Kevin Drum

Fixing the World

| Thu Aug. 20, 2009 12:29 PM EDT

Bloomberg reports on the upcoming central banker pow-wow:

Federal Reserve Chairman Ben S. Bernanke and fellow central bankers gathering in Jackson Hole, Wyoming, are showing scant signs of reprising the coordinated stance they took fighting the worst financial crisis since the Great Depression as they deal with its aftermath.

....Bernanke, 55, and other policy makers, who meet on Aug. 20-22, are already staking out differing positions as they gain traction in their battle against a crisis that has cost financial companies worldwide about $1.6 trillion in writedowns and losses.....“What you would hope to happen is much better coordination internationally,” [Mohamed] El-Erian said. “What’s likely to happen, however, is that national interests are going to dominate.”

Well, so much for Ben Bernanke being greeted as a conquering hero.  Either that or else conquering hero-hood just isn't what it used to be.

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Credible Threats

| Thu Aug. 20, 2009 12:11 PM EDT

Via ActBlue, Blue America has raised nearly $200,000 for members of Congress who have pledged to vote against any bill that doesn't contain a public option.  Pretty impressive.  If push comes to shove, and the choice is no bill vs. a bill without a public option, I sort of hope these guys all break their word and vote for it anyway.  (Or at least enough of them, anyway.)  But my preferences aside, this is a pretty good way of solving a big problem for the public option supporters: how do you make a threat to vote No credible when everyone knows liberals are champing at the bit to pass healthcare reform?  Well, this is one way.  It's a lot harder to make a U-turn and vote Yes after taking a very public stand against it and then accepting a bunch of activist money based on giving your word to stand firm.1

1Which isn't to say they won't do it anyway.  These are politicians, after all, and thus capable of just about anything.  But it's definitely harder.

UPDATE: Ezra Klein says my email explanation of the point I was making was much clearer than my actual post.  So here it is:

The Blue America money helps make the promise to vote against any bill without a public option more credible.  Right now, no one believes it.  Everybody thinks that, in the end, liberals will cave and vote for it regardless.  But with this money in place, which is going to people on condition that they vote against any bill without a public option, it makes it genuinely hard for them to turn around and vote Yes after all.  It helps turn a meaningless threat into a credible one.

CORRECTION: This money was raised by Blue America.  ActBlue is just the conduit.  The text has been corrected to reflect this.

Ensign: IOKIYAR

| Thu Aug. 20, 2009 11:55 AM EDT

Senator John Ensign says his sleazy recent affair wasn't nearly as bad as Bill Clinton's blow jobs in the Oval Office:

"I haven't done anything legally wrong," the Nevada Republican told the Associated Press in an interview. "President Clinton stood right before the American people and he lied to the American people," Ensign said. "You remember that famous day he lied to the American people, plus the fact I thought he committed perjury. That's why I voted for the articles of impeachment."

There you have it.  Ensign may have carried on with with a friend's wife for months, leaving their family in shambles, and he may have then bribed them to stay quiet in small chunks deliberately designed to evade IRS rules, but by God he didn't lie to the American people.  So that's OK.

Healthcare Maneuvering

| Thu Aug. 20, 2009 11:25 AM EDT

The latest trial balloon from the Democratic leadership is that they might split healthcare reform into two bills.  The first would have all the controversial provisions and would go through the reconciliation process, where it needs only 50 votes.  The second would go through the normal process and therefore need 60 votes, but since it includes the stuff that's widely popular it would pass anyway.  But Ezra Klein is puzzled: if you piss off Republicans by using reconciliation for Bill #1, what are the odds you can then sweet talk them into supporting Bill #2?

The one potential answer is that reconciliation isn't about bypassing the GOP at all. It's about bypassing a handful of centrist Democrats. Angry Republicans won't support a consensus-oriented second bill after being cut out of the important work of the first. But Democrats like Kent Conrad might, as reconciliation won't specifically have hurt them, even as its real point was to take the process out of their hands and put it back in the hand of the Democratic Senate Leadership.

It's hard to say if this chatter is really serious, but if it is the point is probably to protect centrist Democrats.  They can vote against Bill #1 and for Bill #2, and then go home and tell their constituents that they voted against a gummint takeover of healthcare (public option, strong subsidies) but in favor of sticking it to the evil insurance industry.

