce the deficit substantially, but not make it "nearly vanish." I've corrected the text to make it more accurate.

The Republican Algorithm

| Mon Feb. 14, 2011 2:04 AM EST

I think Paul Krugman is uncharacteristically wrong in his analysis of why Republicans are proposing the budget cuts they are:

The answer, once you think about it, is obvious: sacrifice the future. Focus the cuts on programs whose benefits aren’t immediate; basically, eat America’s seed corn. There will be a huge price to pay, eventually — but for now, you can keep the base happy.

If you didn’t understand that logic, you might be puzzled by many items in the House G.O.P. proposal. Why cut a billion dollars from a highly successful program that provides supplemental nutrition to pregnant mothers, infants, and young children? Why cut $648 million from nuclear nonproliferation activities? (One terrorist nuke, assembled from stray ex-Soviet fissile material, can ruin your whole day.) Why cut $578 million from the I.R.S. enforcement budget? (Letting tax cheats run wild doesn’t exactly serve the cause of deficit reduction.)

I don't think you need to make up anything new and complicated to explain this. They want to cut the nutrition program because it's welfare for poor people. They want to cut the nonproliferation budget because it represents squishy liberal idealism. And they want to cut the IRS budget because rich people don't like being audited. Other parts of the GOP proposal include cuts to rail projects, the EPA, NOAA, Bill Clinton's program to put more cops on the street, the NSF, energy efficiency programs, the SEC, green building programs, clean water funding, employment training, various health programs, Head Start, community service, public broadcasting, foreign aid, rental assistance and other housing programs, FEMA, and both CDC and NHS. I'll confess that I don't quite get the last two: do Republicans think that capturing the House means we'll have fewer natural disasters and less disease? But the rest of this stuff is really straightforward: they're all programs that benefit poor people, hurt rich people, or just generally stink a little too much of liberalism.

But then, what do you expect? They're Republicans. What else would you expect them to cut?

Weekend Miscellany

| Sun Feb. 13, 2011 10:03 PM EST

Just a bit of weekend miscellany:

  • As of this writing, my Friday post about Glenn Beck has gotten 466 comments. This is — by far — the most comments I've ever gotten on a post since I moved to Mother Jones. So I dived in to see why. Answer: a Beckian true believer named Suzanne somehow discovered the post and wrote the very first comment. As near as I can tell, the entire rest of the comment thread is either directly or indirectly a response to Suzanne, not a comment on the blog post per se. There's no real moral here, just a demonstration of the power of the first mover.
     
  • The Egyptian government released Wael Ghonim from detention on February 7. Four days later Hosni Mubarak was toast. I wonder how many Arab regimes are drawing the obvious lesson from this?
     
  • Maybe Michael Hiltzik is just an old codger who doesn't know a good thing when it smacks him in the face. Maybe I am too. But the valuations of any site that can somehow pass itself off as "social networking" have gotten awfully eye-popping lately, and that sure brings back memories. Plus this: "It's not just the numbers that transport one to bygone times; it's the familiar trappings of frenzy. There are the same explanations that what's important isn't actual revenues, but eyeballs, and the lionization of venture investors who thus far have proved themselves wholly capable of shoveling the money out, not yet of shoveling it back in....Maybe one of these hot companies is the next Google. But it's more likely that these prices are insane."
     
  • I hate loyalty cards. A few days ago I was buying some books at Borders (gotta use up my gift cards before they go bust!) and dropped into a nearby Petco to buy some litter and cat food. Do you want to join our loyalty program? asked the cashier. Nope. Are you sure? You'll save mumble mumble dollars. No. Just ring me up. Thanks.

    I wasn't really paying attention, and it was only when I was halfway home that I realized he had said "nine dollars." Nine dollars? Sure enough, a pair of items that would cost about $28 even at my expensive local grocery store had set me back $35. So we've gotten to the point, at Petco at least, where you can't simply drop in casually to buy something if you happen to be in the area. Unless you're willing to sign up for their loyalty program, you're going to pay fantastically more than the ordinary retail price for stuff. This really pisses me off. And needless to say, I'll never drop into a Petco again.

Who Put Words in Keynes' Mouth?

| Sun Feb. 13, 2011 1:53 PM EST

John Maynard Keynes is famous for saying "The market can stay irrational longer than you can remain solvent." He's also famous for quipping at a dinner party to someone who criticized him for contradicting himself, "When the facts change, I change my mind. What do you do, sir?" Jason Zweig follows up:

There’s just one problem with both these quotations: No one can point to a primary source proving that Keynes ever uttered them.

In an e-mail in 2003, Keynes’ most authoritative biographer, Lord Robert Skidelsky, told investment advisor William Bernstein that he believed they were “both apocryphal.” This week I asked another renowned expert on Keynes, Donald Moggridge of the University of Toronto, if he could identify the source of either of the oft-quoted remarks. “The simple answer,” Prof. Moggridge replied by e-mail, “is there is no evidence.”

These two quotes, which really need to exist even if Keynes didn't utter them, join loads of others that apparently never got said either. Like this one and this one, for example. Zweig has offered ten dollars each to anyone who can find a primary reference for the Keynes quotes, but I'm willing to concede right now that he'll probably be able to hang on to his sawbucks. I'm more interested in something else: who made up the quotes? As a social phenomenon, that's really more intriguing. Someone, somewhere, invented these quotes, and they sounded so much like Keynes that they've been almost universally accepted ever since. Who knows? Maybe they were accepted even by Keynes himself. One of the linked quotes above is from Everett Dirksen, who was alive while he was being misquoted all over the place but just never bothered to correct the record. So this could go back a long way.

Anyway, fine: Keynes didn't say this. So who made up the story?