Quote of the Day: McConnell on START

From Republican minority leader Mitch McConnell, explaining why he opposes the New START treaty:

All of a sudden, we're once again trying to rush things right here before Christmas Eve. I think that was not the best way to get the support of people like me.

Translation: he's pissed that Democrats successfully repealed DADT and is bound and determined to get back at them. The childishness that passes for politics these days is endlessly astonishing.

Innumeracy on the Street

The New York Times inadvertently explains the financial crisis today: Wall Street traders, it turns out, are innumerate. Many firms doubled base salaries and eliminated bonuses for midtier employees after the crash, and apparently this is causing panic among the troops:

One executive, whose firm prohibited discussing the topic with the news media, said the bump in base salaries had confused people, even though their overall compensation was the same. “People expect a big bonus,” this person said. “It is as if they don’t even see their base doubled last year.”

Dealing with the Zeros can be complicated. “It’s a real headache,” said another senior banker, who asked not to be identified because the topic is so volatile at his company.

But not to worry. The Zeros might be confused by this financial trickery, but the industry as a whole is still doing great:

In terms of overall profit, Wall Street is on track for one of its best years ever, although it will trail 2009, which was pumped up by federal bailout money and the rebound from the financial crisis. In the first three quarters of the year, Wall Street earned $21.4 billion, putting it on track to easily outpace 2006, when the economy was booming, and well ahead of the New York City government’s initial estimate of $20.6 billion for profit in all of 2010.

Chief executives, says the Times, will continue to get paid the old-fashioned way, "with bonuses climbing into the stratosphere as the shock of the financial crisis fades and pay for the top tier climbs back toward historical averages." Good to hear.

Obama After Two Years

Jonathan Bernstein has a question for us left-leaning types:

Think back to what you were thinking in November 2008, and in January 2009. As the 111th Congress winds down, what's your biggest disappointment of the things you expected to happen? Not your wish list, but the things you really expected to happen. What's your biggest happy surprise?

This is fairly easy for me, since I wrote a blog post on November 3, 2008, saying that I'd consider Obama's first term a success if he got three things done: (1) withdrawal from Iraq, (2) real healthcare reform, and (3) carbon pricing. "Get something serious done on those issues, and Obama's administration will be a big success. Fail on them, and it's not clear to me that any combination of other new programs will be enough to salvage it."

This leaves me in a pickle. Withdrawal from Iraq appears to be proceeding apace, and healthcare reform did indeed get passed. Carbon pricing, obviously, didn't. On the other hand, we can add a modest stimulus bill, a modest financial reform bill, and repeal of DADT to Obama's list of accomplishments. Does that make up for the failure of the carbon bill? Two years ago I said I didn't think any combination of other new programs would be enough to make up for failure on one of the big three, and that's a tough statement to walk back. So I guess I'd say I consider Obama's first term a success, but not a big success. How's that for weaseling?

As for happy surprises, I'm not sure I have any. I didn't expect miracles, but I did expect more from Obama, and I can't think of anything significant he passed that I wasn't expecting. Partly this was due to epic levels of Republican obstructionism, and partly it was due to Obama's native economic conservatism. On the other hand, I can think of two big disappointments that I didn't fully expect: the size of the buildup in Afghanistan and Obama's failure to rein in some of the civil liberties excesses of the Bush era. Again, I didn't expect miracles, but neither was I expecting 140,000 troops in Afghanistan or almost complete acquiescence to the national security posture of the Bush/Cheney administration.

So there you have it: on net, I'd call Obama a successful president, but not a hugely successful president. But he's still got six years left. There's still time to surprise us.

The Descent of John McCain

Joe Klein on John McCain, who led the charge this weekend against both the DREAM Act and the repeal of DADT:

I used to know a different John McCain, the guy who proposed comprehensive immigration reform with Ted Kennedy, the guy — a conservative, to be sure, but an honorable one — who refused to indulge in the hateful strictures of his party's extremists. His public fall has been spectacular, a consequence of politics — he "needed" to be reelected — and personal pique. He's a bitter man now, who can barely tolerate the fact that he lost to Barack Obama. But he lost for an obvious reason: his campaign proved him to be puerile and feckless, a politician who panicked when the heat was on during the financial collapse, a trigger-happy gambler who chose an incompetent for his vice president. He has made quite a show ever since of demonstrating his petulance and lack of grace.