At least, that's the usual thinking behind this kind of thing.  Harry Reid probably isn't under the delusion that he can get more then one or two Republican votes no matter what, but he does care about protecting the flanks of his own caucus.  This is one way to do it.

Letting Go of Bernanke

| Thu Aug. 20, 2009 2:08 AM EDT

Edmund Andrews writes in the New York Times about Ben Bernanke:

As central bankers and economists from around the world gather on Thursday for the Fed’s annual retreat in Jackson Hole, Wyo., most are likely to welcome Mr. Bernanke as a conquering hero....Fellow economists [...] are heaping praise on Mr. Bernanke for his bold actions and steady hand in pulling the economy out of its worst crisis since the 1930s. Tossing out the Fed’s standard playbook, Mr. Bernanke orchestrated a long list of colossal rescue programs: Wall Street bailouts, shotgun weddings, emergency loan programs, vast amounts of newly printed money and the lowest interest rates in American history.

I really don't have it in for Bernanke or anything (honest!), but this level of adulation puzzles me.  Yes, the blizzard of term facilities and liquidity programs he engineered during 2007 and 2008 was impressive, but is everyone really so sure that no other Fed chairman would have acted similarly?  And beyond that, there's pretty broad agreement that Bernanke (a) badly mishandled the runup to the crisis, (b) inherited and then perpetuated weak regulation of consumer loan products, something that aggravated the housing bubble, and (c) was complicit in allowing Lehman Brothers to collapse.  These are all serious black marks, especially the Lehman fiasco, which is widely believed to have been the trigger for the most acute phase of the crisis during the fall of last year.

Reappointing Bernanke would hardly be a disaster.  But his judgment has been questionable on several fronts, his dedication to better consumer regulation is doubtful, and we'd all be better off if we stopped pretending that Wall Street has to be endlessly coddled by reappointing whatever Fed chairman they've gotten used to over the past few years.  Hero worship of the Fed is a vice that's worth stamping out, and now's a good time to start.  Let's give someone else a chance.

Quote of the Day

| Wed Aug. 19, 2009 9:49 PM EDT

From Michael Scherer, after pointing out that Sarah Palin's latest Facebook post is wrong:

Maybe Palin will post a follow up on Facebook clarifying.

Um, sure.  That would certainly be in character, wouldn't it?

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Afghanistan and the Taliban

| Wed Aug. 19, 2009 3:05 PM EDT

Matt Yglesias, having decided to pay more attention to Afghanistan, finds himself confused about something:

One question I’m looking at somewhat hazily is this. If you read accounts of the Soviet war in Afghanistan in the 1980s, people generally always seem to think that American and Saudi and Pakistani support for the Mujahedeen was an important factor. I don’t see anyone saying “it was all a big waste of time and the same stuff would have happened anyway.” The Taliban has, as best as anyone knows, nothing remotely resembling that level of external support. So why isn’t that making more of a difference? Is our side actually much less effective than the Soviets were when you control for the change in external support?

Actually, that's usually presented as one of the big arguments for staying in Afghanistan and continuing the fight.  Since the Taliban is relatively small and has only minimal outside support, it means they're eminently beatable.  This isn't like Vietnam, where we were taking on half a million troops that had a superpower for a patron.

But I think the opposite is true.  If the Taliban really is small and isolated, we shouldn't need a troop buildup.  We should be able to beat them with 50,000 troops plus help from the Afghan army.  The fact that we haven't after eight years — that, in fact, our progress has been negative over that time — suggests either (a) we have no idea how to fight them, or (b) they're more formidable than we think.

Neither of those is a good reason for withdrawing if we have a clear and well-articulated reason for staying, but I haven't heard it.  Maybe it's in the reading list from Spencer Ackerman that's included in Matt's post.  I'll take a look later today.

Keeping Up With the Loons

| Wed Aug. 19, 2009 2:31 PM EDT

Healthcare conspiracy theories continue to bubble up from right-wing chain email hell.  Ezra has the latest here.

