Kevin Drum

This War is Different

| Thu Mar. 11, 2010 3:14 PM EST

Andy McCarthy thinks that lawyers who represent detainees who have been designated enemy combatants are guilty of "coming to the enemy’s aid during wartime." Orin Kerr counters that McCarthy "strangely overlooks the basic fact that much of the litigation for the Guantanamo detainees concerns whether they are in fact the enemy." (Italics mine.) To make things more concrete, Conor Friedersdorf recounts the story of Fouad al-Rabiah, a relief worker who was hauled into the American net in Afghanistan in 2001, eventually deemed innocent by interrogators, but kept in custody anyway:

Thus Mr. al-Rabiah. It isn’t just that he was an innocent man thrown into Gitmo, or that he was held even after a CIA analyst concluded that he was innocent, or that National Security Council Staffers were aware of his innocence and actively trying to bring about a review of his detention — Mr. al-Rabiah’s case is apt because after the CIA’s 2002 determination of his innocence, he spent another seven years wrongly imprisoned, regaining his freedom and seeing his children only after retaining the help of American attorneys.

Ms. Cheney, Mr. Kristol, Mr. Thiessen and Mr. McCarthy assert that American lawyers who represent Guantanamo Bay detainees are helping the enemy in a time of war. Here is a case, however, where the Guantanamo Bay detainee was innocent, languished for years in custody without a lawyer despite official knowledge of his innocence, and ultimately achieved his freedom with legal help. Ms. Cheney, Mr. Kristol, Mr. Thiessen and Mr. McCarthy have no answer for people like Mr. al Rabiah and his attorneys — their poorly reasoned McCarthyite rhetoric is bankrupt because they are unable or unwilling to acknowledge the distinction between being accused of being an enemy of America in war time, and actually being an enemy of America.

The Andy McCarthys of the world endlessly lecture us about how this war is different because it's fought on one side by non-uniformed terrorists. And there's some truth to that. It is different. But one of the ways it's different is that it's not always simple to know who's a real enemy combatant and who's not. And if that decision is left entirely up to the executive branch, you're practically begging for the same kinds of abuses that you get if you let the executive branch operate without oversight in any other area. Thus, lawyers and judges have a role to play. They aren't aiding the enemy during wartime, they're trying to figure out who the enemy really is. Even Andy McCarthy ought to be interested in that.

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Overtreatment

| Thu Mar. 11, 2010 2:43 PM EST

Matt Yglesias comments on an op-ed about the misuse of PSA screening for prostate cancer:

A kind of odd piece of conventional wisdom has hardened that it’s dishonest of Barack Obama or Matt Yglesias or anyone else to suggest that there are some free lunches to be had in the realm of health reform....[But] in the health care domain, in particular, a mix of weak science, bad economic incentives, and poor mathematical understanding leads to a fair amount of over-treatment. And over-treatment for cancer isn’t just an issue of spending money that didn’t need to be spent — treatment for prostate cancer normally has very unpleasant side effects and it’s really cruel to inflict it on men who don’t actually need the treatment. And as far as cancers go, that’s totally typical. Reducing over-screening and over-treatment would probably save money (though it’s always hard to know what the long-term impact will be since everyone eventually gets sick and dies) and will definitely spare patients a lot of pain and suffering.

True enough. The problem is that it's not just doctors and pharmaceutical companies pushing these tests, though that's part of it. It's also patients who demand this stuff, and if you withhold it because "researchers" or "bureaucrats" say it's not cost effective, they go nuts. And they'll be goaded along in their hollering by whichever political party thinks it might gain them a momentary advantage.

I'm not sure what the answer is. Better patient education? I guess I'm not very hopeful about that. Economic incentives? Maybe, but when it comes to cancer that probably won't do the trick either. More rigorous approval procedures for this stuff? Perhaps, though there's an obvious tightrope to walk in order to get this right.

In any case, this is one of those topics that I have a hard time figuring out because my own temperament is so obviously different from most people's. I don't really like seeing doctors, I prefer the lightest treatment possible, and I dislike trying anything that hasn't been around for at least a decade or two. But most people just aren't wired this way. They see their doctor at the first sign of trouble, demand as much attention as they can get, and insist on whatever the latest and greatest treatments are. I just don't get this. But it's the reality, and the cure — pardon the pun — is hard to figure out.

