Last night, in a post about allegations that Michele Bachmann suffers from migraine headaches that are "frequent" and "incapacitating," I said that this was a serious charge that required a serious response from the Bachmann campaign. A regular reader of mine also suffers from migraines, and he emails to say that it's not quite that simple:

I get them, and it's not such an easy thing to explain. Without medication, they knock me out as bad as they describe with Bachmann (although usually it's a day, not days). With medication, it's pretty manageable. The medication you take for an oncoming migraine (I take Relpax) is a miracle drug, and without it I probably couldn't manage in a job half as stressful as what I do. The preventative drugs I'm given are more of a crapshoot, that's just the unfortunate reality.

So like Bachmann, I'm on a shitload of drugs, and it's not an easy thing to explain; it's a lot of drugs and it's an everchanging regimen. I'm trying to taper off two of the drugs because a third seems to work better, and even when a preventative drug is no good, going off cold turkey induces more headaches. On top of it all, these drugs have primary uses for even more stigmatized medical conditions — two years ago my doctors talked me into taking one that's mainly for epilepsy, and not only did it not work, it put me in the hospital with an ulcer. Now one of the drugs I'm taking (but gradually trying to phase out) is mainly used for depression, something I didn't even know until I'd been on it for over a year.

So, needless to say, it's very easy to understand why she finds this hard to explain. For starters, the most effective thing is to be taking a lot of painkillers indefinitely, and that doesn't look good. Then you're on a boatload of preventative drugs that are also for things like epilepsy, depression, etc. No one really understands why the people who get these things at a severe level get them, or why it's different from a passing ache or pain. Plus, when you do get one that's not controlled, it's like someone flipped an off-switch on your body. In a situation where you don't have the luxury of lying down, you can power through on adrenaline, but you're still not the same person.

Look, I think you know that nothing is going to change my opinion that Michele Bachmann is a dangerous fruitcake. But this condition is very complicated and it doesn't sound like she's in any different pair of shoes than the many people — including many high performing professionals — who suffer from it. So, I guess this hits a nerve for me because this really is not evidence of her nature as a dangerous fruitcake, although it's easy for me to see how she will be unable to avoid that appearance. I think that ultimately this will do a lot of people who suffer from the same condition a disservice.

For the record, I don't think Bachmann's migraines have anything to do with her crazy ideas about how to run the country. But I do think that a condition that's potentially incapacitating during times of stress is very much an issue for a prospective president. We only learned after the fact about JFK's massive cocktail of medical problems, and it was probably just dumb luck that they never caused any serious problems. But it's not 1960 anymore. This might not be easy to explain, but it still needs to be explained. In a followup email, my correspondent agrees:

Of course it's relevant. Even if it had less of an impact than it does, running for President is an open-kimono exercise, so any desire to have some privacy around this is out the window. My fear though is that our very immature discourse combined with the still evolving courses of treatment could distort the depiction of this condition in two different directions: it's literally "in her head," because she's nutty; or it's so serious that it's disqualifying. My view as a sufferer is that it's all too real, but it's manageable like any other chronic health condition, like diabetes.

Matt Yglesias is startled by the chart below, which shows the greenhouse gas emissions produced by various kinds of food: "The carbon gap between lamb & beef on the one hand and pork & chicken on the other is larger than the gap between between pork & chicken and vegetarianism."

Ezra Klein reposts something from a column he wrote a while back:

Two researchers at the University of Chicago estimated that switching to a vegan diet would have a bigger impact than trading in your gas guzzler for a Prius. A study out of Carnegie Mellon University found that the average American would do less for the planet by switching to a totally local diet than by going vegetarian one day a week....A Montanan who drives 40 miles to work might not have the option to take public transportation. But he or she can probably pull off a veggie stew.

