Kevin Drum

Delaware and the Future of the GOP

| Tue Sep. 14, 2010 11:22 AM EDT

I was on the radio yesterday chatting about my piece on the Tea Party movement in the current issue of the magazine, and although I don't think I said anything very interesting, I was at least proud of myself for successfully remembering the names of Mike Castle and Christine O'Donnell, the Republican candidates currently duking it out for a Senate nomination in Delaware. (On the other hand, I unsuccessfully remembered the name of the Koch brothers' father, so you can't win 'em all. It's Fred Koch. Fred Fred Fred.)

Anyway, this came up because the host asked if the tea partiers were nuts for continually dumping centrist candidates who would be easy winners in November and instead nominating true believers who might very well lose. Think Sharron Angle in Nevada, Joe Miller in Alaska, and Rand Paul in Kentucky. As it happens, my guess is that most of these will turn out OK for the tea partiers. Paul and Miller will probably win, and although Angle is certainly the best opponent Harry Reid could have hoped for, even she has a chance.

But Delaware is the real test. Mike Castle would be a shoo-in to win in November, while O'Donnell — Delaware's version of Harold Stassen1 until the Sacramento-based Tea Party Express got involved — is extremely likely to lose even in the current anti-Democrat environment. Nominating her would truly be a case of cutting off your nose to spite your face. E.J. Dionne writes about the Delaware race today:

Few races this year have been more clear-cut on the matter of electability: The polls demonstrate that Castle would be the favorite against a rather strong Democratic candidate, New Castle county executive Chris Coons. By nominating O’Donnell, the Republicans would hand Coons and the Democrats the seat.

Castle, at least, is not in the least bit complacent. “The Tea Party Express, which claims it’s not a political party, is in reality a pretty good political operation,” he said in an interview last night. “This is a more sophisticated political operation than they’ve been given credit for.”

He adds that what’s happening here “goes way beyond this election” — and that’s entirely true. Democrats may be rooting for O’Donnell because they need all the Senate seats they can get this year. But my hunch is that a lot of them would quietly mourn if Castle, a guy of old-fashioned decency, were to lose. If there is no longer any room for him and people like him in the GOP, it will be the clearest sign yet of a party that has decided to go off the edge.

Not me! I'm rooting for O'Donnell with no quiet mourning for Castle at all. I'm not sure at this point why Dionne still wonders "if" there's room in the modern GOP for guys like Castle, since that seems about as clear to me as anything could possibly be. The answer is no, and Castle's fate won't change that one way or the other. The die has been well and truly cast here for some time: the GOP is irrevocably committed to the undiluted Fox/Limbaugh/Drudge party line, and there's no going back. They're either going to stand or fall on that. So I say: let 'em do it. No excuses, no scapegoats. Finish up the Texification of the Republican Party and see how it goes. Only then is there any hope of a return to common sense.

1See Suzy Khimm's report here for more.

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Taking Boehner Seriously

| Tue Sep. 14, 2010 10:38 AM EDT

Jon Cohn wants us to take Rep. John Boehner more seriously. Here is the CBPP's estimate of what Boehner's proposal for spending cuts means:

Rep. Boehner has proposed limiting total discretionary funding for fiscal year 2011 to $1.029 trillion [...] while setting funding levels for defense, military construction, veterans, and homeland security at the same levels that President Obama’s 2011 budget requests for those areas. According to CBO, the President proposes $673 billion for the defense (other than funding for the wars) and veterans parts of the budget (the “budget function” for those areas) and the Department of Homeland Security. This leaves $356 billion for “non-security” discretionary funding under the Boehner plan.

First things first. What's remarkable here is what Boehner doesn't want to do. Out of a total federal budget of about $3 trillion (not counting temporary stimulus spending), he puts almost all of it off the table immediately. He proposes no cuts to Social Security, Medicare, defense spending, overseas wars, or homeland security, and along with interest on the national debt that accounts for nearly 85% of the total budget.

So what's left? About $450 billion, which accounts for a grand total of 15% of the federal budget. That's not much, so in order to make a splash Boehner has to propose some pretty swinging cuts. But on what? Transportation? Energy? Agriculture? The Department of Justice? The EPA? NASA? Food stamps? He doesn't say.

