Kevin Drum

Shakeup in Afghanistan

| Mon May. 11, 2009 11:45 AM PDT

Robert Gates announced today that he is firing General David McKiernan, our top commander in Afghanistan:

The abruptness of the move was an indication of the gravity of the decision. General McKiernan had served in his current command for only 11 months, while such tours are usually two years or more.

Defense officials said that General McKiernan was being replaced because of what they described as a conventional approach to what has become one of the most complicated military challenges in American history. He is to be replaced by Lt. Gen. Stanley A. McChrystal, a former commander of the Joint Special Operations Command who recently ran all special operations in Iraq.

Presumably, David Petraeus was behind this decision.  Right?  Coincidentally, BruceR, recently back from Afghanistan himself, has a few thoughts about what we're doing right and what we're doing wrong there, and it sounds like he endorses the general idea that we need a more nonconventional approach.  More later on this, I'm sure.

UPDATE: More here from James Joyner.

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Pete Sessions Speaks

| Mon May. 11, 2009 11:17 AM PDT

What's the deal with members of Congress named Sessions?  Via HuffPost, here's Rep. Pete Sessions (R–Tex.) describing Barack Obama's nefarious scheme to destroy capitalism:

In an interview, Mr. Sessions cited rising unemployment in asserting that the administration intended to “diminish employment and diminish stock prices” as part of a “divide and conquer” strategy to consolidate power.

Mr. Sessions, in his seventh term, said Mr. Obama’s agenda was “intended to inflict damage and hardship on the free enterprise system, if not to kill it.” By next fall, he predicted, voters may regain appreciation for the era of Republican governance when “many dreams were achieved,” the size of the economy doubled and employment and financial markets hit record levels.

Every party has goofballs who say stupid things.  But the GOP is apparently trying to get itself into the Guiness Book of World Records or something.  I'd sure like to see a complete transcript of this interview, if only for the entertainment value.

Obama to Release Torture Report?

| Mon May. 11, 2009 10:17 AM PDT

The Washington Post today describes the difference between the limits placed on waterboarding by Justice Department lawyers and the practice of waterboarding once it got into CIA hands:

When the technique was employed on Abu Zubaida and later on 9/11 mastermind Khalid Sheik Mohammed and al-Qaeda planner Abd al-Rahim al-Nashiri, the interrogators in several cases applied what the CIA's Office of Inspector General described in a secret 2004 report as "large volumes of water" to the cloths, explaining that their aim was to be more "poignant and convincing," according to a recently declassified Justice Department account.

....Government officials familiar with the CIA's early interrogations say the most powerful evidence of apparent excesses is contained in the "top secret" May 7, 2004, inspector general report, based on more than 100 interviews, a review of the videotapes and 38,000 pages of documents. The full report remains closely held, although White House officials have told political allies that they intend to declassify it for public release when the debate quiets over last month's release of the Justice Department's interrogation memos.

....Although some useful information was produced, the report concluded that "it is difficult to determine conclusively whether interrogations have provided information critical to interdicting specific imminent attacks," according to the Justice Department's declassified summary of it.

Emphasis mine.  Greg Sargent says that Hill sources describe this report as the "holy grail" because "it is expected to detail torture in unprecedented detail and to cast doubt on the claim that torture works."  Doubt probably won't be enough, though.  If there's even a hint of "useful information," I imagine the torture advocates will stick to their guns.

Quote of the Day - 5.11.09

| Mon May. 11, 2009 9:51 AM PDT

From my sister, after a conversation about the death grip the financial industry continues to exert on Congress:

"Why should I even bother to vote if none of these people ever does anything that's good for me?"

Good question!  I didn't really have a very good answer.  Can anyone help?

Cui Bono?

| Mon May. 11, 2009 9:38 AM PDT

Today a bunch of healthcare industry executives will announce that they plan to go shoulder to shoulder with President Obama in his quest to cut healthcare costs.  Paul Krugman is cautious but supportive.  Jon Cohn is cautious but enthusiastic.  Ezra Klein is just cautious.

