Kevin Drum

What's Next in Iran?

| Sun Jun. 21, 2009 10:46 PM PDT

The BBC reports that a day after Saturday's crackdown in Tehran, things were quiet on Sunday.  The Guardian suggests this might be the beginning of the end:

Protesters who have shaken the authorities by venting anger en masse at the "stolen" elections that returned Mahmoud Ahmadinejad to office spoke of a hiatus, even a despair, settling on the movement after yesterday's Saturday's clashes killed at least 10 and wounded scores more.

But in Time, Robin Wright says this may be the calm before the storm, partly thanks to the widely circulated video of a woman known as "Neda" being gunned down on Saturday:

Although it is not yet clear who shot "Neda" (a soldier? pro-government militant? an accidental misfiring?), her death may have changed everything. For the cycles of mourning in Shiite Islam actually provide a schedule for political combat — a way to generate or revive momentum. Shiite Muslims mourn their dead on the third, seventh and 40th days after a death, and these commemorations are a pivotal part of Iran's rich history.

....Shiite mourning is not simply a time to react with sadness. Particularly in times of conflict, it is also an opportunity for renewal. The commemorations for "Neda" and the others killed this weekend are still to come. And the 40th day events are usually the largest and most important.

If Wright is correct, Tuesday could be a pivotal day.  Stay tuned.

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Iran Update

| Sun Jun. 21, 2009 12:03 PM PDT

The New York Times: "Estimates of the death toll in clashes [Saturday] between security forces and demonstrators protesting what they called a fraudulent presidential election varied. State television said that 10 had died, while radio reports said 19 people had been killed.  Major streets and squares of Tehran were saturated with police and Basij militia forces. There were reports of scattered confrontations with the police, but there was no confirmation of any new injuries Sunday evening.".....LA Times: "There was uncertainty over what might unfold next. Would protesters rally again despite the government's blunt warnings it would use force to clear the streets, as they did Saturday? Or were both sides recalibrating strategies to keep the nation from sliding into further chaos?"

Juan Cole: "The regime has arrested Faezeh Hashemi Rafsanjani, daughter of the former president, who spoke at a pro-Mousavi rally, along with 4 other members of that family. This step is typical of an old Iranian ruling technique, of keeping provincial tribal chieftains in check by keeping some of their children hostage at the royal court."

Roger Cohen reporting from Tehran: "I don’t know where this uprising is leading. I do know some police units are wavering.".....Shahram Kholdi: "There is a division in the ranks of the police, which in a way is a good sign. Two close friends [...] were stopped at a check point and their car trunk was full of posters and green bands. The constables took them to their immediate commander who confiscated all the material and ordered them to be arrested. However, as they were taken to another check point where the district commander was, he overruled his superiors [...] As they got in the car to leave the station, the district commander told them that they have to be extra careful and told them Movaffagh Bashid (meaning roughly 'good luck').".....Andrew Sullivan: "Just watch this pitched battle in the streets between a crowd and the riot police (via BBC Farsi). And watch it to the very end, as the police suddenly turn tail and run."

Chatham House on irregularities in the vote: "The massive increases from 2005, the collapse of regional variations, and the absence of any clear correlation between increases in turnout and increased support for any candidate on their own make the results problematic.".....BBC: "Iranian authorities have asked the BBC's correspondent in Tehran to leave the country within 24 hours."

Al Arabiya: "Iran's religious clerks in Qom and members of the Assembly of Experts, headed by former President Mahmoud Ahmedinejad, are mulling the formation of an alternative collective leadership to replace that of the supreme leader, sources in Qom told Al Arabiya on condition of anonymity.".....The Lede: "More splintering among Iran’s clerics is reported by Reuters.".....Fareed Zakaria: "Something very important has been laid bare in Iran today — legitimacy does not flow from divine authority but from popular support.".....Bill Clinton: "Basically, this is about a government trying to deny the modern world."

Chart of the Day

| Sun Jun. 21, 2009 10:03 AM PDT

Republicans have been screaming blue murder for months about the cost of the cap-and-trade provision of the Waxman-Markey climate change bill.  It's going to cost us $1,600 each! No, that's wrong: it's going to cost us $3,100 each!  Head for the hills!

So Rep. Dave Camp, the ranking Republican on the House Ways and Means committee, asked the Congressional Budget Office for a verdict.  And guess what?  The net cost turned out to be — at most — $175 per household by the year 2020.  That's less than $70 per person:

The Congressional Budget Office (CBO) estimates that the net annual economywide cost of the cap-and-trade program in 2020 would be $22 billion — or about $175 per household. That figure [...] does not include the economic benefits and other benefits of the reduction in GHG emissions and the associated slowing of climate change....Overall net costs would average 0.2 percent of households’ after-tax income.

Low income households would fare even better.  The CBO's table of net costs is below.

Compare and Contrast

| Sun Jun. 21, 2009 9:31 AM PDT

From McClatchy:

President Barack Obama is morphing into George W. Bush, as administration attorneys repeatedly adopt the executive-authority and national-security rationales that their Republican predecessors preferred.