Harnessing Nationalism

| Wed Aug. 19, 2009 2:05 PM EDT

Brad Plumer today:

A recurring source of anxiety among op-ed writers lately is the fear that China is winning some sort of clean-energy race. Earlier this month, venture capitalist John Doerr and GE head Jeffrey Immelt took to The Washington Post to fret that Chinese cars were 33 percent more efficient than U.S. cars, that China was investing ten times the fraction of its GDP on clean energy that the United States was, and that China was on track to generate five times as much wind power by 2020. "We are clearly not in the lead today," they concluded. "That position is held by China, which understands the importance of controlling its energy future."

Those pleas for stronger U.S. action have some merit....But framing these efforts as some sort of zero-sum competition, in which only the winners benefit, isn't quite right. The entire planet will benefit from cheaper, better sources of clean energy, and it's not as if we'll somehow "lose" if China makes a massive push to mop up its emissions.

Sometimes there can be such a thing as too much intellectual honesty.  This is one of those times.

Look: on the global warming front, "Bangladesh will drown and California will have more wildfires in 2080" doesn't seem to be doing the job.  So if the only way to convince Americans to get serious about this stuff is to have 4-star generals issue grim warnings about climate change being a national security threat, followed by corporate honchos ginning up some kind of "green race" with the scary Chinese, then so be it.  If this kind of thing got us to the moon, maybe it can save the planet as well.  I say we go along.

Besides, having the Pentagon worry about climate-induced global instability is a good thing.  And competing with China to produce wind turbines is way more productive than endless scaremongering about whether they're going to build an aircraft carrier or two by 2020.  So let's get in the spirit of things.  We must never allow the quasi-socialist Chinese hordes to overtake us in producing green technology!  Green tech is the future of our country!  Buy (green) American (stuff)!  USA!  USA!

POSTSCRIPT: Brad actually does have some serious points to make about cooperating with the Chinese on green tech.  But that's hard to turn into a jingoistic crowd pleaser, I'm afraid.

The Real Barack Obama

| Wed Aug. 19, 2009 12:25 PM EDT

Our story so far: Democrats offer up a bipartisan proposal to fund advance care counseling and Republicans turn it into a plan to create death panels.  Democrats agree to fund home nurse care and Republicans tar it as a secular brainwashing program.  Democrats take Republican concerns about cost containment seriously by setting up the Independent Medicare Advisory Council and Republicans start screaming about "rationing."  Democrats give in on a public option and accept a co-op program in its place and Republicans dig in and finally announce that they're just going to oppose everything no matter what Democrats do.

The White House has taken notice:

Given hardening Republican opposition to Congressional health care proposals, Democrats now say they see little chance of the minority’s cooperation in approving any overhaul, and are increasingly focused on drawing support for a final plan from within their own ranks.

....Rahm Emanuel, the White House chief of staff, said the heated opposition was evidence that Republicans had made a political calculation to draw a line against any health care changes, the latest in a string of major administration proposals that Republicans have opposed.

“The Republican leadership,” Mr. Emanuel said, “has made a strategic decision that defeating President Obama’s health care proposal is more important for their political goals than solving the health insurance problems that Americans face every day.”

OK then.  Obviously Emanuel said this with presidential approval, so the question is: did Obama ever expect anything different?  Was his calm, deliberative, bipartisan sales pitch genuine, or did he know it would fail all along?

We've been asking this question ever since the primaries — does he really believe he can sweet talk Republicans into cooperating with him? — and we still don't know the answer.  Obama is a guy who plays his cards very close to his chest.  But the next couple of months should give us a clue.  If he really believed it, then he probably doesn't have much of a Plan B and the next stop for this train is Chaosville.  But if it was mostly an act, then his next step is obvious: he'll make a barnstorming public case that he made a good faith effort to work with Republicans but they were just completely intransigent.  He'll attack them mercilessly and do everything he can to whip public opinion into a lather against the obstinate, obstructionist, reactionary GOP.

If that was his plan all along, it wouldn't be a bad one.  He correctly divined a long time ago that the American public was weary of endless partisan fighting and wanted a break, and he rode that insight to victory.  Regardless of his own beliefs, then, it meant he had to start his presidency by demonstrating a genuine effort to work across the aisle, and he had to keep it up long enough to show he was serious.  Only if it plainly failed would he be able to turn the screws and start fighting on pure partisan lines.

Will it work?  Stay tuned.