Kevin Drum

Taking Governance Seriously

| Fri Nov. 6, 2009 1:32 AM EST

Congress passed something today.  Hooray!

Congress gave final approval Thursday for an additional $24 billion to help the jobless and support the housing market as climbing unemployment poses a growing liability for elected officials.

The bill, passed overwhelmingly by the House and headed to President Obama for his signature Friday, extends unemployment nsurance benefits that were due to expire and renews an $8,000 tax credit for first-time home buyers, while also expanding it to cover many other home purchases.

And Democrats only had to break three separate filibusters in the Senate to get this passed!  The first filibuster was broken by a vote of 87-13, the second by a vote of 85-2, and the third by a vote of 97-1.  The fourth and final vote, the one to actually pass the bill, was 98-0.  Elapsed time: five weeks for a bill that everyone ended up voting for.

Why?  Because even though Republicans were allowed to tack on a tax cut to the bill as the price of getting it passed, they decided to filibuster anyway unless they were also allowed to include an anti-ACORN amendment.  Seriously.  A bit of ACORN blustering to satisfy the Palin-Beck crowd is the reason they held up a bill designed to help people who are out of work in the deepest recession since World War II.  Details here and here.  That's called taking governing seriously, my friends.

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Ft. Hood Massacre

| Thu Nov. 5, 2009 5:55 PM EST

Mass murder at Ft. Hood:

Twelve people have been killed and 31 wounded in a shooting spree at a Texas military base by what officials believe was possibly carried out by an Army officer. The suspected gunman was identified by ABC News as Major Malik Nadal Hasan.

The shooter was killed and two other suspects, who are also soldiers, have been apprehended, Lt. Gen. Robert W. Cone said.

Oh Lord.  This is very, very bad.  And it's going to get worse.

State Secrets

| Thu Nov. 5, 2009 5:30 PM EST

Here's an interesting little story.  Way back in 1993 a couple of CIA agents wiretapped a DEA agent in Burma named Richard Horn, and when Horn found out he sued both the agents and the CIA for violating his civil rights.  The case muddled along for years, and a couple of days ago the government agreed to a settlement.

So far, so boring.  But why, after 15 years, did the government finally cave?  Turns out it's because they were lying to the judge and got caught:

Earlier this year, U.S. District Judge Royce Lamberth suggested that the past and present CIA men may have perpetrated a "fraud on the court" through inaccurate declarations....Until Lamberth's angrily worded July decision, government attorneys had successfully argued that the lawsuit, first filed in August 1994, must be sealed to protect state secrets.

....Tellingly, Lamberth further hinted in September that the government could be on a losing course if the case went to trial, as he suggested that "the only secret the government might have left to preserve is the fact they did what Horn alleges."

The CIA had invoked the state secrets privilege, insisting that the case against one of its agents be dropped because he was working covertly and his identity couldn't be revealed.  And they kept insisting that even after his cover had been lifted.  When Lamberth found out, he was not a happy judge.

More here.  This is yet another data point that restates the obvious: just because the government invokes the state secrets privilege doesn't mean there really are state secrets involved.  Congress and the courts, who know this perfectly well, would be wise to demand a wee bit more judicial oversight in these cases instead of allowing the executive absolute discretion.  Pat Leahy's State Secrets Protection Act would be a good place to start.

Sanctioning Iran

| Thu Nov. 5, 2009 2:12 PM EST

Dave Schuler thinks it's time to crack down on Iran:

We should implement consequences for Iran as stern as we can make them, non-violent in nature but punitive in quality. We should muster all of the permanent members of the Security Council to participate in these measures but be prepared to proceed without them. A peaceful, prosperous, and just Iran is in Russian and Chinese interests as it is in ours and, if they elect to support tyranny in Iran, Russia and China should be made aware that this latest tyranny in Iran will eventually end and the Iranian people will know who supported the tyrants and who opposed them.

Setting aside the question of whether this is wise or not, I don't quite get what the sanctions crowd is after.  We have no diplomatic relations with Iran.  Trade is embargoed and imports are prohibited.  (Except for Persian rugs!)  We sanction foreign companies who do business with Iran.  Investment in Iran is prohibited.  The Treasury Departments forbids banks from processing even indirect financial transactions with Iran.  There's a little more we could do, but not much.