In courtroom battles and freedom-of-information fights from Washington, D.C., to California, Obama's legal arguments repeatedly mirror Bush's: White House turf is to be protected, secrets must be retained and dire warnings are wielded as weapons.

From the Associated Press:

Gay rights groups expressed dismay with the Obama administration Friday over its championing of the Defense of Marriage Act, a law the president pledged to try to repeal while on the campaign trail.

The government filed a motion late Thursday to dismiss the case of Arthur Smelt and Christopher Hammer, who are challenging the 1996 federal act....It repeated several arguments made under Bush, including the argument that a union between a man and a woman is "the traditional, and universally recognized, version of marriage."

From the Los Angeles Times:

As a candidate for president, Barack Obama wooed environmentalists with a promise to "support and defend" pristine national forest land from road building and other development that had been pushed by the George W. Bush administration.

But five months into Obama's presidency, the new administration is actively opposing those protections on about 60 million acres of federal woodlands in a case being considered by the U.S. 9th Circuit Court of Appeals.

....Whatever the strategy, the result has been a series of cases in which President Obama appears to be taking positions in court that run counter to his stated goals....The Interior Department this spring, for example, defended a Bush plan to lease western Colorado's picturesque Roan Plateau for oil and gas drilling....Administration lawyers have also fought environmentalists in court over a coal mining technique known as mountaintop removal.

Hope and change, baby, hope and change.

Friday Cat Blogging - 19 June 2009

| Fri Jun. 19, 2009 12:32 PM PDT

On the left, Inkblot looks like a subject in a Rembrandt still life.  Or so he thinks.  On the right, Domino is getting a bellyful of afternoon sun.  No problems with body image for Domino!  Enjoy your weekend, everybody.

Yet More VAT

| Fri Jun. 19, 2009 11:35 AM PDT

A couple of days ago the New York Times reported that House Democrats were considering a VAT (a tax similar to a national sales tax) as a partial funding source for national healthcare.  Today AP reports this again.  Jon Cohn is pleased.  Ezra Klein isn't.

I continue to think this isn't a serious possibility.  The VAT is just one of half a dozen potential revenue sources that Ways & Means is considering, and in the end my guess is that the others are far more likely to be approved than a VAT.  But I'm happy to see this on the table anyway.  One of these days I think we're going to need a VAT as a funding source for healthcare, but it's not going to happen until the ground has been prepared and it morphs from being viewed as an outré piece of European socialism to being just an ordinary and familiar option to argue over.  It's an Overton window kind of thing, and the sooner it gets started the better.

Bruce Bartlett has more on the VAT here and here.  I've written about it here. Properly constructed, it's transparent, reasonably progressive, able to raise significant sums, and economically efficient.  It's worth trying to give it a higher profile.

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Obama's Temperament

| Fri Jun. 19, 2009 10:56 AM PDT

Jacob Heilbrunn praises Obama's reaction to the Iranian election crisis:

Clearly Obama was caught flatfooted by the protests. But he does seem to be carefully ratcheting up his criticisms of the mullahs. In a Tuesday interview with CNBC, Obama said that when, "you've got 100,000 people who are out on the streets peacefully protesting, and they're having to be scattered through violence and gunshots, what that tells me is the Iranian people are not convinced of the legitimacy of the election. And my hope is that the regime respond not with violence, but with a recognition that the universal principles of peaceful expression and democracy are ones that should be affirmed."

....The truth is that the impressive thing has been how well Obama has handled the crisis....Obama's basic approach has been to follow the foreign policy equivalent of the Hippocratic Oath: "First, do no harm." Imagine the obloquy that would greet Obama if he were to champion the demonstrators and help to create a bloodbath, as Radio Free Europe did during the 1956 Hungarian revolution, when it encouraged Hungarians to revolt by assuring them that they had backing of the West, which they didn't. So far, Obama has shrewdly hewed to a middle course that allows him some flexibility in dealing with Iran.

This, of course, is Obama's basic modus operandi for everything.  He doesn't feel like he has to react immediately to every provocation.  When he does, his responses are usually measured and sober.  He looks for middle ground.  He's willing to wait for the right time to push the boundaries a little further in the direction of his choosing.

This is sometimes intensely frustrating.  The gay community, for example, is up in arms over his lack of action on issues like DOMA and DADT.  But there shouldn't be any surprise about that.  It was obvious throughout the entire campaign season that this is how he works.  He'll let the military stew over DADT for a while until they basically ask him to change it, rather than the other way around.  It might take longer, but he figures — probably correctly — that the end result will be better for everyone.  Ditto for DOMA, which doesn't yet have the votes in Congress for repeal.

And ditto for lots of other stuff.  He's shown a disturbing willingness to compromise on financial regulation and healthcare.  He hasn't engaged much with the Waxman-Markey climate bill as it slowly gets watered down into nothing.  He's a cautious guy who doesn't take a lot of chances unless he feels some real pressure to do so.  Paradoxically, this is exactly what I expected from him but I find myself disappointed anyway.  A little bit more fire in the belly would be welcome.

