Banks and Populism

Spencer Bachus, who's likely to be the new chairman of the House financial services committee, wants to go through the financial reform bill "page by page" and gut its toughest provisions, including the Volcker rule, which bans proprietary trading. The Financial Times explains:

Underlining the change in Congress, Mr Bachus, who as ranking Republican on the committee could replace Barney Frank as chairman of the panel, expressed concern that shareholders of Goldman Sachs and JPMorgan Chase will be hurt because the banks will be less profitable.

Kudos for honesty, I guess. No shilly shallying here about how this is bad for consumers or bad for America or anything like that. It might hurt Goldman Sachs shareholders, so the Volcker Rule has to go.

This is one of the great political triumphs of our day. Right-wing opposition to healthcare reform I get. Liberals and conservatives have been fighting over national healthcare for a century. But opposition to modest banking reform? In the wake of the most catastrophic financial failure since the Great Depression? It's mind boggling. Somehow, all those tea partiers who are mad as hell at Wall Street and aren't going to take it anymore have been persuaded to believe that financial reform is a gigantic socialist/statist conspiracy to....what? I'm not even sure. But they're mad about it and think Bachus is doing the Lord's work by trying to repeal it. If you ever needed any evidence that the tea party movement is largely in thrall to all the usual Republican power centers, this is it. How else can you explain why a plumber in Dubuque is convinced that a bill to rein in Wall Street excesses is really a socialist ruse to allow Barack Obama to take over the banks?

Via Tyler Cowen, who has additional comments.

Notes on the Presidency

Tyler Cowen on the presidency and its discontents:

I would be pleased if critics of the Obama presidency would indicate their managerial background and expertise, yet few do. How many of them could manage a team of ten people with any success?

Well, I managed a group of about a hundred or so at one time. Whether I did it with any success, though, is harder to say.

Intriguingly, Tyler also suggests that marijuana legalization is in tough shape if even Californians won't legalize it. "We're seeing the high water mark for pot, as aging demographics do not favor the idea," he says. I disagree, but it's an interesting thought.

Guerrilla Politics

Tonight's New York Times puff piece about the Republicans' visionary two-year strategy for regaining control of Congress (lots of money, lots of obstruction, lots of candidate recruitment — i.e., the usual) contains the following guerrilla warfare nugget:

They also tried to push Democrats into retirement, using what was described in the presentation as “guerilla tactics” like chasing Democratic members down with video cameras and pressing them to explain votes or positions. (One target, Representative Bob Etheridge of North Carolina, had to apologize for manhandling one of his inquisitors in a clip memorialized on YouTube. Only this week did Republican strategists acknowledge they were behind the episode.)

I guess all's fair in love and politics, but seriously? One of their official strategies, memorialized in a PowerPoint presentation, was to harrass Democrats with video cameras until they got so sick of politics that they just gave up? Did we really just hand over control of Congress to a bunch of seventh graders?

Quotes of the Day: Schmitt, Lithwick, Krugman

From Mark Schmitt, ruminating on the Republican agenda now that they've won control of the House:

Six years ago, pollster and political scientist Stan Greenberg published a book, The Two Americas, in which he broke down the American electorate of the middle Bush era into new categories. Two of those categories — the only two I remember — were the "F-You Boys" and the "F-You Old Men." The categories are so perfectly named that they require little explanation.

Indeed they don't — though the rest of Mark's piece is worth reading. Next up is from Dahlia Lithwick, about a Supreme Court case argued today:

Arizona v. Winn is about a suicide pact between two doomed lines of First Amendment jurisprudence.

I don't have anything to say about the case itself. I just love that sentence. Finally, here is Paul Krugman on the economy:

It’s an amazing thing: Obama and company have managed to convince people that big government failed, without actually delivering big government.

This is why I'm depressed about yesterday's election. Not because it means Obama's domestic agenda is finished. I never figured he'd have more than two or three years to get things done anyway. No, what's depressing is that on the single biggest domestic issue we face, the election didn't even matter. Our economy remains anemic, and even in the best case growth will stay slow and unemployment will remain dismally high for years. In the worst case, it's fragile enough that almost any kind of external shock — a housing bust in China, a wave of state or local defaults in the U.S., the collapse of Greece or Ireland, an oil shock brought on by God knows what — would be enough to bring it to its knees.

