Kevin Drum

What Spies Do

| Thu Jul. 8, 2010 7:23 PM EDT

Bruce Bartlett recalls his sole experience with Soviet spying: a fellow named Valery Sorokin who was a "counselor" at the Soviet embassy and wanted to come and chat with him about economic policy in the early 80s:

I remembered all this some years later when I was working at the Treasury Department and was on the distribution for some CIA raw material relating to economic issues. Almost all of it was worthless. It involved conversations some CIA agent had with a prominent foreign businessman or economist relaying information that could easily be gleaned from that day’s Financial Times.

Suddenly, I understood what Sorokin had been up to. He could have written a memo to his bosses just regurgitating what was in the daily papers, news magazines and other public sources, but that wouldn’t have been very spy-like. It undoubtedly sounded so much better if he could relay the same identical information but say that it had been secured from a high-level congressional staffer. That’s what spies do.

Eventually, I took myself off the distribution for the CIA material. It was a pain to handle and almost never offered insights that couldn’t be found in public sources. But I suppose it provided employment for American versions of Dr. Sorokin working in London, Tokyo and elsewhere.

In a slightly off-center way, this sounds an awful lot like Daniel Ellsberg's experience with classified information. It kinda makes you wonder if we even need the CIA, doesn't it?

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How Long Will the Economy Suck?

| Thu Jul. 8, 2010 12:55 PM EDT

You can make a pretty good case that the U.S. economy won't truly recover until we finish deleveraging from the credit bubble of the aughts. Stuart Staniford takes a quick look at several methods of estimating how long that's going to take, and comes up with the following: 15-25 years, 13 years, 10+ years, and 10-15 years. "All of these methods have problems," he acknowledges, "and you can pick your poison. What they all have in common though is this: deleveraging will take at least a decade, and it could easily take 15-20 years. In the meantime, the economy is likely to be pretty choppy at best."

Anybody got a problem with this? No? Then back to work you slackers.

Political Incorrectness in the Media

| Thu Jul. 8, 2010 11:50 AM EDT

I didn't get to this yesterday, but better late than never. After 20 years as a CNN producer, Octavia Nasr was let go on Wednesday for sending out this tweet:

Andrew Sullivan writes: "Froomkin was fired for opposing torture a little too passionately; Weigel was forced out because his private emails revealed he was not acceptable to the partisan right; Frum is cut off from conservative blogads funding; Moulitsas is barred from MSNBC for criticizing Joe Scarborough; and Octavia Nasr is fired for offending the pro-Israel lobby over a tweet expressing sadness at the death of a Hezbollah leader." Glenn Greenwald reels off a list of his own and asks: "What each of these firing offenses have in common is that they angered and offended the neocon Right....Have there ever been any viewpoint-based firings of establishment journalists by The Liberal Media because of comments which offended liberals? None that I can recall." And David Carr worries: "as a journo who tweets, gotta say this trend toward career-ending posts is a might disturbing."

Nasr herself calls her tweet an "error of judgment" and acknowledges that "It is no secret that Sayyed Mohammad Hussein Fadlallah hated with a vengeance the United States government and Israel." But then she explains why she said what she did:

I used the words "respect" and "sad" because to me as a Middle Eastern woman, Fadlallah took a contrarian and pioneering stand among Shia clerics on woman's rights. He called for the abolition of the tribal system of "honor killing." He called the practice primitive and non-productive. He warned Muslim men that abuse of women was against Islam.

....Through his outspoken Friday sermons and his regularly updated website, Fadlallah had a platform to spread what many considered a more moderate voice of Shia Islam than what was coming out of Iran. Immensely popular in Lebanon among the various religious groups, he also had followers across the region including in Saudi Arabia, the UAE, Kuwait, Bahrain and even as far as Morocco in northern Africa.

Sayyed Fadlallah. Revered across borders yet designated a terrorist. Not the kind of life to be commenting about in a brief tweet. It's something I deeply regret.

It's easy to understand why Nasr was let go, but the end result is a mainstream media ever more curled up in a fetal crouch, afraid of its reporters and producers ever saying an unguarded word that might offend someone. The age of unedited blogs and real-time tweets is going to put an end to that one way or another, though, and the sooner the better. In the meantime, as with any culture in transition, there are going to be some ugly casualties. Nasr is one of them.