But he is who he is, and the same instincts that disappoint us on some issues serve him well on others. So far, anyway. The next few months — possibly the next few days in Iran — will tell us just how much real hope and change Obama's temperament produces when the rubber finally hits the road.

Regulating Risk

| Fri Jun. 19, 2009 9:52 AM PDT

I'm not really sure if the federal government needs a "systemic risk regulator."  I just don't have a strong opinion about whether this is the right way to think about managing credit bubbles.  But a couple of days ago I said that if we do have such a thing, it shouldn't be the Fed.  Instead, "you want to give the authority to an agency that's institutionally dedicated to reducing risk and considers it a primary task.  That ain't the Fed.  It's just going to get buried in the bureaucracy and forgotten there."  Tyler Cowen responds:

Assuming we are going to do it, I think it has to be the Fed, whether we like it or not.  It's the Fed who is the fireman with the awesome power to print money, move markets, lend to the banking system on a large scale, and now even conduct fiscal policy, all without Congressional approval.  Our textbooks speak of the Fed as a lender of last resort but very often it is the lender of first resort too.

Now, this might be right.  It's possible that we just don't have any choice.  But at the risk of a bit of incoherence, let me offer an alternative.

It's true that the Fed is the agency with the brute force to make things happen in an emergency.  But I'm not sure that's the relevant thing to think about.  What we want is some kind of body that works to prevent emergencies.  That requires credibility and influence, but it doesn't necessarily require a trillion dollar balance sheet.

I guess the model I have in mind here is the Congressional Budget Office.  The CBO is unknown to most people, but despite its small size and low public profile it has a remarkable amount of power.  This power comes from two sources.  First, it has institutional credibility.  I honestly don't know how it's managed to keep this credibility in the face of what must be enormous partisan pressure, but it has.  It's widely considered an honest broker and its budget estimates are taken seriously by everyone.

Second, although the CBO itself doesn't have a huge staff or control of a huge budget, Congress has agreed to abide by its cost estimates for legislative programs.  This means that CBO analysts have considerable indirect control over a lot of money.  And in Washington, money equals power.

So my question is: could we create an agency like the CBO, but charged with monitoring systemic risk in the financial system?  It would have to be nonpartisan and independent.  It would need to have risk management baked into its DNA as its primary mission, rather than being #7 on a list of ten goals — with everyone knowing that only the top three get any real attention anyway.  Its director would need the kind of credibility that makes people listen when he warns that other agencies are allowing too much giddiness on Wall Street.  And, finally, it would need the right mix of authority, either direct or indirect, that's enough to force people to take it seriously when its mere credibility isn't quite enough.

But here's the incoherent part: I'm not quite sure how you'd construct such an agency or what authority might be sufficient for it to do its job without getting it hopelessly at odds with other regulatory agencies.  One way or another, though, I feel that giving this mission to the Fed is simply a waste of time.  Right now, virtually every impulse — both at the Fed and in the private sector — works in the direction of either ignoring credit bubbles or actively cheering them on.  If we're going to put a brake on this, we need to think about institutional priorities and balances of power, and figure out what it would take to get systemic risk established as a bureaucratic turf with a built-in constituency dedicated to protecting it over the long term.

Smart people, help me out.  What should this look like?  Or is it foolish to think this is even possible?

Twenty Bucks on Healthcare

| Fri Jun. 19, 2009 9:07 AM PDT

It's been a rough week for healthcare reform, but Ezra Klein points to a recent Wall Street Journal poll that has a smidgen of good news:

Luckily, there are some elements of health reform that meet with overwhelming public approval. Among them is the public plan. According to the poll, 76 percent of Americans believe it's either "extremely important" or "quite important" to "give people a choice of both a public plan administered by the federal government and a private plan for their health insurance."

Hmmm.  A crisp new twenty dollar bill says this poll result is meaningless.  My guess is that (a) the vast majority of these respondents have no real idea what this even means and (b) would change their mind in an eyeblink if they saw even a single 30-second attack ad on the subject.

On the other hand, maybe I'm just cranky this morning.  In fact, I am cranky this morning.  But twenty bucks still says I'm right about this.

Khamenei's Sermon

| Fri Jun. 19, 2009 8:51 AM PDT

Iran's supreme leader, Ayatollah Ali Khamenei, gave his long awaited sermon today, and it wasn't pretty:

Addressing huge crowds at Tehran University, the ayatollah voiced support for President Mahmoud Ahmadinejad, saying the president's views on foreign affairs and social issues were close to his.

....Responding to allegations of electoral fraud, the ayatollah insisted the Islamic Republic would not cheat. "There is 11 million votes difference," the ayatollah said. "How can one rig 11 million votes?"

....He said the election was a "political earthquake" for Iran's enemies — singling out Britain as "the most evil of them" — whom he accused of trying to foment unrest in the country.

"Some of our enemies in different parts of the world intended to depict this absolute victory, this definitive victory, as a doubtful victory," the Supreme Leader said.

Until now, there was some thought that Khamenei might back down and look for a compromise solution of some kind.  Doesn't look that way now.  On the bright side, though, Obama's careful reaction seems to have shifted the mantle of Great Satan to a different country for at least a few days.

Steve Aquino has more here.