Kevin Drum

Cross Over Crosswords

| Sun Jan. 24, 2010 1:54 PM EST

I admit that this story sounds an awful lot like an urban legend, but if it is, at least it's an amusing one. It's from Simon Bucks about a complaint to a British newspaper:

The paper's crossword had a clue which invited the solver to name the current beau of a young actress....Not long after it appeared, a letter was delivered to the paper's managing editor from one of London's top libel lawyers. It said they represented a young man, also an actor. They complained that the number of letters in the answer to the clue was the same as the numbers of letters in the surname of their client! Since he was adamant that he was NOT stepping out with the young woman in question, he had been potentially libelled, so would the paper a) promise not to do it again, b) pay his costs and c) pay damages.

According to Bucks, the paper's crossword editor "is planning to leave a gap when he publishes the puzzle's answers, with a note blaming the omission on legal considerations." I guess when that happens we'll know for sure that the story is true. Hopefully some British reader can give me a heads up if they run across this. (Via Felix Salmon.)

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Confirming Ben

| Sun Jan. 24, 2010 1:25 PM EST

Yesterday I dithered a bit about Citizens United. Today I'm going to dither a bit about Ben Bernanke.

Since I was opposed to Bernanke's renomination from the start, you'd think I'd be pretty happy about the growing opposition in the Senate to confirming him for a second term as Fed chairman. But for a couple of reasons, I'm not sure I am.

First, I really do believe as a matter of principle that the president's picks for executive branch positions deserve a fair amount of deference.1 Not infinite deference, but a lot. Any other rule will turn appointments into even more of a circus than they are now, with rump minorities routinely refusing to allow presidents to appoint policymakers who will carry out their agendas. So we're at a different point now than we were five months ago: like it or not, Bernanke is Obama's choice, and he deserves a fair amount of deference in that. Bernanke isn't unfit for office, he's plainly well qualified, and he isn't wildly outside the mainstream of economic/monetary opinion (quite the contrary, unfortunately). That should be enough.

I imagine, though, that most of you don't find this very persuasive. So here's a second, related reason: If Bernanke goes down, who would Obama nominate in his stead? Here's the problem: the opposition to Bernanke isn't principled, it's a toxic partnership of left and right that would almost certainly force Obama to choose someone even worse. The reason to oppose Bernanke, after all, is that even if he did a good job steering the Fed through the 2008 financial crisis (and I think he did), that's not what we need now. What we need is someone who can unwind the Fed's balance sheet (a technical job that's largely up to the Fed staff) and who will be a champion for a smart and reinvigorated regulation of the financial sector.2 Barbara Boxer and Russ Feingold, two of the Democrats who are opposing Bernanke, are surely on board with that, but what are the odds that Richard Shelby and Jim DeMint, the Republican leaders of the opposition, would support someone with genuinely progressive views on bank regulation? About zero. If Bernanke goes down and we've implicitly approved of the notion that high-profile nominees can be filibustered, Republicans and "centrist" Democrats will almost certainly band together to take down a more liberal alternative to Bernanke too.

I'm not excited about Bernanke's reappointment, but teaming up with wingnuts to filibuster him would do far more long-term damage to the progressive agenda than giving him another term. Once that's done, we become hostages to them. I think Obama was wrong to renominate Bernanke, but he's the president, not me. He should be allowed his choice.

POSTSCRIPT: But while we're on the subject, I'll also say this. If I had to choose between Brad DeLong's belief that Bernanke privately has sound views and Matt Yglesias's view that Bernanke can be far more easily understood as simply a conventional conservative Republican, I think Matt wins in a walk. The evidence that Bernanke is, both privately and publicly, a smart but conventionally conservative economist, is overwhelming. It should hardly be a mystery that he acts like one.

1Judicial appointments are a different story. For practical reasons, I think presidents still deserve a fair amount of deference here, but less than when they're dealing with their own branch of government.

2There are, of course, lots of other arguments both for and against Bernanke's nomination. Some are good (he's made too many mistakes to deserve reappointment, voting him down would damage Obama when he can least afford it) and some are bad (voting against him would roil the markets! we're mad at him for spending lots of money!). I'll leave those for another day.

Google's Back Door

| Sat Jan. 23, 2010 9:43 PM EST

Bruce Schneier tells me something I didn't know about how those Chinese hackers managed to break into Google's email system:

In order to comply with government search warrants on user data, Google created a backdoor access system into Gmail accounts. This feature is what the Chinese hackers exploited to gain access.

