Kevin Drum

Star 6

| Tue Sep. 22, 2009 5:23 PM EDT

The shiny new toy du jour for the conservative movement is the Great NEA Conference Call Scandal.  Unless I'm missing something, here's what happened: a White House flack and an NEA flack arranged a conference call with a bunch of artists and encouraged them to create artwork in support of the president's National Day of Service.  That's, um, about it.  But conservatives are going absolutely ape over it.  Freddie can't take it anymore:

Yes, that’s it. That’s that horrible piece of unAmerican propaganda currently poisoning our government and causing Lady Liberty to weep bitter tears....What’s there is precisely the kind of vague, empty bureaucrat speak that suffuses not only every branch of government, regardless of the party of the sitting president, but also every corporate conference call promoting “synergy” and collective effort for collective goals.

....As SEK from the Edge of the American West blog says, the actual ends that this call is trying to achieve are an increase in community service, such as seeing more young people at blood drives. This is the alleyway the drunken husk of conservatism has crawled into, opposing service to one’s country and community as tantamount to socialism.

Now, that’s what matters — the fact that what was said was absurdly trivial, and that the conservatives screaming and carrying on like they’ve found a dead body in Joe Biden’s trunk are actually completely wrong about what they think the call is about. But, yes, the hypocrisy rankles. It does indeed bother me that the ideology responsible for having people sign written pledges declaring their support for President Bush before they see our elected officials speak now complains about this. It does indeed piss me off that a few short years ago, Republicans were routinely doing things like calling for Howard Dean’s hanging for criticizing the war in Iraq, and yet now they stand enraged over this meaningless conference call.

You know, we saw the same thing happen after conservatives helped expose the forged memos that Dan Rather touted on 60 Minutes.  For about two years after that, conservative bloggers saw forgeries everywhere.  Forged photos.  Forged documents.  Forged pieces of paper from senators' pockets.  They were so intent on recreating their most glorious moment that everything they saw became another potential Rathergate.

This has the same feel.  The ACORN sting was a brilliant piece of political theater.  Not exactly critical to the freedom of the Republic or anything, but certainly something that very entertainingly did some real damage to a liberal group that had been in conservative gunsights for years.  But since nobody really cares all that much about ACORN, the beast needs to be fed again.  And again.  And so they come up with stuff like this: a transcript of a phone call that, at most, suggests a minuscule bit of bad judgment from a couple of low-level flacks.

But there's good news here for liberals: if this is the direction Breitbart and Glenn Beck and the rest of the crew are going, they'll soon be taken about as seriously as Abbie Hoffman and the Yippies.  The first stunt is kind of cool.  The second one, not so much.  The third one is a yawn.  There's just no there there.  Unless there's another shoe to drop on the NEA call, this is a nothingburger.

But this won't be the end of it.  The old admonition to always leave 'em wanting more is good advice for any kind of theater, including political theater, but I don't think the wingers get that.  They should have quit while they were ahead.

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Rumsfeld and Bush

| Tue Sep. 22, 2009 4:47 PM EDT

Taegan Goddard explains some of the background behind the kiss-and-tell memoir of the moment:

If you're wondering why Secretary of Defense Donald Rumsfeld comes out unscathed in Matt Latimer's just released tell-all, Speech-less, his old Bush White House boss explains in the Wall Street Journal that it's because he's currently working for Rumsfeld as a ghost writer on his memoirs.

Writes William McGurn: "Not that Mr. Rumsfeld need fear. If this book is any guide, an employer will read how stupid Matt really thought he was only after he's no longer being paid."

There's another possible explanation, of course: Rumsfeld probably knew perfectly well that Latimer was busy slagging the White House in a book of his own and was cheering him on while he did it.  Rumsfeld is likely still pissed off at the way he was treated by Bush, which means that Latimer's behavior toward their old boss might have been a feature, not a bug.

Quote of the Day

| Tue Sep. 22, 2009 1:29 AM EDT

From Bill Clinton, on New York Times columnist Maureen Dowd:

She must live in mortal fear that there's somebody in the world living a healthy and productive life.

More good Clinton stuff at the link from Taylor Branch's upcoming book.

Hillary Clinton on Afghanistan

| Mon Sep. 21, 2009 6:56 PM EDT

Via Steve Clemons, here is Hillary Clinton on The News Hour tonight talking about Afghanistan:

MARGARET WARNER: Getting back to General McChrystal's memo though, he conveys a great sense of urgency. I mean there's one line in there in which he says, "failure to gain the initiative" — and he's talking about in the near term, while we wait for the Afghan security forces to really get able to handle this — he said, "risks an outcome where defeating the insurgency's no longer possible." So he is strongly suggesting that there aren't months and months to come to a decision here.