Yes, the Healthcare Bill Really Does Pay for Itself

| Thu Mar. 11, 2010 2:11 PM EST

The CBO has a new score of the final Senate healthcare bill, with all its amendments included, and it hasn't changed much. Over the next decade they estimate that it would lower the federal deficit by $118 billion.

But isn't this just smoke and mirrors because the bill raises taxes for ten years but only spends money for six? Nope. It also reduces the federal deficit in the full decade after 2019:

In subsequent years [] the effects of the proposal that would tend to decrease the federal budgetary commitment to health care would grow faster than those that would increase it. As a result, CBO expects that the proposal would generate a reduction in the federal budgetary commitment to health care during the decade following 2019; that judgment is unchanged from CBO’s previous assessment.

Now, obviously you can choose to simply not believe this. Or you can insist that Congress will never let it happen. Or you can object to spending more money on healthcare even if it is fully funded. But for better or worse, the CBO is the official scorekeeper, it's one that both sides accept, and they say the bill cuts the deficit. Special pleading aside, that's most likely exactly what it will do.

Oh — and it insures 31 million people who would otherwise go without coverage. That gets us to 94% of all legal residents. Not bad.

John Ensign Soldiers On

| Thu Mar. 11, 2010 1:43 PM EST

Democrats have suffered through their share of bad behavior lately, but honestly, none of it compares to the travails of Republican Sen. John Ensign. I mean, the guy had an affair with his top aide's wife, paid out hush money in a way plainly intended to skirt IRS reporting rules, and then worked illegally to get his ex-aide some consulting income doing congressional lobbying. “Senator Ensign has stated clearly, he has not violated any law or Senate ethics rule,” says Ensign's flack, but Ensign can say it as clearly as he wants. The evidence says otherwise.

Today, the New York Times got hold of some emails suggesting pretty clearly that Ensign, who was "a bit rattled" according to one of the messages, intervened with a guy named Bob Andrews, who was trying to get help with some energy projects in Nevada:

According to the documents, Mr. Ensign forwarded the note about the company’s business plans to Mr. Hampton with a message of his own saying: “I think you have played golf with him. This is who I met with.”

That led to a series of meetings between Mr. Hampton and Mr. Andrews about consulting work. “It was my understanding he was in the lobbying business,” Mr. Andrews said of Mr. Hampton. “Being able to lobby our Congressional and senatorial lawmakers was certainly something we were exploring.”

A typical excerpt from one of Hampton's emails to Ensign is below. How this guy manages to stay in office mystifies me. I guess he must have taken lessons from David Vitter and Mark Sanford.

Climate Change's PR Disaster

| Thu Mar. 11, 2010 1:12 PM EST

The chart below, from Gallup, shows that public recognition of the seriousness of global warming has taken a steep hit over the past two years. This comes via Aaron Wiener, who believes the most obvious explanation for the shift is the growing politicization of climate change. "What was once a broad moral and scientific issue is now a centerpiece of the Democrats’ legislative agenda. The percentage of Americans expressing a belief in man-made climate change now correlates loosely with the level of support for the president, while the percentage expressing skepticism is in line with opposition to Democrats in Washington."

True enough, though I'd say that the recent failure of Copenhagen and the concerted disinformation campaign surrounding "Climategate" probably played a role in the latest numbers. Whatever the reason, though, the effects have been devastating. It's one thing to acknowledge climate change but to argue over its likely impact. That would lead politicians to accept cheap, small-bore measure to address warming but to reject bigger, more expensive ones.

But that's not what's happened. The Republican Party has largely decided that climate change simply doesn't exist. It's a hoax. And that leads them to oppose everything, even programs that have light footprints, don't cost a lot of money, and don't require massive regulation. After all, why should they support them if the problem they address literally doesn't exist?

This is why so many environmentalists have switched gears recently, suggesting that climate change action should be disguised as energy research, national security programs, or competition with China for market share in windmills and solar panels. And maybe that will work for a while. But just saying something doesn't exist doesn't make it so. Eventually even the GOP is going to have to acknowledge this.

Healthcare Looking Up

| Wed Mar. 10, 2010 9:23 PM EST

Guess what? Healthcare reform is getting more popular. Just a little more popular, mind you, but every little bit counts when it comes to wavering congress critters.