And since Republicans have been in office before, after all, we know perfectly well what their spending priorities are. And they don't include swinging cuts to transportation or energy or agriculture or the FBI or NASA. This is, in other words, a joke. Boehner isn't just proposing a bit of trimming here and there, he's proposing truly massive cuts to a tiny sliver of the budget. And we all know that neither he nor the rest of his party will even pretend to follow through on this if they're elected.

But $70 billion a year in tax cuts for the rich? That seems like a pretty good bet. In the meantime, Jon is right: the media should treat Boehner like a grownup and ask him exactly how his plan adds up. If he has the guts to tell us, well and good. If not, then it's time to stop taking him seriously.

Republicans and the Rich, Part LXXVII

| Tue Sep. 14, 2010 9:47 AM EDT

The unconditional subjugation of the Republican Party to the interests of the rich, the super-rich, and the hyper-rich remains impressively monolithic. That is all.

Making Basel Work

| Mon Sep. 13, 2010 11:45 PM EDT

The Financial Times reports that the new Basel III banking standards might get toughened up in a few countries:

Top bankers in the UK, US and Switzerland are braced for their national regulators to impose tougher capital requirements than those required by Sunday’s landmark global agreement, even as investors bid up bank shares on relief that the standards were not more rigorous....Global banks based on Wall Street, in the City and Switzerland fear they will face the toughest rules.

They point to the “Swiss finish” that regulators there have traditionally applied on top of global standards and the UK’s willingness to be tougher on other issues, such as pay. They also said US regulators were likely to consider shorter timetables and may face pressure from Congress to be tougher.

Well, we can hope. And we can hope that these same regulators will toughen up on the risk weighting of assets while they're at it. At this point I think we can all agree that AAA-rated MBS should probably require a wee bit bigger capital cushion than the same amount of United States treasury bonds, right?

Quote of the Day: More Preservatives, Please

| Mon Sep. 13, 2010 11:21 PM EDT

From Robert Waldmann, responding to criticism of preservatives in food:

I stress this post is not a joke. I think that BHA and BHT are good for people's health. I even think that use of BHA and BHT are partly responsible for the increase in life expectancy since they were introduced.

You may read his reasoning here.

The End of Tennis

| Mon Sep. 13, 2010 5:55 PM EDT

Ah, tennis. The rain-delayed U.S. Open — currently suffering through yet another rain delay — is on right now, and twitterer @jenningscraig says, "Would love to hear some commentary on this year's tourney." Sadly, though, the truth is that I've only watched bits and pieces of the Open this year. In fact I find myself following tennis less and less every year.

Why? Because it's gotten boring. Sure, today's players are phenomenal athletes, covering the court like gazelles and routinely hitting breathtaking shots. But every match is the same, what I've come to think of as "thug tennis": huge topspin forehands, booming two-handed backhands, and endless baseline rallies. The power and shotmaking are mesmerizing at times, but in the end, I can hardly tell the players apart these days.

I always thought that the beating heart of tennis was in the matchups between the top baseliners and the top serve-and-volleyers. Brilliant points, contrasting styles, and blinding speed. I loved those matches. Borg-McEnroe. Lendl-Edberg. Sampras-Agassi. But a few years ago the last generation of serve-and-volleyers retired — guys like Sampras, Rafter, Henman, and Martin — and today, thanks to improved racket technology that favors returners more than servers, there aren't any left in the top ranks. The clay court season now lasts 12 months a year.

And so I've slowly lost interest. Roger Federer is the last player who's really attracted my attention: he's a baseliner like everyone else, but it's a different, more fluid style that's a joy to watch regardless. And at least he has a one-handed backhand to set him apart a little bit. But that's about it. I still watch tennis, but I'm not glued to the set and I don't really mind that much if I miss a final — especially if Federer isn't in it. When he retires I'm not sure if I'll bother watching very much at all anymore.

I know the current state of the game has lots of fans, but aside from an intellectual admiration I just can't work up a lot of enthusiasm these days. In the end, new racket technology and the coaching that went along with it have finally conspired to spoil the game for me.

