Kevin Drum

Feeding the Outrage Machine

| Tue Aug. 11, 2009 2:54 PM EDT

In his new book And Then There's This: How Stories Live and Die in Viral Culture, Bill Wasik talks to John Harris and Jim VandeHei, founders of Politico, about the kinds of stories they want to cover:

VandeHei mentioned the classic pseudo-event: a presidential press conference. At major newspapers like the Post, he said, "you feel this sense of obligation to lead your newspaper the next day with a story about what Bush said at the press conference, even if he didn't say anything that was all that revelatory, and despite the fact that it's pretty damn stale: most news consumers have not only consumed it, they've digested it and moved on."

He contrasted this with a recent Politico story that, he noted, the Post did not touch, that "ten years ago would have been confined to the inside pages of Roll Call": the revelation that Rep. Loretta Sanchez (D., Calif.) had quit the Congressional Hispanic Caucus and alleged that its chairman, Rep. Joe Baca (D., Calif.), had called her a "whore."

This story, VandeHei said, was "a perfect example of how media has changed. We put it upfront early on the webpage. Instantly it's linked to by Drudge and all the other blogs; Fox News is doing a story based on it; MSNBC is doing a story based on it; and then the next day, on the Colbert Report, he does twenty minutes on 'whore.' So you have just, from this perch, been able to reach significantly more people than I would have reached even at the Washington Post." The challenge for The Politico, he said, is "figuring out how to put things into that pipeline."

Well, good for Politico.  But what happens when everyone decides to quit covering the "boring" stuff and just follow the Politico model instead?  Is this really a world any of us want to live in?

But I guess what's most remarkable about this isn't that Politico was the first to popularize political gossip.  I suppose someone was bound to do it eventually.  It's the fact that VandeHei sees their primary task as "putting things into that pipeline."  Not just reporting and winning a reputation, even if it's only for gossip, but feeding the outrage machine.  Only if a story has done that do they consider it a success.  What a sad career choice for a couple of highly regarded journalists to have made.

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Trojan Horses

| Tue Aug. 11, 2009 1:27 PM EDT

Alex Massie writes about Britain's much-loved-much-loathed NHS:

There are, I think, two essential truths in international health policy. No-one sees fit to copy the National Health Service and no-one sees fit to copy the American system.... The relevance of the NHS to American health care plans seems pretty limited anyway since, as best I can tell (though I try not to pay too much attention to these things) Obama doesn't actually plan on copying the NHS.

That last sentence really is correct, by the way.  It's true that some things aren't entirely what they seem: they're Trojan horses for something else, or maybe the camel's nose under the tent that will eventually lead to more fundamental reforms.  Both sides do this on occasion.  I, for example, happen to think that community rating (along with the cloud of regulations that accompany it) will eventually put private insurance companies out of business — or, at a minimum, turn them into little more than semi-public utilities.  I don't know how many other people agree about that, but you could certainly accuse me of pushing for community rating not just because I like it as a policy, but because I think it will eventually lead to more systematic reform of the healthcare industry.

But with the exception of a few outliers, the liberal community really, truly doesn't want a fully government owned and operated healthcare system like the NHS.  We want a government-funded healthcare system like Medicare or most of the world outside of Britain.  And unless I'm mistaken, this isn't a ruse in any way.  That's really what most of us want: basic care funded by taxes, with additional care available to anyone who wants to pay for more.  France and Holland, not Britain or Canada.

Changing Healthcare

| Tue Aug. 11, 2009 12:48 PM EDT

A reader emails to say he just came back from a town hall meeting in his district and came away wondering if Obama might have bitten off more than he could chew:

It occurred to me that one of the things that helps the opponents of health reform is the complexity of the issue — big omnibus bills give opponents all sorts of opportunity to deceive. Moreover, there's a tipping point with big bills: if you try to get everybody on board by giving everyone something they want in exchange for something they don't want, you can sometime get a big program passed. But if the various interests decide they're better off without the bill, then the enemies just accumulate.

Under the circumstances, sometimes it's better just to try and eat the elephant one bite at a time — a series of bill over the first term that would whittle things down to size:

An initial bill would provide for community rating and pre-existing condition protections. This bill would have the opposition of the insurance industry, but everyone else would be for it.

After you get that done — individual mandate, small business coverage requirements, assistance to those with lower incomes for purchase. Small business would be against this part, but all those insurance lobbyists would be on board.

This is a defensible position, but I think it's also an example of a "grass is greener" approach to political process that's much too common.  Basically, whenever something is in trouble, people start to think that it would have worked if only we'd approached it in just the opposite way.

So Clintoncare failed because it was written in the White House and dumped in Congress's lap.  Won't make that mistake again!  Opponents are vilifying cherry-picked provisions of the House bill?  A watered-down bipartisan compromise would have had a better chance.  A big omnibus measure is in trouble?  We should have broken it into pieces.

Maybe so.  But I think this overrates process.  The opposition is always going to oppose, and they're going to find a way to oppose effectively no matter what you do.  If the White House creates a bill, it was "written in secret."  If Congress does it, it's a pork-filled monstrosity.  Write a liberal bill and you'll lose centrist Republican support; write a compromise bill and you'll lose Democratic support.  Write a big bill and it's confusing; write a bunch of little bills and you expend all your political capital on trivia and never get anything done.