HILLARY CLINTON: Well and I respect that because clearly he is the commander on the ground, but I can only tell you there are other assessments from, you know, very expert military analysts who have worked in counter insurgencies that are the exact opposite. So what our goal is, is to take all of this incoming data and sort it out.

That's interesting.  What exactly is Clinton referring to when she says "exact opposite"?  Is she suggesting that a bunch of other analysts are saying we can take our time figuring out what to do?  That's the literal interpretation here, but it doesn't seem very likely.

But if that's not what she means, then she must be referring to something more substantive about McChrystal's strategy.  And the internal disagreements must be pretty stark if some of the advice Obama is getting is the "exact opposite" of McChrystal's.

There are only hints of what this might be, though.  At one point Clinton says McChrystal's assessment is important, "but it's a part of the overall process and there are many other considerations that we have to take into account."  To my ear, she also seems to downplay McChrystal's emphasis on governance, suggesting that although things in Afghanistan aren't moving at the pace she'd like, "there are some positive changes going on [...] and I can see, you know, the positives and then we want to move more to the positive side of the ledger."  Then there's this:

We have a clear and critical objective of trying to disrupt and dismantle and defeat al-Qaida and their extremist allies and prevent a return to safe haven....Some people say, "well al-Qaida's no longer in Afghanistan." If Afghanistan were taken over by the Taliban, I can't tell you how fast al-Qaida would be back in Afghanistan. So we have to be really clear-eyed about this.

I might be overinterpreting all this, but my take from this interview is that McChrystal wants to emphasize counterinsurgency (population protection, "heart and minds") more than counterterrorism (killing bad guys) while perhaps Clinton — and Obama? — would rather do the opposite.  When Warner asks about governance, for example, Clinton doesn't seem very engaged: sure, Afghanistan is corrupt, but hey — the place has never been well governed and the improvements we're seeing now are nothing to sneeze at.  But when Warner asks about al-Qaeda, Clinton gets much more animated. "We have to be really clear-eyed about this," she insists.  There might be a bigger struggle over fundamental strategy going on in the White House than we think.

UPDATE: It looks like pretty much everyone agrees that the counterinsurgency vs. counterterrorism argument has now heated up to the boiling point.  LA Times here, McClatchy here, Washington Post here.

Good News on Healthcare

| Mon Sep. 21, 2009 6:03 PM EDT

A bit of good news on the healthcare front:

The chairman of the Senate Finance Committee, Max Baucus, said Monday that he would modify his health care bill to provide more generous assistance to moderate-income Americans, to help them buy insurance.

It was not immediately clear how much Mr. Baucus would increase the proposed subsidies. He said he wanted to reduce the maximum amount that moderate-income Americans would have to pay in premiums, under the legislation, to less than 12 percent of income.

Right now the Baucus bill requires families to pay a maximum of 13% of their income for health insurance, so while a reduction to 12% would be a step in the right direction, it's a fairly small step.  Still, at least it's a welcome sign.  If both Baucus and Olympia Snowe are open to compromise on subsidy levels, and if this is their opening bid, we might actually get somewhere before this thing is put to bed.

Revisiting Banker Pay

| Mon Sep. 21, 2009 2:20 PM EDT

Via Tyler Cowen, I noticed this morning that Jeffrey Friedman had written a blog post suggesting that executive compensation practices weren't really at the core of our recent financial crisis.  Since I'm sort of a squish on this subject myself, I clicked over to read it.  Unfortunately, this was a big part of Friedman's case:

Perhaps the most powerful evidence against the executive-compensation thesis, however, is that 81 percent of the mortgage-backed tranches purchased by banks were rated AAA, and thus produced lower returns than the double-A and lower-rated tranches of the same mortgage-backed securities that were available. Bankers who were indifferent to risk because they were seeking higher return, hence higher bonuses, should have bought the lower-rated tranches universally, but they did so only 19 percent of the time. And most of those purchases were of double-A rather than A, BBB, or lower-rated, more-lucrative tranches.

Oh come on.  Before 2001, banks were required to meet full capital requirements for all asset-back securities on their books.  But in January 2002 that changed: AAA-rated securities, because they were so safe, were allowed to be backed by only 20% of the usual capital.  That meant banks had every incentive to manufacture and keep on their books as much AAA debt as possible.  It allowed them to increase their leverage fivefold.