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Is the Gulf Recovering Faster Than Expected?

| Mon Sep. 13, 2010 2:26 PM EDT

This is all tentative and preliminary, so don't break out the champagne yet. Still, it's increasingly looking like the Gulf might be recovering from the BP blowout more quickly than we expected:

As the weeks pass, evidence is increasing that through a combination of luck (a fortunate shift in ocean currents that kept much of the oil away from shore) and ecological circumstance (the relatively warm waters that increased the breakdown rate of the oil), the gulf region appears to have escaped the direst predictions of the spring.

While its findings were disputed by some, the National Oceanic and Atmospheric Administration reported several weeks ago that the oil was breaking down and dispersing rapidly, probably limiting future damage from the spill.

And preliminary reports from scientists studying the effects on marshes, wildlife and the gulf itself suggest that the damage already done by the spill may also be significantly less than was feared — less, in fact, than the destruction from the much smaller Exxon Valdez spill in Alaska in 1989.

On the less optimistic front, however, the piece acknowledges that "The spill’s greatest scientific challenge may be understanding how the oil is interacting with the undersea environment. The oil was released 5,000 feet beneath the water’s surface and then treated with an unprecedented volume of chemical dispersants. Some enormous fraction — how much is disputed — formed at least one great undersea plume of microscopic droplets." For more on this, see Julia Whitty's definitive take on the potential undersea damage in our current issue.

Obama's Hidden Stimulus

| Mon Sep. 13, 2010 1:02 PM EDT

Why does the American public seem to be convinced that the 2009 stimulus bill hasn't had any effect? Republican attacks are one reason, of course, as well as the fact that it failed to get unemployment down to the 8% level the Obama administration originally aimed for. But James Surowiecki suggests another factor as well. There was a lot of talk back when the bill was moving through Congress about the "smartest" way of implementing stimulus spending, and Surowiecki suggests that Democrats might have been too smart for their own good:

Paradoxically, the very things that made the stimulus more effective economically may have made it less popular politically. For instance, because research has shown that lump-sum tax refunds get hoarded rather than spent, the government decided not to give individuals their tax cuts all at once, instead refunding a little on each paycheck. The tactic was successful at increasing consumer demand, but it had a big political cost: many voters never noticed that they were getting a tax cut. Similarly, a key part of the stimulus was the billions of dollars that went to state governments. This was crucial in helping the states avoid layoffs and spending cuts, but politically it didn’t get much notice, because it was the dog that didn’t bark—saving jobs just isn’t as conspicuous as creating them. Extending unemployment benefits was also an excellent use of stimulus funds, since that money tends to get spent immediately. But unless you were unemployed this wasn’t something you’d pay attention to.

The stimulus was also backloaded, so that only a third was spent in the first year. This reduced waste, since there was more time to vet projects, and insured that money would keep flowing into 2010, lessening the risk of a double-dip recession. But it also made the stimulus less potent in 2009, when the economy was in dire straits, leaving voters with the impression that the plan wasn’t working. More subtly, while the plan may end up having a transformative impact on things like the clean-energy industry, broadband access, and the national power grid, it’s hard for voters to find concrete visual evidence of what the stimulus has done (those occasional road signs telling us our tax dollars are at work notwithstanding). That’s a sharp contrast with the New Deal legacy of new highways, massive dams, and rural electrification. Dramatic, high-profile deeds have a profound effect on people’s opinions, so, in the absence of another Hoover Dam or Golden Gate Bridge, it’s not surprising that the voter’s view is: “We spent $800 billion and all I got was this lousy T-shirt.”

Good policy, unfortunately, isn't always good politics. If Democrats had really been trying to get the biggest political bang for the buck, they probably would have proposed $800 billion in programs like cash for clunkers. Everyone loved cash for clunkers! But it didn't really do much to stimulate the economy. Aid to states did, but the money mostly went to government workers, and these days everyone hates government workers. I dunno. Maybe Obama should have insisted on a big slug of money going to a plan to buy every man, woman, and child in America a free weekly lottery ticket. At least people would have noticed it.