Good presidents understand process and use it to their advantage.  But one way or another, you have to have the votes.  And one way or another, healthcare won't really be reformed unless, eventually, we pass something big.  We've been passing piecemeal legislation for a long time, and it just hasn't added up to much.  So every 20 years or so we need to take another crack at serious reform, and every 20 years or so we're going to learn the same lesson: if the public is on our side, we'll be able to pass something.  If we can't get them on our side, we won't.

For my money, the current bills wending their way through Congress are about as small as you can get and still call them serious healthcare reform.  If we can't pass some version of what's on the table now, there's really no reason to think that Obama has the political capital to pass it little bits at a time as his popularity inevitably wanes throughout his term.  It's now or never.

What Obama Is Reading

| Tue Aug. 11, 2009 12:10 PM EDT

Via Rachel, Samuel Jacobs rounds up Barack Obama's post-campaign reading list here.  Usually when things like this pop up, I've read none or, at most, one of the books on the list, but I've read four on Obama's list (Eggers, Alter, Coll, and Goodwin) — and I know Friedman well enough to feel like I've read his latest book even though I haven't.  That practically makes us soulmates, literarily speaking.

Ravitch on Charters

| Tue Aug. 11, 2009 11:57 AM EDT

Educational historian Diane Ravitch has had doubts about the charter school movement for a while, but lately the evidence appears to have turned her firmly against the idea.  In the Los Angeles Times today, she warns the LAUSD to think twice before allowing new schools to be run by private companies:

Because of a brilliant media campaign by charter school organizations, there is a widespread impression that any charter school is better than any public school. This is not true....A recent Stanford University study, which compared half the nation's charter schools with a neighboring public school, concluded that 46% were no better, 37% were significantly worse and only 17% were significantly better than the public school.

....The L.A. proposal for the 50 new schools has been likened to New York City's approach. But Los Angeles should be aware of two points. First, under N.Y. Mayor Michael Bloomberg, spending on education has increased from $12.5 billion annually to $21 billion, or nearly $20,000 per child. Is L.A. willing to match that?

Second, New York City's new high schools started small and were allowed to limit the admission of special-education students and students with limited English proficiency for the first two years. The remaining high schools were left with a disproportionate share of the neediest students. A study this year of the new schools found that, over time, when their enrollment became similar to traditional public schools, their attendance rates and graduation rates declined.

Needless to say, the LAUSD is in a tough spot.  The research evidence on charters hasn't been very favorable lately, but then, it's not as if LAUSD's public schools are burning up the academic track either.  And no, a 50% increase in the education budget isn't in the offing either way.

I've been modestly favorable towards charter schools for a while, and I still think they're worth trying.  It might take more than a few years to get the formula right, after all, and most of the research suggests only that charters don't outperform public schools, not that they're actively worse.  (The Stanford study showed mixed results, with better results for charters in grade school and middle school but worse results in high school.)  Still, time is running out.  If charters can't start demonstrating systematically better results soon, the experiment is going to run aground.

UPDATE: Matt Yglesias responds:

On average the charters are about the same as public schools, but there’s a range of outcomes within the charter sector. We need to get more aggressive about shutting down the low-performing charters, more aggressive about allowing successful charters to expand or replicate, and committed to always permitting space for people to try something new.

....There’s no “charter magic” that makes schools good, but the greater openness and flexibility of the charter sector lets us experiment and discover which things work. What we need to do is take that to step two where we act on the basis of that knowledge.

I agree entirely.  But we need to find out if step two is feasible in practical and political terms, and then we need to start the pruning to see if the good charters stay good once they start growing.  And it needs to happen soon.  If it doesn't, public support for the charter experiment simply won't stay strong enough to beat off its entrenched opposition.

Another Question for Goldman Sachs

| Mon Aug. 10, 2009 3:27 PM EDT

In the New York Times this morning, Gretchen Morgenson and Don Van Natta raised eyebrows by getting hold of Henry Paulson's phone records for the week of the AIG bailout and reporting that Paulson — the former CEO of Goldman Sachs — spoke more than two dozen times that week with the current CEO of Goldman Sachs.  This, they say, was "far more frequently" than he talked with other Wall Street executives.

But Matt Taibbi has a different take.  He's curious not about why Goldman was consulted more than any other bank, but about why Goldman was consulted at all:

The main players involved in the AIG bailout that weekend were AIG (obviously), JP Morgan, Morgan Stanley, and Goldman Sachs....Now, we know why AIG was there, obviously. Morgan Stanley was there representing the Treasury (it had been hired to advise the Treasury on the bailouts by Paulson during the Fannie/Freddie mess [...]). JP Morgan we know was there because AIG had hired them weeks before to come in and try to clean up its messes. Only Goldman Sachs did not have an official role at these proceedings.