This, of course, highlights the genius of the best answer to all of this: a carbon tax. If you tax carbon, nobody makes these decisions for you. You make them for yourself just by deciding what you want to spend your money on. If a carbon tax increases the price of carbon-intensive activities, some people will prefer giving up their hot rod to going without beef. Some will prefer eating more vegetables to giving up their SUV. Some will end up doing neither and giving up something else. But whatever it is, each individual will reduce his or her carbon use in the way that's the least personally onerous. No regulation can do that and no PR campaign can do that, but a price on carbon can. And in addition to all the awesomeness of letting the market work its magic to reduce carbon emissions with minimum pain and maximum consumer surplus, it also produces a pot of money that can be used to motivate research into better energy alternatives for everyone. We are almost literally insane for not doing this.

The FT's Neil Hume quotes Harvinder Sian of the Royal Bank of Scotland:

Spain has entered the danger zone for yield levels. The chart below shows the yield moves in the constant maturity 10y paper for the GIIPS countries. These markets traded a range between 6 per cent and 7 per cent but ultimately this proved to be a pause before the move to higher yields then accelerated. There is no consistent yield trigger level inside this range but market talk of point-of-no-return around the 6 ½% is not without foundation either.

....The conditions for a near death experience for the Euro are in place now, which in turn should finally galvanise a more serious policy reaction. In the interim, risk assets can be crushed.

This is not, repeat not, a good time to be screwing around with the possibility of defaulting on U.S. debt. Repeat: not, not, not. It's time for the Republican leadership to start facing reality and getting their troops in line. Playtime is over.

From the Wall Street Journal:

Worries about government debt rocked capital markets on both sides of the Atlantic Monday, as fears that the Greek crisis will spread combined with concerns at the standoff over the U.S. debt ceiling....Adding to the market woes were indications that, after months of shrugging off the debate over the U.S. debt ceiling, investors are getting edgy over Washington inaction ahead of an Aug. 2 deadline. The discomfort was reflected in the recent underperformance of the 30-year Treasury bond, traders and analysts said.

Hey, maybe investors are finally starting to understand that a big chunk of the Republican Party is really, truly batshit insane. They're not faking it! But here's a guess: all it will take to get the tea partiers in line is a thousand-point drop in the Dow. Suddenly, playing games won't seem like quite so much fun anymore, and it's about the only thing that seems to get their attention. I figure it should happen sometime around August 3rd or so.

The Daily Caller reports that Michele Bachmann frequently suffers from severe migraine headaches:

The Minnesota Republican frequently suffers from stress-induced medical episodes that she has characterized as severe headaches. These episodes, say witnesses, occur once a week on average and can “incapacitate” her for days at time. On at least three occasions, Bachmann has landed in the hospital as a result.

“She has terrible migraine headaches. And they put her out of commission for a day or more at a time. They come out of nowhere, and they’re unpredictable,” says an adviser to Bachmann who was involved in her 2010 congressional campaign. “They level her. They put her down. It’s actually sad. It’s very painful.”...."When she gets ‘em, frankly, she can’t function at all. It’s not like a little thing with a couple Advils. It’s bad,” the adviser says. “The migraines are so bad and so intense, she carries and takes all sorts of pills. Prevention pills. Pills during the migraine. Pills after the migraine, to keep them under control. She has to take these pills wherever she goes.”

....Of particular concern to some around her is the significant amount of medication Bachmann takes to address her condition. The former aide says Bachmann’s congressional staff is “constantly” in contact with her doctors to tweak the types and amounts of medicine she is taking. Marcus Bachmann helps her manage the episodes.

I have no idea if this is really serious or not. Still, it sure sounds like something that deserves a more considered response from Bachmann's flack than an opaque statement that her headaches are "under control" and "I’m not going to go into her medical history.” If she wants to be president of the United States, her medical history is no longer something she can just blandly pretend is no one's business but hers. Just ask Thomas Eagleton.

UPDATE: Atrios thinks this is all stupid: "Aside from 'imminent death is likely' I really have never understood why people think random health issues matter."

Look, maybe this story is wrong or overblown. If so, Bachmann can explain and it becomes a non-story. But multiple members of her staff are claiming that this "random health issue" is something that happens frequently and is incapacitating when it occurs. If it's true, then yes, of course this matters in someone who wants to be president of the United States. I know we're all supposed to be disgusted by the media's relentless campaign preoccupation with minor personal issues, but sometimes these things actually matter.