Obama and the Bankers

| Thu Jul. 8, 2010 11:21 AM EDT

Mike Konczal captures perfectly some of the concrete ways in progressives are right to be pretty dissatisfied with the Obama administration over financial reform:

I do think Treasury could have moved this bill in a lot of ways. They set the terms under which the debate would unfold. And whenever they got involved with Congress, they pushed for less structural reforms. They pushed for the solution that embraced the status quo with arms wide open.

Examples? Off the top of my head, ones with a paper trail: They fought the Collins amendment for quality of bank capital, fought leverage requirements like a 15-to-1 cap, fought prefunding the resolution mechanism, fought Section 716 spinning out swap desks, removed foreign exchange swaps and introduced end user exemption from derivative language between the Obama white paper and the House Bill, believed they could have gotten the SAFE Banking Amendment to break up the banks but didn’t try, pushed against the full Audit the Fed and encouraged the Scott Brown deal.

That's it in a nutshell. The final shape of the financial reform bill, even after it got watered down in conference, is decent enough to be well worth passing. But it's decent almost entirely because of amendments that were tacked on during the final two months of debate, not because the White House tried to introduce a decent bill in the first place. And to make it worse, as Mike notes, the White House actually opposed most of the amendments that improved financial reform from a D to a B-.

In one sense, it doesn't matter who was responsible for what. The final bill is the result of a complex dance between the White House, the Treasury, and Congress, and it's silly to give too much (or too little) credit to any one of them. But the fact remains that Obama's team has been pretty weak on financial reform from the start. Whether this was from political miscalculation or genuine conviction I don't know, but neither one reflects well on them.

Of course, none of this changes the fact that Obama is still a business-hating, job-killing, government-loving, socialist wannabe. But he would have been that no matter what. He should have just done the right thing and not worried too much about it.

Quote of the Day: About Face in Alaska

| Thu Jul. 8, 2010 11:00 AM EDT

From 20-year-old Levi Johnston, apologizing for remarks he made when he was 19:

To the Palin family in general and to Sarah Palin in particular, please accept my regrets and forgive my youthful indiscretion.

That's sort of funny, but the rest of his statement is just creepy, like one of those things the Soviets used to extort out of supposed dissidents. I wonder what the Palins have on him?

Can START Get to the Finish Line?

| Thu Jul. 8, 2010 10:22 AM EDT

Dan Drezner, after pointing out that the START nuclear arms treaty is supported by virtually every foreign policy bigshot on both sides of the aisle, says this:

If the Obama administration can't get Senate ratification of START despite the bipartisan support of the foreign policy community, well, it suggests that the foreign policy community doesn't have the political capital it once did. I posited earlier this year that START would pass because it was pretty unobtrusive and wouldn't play a big role in political campaigns. If GOP senators think differently, however, then you can kiss any foreign policy initiative that requires congressional approval bye-bye.

Best to start puckering up, I'd say. I'd love to be wrong about this, but the Tea Party base of the Republican Party, like every outbreak of right-wing extremism for the past century, is dead set against any treaty that limits the U.S. in any way, dead set against cooperation with Russia of any kind, and dead set against anything that gives up American "sovereignty." So that's that. I don't think there are more than five or six Republican senators at this point who are willing to buck the tea partiers, and it will take more than that to pass this thing. If Obama submits it as an executive agreement, which only requires 60 votes, maybe it's got a chance, but it's hard to see how it gets to 67 in the current environment.

But maybe I'm wrong. As Dan says, START is a "modest treaty that yields modest gains," and maybe there are still a few more foreign policy pragmatists in the GOP ranks than I think. I'm not sure I'd want to bet money on it, though.

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Fed to Unemployed: Drop Dead

| Thu Jul. 8, 2010 12:22 AM EDT

When I read this headline at the Washington Post:

Federal Reserve weighs steps to offset slowdown in economic recovery

I was encouraged. Hey, at least someone is thinking about doing something. But then I read further into the article and saw phrases like "modest steps" and "not imminent." As it turns out, the ideas under consideration are modest indeed:

One pro-growth strategy would be to strengthen language in Fed policy statements that the central bank's interest rate target is likely to remain "exceptionally low" for an "extended period." The policymakers could change that wording to effectively commit to keeping rates near zero for even longer than investors now expect.

They might strengthen the language in their policy statements! That oughta do it! In fairness, there are a couple of other ideas under consideration that are a bit more concrete, but not, unfortunately, much more ambitious. For now, anyway, it looks like no one thinks the economy is in bad enough shape to actually bother doing anything about it.