We know what to do about this: on the fiscal side, spend a whole bunch of money; on the monetary side, target higher inflation. There's nothing stopping us. But we're not going to do it. We just aren't. And even if Democrats had retained control of Congress yesterday, we still wouldn't have done it. Instead, we've resigned ourselves to simply gutting through a long, grinding period of working class stagnation and praying that nothing happens to make it even worse. Basically, we've given up.

I really hope I'm wrong about this. I spend a lot of time these days hoping that I'm wrong.

The Commanding Heights

In a post from May 2009 about bloc voting creating effective one-party rule, Arnold Kling throws out this aside:

I saw this scenario playing out way back in September [2008], when I tried (unsuccessfully) to convince a Republican Congressperson to vote against what we now call TARP. I said that this would be exactly what the Democrats needed — much greater government control over the financial system and big business in general. From now on, every Fortune 500 company has to align itself with the party in power.

I am curious what Arnold thinks of this now. It seems to me that in hindsight, even a conservative/libertarian TARP skeptic should be willing to concede that Obama never had any intention of using TARP to assert greater control over the financial system and, in the event, didn't use it to assert greater control over the financial system. Ditto for the auto bailouts and the stress tests. The financial reform bill, conversely, was designed to regulate the financial system, but did it in the most minimal way possible considering the vast damage that the financial system had just finished causing us all. 

In fact, all things considered, Obama treated the financial system with kid gloves, and despite — or because of? — that treatment, the financial industry (and big business in general) rather flamboyantly declined to align itself with the party in power this year. We saw the results of that yesterday.

But I wonder if Arnold sees things that way too? Probably not.

Beware the Spin

Over at the mothership, Stephanie Mencimer says that former Christian Coalition wunderkind Ralph Reed is "still one of the shrewder observers of American politics." Maybe so, but this sure doesn't convince me:

To support his assessment that the election was a direct reflection of the voters' feelings about Obama, Reed produced some exit polling data that showed that Obama is far more hated among midterm voters than even Bill Clinton was in 1994. According to Reed's surveys, 63 percent of voters said their midterm votes were intended to send the message that they were opposed to the president and his agenda, the highest ever recorded.

Hmmm. According to the standard exit polls, 37% of the electorate said their vote was meant to express opposition to Obama. Those numbers might be off by a few points, but there's no way they're off by 26 points. This sounds a lot less like shrewdness than it does good old fashioned spin.

Beware the pundits. Beware the spin.

Prop 19 Postmortem

I've been busy and only just now got around to looking at the final results for Prop 19, the California initiative to legalize marijuana. Here it is:

I know this won't be much solace to everyone who worked on Prop 19, but.....this isn't so bad, really. Given the automatic headwind of getting people to vote Yes on anything, the additional headwind of a big Republican turnout, plus the general nervousness that middle class people have about drugs, a loss this small is actually sort of encouraging. All we need to turn this around in a few years is for 4% of voters to change their minds.

What's more, the threat of Prop 19 passing probably helped to get the penalty for pot possession reduced from a misdemeanor to an infraction. So now, on the off chance that you get caught with a small bag of weed, all you get is the equivalent of a traffic ticket. A lot of people think this reduced the incentive to vote for Prop 19 and thus helped to defeat it, and maybe it did (though I'm skeptical). But it still means we made progress. And we're not very far from making even more. Probably not in 2012, but I wouldn't be surprised if something similar to Prop 19 could pass by 2014 if the stars align favorably.

QE2 Sails Into Port

Quantitative easing is officially here:

The Fed said it would buy an additional $600 billion in long-term Treasury securities by the end of June 2011, somewhat more than the $300 billion to $500 billion that many in the markets had expected.

The central bank said it would also continue its program, announced in August, of reinvesting proceeds from its mortgage-related holdings to buy Treasury debt. The Fed now expects to reinvest $250 billion to $300 billion under that program by the end of June, making the total asset purchases in the range of $850 billion to $900 billion.

I would like to feel optimistic about this. It's certainly better than nothing. I just wish that "better than nothing" weren't the best we could do at the moment.