What Was Forbes Thinking?

| Mon Sep. 13, 2010 12:12 PM EDT

Former Bush speechwriter David Frum comments on Newt Gingrich's endorsement of Dinesh D'Souza's recent Forbes cover story claiming that Barack Obama's mainstream liberalism can best be understood as the neocolonial racial animus of the son of a Luo tribesman:

As for the underlying D’Souza article that inspired Gingrich, what is there to be said? When last was there such a brazen outburst of race-baiting in the service of partisan politics at the national level? George Wallace took more care to sound race-neutral.

Here’s the question, though, for the rest of us: Why do Forbes (which presumably has many choices of cover material) and Gingrich imagine that such a message will resonate with their conservative audience? Nothing more offends conservatives than liberal accusations of racial animus. Yet here is racial animus, unconcealed and unapologetic, and it is seized by savvy editors and an ambitious politician as just the material to please a conservative audience. That’s an insult to every conservative in America.

This is the right question. Newt Gingrich is a firebrand who will say almost anything to get attention. Dinesh D'Souza is so consumed with a revulsion toward modern society that he sees demons everywhere he goes. It's hardly news that they're dishing out shameless bombast like this.

But Forbes? Why on earth is a mainstream business magazine giving this kind of obscenity cover story treatment? One can only assume they think their audience will buy it without complaint. Frum again:

With the Forbes story and now the Gingrich endorsement, the argument that Obama is an infiltrating alien, a deceiving foreigner — and not just any kind of alien, but specifically a Third World alien — has been absorbed almost to the very core of the Republican platform for November 2010.

Apparently so. Even for the cynical among us, the events of the past few months have been pretty astonishing. The only glimmer of good news here is that maybe — just maybe — movement conservatives are finally riding the racial animus bandwagon too hard and too blatantly. Maybe — just maybe — it's finally gotten out of control and it's going to lead to the backlash of disgust and revulsion they so richly deserve. Maybe.

Income Inequality Week Continues!

| Mon Sep. 13, 2010 11:42 AM EDT

Our complex modern economy increasingly rewards education and skills. Does this explain the huge rise in income inequality over the past few decades? Ezra Klein:

That explanation is intuitively appealing, but it doesn't fit the facts. For one thing, Europe had the same technological revolution, but without the attendant increase in inequality. For another, the startling changes in inequality was between those at the 99th percentile and those in the 90th percentile. It was the tippy-top pulling away from the top, or what I like to call "the conehead economy." If you imagine the economy as the person, it's grown eight inches, and most of that growth has been in its forehead.

Matt and Alex both double back on this and note that technology does play a major role here, and they're right: The Internet, television and other forms of mass media and communication make it much easier for one person or firm to serve a national or international audience. To use an easy example, Kobe Bryant can make more money because the Chinese watch his basketball games and pay him to endorse their products (that's not a random example, incidentally).

Two points. First the minor one: the idea that sports stars and Hollywood celebrities and J.K. Rowling are driving the growth in inequality is just flat wrong. There simply aren't enough of them. If you take a look at income statistics, the tippy top is occupied almost entirely by corporate executives, Wall Street financiers, and a motley collection of doctors, lawyers, and other high-paid professionals. Sports and entertainment personalities make up only a few percent of the total.

But there's a bigger point to make here too. It's true that one of the great mysteries of the modern American economy is that the biggest growth in income inequality hasn't been between, say, the average worker and the well-off computer programmer. The biggest growth has been between the programmer and the white shoe lawyer. And an even bigger chasm has developed between the white shoe lawyer and the Fortune 500 CEO. In other words, the biggest change in inequality has mostly been within the top 10% or so. Any explanation has to grapple with that fact.

Still, all that extra money had to come from somewhere. And there's not much question where that is: the middle classes. Basically, the overall economy has grown considerably over the past 30 years, generating lots of additional income. However, the vast middle of the wage-earning class has received only a small part of that income growth. The chart below shows how much less income the working and middle classes have gotten because their earnings didn't increase at the same rate as overall economic growth:

So about $800 billion per year has been transferred from the bottom 90% to the top 10%. In addition, it turns out that within the top 10%, almost all of that $800 billion has gone to the top 1% and especially to the top 0.1%.

So there are, in fact, two mysteries here. First, what caused middle class incomes to stagnate, thus making a gigantic pool of additional money available to the better-off? Second, why did that giant pool go almost entirely to the rich and super rich? Any theory of rising income inequality needs to answer both those questions.