Count me in Ezra's camp.  The healthcare folks are promising initiatives that will cut the growth of healthcare spending by 1.5 percentage points a year.  Here's Jon Cohn on that:

That may not sound like a lot of money. But it is. If indeed the industry could produce such savings, according to the White House, it'd be worth around $2,500 a year to the typical family — which, it just so happens, is what Obama promised during his presidential campaign. (Amazing coincidence, no?)

....This doesn't mean the groups are acting out of altruism. The five big industry groups are the Advanced Medical Technology Association (AdvaMed), America's Health Insurance Plans (AHIP), the American Hospital Association (AHA), the American Medical Association (AMA) and Pharmaceutical Manufacturers of America (PhRMA). And they've made no secret of their opposition to proposals for creating a public insurance plan, into which anybody could enroll. Monday's gesture may simply be an effort to cut a deal that leaves out the public plan.

Ya think?  My problem here isn't that the industry folks haven't proposed detailed plans or enforcement mechanisms.  That's to be expected.  My problem is that they're apparently planning to argue that things like streamlined billing and "encouraging" the use of evidence-based guidelines will be enough to entirely meet Obama's cost goals.  Cost effectiveness research?  No need!  A public plan?  No need!  It's just like 1993, when the HMO revolution was going to change medical care so dramatically that there was no need for Bill Clinton's healthcare reform.  That didn't work out so well.

Anyway.  Jon argues that the optics are good even if we should continue to watch these guys like hawks.  Ezra just thinks we should just watch them like hawks.  I'm with Ezra.  Their incentives here are simply too clear to believe they want to genuinely be of help.

UPDATE: Matt Yglesias offers a comment:

Whatever kind of backstabbing these industry groups may or may not do in the future, they won’t be able to take back the fact that once upon a time they stood beside the White House in agreeing that it’s possible to achieve massive cost-savings without compromising patient care. That argument may well prove hugely important, politically, to getting a package through congress.

True enough.

Taxing Carbon - Part 4

| Mon May. 11, 2009 8:44 AM PDT

A few days ago I took Jeffrey Sachs to task for a post he wrote supporting a carbon tax in preference to cap-and-trade.  Over the weekend he sent me a response.  I'll probably have a reply later today, but in the meantime, here's Sachs:Kevin Drum is certainly right that a cap-and-trade system potentially can look a lot more like a carbon tax than actual cap-and-trade systems have done in the past.  My worries are about the reality of such systems, not the theory.  Both the Waxman-Markey draft bill and the actual experience of the European Union Emissions Trading System (EU ETS) give me concern for the reasons that I mentioned.  While a tax can be levied at a few upstream points, the EU ETS involves around 12,000 enterprises and the draft Waxman-Markey bill would apparently involve several thousand US sites as well (essentially all industrial units which emit more than 25,000 tons of carbon dioxide equivalent greenhouse gases). We would create for essentially no reason a highly expensive, Wall-Street-based system of permit trading and enterprise compliance that could be substituted by an easy-to-implement upstream tax.  Mr. Drum correctly notes that the Waxman-Markey proposal is both upstream and downstream.  I do indeed like the upstream part. The fact, however, that it is also a downstream system, which is the administratively cumbersome part that would be avoided by an upstream carbon tax.

As for the lack of price predictability, the price fluctuations of the EU ETS are notorious.  Emissions prices actually collapsed for Phase I permits at the end of that phase (2007), and recently emission permit prices have declined from more than 30 euros per ton in 2008 to less than 15 euros this year.  Some European economists are arguing for a floor price in the EU ETS, which indeed would make it much more like a tax.  I disagree with Mr. Drum that we should see the trading system as a helpful macro stabilizer and therefore like the fact that the price on carbon emissions has collapsed. We need a stable carbon price into the future to give the right incentives for a new generation of low-emissions technology development and adoption, and should use other economic instruments for cyclical policies.

I agree with Mr. Drum that an emissions system can cover most of the economy like an upstream tax, but in practice the EU ETS covers only around 50 percent of the economy.  The Waxman-Markey bill aims for much more, so perhaps I'm too pessimistic on that count and Mr. Drum is correct, but we'll see once the negotiations proceed further.  As for revenues and for revenue transparency, I still believe that a tax is the right way to go. I am not very confident about the fairness of backroom haggling over emissions rights now underway in Washington, or which has characterized the EU ETS.  I think that the tax approach can be more direct and visible, and less vulnerable to unfair insider dealing.