Later, of course, regulators went further and allowed banks to use their own internal models for risk adjustment, which gave them even more incentive to play games with risk weighting.  As a result, they sliced and diced their securities into a little bit of lower-rated stuff and a whole lot of super-senior tranches, which their models said were so safe they required barely any capital at all to back them.  Leverage went through the roof.

Banks didn't hold lots of AAA-rated securities because bankers were playing it safe.  They held lots of AAA because it allowed them to game their capital requirements and pile ever more risk on their books.  It's evidence of exactly the opposite of what Friedman suggests.

POSTSCRIPT: That said, I continue to think that leverage and capital requirements are the key issues we should be concerned about, not compensation per se.  Bear and Lehman didn't collapse because they made bad bets on the housing market.  They collapsed because they made bad bets on the housing market backed by truckloads of overnight repo financing.  When the financing dried up, they went under.  If they hadn't overleveraged their bad bets, they'd be weaker today but still around.  Likewise, the financial system would be licking its wounds but not responsible for a global meltdown.

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The Finance Lobby

| Mon Sep. 21, 2009 12:27 PM EDT

If you use your debit card and overdraw your account, your bank will hit you with an overdraft fee.  If you make five purchases of ten dollars each on the same day, you'll get five more overdraft fees.  And just to make sure you get hit with as many fees as possible, your bank will make sure to debit your biggest transaction of the day first — even if it was actually the last one you made that day.  That way your account goes to zero faster and every subsequent debit triggers another fee.  Ka-ching!

That's all bad enough, but there's one more thing: you have no choice in the matter:

Sen. Christopher J. Dodd (D-Conn.) plans to introduce legislation requiring banks to get permission from customers, rather than allowing overdrafts automatically. If customers decline and then try to overspend, the transaction would be rejected. A similar bill is pending in the House.

Dodd dismissed concerns about the impact on ailing banks. "People out there are getting whacked," he said. "They should have the right to say, 'Deny me the transaction.' "

Well, good for Chris Dodd.  I hope his legislation passes.  But seriously, ask yourself this: what does it say about the power of the finance lobby in America that this was ever legal in the first place?  I mean, it's not even a close call.  It's just flatly outrageous.  It's outrageous that banks should be allowed to charge fees that amount to 1000% interest rates on a short-term loan; it's outrageous that they should be allowed to reorder your debits to make you pay more of these fees than you should; it's outrageous that they should be allowed to charge multiple fees per day in the first place, since they're essentially just making a single loan; and it's outrageous that they should be able to do this whether you want them to or not.

Let's say that again: They can force you to accept a loan at 1000% interest whether you want it or not.  And no one before now has been able to stop them.

Think about that the next you see one of those happy happy happy Visa debit card commercials where they're exhorting you to just swipe that card for every purchase you make without giving it a second thought.  There's a reason for that.  And there's a reason they can get away with it.

Selling Juice to The Man

| Mon Sep. 21, 2009 11:26 AM EDT

Matt Yglesias is in Germany, where the law requires local utilities to buy electricity from you if you install solar panels on your roof and generate excess current during the day:

This raises the overall price of electricity a little, but it has a dramatic impact in making solar power viable at scale. So dramatic, in fact, that Germany is a world leader in solar power despite not being sunny at all. If you took a similar policy framework and deployed it in places like Nevada, California, Arizona, New Mexico, and Texas where they have tons of sun it would be hugely effective. And much larger portions of the United States manage to be sunnier than Germany.

I don't know about those other states, but California passed a Net Energy Metering law back in the 90s.  So the Germans have nothing on us.  And yes, it's a very good idea that makes small-scale solar installations economically worthwhile.

McChrystal's Report

| Mon Sep. 21, 2009 2:02 AM EDT

The Washington Post has obtained a copy of Gen. Stanley McChrystal's report on the war in Afghanistan:

The assessment offers an unsparing critique of the failings of the Afghan government, contending that official corruption is as much of a threat as the insurgency to the mission of the International Security Assistance Force, or ISAF, as the U.S.-led NATO coalition is widely known.

"The weakness of state institutions, malign actions of power-brokers, widespread corruption and abuse of power by various officials, and ISAF's own errors, have given Afghans little reason to support their government," McChrystal says.

The result has been a "crisis of confidence among Afghans," he writes. "Further, a perception that our resolve is uncertain makes Afghans reluctant to align with us against the insurgents."

