Kevin Drum

Embracing Twitter

| Sun Dec. 20, 2009 1:30 PM EST

So: Twitter.  I've decided to take a second crack at it.  I've had an account for quite a while, but the problem is that most of the time I forgot all about it and never wrote any updates.  However, being the dork that I am, I concluded that if technology was the problem, then technology could be the answer too.  So I downloaded a copy of TweetDeck and set it up.  It works pretty well and offers some nice convenience features (multiple columns, real-time link shortening, easy replying/retweeting/etc.), but the main thing it does is pop up a little box on my screen whenever a new tweet arrives.  Benefit: I always remember Twitter is around.  Drawback: little boxes are constantly popping up on my screen.

I dunno.  Is this how it feels to be eighteen in 21st century America?  With a screen constantly full of things demanding attention: email, Twitter, Facebook, IM, etc.?  (Except no one uses email anymore, do they?  Instead they use the unbelievably primitive messaging functions built into apps like Facebook and Twitter, which feels to me like going back to the days of dial-up.)  Maybe.  I imagine I'm just getting a small taste of it, though.

Still, so far, so good.  TweetDeck forces me to pay attention to Twitter, and this inspires me to tweet more often.  Whether that's a good thing or not remains to be seen, but it doesn't really seem to be interrupting my concentration or anything.  And it was pretty handy for following the chaos of the final day of the Copenhagen conference.  Plus there's another bonus: Twitter seems to be generally friendlier than the blogosphere.  You really can't get a good rant going in 140 characters, so you mostly get snark and wittiness instead.  That's actually kind of a nice break.

Next step: build up the list of people I follow, which is currently a ramshackle of random names. Next step after that: get a new picture.

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Leverage and You

| Sat Dec. 19, 2009 4:45 PM EST

The Wall Street Journal reports some evidence that the housing market is starting to loosen:

Some mortgage insurers and lenders are beginning to relax their down-payment requirements, in a sign of increased confidence in the housing market. The changes, which are being done on a market-by-market basis, mean buyers in some parts of the country can now borrow 95% instead of 90% of a property's value. Until recently, mortgage companies had tighter standards for these markets because of falling home prices.

....Under the looser requirements, a borrower with a credit score of 680 or higher in New Orleans, for instance, can finance up to 95% of a home's value.

I'm not thrilled with this.  Financial leverage has gotten a lot of attention lately as the cause of our recent banking woes, and that attention is fully justified.  Asset bubbles are pretty much always credit driven, with leverage climbing relentlessly until suddenly the bubble pops and all the bills come due.  One of the things that I wish Obama's regulatory proposals had focused more strongly on is limiting leverage wherever and however it shows up in the financial system.

But leverage is everywhere, not just on Wall Street.  If you buy a house with 20% down, you're employing leverage of 4:1.  At 10% down it's 9:1.  At 5% down it's 19:1.  At the FHA minimum of 3.5%, it's 27:1.

That's too much.  Just as leverage much above 10:1 is dangerous in the banking system, it's dangerous in the home mortgage market too.  If 10% had been the minimum down payment over the past decade, the housing bubble never would have taken off the way it did.  Crazy loans would have been rare.  Unqualified buyers would have continued to rent.  Mortgage fraud would have been dramatically reduced.  Speculation and flipping would have been dampened.  Foreclosures wouldn't have decimated entire cities. The derivatives market wouldn't have reached such stratospheric heights.  We still might have had a medium-sized housing bubble, but the world probably wouldn't have been on the verge of imploding last year.

We should limit leverage everywhere: in the real banking system, in the shadow banking system, in hedge funds, and where it's baked into derivatives.  But we should also do it at the individual level: mortgage loans, car loans, and credit card loans.  The point is not to cut off credit, but to do what we can to ensure that it grows steadily and sensibly, not catastrophically.  A minimum 10% down payment to buy a house is a place to start.

Quotes of the Day: Healthcare Edition

| Sat Dec. 19, 2009 3:24 PM EST

Take your pick.  First, here's David Waldman on Ben Nelson's abortion compromise:

The problem with leaving the decision up to the states, he says, is that it doesn't go far enough. "I think states should leave the abortion question up to the counties," he explains. "Then I think counties should leave the abortion question up to municipalities. Then the neighborhoods should leave the abortion question up to each block." And each block, as you might have guessed, should leave the abortion question up to each household.

And here's Stan Collender on Olympia Snowe's claim that after endless months of negotiation she's going to vote against the healthcare bill because she feels "rushed":

Many things in American politics are silly but, assuming it's true, this has to be considered a lifetime achievement award.

And finally, here's Ezra Klein's favorite line from the CBO report that scored the Senate bill:

The 5 percent excise tax on cosmetic surgery was eliminated, and a 10 percent excise tax on indoor tanning services was added.

But the day is still young.  There's bound to be more good stuff later on.  Especially when senators start getting tired and cranky later tonight.

Healthcare Gets to 60

| Sat Dec. 19, 2009 1:42 PM EST

Finally, some good news: Sen. Ben Nelson (D–Neb.) has agreed to support the Senate healthcare bill.  That's 60 votes, and that should be the ball game.