The Future of Online News Magazines

| Wed Jul. 7, 2010 5:16 PM EDT

Time magazine has decided to take a lot of its print content off the web and make it available solely to print and iPad subscribers. Felix Salmon asks a good question:

If the 1990s saw news organizations set up massive parallel online operations, then, and the 2000s saw the integration of the online operations with the legacy operations, then is this the beginning of the 2010s backswing, where the two become bifurcated again?

My guess is that the answer is no, and that this is just a case of Time making a tactical decision which makes no strategic sense. It wants to sell lots of copies of its iPad edition at $5 a pop, but [if iPad content can be read] for free just by firing up the web browser, it fears that sensible consumers won't bother. So rather than improve the iPad app and make it worth the money, Time is artificially crippling its website.

As a magazine blogger it's probably counterproductive for me to ask this, but my question is the opposite of Felix's: why do news magazines bother putting all their content on the web in the first place? The answer, of course, is advertising revenue, but that's pretty much turned out to be a bad joke, hasn't it? Reliable figures are hard to come by, but IAB estimates online display advertising amounted to $8 billion last year, and I'd be surprised if more than a quarter of that came from magazine sites. So let's be generous and say that magazines generated $2 billion in online advertising, or roughly 10% of the $20 billion they generate in print advertising. Assuming that news magazines work on about the same ratio, is that even worth keeping their websites alive for if it eats even moderately into print revenue?

I know, I know: it's not as if print advertising is going gangbusters either. And if print is dying, then news magazines had better have nifty websites or else they'll be out of business entirely. But I have my doubts about that logic. If it's online or nothing, I doubt that a news magazine like Time can afford to operate at all. Protecting print and subscription revenue at all costs may not work, but it doesn't strike me as an obviously stupid strategy. And the usual magazine strategy of putting content online several days or weeks after the print magazine has hit the stands obviously won't work in the news world.

I'm not being antediluvian here. I've spent the last eight years of my life writing online, after all. But after well over a decade to sort things out, online journalism still doesn't seem to have found a business model that makes sense. There are exceptions here and there (Politico, Gizmodo), but those do more to highlight the massive number of mainstream failures than to prove that there really is a replicable online model for others to follow.

But maybe I'm way off base here. Are magazines generating — or on track to generate — more online revenue than I think? Are there hybrid models out there that I'm unaware of? Or is the future of online versions of existing print journalism as bleak as it looks? Comments?

Kaplan on Romney

| Wed Jul. 7, 2010 2:24 PM EDT

Yesterday I read Mitt Romney's attack on the New-START treaty with Russia, which cuts back on both sides' nuclear arsenals, and even though I don't know much about this stuff I was left scratching my head. A commission can broadly amend the treaty? (Not likely.) We aren't allowed to load ICBMs on bombers? (ICBMs don't go on bombers, do they?) We aren't allowed to convert ICBM silos into missile defense sites? (Do we even want to?) Etc. etc.

Well, it turns out it's even worse than that. Fred Kaplan does know a lot about this stuff, and his epic takedown is here. There is, almost literally, not a single meaningful word in Romney's entire piece. But I guess that's a feature, not a bug. It's a great bit of base pandering for the Republican Party's 2012 primaries, and that's pretty obviously what it's aimed at.

Taxing Sugary Soda

| Wed Jul. 7, 2010 1:07 PM EDT

Via Matt Yglesias, here's a chart from a recent Dept. of Agriculture study suggesting that a 20% tax on sugary soft drinks would reduce overall consumption of said beverages and thereby reduce our net calorie intake from all beverages:

By assuming that 1 pound of body fat has about 3,500 calories, and assuming all else remains equal, the daily calorie reductions would translate into an average reduction of 3.8 pounds over a year for adults and 4.5 pounds over a year for children.

Not so fast, I say. Even assuming that all the assumptions in the report are correct, all it does is show that our net calorie intake from beverages would, on average, go down. But if you switch to diet soda, it's pretty likely that you'll just make up the calories somewhere else. In fact, if this study is correct, it's possible that you might increase your total calorie intake.

I'd actually be interested in some large state imposing a tax like this purely for research purposes, and since I don't drink sugared soda I'd be happy to nominate California. We need the money anyway. But my guess is that the results would disappointing. People might end up swilling less high-fructose corn syrup, but they'd probably just eat more corn nuts to make up for it.