....Official misuses are bad enough, but it's the unofficial uses that worry me more....China's hackers subverted the access system Google put in place to comply with U.S. intercept orders. Why does anyone think criminals won't be able to use the same system to steal bank account and credit card information, use it to launch other attacks or turn it into a massive spam-sending network? Why does anyone think that only authorized law enforcement can mine collected Internet data or eavesdrop on phone and IM conversations?

....In the aftermath of Google's announcement, some members of Congress are reviving a bill banning U.S. tech companies from working with governments that digitally spy on their citizens. Presumably, those legislators don't understand that their own government is on the list.

If you hide a spare key under a rock outside your house, you'd better make sure that no one else can find it. But what are the odds if that "someone" is a thousand smart, obsessed, Chinese hackers? Probably not as good as you'd like no matter how clever you think your hiding place is.

Oh, and this problem isn't limited to Google. Read the whole piece for more.

Partisan Politics

| Sat Jan. 23, 2010 7:19 PM EST

Jonathan Bernstein thinks Democrats are making a mistake by thinking they can quiet Republican attacks by passing a pared down healthcare bill that everyone agrees with. As he reminds us:

Democrats can be assured that Republicans will attack them, regardless of what they do....That's politics.  It's how partisan politics is played.

....Don't believe me?  Republicans are attacking Democrats for taking away people's guns, even though the Democrats basically surrendered on that issue fifteen years ago.  They are attacking Democrats for cutting Medicare and for allowing Medicare to grow so fast that it'll bankrupt the nation — sometimes in the very same speech (I've seen it in the same paragraph).  Republicans have, repeatedly, attacked Barack Obama for not using a word he uses all the time.  Last I heard, they were still attacking the Democrats for bringing back the Fairness Doctrine, something that as far as I know not a single elected Democrat has any interest in doing.  No, it didn't make sense, but if they don't have attacks ready that make sense, they'll use ones that don't.

On the News Hour last night, David Brooks and Mark Shields both agreed that congressional Democrats were in a state of panic over Republican attacks. Within the Democratic caucus, they reported, "it's every man for himself."

Well, guess what: it's not going to stop no matter what kind of healthcare bill you pass — or even if you pass no healthcare bill at all. So buck up, pass the Senate bill, fix it in reconciliation, and then get out on the stump and defend it. You don't win elections by cowering, you win them by getting stuff done and making sure your constituents know about it. So get cracking.

Money in Politics

| Sat Jan. 23, 2010 5:23 PM EST

I think Glenn Greenwald does a good job here of working through some of the very real issues surrounding Thursday's Supreme Court decision striking down the McCain-Feingold campaign finance law and allowing corporations to directly fund political candidates. It's really not an easy call: corporate money is obviously a blight on the political system and certainly a matter of considerable public interest, but restricting free speech rights, even of corporations, should give us considerable pause too. This isn't an easy question.

I'm probably closer to Glenn's pro-First Amendment position today than I was in 2002, when McCain-Feingold first passed, but at the same time I think he glosses over some of the issues in Citizen United a little too lightly. For example, there's respect for precedent:

It's absolutely true that the Citizens United majority cavalierly tossed aside decades of judicial opinions upholding the constitutionality of campaign finance restrictions. But what does that prove? Several of the liberals' most cherished Supreme Court decisions did the same (Brown v. Bd. of Education rejected Plessy v. Ferguson; Lawrence v. Texas overruled Bowers v. Hardwick, etc.). Beyond that, the central principle which critics of this ruling find most offensive — that corporations possess "personhood" and are thus entitled to Constitutional (and First Amendment) rights — has also been affirmed by decades of Supreme Court jurisprudence; tossing that principle aside would require deviating from stare decisis every bit as much as the majority did here.  If a settled proposition of law is sufficiently repugnant to the Constitution, then the Court is not only permitted, but required, to uproot it.

But there's a difference here: in the case of, say, Brown vs. Board of Education, the pernicious effects of Plessy over the previous half century were plain. In Citizens United, we had an equally plain view of the effects of previous restrictions on corporate campaign funding, and those effects were.....negligible. Corporations quite clearly haven't been shut out from the political system and quite clearly haven't suffered from being unable to directly support candidates for federal office. It's one thing to correct an injustice that's become ever more manifest over the years, but quite another to overturn a long-held precedent that pretty obviously hasn't led us down a slippery slope to increased injustice.

There's also the nature of corporations vs. individuals. Corporations do have First Amendment rights, but to call corporations mere "organized groups of people," as Glenn does, seriously obscures some genuine distinctions. Modern corporations are far more than that, and long precedent recognizes this by allowing them fewer speech rights than individuals. Fairly broad restrictions on advertising, for example, are both constitutional and widely accepted. Ditto for laws that prohibit corporate officers from discussing earnings forecasts during "quiet periods." So it's perfectly defensible to suggest that corporations might also have more restricted rights when it comes to campaign speech.