So what got his vote?  Aside from a comically transparent piece of bribery that gives Nebraska a little extra Medicaid money, it was a deal over abortion language. Here's the LA Times explanation of Nelson's "opt-out" provision:

Under the agreement, individual states would be allowed to prohibit insurers from offering abortion services in new regulated insurance marketplaces, or exchanges, where Americans who do not get health benefits through work would shop for coverage. Senate officials said that is consistent with current law, which gives states this authority over their insurance markets.

But if states do not exercise that option, insurers would be free to offer abortion coverage to customers in an exchange, even if they receive federal subsidies. If a woman who receive a subsidy wants to get a policy that covers abortion, she would have to send two payments to the insurer, one of which would be placed in an account reserved for abortion coverage.

Any insurer that offers an plan with an abortion benefit would also have to offer a parallel plan that does not cover abortion services.

This is....not that bad, actually.  Obviously it's not as good as full funding for reproductive services, but that was never even remotely on the table.  But not only does this language mean that probably two-thirds of the population will have access to abortion coverage through the exchange, it also (I think) relieves the fear that the Stupak amendment in the House bill would eliminate abortion coverage from private insurance altogether.  The argument was that insurers would decide it was too much trouble to offer multiple policies and would just default to the version they offered on the exchange, which wouldn't cover abortion services.  But Nelson's compromise makes it clear that there are going to be multiple policies one way or another, so there's little reason to think that current private coverage will change much.

That's my first take, anyway, and since Barbara Boxer and Patty Murray support Nelson's language, I assume they see it the same way.  Curious to hear from others on this, though.

Onward, then.  I always figured that Nelson would eventually compromise, since I think he's driven largely by genuine, longstanding concerns, not by personal pique.  But he sure had me thinking otherwise for the past couple of days.  In the end, though, he hasn't gutted any major provisions, he's agreed to a constructive compromise on abortion, and his only price was a ridiculous but tiny deal for Nebraska on Medicaid reimbursement.  Not bad.  Now all we have to do is rein in Bart Stupak, who's busily trying to scuttle the whole thing.

Copenhagen Finale

| Sat Dec. 19, 2009 12:41 PM EST

David Corn and Kate Sheppard have a pretty good first-draft-of-history tick-tock on the final round of negotiations at Copenhagen, and you should read their whole piece.  But just to get a flavor of the thing, here's how the final few minutes of the dealmaking went down according to Brazilian Ambassador Sergio Serra:

As the discussion continued, Obama dropped a term on the table: "examination and assessment." This suggested direct monitoring of Chinese emission curbs by outsiders. Chinese officials in the room pronounced it unacceptable."We weren't that happy with it, either," Serra noted. So a new description—"international consultations and analysis" — was worked out. A "consultation" is obviously less intrusive than an "examination." But what does "international consultations and analysis" — soon to be referred to as ICA — mean? Asked this, Serra shrugged and said, "Ehhhh." He added, "The definition will be negotiated by a panel of people. They will decide what it means, like everything else." Obama promised to sell this not-well-defined ICA phrase to the Europeans. He also told Wen and the others that he had been asked by the Europeans to push for the below-2 degrees level.

The resolution of that six-word dispute eased the US-China deadlock that had paralyzed the summit, creating space for an agreement that may not be an agreement — christened the "Copenhagen Accord."

This is worse than an arms control negotiation.  Yuck.  And of course, the final agreement is almost comically vague, providing no numerical targets at all except for those in Appendix I, which is entirely blank.  Each individual country will fill it in later.  In other words, there's virtually nothing here except for a vague agreement that, yes, global warming is real and we probably ought to do something about it someday.

On the other hand, this post from Bill McKibben about how Barack Obama has "gutted progressive values" seems pretty over the top.  Copenhagen obviously didn't produce much of an agreement, but it's hard to see how Obama is the big villain in all this.  He's hemmed in domestically by Congress and internationally by China and other countries that flatly aren't willing to accept tough limits, and it's a little hard to see how he could have waved a magic wand and changed this.

Still, there's no two ways about it: by last September it was already obvious that Copenhagen wasn't going to produce much, and it managed to fail even those low expectations.  The only minuscule bright spot is that what we got was slightly better than what seemed likely Friday morning: total chaos and a complete breakdown.  By that low bar, producing a piece of paper of any kind counts as a success.

Protesting with Doughnuts

| Sat Dec. 19, 2009 12:10 PM EST

If you're ever curious about why so many people hate teachers unions, check out this little story in the LA Times today about the Centinela Valley Union High School District.  Long story short, on the last day of school before break, a minimum day, the district planned to feed their mostly low-income kids the usual mid-morning snack.  The union was pissed about this because it would extend the day by 15 minutes, so teachers all kept the kids in class and fed them Krispy Kreme doughnuts instead.  Result: the district had to throw away the unused snack food, they lost $10,000 in federal funds, and teachers got to leave 15 minutes earlier.