As for Russia and China, sure, the current U.S. sanctions would have a lot more bite if the rest of the world joined in.  But what leverage do we have to make that happen?  Hell, even Europe isn't on board with our sanctions regime, let alone China and Russia.  There's just not a lot we can do on that front.

Is there anything more of any real consequence that the U.S. could do unilaterally?  Is there anything serious the U.S. could do to get the rest of the world to support us?  I don't really see it.  What am I missing here? 

Winners and Losers

| Thu Nov. 5, 2009 12:43 PM EST

Felix Salmon is back from vacation and he's tanned, rested, and ready.  Today he notes that Goldman Sachs and Wells Fargo made big money on interest rate swaps last quarter and asks:

And there’s another question, too: if the likes of Wells Fargo and Goldman Sachs are making billions on these swaps, who’s on the other side of the trade? Who lost billions of dollars by swapping floating into fixed? Call it the Summers trade, after Larry’s disastrous foray into the rates market when he was at Harvard. It didn’t work then, and it clearly isn’t working now, either.

That's a good question.  In fact, I've long wondered about this more broadly: lots of derivatives bets are zero sum deals where winners are always matched up with losers.  So if the financial sector is making boatloads of money betting on derivatives,1 which sectors of the economy are the losers?

To be honest, my main interest in this is polemical.  It's not that I really care all that much about precisely who the winners are losers are, but I do think that public wrath against Wall Street might be very usefully stoked by learning who's paying off on all these bets.  In the case of about $13 billion in CDS winnings from Goldman Sachs, for example, the loser was AIG — and then the taxpayers graciously covered that bet when AIG went bust.  But it's not just banks and hedge funds on the other side of these bets, is it?  It's also pension funds, corporations, and state and local governments.  It would be illuminating, I think, if someone could track the flow of wins and losses in a way that made them a little more concrete for people.  Especially the losses.

1Aside from the late unpleasantness, of course.  But you know what I mean.

Wake Up Call for Dems

| Thu Nov. 5, 2009 12:13 PM EST

Democratic losses in Virginia and New Jersey are making Democratic congressmen nervous.  What will happen to them a year from now when they stand for reelection?

Exit polls circulating on the House floor Wednesday were even more unnerving to Democrats. The Republican candidates, the polls indicated, had received the votes of two-thirds of independent voters.

Now, as the entire House of Representatives and a third of the Senate prepare for next year's midterm elections, some moderate Democrats are wondering whether they can afford to follow President Obama's ambitious legislative agenda on such controversial issues as healthcare and climate change. One said the results were a "wake-up call."

"There are going to be a lot more tensions between the White House and Congress," predicted Rep. Jim Cooper (D-Tenn.), a member of the Blue Dog Coalition of fiscally conservative Democrats. "They've been under the surface so far — and they're going to come out in the open."

Cooper is probably just talking his own book, but even at that I don't really get his point of view.  My take on this is pretty different: if there's any broad lesson to be taken from Tuesday's election (about which I remain agnostic for the moment), it's this: independent voters are getting a little weary of endless political battles with no results.  The problem is not that Congress is trying to tackle too much, but that Congress isn't getting anything done. That's the wake-up call.

The answer to that is to get something done.  Pass healthcare reform, for example.  That would be (no pun intended) a huge shot in the arm for Dems of all stripes, demonstrating to skeptical voters that they can indeed govern effectively.  Ditto for financial regulation, which is a golden opportunity to harness some populist anger against the financial industry.  All Congress has to do is stand up to the finance lobby1 and put some serious constaints on Wall Street's ability to screw people.  Think that won't be popular?

As for Obama, he's probably suffering a bit from his lengthy reconsideration of Afghanistan, but once he decides on a way forward that will all be promptly forgotten.  Memories are short for this kind of thing.

My guess is that the Jim Coopers of the world have everything to gain and nothing to lose by loosening up, following Obama's lead, getting healthcare reform passed, and then following up with some meaty financial reform.  Nobody likes endless wankathons that don't produce results, but they love results once they finally come.  Dems need to have a few.2

1Yeah, yeah, I know.  What are the odds?  I have several thousand words on exactly that subject coming in the next issue of the print magazine.

2And they also need the economy to pick up.  That's not entirely under their control, but it's not entirely out of their control either.  Get cracking, folks.