Politicizing Climate Science

Can climate scientists confine themselves solely to analytical judgments about global warming and steer clear of politics entirely? This is what Judith Curry advocates, but Dave Roberts thinks it just isn't possible in the real world:

I'm not talking about climate sensitivities or hurricane frequency or sea-level projections or other areas of active scientific disputation. I'm talking about whether human beings are driving changes in the climate. That question is simply not in serious dispute in the relevant scientific disciplines....Yet Republicans have now made rejection of that root scientific consensus a litmus test, in keeping with their decades-long assault on America's institutions. Virtually every Republican candidate for Congress has denied the most rudimentary facts about climate change.

Yes, Democrats mangle climate science sometimes too. Activists can exaggerate the degree of certainty behind model projections. Scientists can be unduly dismissive of critics. Nobody is blameless. But there is simply nothing on the left (or in the center, or in professional science) remotely equivalent to the anti-intellectualism that reaches to the very top of the Republican Party.

Conservatives are politicizing climate science. Curry is uncomfortable saying that; it sounds like "getting involved in politics."....But the fact remains: Even if climate scientists confine their comments purely to what's known with a high degree of probability, with all the uncertainties baked right in, staying scrupulously clear of policy or ethical judgments, they will still find themselves aligned against the conservative movement and they will be attacked. Republicans slander peer review, science funding, scientific institutions, and scientists themselves. "Both sides" don't do that. Just the right side.

Obviously this puts climate scientists in a difficult position. As pure scientists they may want to avoid making policy pronouncements, but they also have a legitimate interest in making sure that overreliance on nuance doesn't swamp understanding of their basic conclusion. And their basic conclusion is that greenhouse gases are warming the globe, quite possibly in a catastrophic way. When one side in the debate considers a simple analytical judgment like that to be de facto politicization, that makes it impossible to avoid politicization no matter what you do. So what's a scientist to do?

Pundit Alert

Beware of pundits today. Here is Politico on the fate of House Democrats who voted for the climate bill:

Nearly 30 (and counting) who cast ‘aye’ votes for Waxman-Markey were swept away on Tuesday’s anti-incumbent wave. The casualties ranged from 14-term Rep. Rick Boucher to freshman lawmakers like Betsy Markey, Mark Schauer and Tom Perriello.

But as Kate Sheppard tweets:

Looks like 25 of the 42 Dems who voted against the climate bill lost their seats today. #thatworkedoutwell

Italics mine. Likewise, a bunch of progressive Dems like Tom Periello lost their races, but as Glenn Greenwald points out:

Half of the Blue Dog incumbents were defeated, and by themselves accounted for close to half of the Democratic losses....For slothful pundits who want to derive sweeping meaning from individual races in order to blame the Left and claim that last night was a repudiation of liberalism, the far more rational conclusion — given the eradication of 50% of the Blue Dog caucus — is that the worst possible choice Democrats can make is to run as GOP-replicating corporatists devoted above all else to serving corporate interests in order to perpetuate their own power: what Washington calls "centrists" and "conservative Democrats." That is who bore the bulk of the brunt of last night's Democratic bloodbath — not liberals.

As it happens, I don't buy Glenn's analysis here. Parties win big majorities by nominating moderates who can win in swing districts. Inevitably, when the other party wins, they're going to do it primarily by winning in those exact same swing districts. Being a moderate in a swing district is just a dangerous place to be, full stop.

Still, his broad point is well taken. Liberals lost some seats, Blue Dogs lost some seats. Dems who voted for the climate bill lost some seats, Dems who voted against the climate bill lost some seats. In the House, Democrats just lost a lot of seats. So far, the most persuasive explanation I've seen that goes beyond structural issues is displayed in the chart on the right, from Ezra Klein. Basically, turnout among the young was way down and turnout among the old was way up. We'll need to see raw turnout numbers compared to 2006 to really get the whole story here, but at first glance it looks like young people were discouraged and old people were fired up, and that made most of the difference. For non-lazy pundits, the next question is to ask why that happened. At a first guess, I'd say lack of Obamamania among the young and relentless Medicare demagoguery among the old. But for now, those are just guesses. The key is to find out which groups swung toward Republicans in greater numbers than the average swing, and the only way to do that is to look pretty carefully at the exit poll numbers. I'll try to get around to that later today.