I was never all that entranced by McCain even back in his Straight Talk Express 1.0 days, but like him or not he was a mostly honorable guy. It's hard to recognize the same man in the seething stew of resentment and bitterness he's become. I suspect that someday he'll come to regret what he allowed the past four years to do to him.

DADT is Dead

DADT repeal won today's cloture vote in the Senate 63-33. Actual debate followed by actual voting will now commence, but this was the vote that mattered. DADT is dead.

So: Good work, White House and congressional Democrats — and kudos as well to the few Republicans who stood on the right side of history with them. The tax deal was a tough swallow, but this makes things a little easier.

UPDATE: The final vote was 65-31. DADT has been officially repealed, awaiting only President Obama's signature.

Friday Cat Blogging - 17 December 2010

It's been a dispiriting week for me, the weekend promises to be pretty disagreeable too, and next week I might have jury duty. Blecch. But at least we have cats! As you recall, a couple of weeks ago I wanted to do a "Cats From Your Window" feature, but only Inkblot cooperated. This week I've finally completed the pair with this picture of Domino through our front window. So now the set is complete. On the right, Inkblot majestically ponders the fate of the universe and the likelihood of dinner coming anytime soon.

And courtesy of my sister, we finally have an answer to all the dog lovers constantly pointing to stories of dogs saving people from burning buildings and asking with a sneer, "Can a cat do that?" Well, yes: Pepper the cat, a resident of Devon, saved his owner's house by opening a window after it caught fire and alerting the neighbors. So there. The story, complete with pictures of the amazing feline, is here.

Debit Cards and Capitalism

Over at The Corner, Katrina Trinko is not a fan of the Fed's proposed new caps on debit card swipe fees:

The idea behind the legislation was that the banking industry had these fees set too high. If the Fed forced them to lower the fees, retailers would save — and give their customers lower prices. Well, instead, it now looks like retailers will just pocket the extra cash and not charge lower prices, while banks will try to recoup some or all of their losses by charging consumers new or higher fees. Not exactly what the lawmakers intended to happen!

But it gets worse: the Fed has now announced they want to cap interchange fees at 12 cents per transaction — an amount that the Fed admits is “more than 70 percent lower than the 2009 average.” That’s a lot higher than the worse-case scenario of 50 percent that analysts had predicted — and means that consumers can expect to get slapped with a lot of banking fees.

Yep, that might happen. But here's the thing: the reason that Dodd-Frank forced the Fed to step in is because the debit card market is a monopoly that forces contracts on merchants that are almost criminally one-sided. Visa and MasterCard control an enormous proportion of the market, they charge sky-high fees that are plainly predatory, and they prohibit merchants from passing along these costs to customers.

It's the last one that's the smoking gun. Maybe you don't want to break up the card market because it's more efficient to have a small number of networks. Maybe you don't want the government stepping in to regulate fees. Fine. But if that's the case, then merchants should be allowed the free-market privilege of charging whatever prices they want. If they want to give discounts for cash, fine. If they want to add surcharges for debit cards, that should be fine too. If they want to add different surcharges depending on the card, also fine.

Then we'd find out where the problem, if any, lies. If merchants mostly decide not to bother with surcharges, then it means they feel like they're getting good value in return for the swipe fees. If surcharges become widespread, it means that Visa and MasterCard were using their monopoly power to extract unfair rents.

But the card companies have fought like crazed weasels to keep their contracts intact. They are absolutely, categorically intent on not letting merchants charge free market prices for the use of their cards. This should suggest to any good capitalist that something is amiss. And that's why the Fed is stepping in. The card companies have no one but themselves to blame.

The Digital Fog

Dan Gillmor:

Yahoo has decided to close its Web bookmarking service, Delicious, a move that is sparking angst to outrage around the intertubes. One result is a frenzied search for a new social bookmarking service to replace what many people, including me, have used over the years to stockpile and organize links to online material we've found interesting.

....But the most important result may ultimately be what this move, among others, does for public understanding of the role of Internet service providers of all kinds....We put our data — our websites, photos, bookmarks, email and more — on their sites. But they can, and do, change their terms of service at will, doing what they please with what we've put on their servers. And sometimes they just shut down the services they've been providing. They may do it for good reasons, or absurd ones. It doesn't matter. The point is, they can.