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Fake Plan, Real Score

| Thu Nov. 5, 2009 11:27 AM EST

House Republicans released a "healthcare plan" of their own yesterday, but I didn't bother blogging about it because it pretty transparently wasn't a real plan at all.  It was just a few thousand words of miscellaneous text designed to stop people from saying that Republicans don't have a plan.

Still, it has to be kind of embarassing to send if off to the CBO for scoring and have this come back.  Glurk.

The Coming GOP Civil War

| Thu Nov. 5, 2009 1:52 AM EST

So what's next on the agenda for the Republican Party after this week's elections?  The New York Times reports:

Despite Mr. Hoffman’s loss [in NY-23], many conservatives promised to press on with opposition to centrist Republican candidates. That vow intensified concerns among party leaders that the opportunities they see coming out of Tuesday’s results could be dimmed by intramural battles over whether to reach for the political center or do more to motivate the base on the party’s right.

....The debate has been fueled by a somewhat inchoate populist anger that has taken hold among grass-roots conservatives, encouraged in part by political leaders like Sarah Palin, the party’s vice-presidential nominee last year, and commentators like Glenn Beck of Fox News. In that sense, the divisions within the party extend beyond the traditional strains between the shrinking ranks of Republican moderates and the social and economic conservatives who have dominated the party in recent years.

And the Washington Post:

As the party turns toward the 2010 midterm elections, pitched battles between moderates and conservatives — and between the Washington establishment and the conservative grass roots — are underway from Florida to Illinois to California. Conservative activists, emboldened after forcing out the moderate Republican nominee in a New York congressional race, said they will fan out nationwide and challenge Republican candidates whom they deem too moderate or insufficiently principled.

Well, good luck with that.  Culture war purity battles may be adrenaline rushes for the Palin/Beck wing of the party, but they sure aren't for independents, no matter how soured they are on the economy or how disappointed they are in the Democratic Party.  They may be able to muster some short-term mileage out of all this, but it's a long-term disaster.

What Kind of Patient Are You?

| Thu Nov. 5, 2009 1:40 AM EST

A British physician provides a taxonomy of annoying patients:

GPs used to talk about "heartsink" patients (who make your heart plummet the moment you spot them on your morning list) and a psychiatrist called Groves even split them into four groups (manipulative help-rejecters, self-destructive deniers, entitled demanders, dependent clingers). But there are heartsink doctors too, and when a consultation goes tits up, there are issues on both sides.

I'm pretty sure I'm not #1, and I know I'm not #3 or #4.  So either I'm a self-destructive denier or else I'm not an annoying patient at all.  Possibly a bit of both.

Reporting on Strikes

| Wed Nov. 4, 2009 8:42 PM EST

Atrios blogs about the transit workers strike in Philadelphia:

A big problem is that in these situations there often isn't much solid information about just what are the real issues for the union. News stories focus on wages, and while everyone thinks 50 grand (with some seniority) is a lot for a bus driver, not many of those people are applying for those awesome bus driver jobs. This article provides a bit more of the union's perspective. Aside from wages and health care, concerns about pension underfunding and other issues exist.

If I'm reading this right, Atrios is suggesting that the media is at fault here: unions (and mangement) have lots of serious issues at stake when strikes are imminent, but reporters just lazily throw out a few lines about wage demands and move on.  The result is that the rest of us remain fuzzy about what's really going on.

But I think something else is going on here.  I noticed this a few years ago during the supermarket strike here in Southern California, and I noticed it again a couple of weeks ago reading about the postal workers strike in Great Britain: neither labor nor management is willing to publicly explain exactly what the current contract provides, exactly what the current dispute is over, and exactly what offers each side has laid on the table.  It's frustrating as hell.  It might also be excellent bargaining strategy (though I wonder about that), but in any case I don't think the vagueness in press reports is usually the fault of the press.  Their reports are vague either because both sides are hurling accusations at each other but aren't willing to provide concrete evidence for them, or because neither side will say anything much at all.  Much like a political campaign.

I'm happy to be wrong about this if anyone with more experience can school me on how this stuff really plays out.  But it seems to be a pretty common problem, and it's a little hard to believe that every single reporter who's ever covered a strike is just a bored hack too lazy to spend ten minutes getting the facts straight.