So why was Goldman there?....The ostensible explanation that most people seem to accept is that Goldman naturally was there because it was such a large counterparty to AIG. But I suspect we’re going to find that Paulson was not on the phone two dozen times with executives from Deutsche Bank or Societe Generale or Barclays or Calyon, all of whom were significant counterparties to AIG as well.

No, I'll bet he wasn't. So why Goldman?

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Quote of the Day

| Mon Aug. 10, 2009 2:04 PM EDT

From an editorial in Investors Business Daily about the pitfalls of healthcare reform:

People such as scientist Stephen Hawking wouldn’t have a chance in the U.K., where the National Health Service would say the life of this brilliant man, because of his physical handicaps, is essentially worthless.

Ditto for the Prince of Wales, no doubt. Via Bookman/TPM/Atrios.

The Crazy Base

| Mon Aug. 10, 2009 1:52 PM EDT

Ramesh Ponnuru at The Corner:

If you were a Democratic leader who wanted to lay the groundwork to cut Republicans and moderate Democrats out of the legislative process, wouldn't you be portraying the critics of your health-care legislation as unreasonable racist nuts right about now? In September you could say that you really wanted to work with Republicans but unfortunately they are all being intimidated out of working for the common good by their crazy base. All the more reason for Republicans to do what they should be doing anyway: to make the case against the legislation in as measured, civil, and sensible a way as we can.

Well, it's a nice thought.  A little late, though.  I can't wait to see if any of Ponnuru's fellow Cornerites take the bait.

The Financialization of America

| Mon Aug. 10, 2009 1:42 PM EDT

Matt Yglesias says it's unlikely we can effectively rein in stratospheric compensation levels in the finance industry.  The guys who work on Wall Street are just too smart: "You don’t get to be an important person in the world of finance without being really, really, really good at figuring out ways to pay yourself a lot of money. That’s what the field is all about."  Then this:

That said, we compensation reform aside, we actually have a well-established method of taking market distributions of income and trying to transmogrify it into a more just, useful, and welfare-enhancing deployment of social resources — taxes and public services....It strikes me as ultimately unlikely that the political process will be able to micromanage high finance in a way that strikes people as meeting the claims of justice. But the political process very much can collect tax revenues and use that revenue to finance things that we currently “can’t afford” like more widespread provision of health care services, better rail transportation, cleaner streets, more police officers, more and better pre-kindergarten, etc.

There's something to this, and since the share of national income hoovered up by the super-rich is about three times higher today than it was 30 years ago, I don't have a big problem with taxing that income at a higher rate.  But there's a limit to how effective that can be.  For a whole bunch of reasons, marginal tax rates higher than 50% or so are pretty unlikely, and effective tax rates at that level are probably impossible.  After all, those Wall Street guys are pretty good at tax planning, too.

Overall, there's not much question that Wall Street bankers are going to continue to be paid astronomical sums as long as the firms they run are making astronomical profits.  And that's the key problem.  Tax policy can help — though it's a pretty broad brush — but the fundamental problem is that the finance sector in the U.S. is so damn big.  And it's seemingly an unstoppable juggernaut: Wall Street income may have been down last year, but even the biggest economic collapse since World War II hasn't made even a medium term dent.  A mere year later, the overall size and profitability of the finance industry is on track to be about the same size as it was during the boom years.

In the light of all this, tax policy can work only on the margins, and putting in place a "pay czar" for Wall Street will do nothing except generate a few juicy headlines here and there.  Compensation follows money flows just as surely as the tide follows the orbit of the moon, and the only way to reduce Wall Street compensation is to reduce the size and profitability of Wall Street.  Unfortunately, no one wants to talk about that.  So instead we get a pay czar.

The Alaskan Way of Life

| Mon Aug. 10, 2009 12:34 PM EDT

Kim Murphy of the LA Times reports from rural Alaska:

This summer Takotna, population somewhere between 46 and 61, has become one of the best-known villages in Alaska — thanks to the $18.7-million airstrip the federal government is funding on the edge of town. The 3,300-foot gravel runway, complete with night lighting, will replace the short one on a wind-swept hill where several planes have crashed.

....In an era of dwindling public revenue, even Alaskans increasingly wonder how much they can afford to support those who choose to live miles from civilization....According to the Institute for Social and Economic Research at the University of Alaska, about $1.4 billion a year in state and federal government subsidies, purchases and wages goes to more than 200 far-flung villages in the state — from the frigid Arctic coastal plain to the soggy, impenetrable tundra of the deep Alaskan interior. Federal dollars help pay for airline service and mail delivery, subsidize electricity rates and fund health clinics, among other things.

"Even Alaskans" wonder how they can support this?  Spare me. For the most part, "Alaskans" don't.  The federal government does.  Alaskans could support these communities out of oil revenues, of course, but they choose instead to divvy up that cash into annual Christmas presents for themselves and then let the rest of the country support them.  See Charles Homans for more on this.

There's nothing unusual about this, of course.  On a per capita basis, rural America receives far more federal cash and far more federal development aid than the rest of the country, but they're also the ones who yell the loudest about big government and high taxes and standing on your own two legs.  Alaska just stands out more because their version of this hypocrisy is performed on a somewhat more spectacular scale.