What's really important here, though, isn't the magnitude of the change, but just the fact that the tide is shifting. This might have something to do with the recent summit and some of Obama's more aggressive speechmaking recently, but my guess is that it mostly has to do with the fact that there's an actual bill on the table now; Democrats have something concrete to sell; Republican obstructionism has been a little too screechy for a lot of independents lately; and, most important, it looks like we're actually in the home stretch.

That, I think, concentrates the mind wonderfully. The long, dreary dog days of the legislative process are over, and now we're in the final few seconds of the game. It's exciting! And it makes some of the concrete measures in the bill just a little more.....well, concrete. It's still gonna be a close one, though.

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Summing Up Paul Ryan

| Wed Mar. 10, 2010 6:06 PM EST

I'd just like to quickly sum up what we now know about conservative Rep. Paul Ryan's "Roadmap for America’s Future":

And remember, this comes from the guy who's pretty much the best the GOP has to offer. Pretty impressive, no?

The Problem With Credit Default Swaps

| Wed Mar. 10, 2010 5:42 PM EST

Felix Salmon, who has been a one-man truth squad lately when it comes to credit default swaps, lauds Tuesday's CDS speech by CFTC head Gary Gensler as "by far the best thing written on the subject to date. He's absolutely right about pretty much everything." Among other things, Gensler favors exchange trading for CDS, stronger regulation of all OTC derivatives so that CDS pathologies don't just move elsewhere, and much more restrictive rules on allowing banks to use CDS to meet regulatory capital requirements. All good stuff.

But CDS are basically insurance policies on bonds or other financial instruments, and Gensler thinks that can be a problem too:

At the height of the crisis in the fall of 2008, stock prices, particularly of financial companies, were in a free fall. Some observers believe that CDS figured into that decline. They contend that, as buyers of credit default swaps had an incentive to see a company fail, they may have engaged in market activity to help undermine an underlying company’s prospects. This analysis has led some observers to suggest that credit default swap trading should be restricted or even prohibited when the protection buyer does not have an underlying interest.

Though credit default swaps have existed for only a relatively short period of time, the debate they evoke has parallels to debates as far back as 18th Century England over insurance and the role of speculators. English insurance underwriters in the 1700s often sold insurance on ships to individuals who did not own the vessels or their cargo. The practice was said to create an incentive to buy protection and then seek to destroy the insured property. It should come as no surprise that seaworthy ships began sinking. In 1746, the English Parliament enacted the Statute of George II, which recognized that “a mischievous kind of gaming or wagering” had caused “great numbers of ships, with their cargoes, [to] have . . . been fraudulently lost and destroyed.” The statute established that protection for shipping risks not supported by an interest in the underlying vessel would be “null and void to all intents and purposes.”

For a time, however, it remained legal to buy insurance on another person’s life in England. It took another 28 years and a new king, King George III, before Parliament banned insuring a life without an insurable interest.

Interesting! And it's a pretty good analogy that makes the underlying conflict understandable. However, although Gensler acknowledges the problem, he misses the aspect of this that's come to bother me the most: the effect this has on market stability.

Here's the problem: if you own a corporate bond of some kind, but don't want to run even the small risk of default that it carries, you can buy a CDS on that bond. This is basically fine. As Gensler points out, it does have the downside of making bond buyers less careful about due diligence, but that's probably manageable. (And Gensler has some ideas about how to manage it.) But what happens when lots of other people also buy a CDS on that bond? Obviously, you have the problem Gensler mentions, namely that under some circumstances these CDS owners might have a vested interest in helping the bond issuer fail — the same way you might want your house to catch on fire if it's insured for more than it's worth. But you also have another problem: if the bond issuer does default, and there are a hundred speculators who own CDS protection on one of its bond, you've gone from, say, a $10 million event to a $1 billion event. Basically, when things go bad — and eventually they always do — widespread CDS protection can cause things to spiral far more out of control than they would otherwise.

And what's the upside of allowing this? The argument I hear most often is that broad market trading of CDS provides an efficient price discovery mechanism for the underlying securities. Moody's may rate that bond AA, but the CDS market will tell you what traders really think.