"A lot of teachers are very protective of their time," said the union rep.  No kidding.

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Friday Cat Blogging - 18 December 2009

| Fri Dec. 18, 2009 3:17 PM EST

Man, am I in a bad mood today.  I'll spare you the details.  And there's only one answer for that: cats!  Big ones.  On the left, I figured I'd show you the pillow/pod combo that I mentioned last week as a distraction to keep Domino off my desk.  It was working pretty well until yesterday, when she suddenly seems to have decided it's no longer a favored snoozing spot.  Not sure why.  Hopefully it's just a passing thing.  On the right, Inkblot is inhabiting a box of tissue paper that a few minutes before was a box full of Christmas ornaments.  A few minutes later it was a napping spot.  Festive!

Speaking of which, a regular reader emailed this morning to remind me that next Friday is (a) Christmas and (b) a Friday.  I'm not really planning to blog that day, so how about a catblogging extravaganza instead?  Send me a Christmas-themed photo of your cat, and I'll post a bunch of them next Friday.  In fact, since I'm actually a secular liberal Christmas-hater underneath my mild exterior, you can also send me Hanukkah cats, Kwanzaa cats, Eid cats, or just plain old holiday cats.  Just make it festive somehow and your cat can be famous!  I'll post a dozen or so of the best.  My email address is calpundit@cox.net.

Reasonable Conservatives

| Fri Dec. 18, 2009 2:58 PM EST

The "Party of No" reactionaries are pretty annoying.  The "centrist" Democrats are pretty annoying.  But sometimes I wonder if the "reasonable conservatives" are even worse.  After providing us with four reasons to support the Senate healthcare bill and six reasons to oppose it, David Brooks ends with this today:

So what’s my verdict? I have to confess, I flip-flop week to week and day to day. It’s a guess. Does this put us on a path toward the real reform, or does it head us down a valley in which real reform will be less likely?

If I were a senator forced to vote today, I’d vote no. If you pass a health care bill without systemic incentives reform, you set up a political vortex in which the few good parts of the bill will get stripped out and the expensive and wasteful parts will be entrenched.

I wonder.  Does Brooks really flip-flop every day on this?  If he does, then by an amazing coincidence, every single moderate conservative has done the exact same thing and come to the exact same conclusion: a sort of sad declaration that although reforming healthcare is a noble idea, the current legislation on offer is just too compromised, too full of barnacles and bribes, too lacking in real reform to deserve support.

And the same thing is true of climate legislation.  And financial regulatory reform.  And stimulus spending.  It's amazing!  They all have fine goals, but in their current form none is worth supporting.  They're just too messy.

But look: these guys all know how the political system works.  Nothing ever comes through Congress pure and pristine.  "Systemic incentives for reform," as Brooks well knows, is just another way of saying "ways to push costs down."  And plans to reduce costs are all going to be demagogued endlessly and cynically by every conservative officeholder and pundit in the country, leaving Democrats with no choice but to water them down, pretend they're something else, or just plain run away from them.

So we end up with a sausage.  We always end up with a sausage.  Brooks knows this.  So if that's his excuse for not supporting healthcare reform, he's just blowing smoke.  He knew months ago what the basic Democratic plan was, and he knew months ago that anything this big would end up compromised and messy.  Pretending now that this is why he opposes it really grates.  If he just doesn't like liberal ideas about healthcare reform, he should have the guts to come out and say so directly.

Quote of the Day: Getting Serious

| Fri Dec. 18, 2009 12:36 PM EST

From Felix Salmon, on the Washington Post's decision to team up with entitlement scold Pete Peterson and former Reader's Digest editor Jackie Leo to produce a new publication called The Fiscal Times:

With any luck, this will help move the press in general, and WaPo in particular, away from the normal emphasis on who's winning the political game on Capitol Hill, and towards more substantive analysis of policy issues.

That's a good one, Felix.  I've been feeling pretty down this morning, but this gave me a much needed belly laugh.  Thanks.

The Public and the Climate

| Fri Dec. 18, 2009 12:18 PM EST

Here's the last year's worth of answers to a Washington Post poll question about whether or not the government should regulate greenhouse gases even if it costs you an extra 25 bucks a month.  As you can see, in the most recent survey support for regulation jumped from 39% to 55%.

Over at NRO, Kathryn Jean Lopez takes this as evidence of trickery on the Post's part.  In previous polls they asked how you'd feel if your electric bill went up $25, but in the latest poll they asked how you'd feel if your energy bill went up by $25.  "And so 55 percent wanted to feel good," she says, "and could do so with the less direct question."

I think I'd take a wee bit different lesson from this: polls like this are lousy indicators of true public opinion.  Asking about "energy costs" isn't nefarious, it's just more accurate since cap-and-trade affects all energy, not just electricity.  Still, the change in public opinion is surprisingly strong anyway, which mostly goes to show that there are a lot of people who simply don't have very strong opinions on this topic.  And that in turn means there's a pretty wide scope for public opinion to be influenced.  How are we doing on that?