All three credit rating agencies have now announced that they'll downgrade the United States if it fails to pass a debt limit increase and then defaults on its bond payments. Fitch is the latest:

The Fitch credit rating agency has warned that it could downgrade the nation's credit rating from AAA to B-plus as soon as Aug. 4 if a deal is not struck to raise the debt limit.

....First, the rating would be placed on Credit Watch Negative — a move already adopted by fellow rater Standard & Poor's. Two days after the deadline, the Treasury has a $90 billion bond due to mature. If the government does not pay in full that bond, Fitch would immediately knock the rating down several notches to B-plus — the highest possible rating for a nation in default.

God knows I don't want to downplay the urgency of all this, but WTF? Unless I'm missing something big here, defaulting on a bond payment is the last thing the government would do. There are a whole raft of other disastrous things (furloughs, Medicare payments delayed, Social Security checks reduced, etc. etc.) that would have to happen first, and even if they did, the Treasury Department probably has the constitutional right to do whatever it has to do to make debt payments anyway.

So what's going on here? Why the pretense that we might default on a bond payment on August 4? There's precisely zero chance of that happening no matter what Congress does.

From Felix Salmon, on a Wall Street Journal editorial over the weekend that lashed out at Rupert Murdoch's critics:

That editorial has achieved the remarkable feat of making the WSJ editorial page even less respected than it was before.

I'm not sure I've ever read an editorial quite so self serving and plainly written in a blind rage. It's here if you want to read the whole thing. More from Andrew Sullivan here and David Carr here.

Back in the 90s, if you'd asked me what my political persuasion was, I probably would have said I was sort of a neoliberal (in the American, Charlie Peters-ish sense of the word). My political leanings are liberal, but my temperament is technocratic and market oriented, and that made me a pretty good fit for the neoliberal team.

I got steadily off that bus over the years, partly because the whole neoliberal project was based on the assumption that moderation from Democrats would prompt similar moderation from Republicans that would eventually turn down the temperature of the culture wars and produce better overall governance. Needless to say, that's not quite what happened, something that Charlie Peters himself recognized and was unhappy about. More recently, though, I've moved even further away from the neoliberal persuasion because my nose has been rubbed a little too firmly in the fact that it simply doesn't work politically. The world is a messy place governed by messy interest groups and messy countervailing powers, and if you absent yourself from that world you'll get steamrolled. Henry Farrell discusses this today:

There is a real phenomenon that you might describe as left neo-liberalism in the US — liberals who came out of the experience of the 1980s convinced that the internal interest group dynamics of the Democratic party were a problem. These people came up with some interesting arguments (but also: Mickey Kaus), but seem to me to have always lacked a good theory of politics.

To be more precise — Neo-liberals tend to favor a combination of market mechanisms and technocratic solutions to solve social problems. But these kinds of solutions tend to discount politics — and in particular political collective action, which requires strong collective actors such as trade unions. This means that vaguely-leftish versions of neo-liberalism often have weak theories of politics, and in particular of the politics of collective action.

I see Doug [Henwood] and others as arguing that successful political change requires large scale organized collective action, and that this in turn requires the correction of major power imbalances (e.g. between labor and capital). They’re also arguing that neo-liberal policies at best tend not to help correct these imbalances, and they seem to me to have a pretty good case. Even if left-leaning neo-liberals are right to claim that technocratic solutions and market mechanisms can work to relieve disparities etc, it’s hard for me to see how left-leaning neo-liberalism can generate any self-sustaining politics.