McChrystal is equally critical of the command he has led since June 15. The key weakness of ISAF, he says, is that it is not aggressively defending the Afghan population. "Pre-occupied with protection of our own forces, we have operated in a manner that distances us — physically and psychologically — from the people we seek to protect. . . . The insurgents cannot defeat us militarily; but we can defeat ourselves."

A separate report outlines McChrystal's request for more troops, without which the war "will likely result in failure," he says.  But I gotta ask: considering the unrelentingly grim assessment in the rest of his report, is it really likely that a few more troops and a change in emphasis toward COIN and away from counterterrorism will bear results within 12 months?  Because that's what McChrystal says the timeframe is.

That hardly seems likely to me.  But then, the surge in Iraq seemed an unlikely strategy to me too, and yet it worked1.  So my track record in surge-ology isn't great.  Still, it's worth bearing a couple of things in mind.  First, the Iraqi surge succeeded only because it was accompanied by several other developments (primarily the Sunni awakening, two previous years of sectarian cleansing, and al-Sadr's ceasefire), none of which can or will be duplicated in Afghanistan.  Second, the Iraqi surge was fundamentally targeted at Baghdad.  Spreading 28,000 troops throughout a country where we already had 140,000 in place would almost certainly have had no effect.  But most of the troops were deployed in Baghdad, where it meant a near doubling of capacity, and that did have an effect. Baghdad was so central to the rest of Iraq that a reduction of violence there had a country-wide effect.

But no such concentration is possible in Afghanistan.  Kabul isn't as important to Afghanistan as Baghdad is to Iraq, and in any case Kabul is already relatively safe.  It's the rest of the country that needs more troops, and it's hard to think of any single place they could be concentrated enough to have a real impact.

I think that's the key thing to look for when McChrystal gets more specific: what, exactly, does he propose to do with the additional troops?  If the idea is to spread them out in some way (for troop training, insurgent fighting, population protection, etc.), his request should probably be viewed skeptically.  But if he can propose some key operation or area where additional troops would represent a doubling or tripling of capacity and success might have an outsize effect on the entire conflict, then it might be worth trying. We'll see.

1I know, I know: "worked" is a question begging term.  But the surge did reduce violence, increase security, and make political reconciliation at least a possibility.  Long term stability is still up in the air, but even the short-term success of the surge was more than I thought likely at the time.

Net Neutrality is Back

| Sun Sep. 20, 2009 7:10 PM EDT

One of the blogosphere's pet topics, net neutrality, is back in the limelight.  When we last heard from our heroes at the FCC, they had adopted a set of four "principles" that basically said service providers should allow their customers access to any content and any application on the internet, should allow connection of any device, and should have to compete with other service providers.

That was all well and good, but a principle is a pretty thin reed to rely on and most liberals (as well as most content providers) thought that actual regulations would be a little more comforting.  We further thought that although guaranteeing access to any content was fine, we'd also like some assurance that quality of access to content was guaranteed too.  After all, access to YouTube isn't very useful if, say, Verizon decides to slow all YouTube connections to a crawl in order to lure people to its own video site instead.

For their part, service providers thought they should be allowed to favor their own content if they wanted to, and they also wanted to make sure that they still had the ability to manage traffic on their networks.  But if the Washington Post is to be believed, they're not going to get much satisfaction from the new net neutrality plan that will be unveiled tomorrow:

The proposal, to be announced Monday by FCC Chairman Julius Genachowski, will include an additional guideline for carriers that they make public the way they manage traffic on their network, according to sources at the agency. The additional guideline would be a "sixth principle" to four existing guidelines adopted in 2005 on Internet network operations. A fifth principle is expected to be announced by Genachowski on Monday during a speech at the Brookings Institute that would prohibit the discrimination of applications and services on telecommunications, cable and wireless Internet networks.

That fifth principle is a key victory for content providers (and all us content users).  It means that service providers can't provide faster or slower access to particular sites or applications.  And although they'll be allowed to perform technical traffic management in a content-neutral way, they'll have to disclose exactly how they're doing that so that everyone knows beforehand what the rules of the road are.

What's more, principles are out and rules are in:

The FCC is expected to vote on the proposed rulemaking of so-called net neutrality regulations at its October meeting. That vote will set off a series of regulatory procedures, and a final rule is expected to be introduced in the spring.

Obviously this is cause for only cautious optimism until we see the actual proposed rules.  The devil is always in the details, after all.  But it's a good start.  If you're interested in following along, the announcement and subsequent panel discussion will be streamed live on Monday starting at 10 am Eastern.