On the other hand, there's no question that political speech is at the core of the First Amendment. Restricting commercial speech is one thing, but restricting political speech, no matter who's doing it, ought to raise much louder alarm bells. On a practical level, there's also the question of whether campaign finance laws even work. Did McCain-Feingold reduce corporate influence on the political process? It's hard to argue that it did. As Glenn puts it: "Corporations find endless ways to circumvent current restrictions — their armies of PACs, lobbyists, media control, and revolving-door rewards flood Washington and currently ensure their stranglehold — and while this decision will make things marginally worse, I can't imagine how it could worsen fundamentally.  All of the hand-wringing sounds to me like someone expressing serious worry that a new law in North Korea will make the country more tyrannical."

I'm just enough of a First Amendment fundamentalist to believe that there are plausible arguments for allowing corporations to make political contributions; just enough of a realist to think that it might not make as much difference as a lot of people think; and just enough of a cynic to think that corporations might not be as eager to spend huge pots of political money in plain view of their customers as you might suppose. On the other hand, I'm not credulous enough to think that modern multinational corporations are mere voluntary assemblies of concerned citizens who deserve to be treated the same way as the local PTA. The world is what it is, and in a practical sense corporations have such enormous power that it would be foolhardy in the extreme to think that we can just blindly provide them with the same rights as individuals and then let the chips fall where they may.

In the end, I guess I think the court missed the obvious — and right — decision: recognizing that while nonprofit corporations created for the purpose of political advocacy can be fairly described as "organized groups of people" and treated as such, that doesn't require us to be willfully oblivious to the fact that big public companies are far more than that and can be treated differently. Exxon is not the Audubon Society and Google is not the NRA. There's no reason we have to pretend otherwise.

What Scott Brown's Victory Means

| Sat Jan. 23, 2010 12:31 PM EST

Was Scott Brown's victory in Massachusetts part of a widespread revolt against the Obama agenda, and in particular against the passage of healthcare reform? Apparently not. The Washington Post polled Massachusetts voters after the election and asked if "one reason" for their vote was to express opposition to the Democratic agenda. The result is on the right.

Bottom line: only 35% of voters cast their vote to express opposition to the Democratic agenda. And although Massachusetts is a liberal state, 30% of its residents still self-identify as conservative. In other words, not only was the absolute number of people opposed to the Democratic agenda small, but virtually all of them were conservatives who have opposed the Democratic agenda from the start. There's just no sign of a sudden tidal wave of new opposition there. This election was mostly about a bad economy and a lousy candidate, not a rebellion against healthcare reform.

UPDATE: Time's Karen Tumulty disagrees, reporting that Massachusetts voters really were disgusted over the process that produced the healthcare bill:

The deal now known as the "Cornhusker Kickback" may have been one of the biggest blunders in modern political history. Normally, you'd be surprised if people in Massachusetts even know who the Senator from Nebraska is. But the number of people I talked to who brought up Ben Nelson's name, unprompted, was striking. I'm also told, by some who were doing phonebanking, that they got an earful about it over and over.

Voters I talked to also brought up the deal with labor. How come, they wanted to know, that everyone has to pay this "Cadillac Tax" on high-cost insurance plans except for the unions, who get a five-year exemption? People are so disgusted by the process, I think, that they have ceased to believe that there is anything in this bill for them.

I don't want to pretend that there's absolutely nothing to this, but you really have to be careful interpreting stuff like this. Did people bring up Ben Nelson's deal unbidden? Sure. Because Fox News and talk radio have been screaming about it nonstop. Ditto for the union deal. The people who brought it up were almost certainly primarily conservatives who listen to conservative media and have been getting an earful of these outrages on an hourly basis for weeks. Again: this isn't a sign of a huge new tsunami of resentment against healthcare reform. These are mostly the same people who have been opposed to it from the start.

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What People Know

| Sat Jan. 23, 2010 12:28 AM EST

Nate Silver tweets: "Make sure to check out the new Kaiser poll on health care. You'll be shocked at how little people know about the bill."

Really? I doubt that. I have a dim view of human nature, so I already figure that most people don't know squat about this stuff. Still, I guess you never know. Maybe 73% think that Obamacare mandates monthly applications to the government to justify your continued use of medical services after the age of 65. Or the construction of new Soylent Green factories in every state. So let's grit our teeth and take a look. Here's the chart:

Nate is right: I am shocked. But in the opposite direction. I'm surprised people know as much as they do. And the most important stuff — guaranteed issue, subsidies, individual mandate, Medicaid expansion, and funding sources — all score in the 60-70% range. Considering how complicated this stuff is, that's not bad.