This is true. At the same time, it's nothing all that new. My first word processing was done in Scripsit on a TRS-80. Then in MASS-11 on a VAX 750. Then in Ami Pro under Windows 3.1. Then in Word. Then in Blogspot. Then in Movable Type at the Washington Monthly. Now in Drupal at Mother Jones. Everything I wrote on Blogspot is already gone, and it's true that everything I wrote at the Monthly and currently write at MoJo could easily disappear if either of those magazines goes bust. But guess what? Most of the older stuff is gone forever too even though it never touched the internet. The programs disappeared, the data formats disappeared, and the physical formats became obsolete. You can't buy Ami Pro or 5¼-inch floppy disks anymore. This is something that data retention experts have wrestled with for decades. Archival storage is nearly impossible in an era where both physical media and digital formats change relentlessly.

So yes, be careful. Backup your data. Don't trust the cloud for everything. But every time we do anything on our computers, we're trusting that the programs we use will be around for a while. Sometimes that bet pays off, sometimes it doesn't. I have a Civil War diary written by my great-grandfather in 1863, and it's still extremely legible and accessible. But what are the odds that a single word I've ever written will still be accessible in the year 2160? Aside from the stuff on paper, pretty slim, I'll bet.

The Stimulus Bill That Failed

New research from the University of Maryland shows that viewers of Fox News were more misinformed about factual questions than any other news audience during the 2010 midterm elections. No surprise there, I guess. But here's the breakdown on one particular piece of misinformation:

Overall, heavy Fox viewers were the most uninformed about this. But only slightly. With the exception of the MSNBC audience, every other audience was almost equally uninformed. The only exception was daily viewers of Keith and Rachel, and even there an astonishing 64% of viewers basically thought the stimulus was worthless.

I don't happen to believe that communication and messaging are as critical as the press sometimes makes them out to be, but something sure went cockeyed here. One way or another, the White House and congressional Democrats utterly failed to make a case that the stimulus bill did the economy any good at all. That's obviously a tough sell in a high-unemployment environment, but still. Complete, utter failure. It's astonishing.

The Decline of America

Ezra Klein on the tax deal:

Stripped bare, here's what the deal says about the two parties: Republicans care much more about tax cuts for the rich than about any of their specific arguments about what's impeding recovery, while Democrats don't have the votes to really put their preferred policies into place, and so are left settling for policies that they don't think will work that well and, in some cases, don't think will work at all. What we ended up getting was better than I expected, but it's not a deal that anyone with a coherent view of the jobs crisis would've designed.

Roger that. I can't remember when I've been more demoralized about American governance. I have this overwhelming feeling of barnacles building up relentlessly, untouchable because of interest group pressure on both left and right, and a complete inability and/or unwillingness to address any of it. Democrats have some things they want to do, but in addition to satisfying their own interest groups they have to settle for third or fourth best policies because Republicans have simply decided they don't care about anything except tax cuts for the rich, hating gay people, and bennies for favored industries. In the middle of a massive recession they opposed a stimulus bill. In the aftermath of a financial crisis they opposed a financial reform bill. In the face of skyrocketing healthcare costs they demagogued modest cuts in Medicare spending. They spent months negotiating a spending bill — transparently, openly, via the ordinary committee process — and then killed it just because it would annoy Harry Reid. Global warming is a hoax, gay recruits will destroy the military, and creationism is an appropriate topic for high school biology classes. Our infrastructure is crumbling and our schools are mediocre, but the creeping encrustation of government prevents anything serious from being done about either. We're in hock to Middle Eastern theocracies for our oil, and the laughable answer from the right consists entirely of nukes and a bit of marginal extra drilling around the periphery of America. An arms control treaty that could have been negotiated by Ronald Reagan himself is unsure of passage because too many Republican senators deem it unsafe to risk the wrath of Fox News or their tea party constituencies.

Democrats have their pathologies too. Teachers unions really do impede school reform. Public sector unions have bid up government salaries. Environmental and land use rules have made infrastructure development of any kind a grueling, expensive marathon. Both parties subsidize idiocies like corn ethanol, and both sides boast coal state senators who are unwilling to think seriously about pricing carbon.

But at least we all have access to 300 TV channels in glorious high definition! Who says America can't accomplish great things anymore?

Anyway. Just had to get that off my chest. Sorry. Back to work now.