Finally, I would like to remind Mr. Drum and his readers that I stated clearly in my brief Yale article cited by Mr. Drum that either a tax or a cap-and-trade system is far superior to the status quo.  We are arguing about matters that are less than essential.  If Congress actually adopts a cap-and-trade system, that would be a huge advance. In fact, putting a market price on carbon emissions (through either a tax or permit system) is just one modest part of a truly comprehensive and effective carbon mitigation strategy, that must involve standards, R&D, demonstration projects, and many other kinds of incentives and public policies.

Sachs is, among other things, Director of the Earth Institute at Columbia University and author of The End of Poverty: Economic Possibilities for Our Time.

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Quote of the Day - 5.10.09

| Sun May. 10, 2009 9:38 AM PDT

From Bill Schneider, CNN election guru and former senior fellow at the right-wing American Enterprise Institute:

"The Republicans aren't a party, they're a cult."

Well, today's GOP does seem to check most of the boxes in the International Cultic Studies Association's "Characteristics Associated with Cultic Groups."  Except for this one: "The group is preoccupied with bringing in new members."  That doesn't seem to be much of a priority for them these days.

Banned

| Sun May. 10, 2009 9:12 AM PDT

Last week the British government published a list of people banned from entering the country.  The list included radio shock jock Michael Savage, thus guaranteeing it wide publicity and considerable condemnation.  But wait!  We ban people too.  We just don't make our list public. Graham Bowley reports:

To make the Coordinated Terrorist Watchlist, which has been maintained since 2003, you have to be “reasonably” suspected of “involvement in terrorist activity,” according to Chad Kolton, spokesman for the F.B.I.’s Terrorist Screening Center in northern Virginia. It can be fund-raising or recruiting, “but it’s a fairly high standard,” he said, and so probably does not include simply speaking about terrorism.

"Probably"?  Why does this not reassure me?

The Civic Function of Blogs

| Sat May. 9, 2009 4:59 PM PDT

If newspapers go away as a way of holding politicians accountable, can blogs replace them?  Andrew Sullivan says yes:

A good blog, with a tenacious blogger, on a difficult subject, can keep at a subject with intensity newspapers are hard-pressed to match. And as long as there are meta-blogs or aggregators or edited blogs that can highlight niche blogging on important, less-read subjects, these issues can be brought to the fore. Ideally, blogs and newspapers form a helpful nexus. But both can and will evolve to save the old civic function of the press.

I don't disagree with this.  Still, even as recently as the 2008 campaign, it was striking how little impact most net-based feeding frenzies had until they were picked up by someone in the mainstream press.  So far, at least, it's still the MSM that mostly provides legitimacy to stories and forces public officials to react to negative publicity.  I wonder how long that will continue to be true?

Chart of the Day - 5.9.2009

| Sat May. 9, 2009 4:34 PM PDT

Just for the hell of it, here's a composite version of the two charts I posted the other day from the stress test report. Basically, for each of the 19 big banks that were tested, it shows estimates of both projected losses under adverse economic conditions as well as the ability to absorb those losses without eating into capital. For example, on the far left, American Express has big expected losses, but also has the capacity to absorb them all via earnings. So, since their capital structure is OK right now, that means it will stay OK and they don't need to raise money.

Next door, however, is Bank of America. They have big projected losses and only a limited ability to absorb them via earnings. That means their losses will eat into their capital. What's more, their capital structure isn't so hot even now. That's why Treasury is requiring them to raise a huge tranche of new money.

Anyway, as you can see, hardly anybody is in really good shape. Even the banks that have adequate capital and income to see them through the recession are still expected to take sizeable losses. And yet, bank stocks are up, up, up. Go figure. If I didn't listen to Paul Krugman so much maybe I would have bought 10,000 shares of BAC a couple of months ago and made a killing. Thanks a lot, Paul.