This is a point I tried to make in different form a few months ago in "Plutocracy Now." Political change requires big, sustained institutional pressure, and in the past that came mainly (though not exclusively) from organized labor on the left and from the business community on the right. But organized labor is now all but dead as a motivating force in American politics, and this means that the nature of America's two main parties has been turned on its head. In the 70s, Republicans were in a certain amount of disarray, while Democrats were the party supposedly captured completely by interest group politics. Today, it's just the opposite: Republicans have been captured almost entirely by a coherent and mutually cooperative set of interest groups who know exactly what they want, while Democrats are at war with themselves, owing allegiance both to middle class interests and corporate funders, and unable to choose between them. Barack Obama is an almost perfect example of this tension, and it's the reason for his longstanding problems with the progressive wing of the Democratic Party. 

In any case, it's pretty obvious which organizing principle has been more successful over the past couple of decades, and it hasn't been the liberal one. Put simply, the middle class simply doesn't have any kind of big, persistent, institutional representation in American politics any more, and that's left the field open for corporations and the rich to increasingly dominate economic policy. They know where their interests lie and they aren't afraid to fight for them.

Unfortunately, answers to this dilemma are thin on the ground, and Obama certainly hasn't figured out an answer. He's just trying to muddle through somehow. I don't know the answer either. But as I said a few months ago, "If the left ever wants to regain the vigor that powered earlier eras of liberal reform, it needs to rebuild the infrastructure of economic populism that we've ignored for too long. Figuring out how to do that is the central task of the new decade." It still is.

Here on the left, everyone has long wanted President Obama to nominate Elizabeth Warren to head up the new Consumer Financial Protection Bureau. It was mostly her brainchild, after all, and she's been running it on an interim basis for nearly a year (as a "special advisor" to the president). But opposition to her appointment is strong, and over the weekend Obama decided instead to nominate Richard Cordray, a former Ohio attorney general who's been running the enforcement arm of the CFPB since December.

The problem with this is that Warren isn't the only potential head of the CFPB that Republicans dislike enough to filibuster. In fact, they dislike all of them. But it's not personal, just business. They hate the whole idea of the CFPB so much that they've promised to keep anyone from running the agency unless some changes are made. Mike Konczal elaborates:

What are the strengths of the way the CFPB is structured in the Dodd-Frank Act? There are many, especially the consolidation of consumer regulation and focus on research. But three structural strengths stand out: it has a single director, there’s been careful attention paid to its budgeting process and it is just like other regulators in terms of accountability but with focus on consumer protection as its primary goal. These three parts of the CFPB were carefully planned, designed and fought for.

....[Those three] major strengths — a director, funding and accountability with a focus on consumer protection — are exactly what the Republicans want to dismantle. No doubt they are trying to stall and annoy the implementation of Dodd-Frank and prevent the CFPB from doing all its work — of course they are — but if there were three critical points where they could significantly weaken what the CFPB can do, these would be those three.

So there you have it. Republicans want to emasculate the agency almost completely because big banks don't much like the idea of a consumer protection bureau. One way to do that is to change the operation of the agency in a way that makes it toothless. Another way is to prevent confirmation of a director, since several of its most important powers are only allowed to be carried out by a Senate-confirmed director and those powers become dead letters if they filibuster every possible candidate. That's what Republicans have promised to do, and it's why Ezra Klein thinks it's hardly a huge loss that Obama didn't nominate Warren:

Whoever is nominated to lead the CFPB is going to spend the next year of his life being filibustered by Republicans. The very best he can hope for is a recess appointment, in which case his tenure in the position would be relatively swift. So the question isn’t who you want leading the CFPB for the foreseeable future. It’s who you want spending his or her time being stopped from leading the CFPB for the foreseeable future. And it’s not clear that the answer to that question is “Elizabeth Warren.”

The real question is, why would anyone want to be this person? Richard Cordray knows what he's in for, so why is he doing it? It's mysterious. But then again, Cordray is a five-time Jeopardy! champion, so maybe he has something up his sleeve that the rest of us can only guess at. Wait and see.

A few weeks ago I criticized a David Brooks column that tried to pin the blame for the housing bubble and its subsequent collapse on Fannie Mae. Afterwards, though, I felt a twinge of guilt. The column was based largely on Reckless Endangerment, by Gretchen Morgenson and Joshua Rosner, and I hadn't read the book. Maybe there was more to this than I thought. So I read the book.