Still, it could be better. So what would it take to turn opponents into supporters? According to Kaiser, it would take wider knowledge of the following features: (1) Tax credits to small businesses, (2) Won’t change most people’s existing arrangements, (3) No federal money for abortion, (4) No federal money for illegal immigrants, (5) Health insurance exchange, and (6) Guaranteed issue. So that's the stuff to talk up.

And the least popular feature? The individual mandate, by a landslide. It's even less popular than the $900 billion cost, which is pretty remarkable. Unfortunately, the whole plan falls apart without a mandate, so there's not much we can do about that. Just learn how to explain adverse selection to your relatives when you're trying to sell them on the plan, OK?

The Drones are Coming!

| Sat Jan. 23, 2010 12:06 AM EST

One of the innovations on the current season of 24 is that CTU now apparently uses a fleet of drones to keep watch over New York City. Creepy. But it turns out that art is merely imitating life:

Police in the UK are planning to use unmanned spy drones, controversially deployed in Afghanistan, for the ­"routine" monitoring of antisocial motorists, ­protesters, agricultural thieves and fly-tippers,1 in a significant expansion of covert state surveillance.

The arms manufacturer BAE Systems, which produces a range of unmanned aerial vehicles (UAVs) for war zones, is adapting the military-style planes for a consortium of government agencies led by Kent police.

....Five other police forces have signed up to the scheme, which is considered a pilot preceding the countrywide adoption of the technology for "surveillance, monitoring and evidence gathering". The partnership's stated mission is to introduce drones "into the routine work of the police, border authorities and other government agencies" across the UK.

I can hardly wait for these things to show up over my neighborhood. I'll feel so much safer.

1British slang for people who illegally dump trash anywhere other than an authorized landfill.

Friday Cat Blogging - 22 January 2010

| Fri Jan. 22, 2010 2:58 PM EST

Catblogging today is a visual metaphor for the dismal week we progressives have been suffering through. It's been raining Old Testament style this week in Southern California, and that means Inkblot doesn't get to go out and play in the morning. Instead, all he can do is stare forlornly out the bleak, gray window, wondering why Daddy won't let him go outside.

Of course, he should know why by now. Daddy did let him go out once or twice earlier in the week and feline opinion was firm: Inkblot. Did. Not. Like. It. At all. Water came out of the sky and fell on his fur! I've told him he should blame it all on Democratic fecklessness and Republican intransigence. And why not? That's what I'm blaming everything else on this week. Might as well get some mileage out of it.

Here's hoping that everyone regains a measure of sanity next week. There's a lot of work to do.

Wall Street Yawns

| Fri Jan. 22, 2010 2:25 PM EST

"New Bank Rules Sink Stocks" shouted the Wall Street Journal yesterday after President Obama announced his plan to rein in the size and riskiness of the financial sector. But here's an email I got this morning from a friend:

Nobody I've talked to on Wall Street seems to think the proposed reforms (although details remain vague) are anything more than PR, aimed in the wrong direction, don't do anything to make risk-taking more expensive, and are mere structural reforms that will be annoying to get around, but will be gotten around.

We'll see what comes out in the next few days. Maybe there's more to it than telling a bank you can't invest in PE funds. We can hope anyway.

But if the intent was to "go after the banks" and get the HuffPo crowd revved up, it seems to be working. Hey, maybe we can throw in Geithner or Bernanke's scalp and "hope" will re-spring eternal.

Or at least for the next couple weeks.

You know, if investors were really worried that these new rules were going to have teeth, the Dow would have dropped a couple thousand points, not a couple hundred. But the details of Obama's proposal are sketchy, Barney Frank has already made it clear that nothing will happen quickly, and Tim Geithner is busily assuring everyone that he'll make sure it's all done with a light touch. So nothing to worry about, folks.

Obama could have seriously taken on Wall Street last June if he'd wanted to. It's not as if he was too busy with healthcare, since he was mostly leaving that up to Congress anyway, and in any case it's a completely different set of people who work on these things. And it would have been popular. But now? It's pretty hard to suddenly pivot into populist mode and be taken seriously. So no one is taking him seriously.

And once again: the key thing would be to regulate leverage in every form throughout the entire financial system. That would allow us to have a thriving financial sector that's also a safe financial sector. Unfortunately, it's also the one thing that would seriously limit the ability of Wall Street banks to make astronomical amounts of money. So it remains largely off limits.

UPDATE: More here from Felix Salmon, who has a good roundup of whether Obama's proposals are likely to have a serious impact.