I guess I have two questions about that. First, does it really work? Are CDS marks really reliable indicators of creditworthiness? That's debatable. Second, even if they are, is this a big enough benefit to make the instability risk worth it?

I'm no CDS expert, but I wish Gensler had at least addressed this problem. Maybe there's a simple solution. Or maybe the danger is a lot less than I think it is. It's not clear, for example, that CDS instability was a big problem in the 2008 crash. AIG was a big problem, but that's because they sold too much CDS without proper risk management or enough capital to back it up, not because speculators were loading up on specific issues.

So: Does widespread use of CDS make the financial system inherently less stable? Or is this just another of the endless slanders that CDS has to endure? Conversation on this topic welcome. 

Swan Song for the Filibuster?

| Wed Mar. 10, 2010 3:00 PM EST

Harry Reid on the filibuster:

The filibuster has been abused. I believe that the Senate should be different than the House and will continue to be different than the House. But we're going to take a look at the filibuster. Next Congress, we're going to take a look at it.

Sam Stein explains:

Reid's embrace of filibuster reform comes after he previously threw cold water on the likelihood of getting the rules changed. His reference to the "next Congress" stands out. To change Senate rules in the middle of the session requires 67 votes, which Democrats clearly don't have. But changing the rules at the beginning of the 112th Congress will require the chair to declare the Senate is in a new session and can legally draft new rules. That ruling would be made by Vice President Joe Biden, who has spoken out against the current abuse of the filibuster. The ruling can be appealed, but that appeal can be defeated with a simple majority vote.

Of course, setting this precedent means that Republicans can change the filibuster rules too, the next time they have both a Senate majority and a president in the White House. Are 51 Dems willing to take that chance? Does Harry Reid have the stones to find out? Is Barack Obama fed up enough that he'll give Joe Biden the go-ahead? Tune in next January!

Defending Public Schools

| Wed Mar. 10, 2010 2:29 PM EST

Erik Kain writes that a blog post from conservative Austin Bramwell about the benefits of public schools has "pulled me back from the brink of school choice advocacy and the adoption of pro-voucher views." Sounds interesting! Let's take a look at this conservative defense of the public school system:

As every schoolchild likes to say, America is a free country. That is, parents have the right to settle in whatever school district they choose. (They also have a constitutional right to send their children to private school if they wish.) Predictably, therefore, those families willing to pay the most for a good education gravitate to the best schools, the “price” of which is reflected in the cost of real estate and local property taxes, while the families that care the least about education gravitate to the worst. Meanwhile, the extent to which parents value education itself enhances (or degrades) school quality, as schools are always more likely to thrive when they can attract the families with the highest social capital. Thus, good schools and “good” (that is, education-valuing) families cluster together. So long as Americans enjoy freedom of movement, supply and demand will always tend to produce a huge gap between successful and failing schools. The outcome is basically fair and not altogether inefficient.

Holy cats. That's it? This has pretty much the opposite effect on me: if this is the best defense of public schools we can come up with, then sign me up for vouchers. Aside from the obvious question of whether entire classes of children should be doomed to a lousy education based on where their parent choose to live, there's the equally obvious problem that lots of non-wealthy parents flatly can't afford to move to neighborhoods with good schools no matter how much they value education. Luckily a couple of commenters make note of this, and Bramwell responds:

You are troubled by the cases of people who value education highly but are still trapped in bad schools. I am troubled by these cases too, though I suspect that the number is smaller than imagined.

To reduce the number of such cases, how about this: since reforming schools is so inherently difficult, we should instead try to make housing more affordable even in the best school districts. I would consider first reforming zoning laws that restrict density and discourage/prohibit rental housing.

Sounds great! Let's just build lots of affordable housing in nice, upscale suburban neighborhoods. I don't imagine there will be any political problems associated with that. Should be a piece of cake.

Or, on a more serious note, we could fund poverty and educational interventions with proven track records, allow schools more leeway to deal with incorrigible students, encourage our best teachers to work in our most challenging schools and allow principals to fire the ones who fail, promote experimentation via charter schools, and make sure every school is adequately funded. Feel free to add your own favorite ideas to this list. It's a little messy and it's no silver bullet — it's a long, hard slog, if you will — but these are the sorts of things that will eventually make a difference. Best of all, some of it is even politically feasible.