And it was.....weird. The first hundred pages or so were about Fannie Mae in the 90s, when Jim Johnson turned a formerly low-key quasi-governmental utility into a full-blown Wall Street firm obsessed with growth, market share, and executive compensation. Johnson essentially used his political connections with Congress to parlay Fannie's low cost of funds (a consequence of its implicit government guarantee) into a steady stream of ever-growing profits and higher pay. This part of the book is pretty good.

Then the book morphs into something different. Fannie largely disappears from the scene, to be replaced by a couple hundred pages about the subprime mortgage market of the aughts. This part of the book was OK, but not great. Joe Nocera and Bethany McLean told the story a lot better in All the Devils are Here.

But there was also a third strand woven throughout the book, one that tried to blame Fannie Mae (and, to a lesser extent, Freddie Mac) for the Great Collapse of 2008. And this piece of the book just didn't hold up. Morgenson and Rosner's basic argument is a little hard to pin down precisely, but basically they suggest that Johnson's go-go management of Fannie in the 90s somehow gave the green light to Wall Street to go crazy in the aughts. Here's a typical passage, about bank lobbying to keep capital standards low in the late 90s:

Executives at the big banks had watched Jim Johnson's success years earlier in ensuring that capital standards at Fannie Mae would be set exceedingly low. They knew that their profits would be bolstered if they could reduce the amount of money regulators required them to set aside for problem loans. Smaller set-asides meant more money to be deployed in lending or purchases of income-producing securitieis. Banks also recognized what Johnson had — higher profits means loftier executive pay.

Nice try, but does anyone take this seriously? Banks have been keenly aware of the benefits of low capital requirements for about as long as they've been aware that higher profits mean higher executive pay: namely forever. Jim Johnson had nothing to do with it.

The book is studded with passages like this that try to imply that Wall Street might have remained sober and prudent throughout the aughts if only Fannie Mae had set a better example. Robert Kuttner gives this the treatment it deserves in the American Prospect this month:

As Morgenson and Rosner obliquely acknowledge elsewhere in the book, other Wall Street firms created the subprime bubble precisely because Fannie would not buy those loans. Morgenson and Rosner admit this contradiction when they write of the Wall Street-financed boom in poor-quality loans that took off circa 2001: “Because higher-quality borrowers were still at this time the domain of Fannie Mae and Freddie Mac, Wall Street could not hope to compete in this area. So the big investment firms stepped up their interest in alternative mortgage products offered to sub-prime or near-prime borrowers.” In other words, Wall Street went where Fannie prudently feared to tread.

Morgenson and Rosner contend that Fannie’s perdition began in the mid-1990s when the company started purchasing mortgages with down payments of just 5 percent. “Traditionally,” they write, “banks had required that borrowers put 20 percent of the property price down to secure a mortgage loan.” That’s an embarrassingly novice mistake. Veterans’ loans under the GI bill accepted zero down payments. For decades, the Federal Housing Administration has insured loans with down payments of 5 percent—and these loans were purchased by Fannie Mae. Private mortgage insurers, which began competing with the FHA in the 1960s, also offered insured loans with small down payments. How could Morgenson and Rosner have missed something so basic and central to the story? What made these loans safe and insurable and liquid in the secondary market was careful underwriting, of the property value and the borrower’s capacity to pay, not the down payment. It was the lack of serious underwriting that made subprime such a disaster.

The whole thing is well worth a read. Fannie Mae was, in a lot of ways, a rogue and quasi-corrupt agency for much of the 90s and aughts, and its behavior ended up costing taxpayers a bundle. That story deserves telling, and any honest telling leads to an obvious conclusion: at a minimum, Fannie and Freddie need to be seriously cleaned up, and quite possibly they should simply be phased out of existence entirely.

But were they responsible for the housing bubble and its subsequent collapse? Nope. They might have made the very end stages a bit worse than they had to be, but both the bubble and the collapse were almost entirely creatures of the private sector. Strained psychoanalysis of Wall Street aside, the evidence could hardly be clearer on this point.