Kevin Drum

The New Pentagon

| Mon Aug. 17, 2009 7:45 PM EDT

In the Washington Post today, Rajiv Chandrasekaran tells us why Gen. David McKiernan was so abruptly fired a few months ago as the top commander in Afghanistan:

Gates and Mullen had been having doubts about McKiernan since the beginning of the year. They regarded him as too languid, too old-school and too removed from Washington. He lacked the charisma and political savvy that Gen. David H. Petraeus brought to the Iraq war....He did not fawn over visiting lawmakers like Petraeus did in Iraq.

...."Blame General Petraeus," a senior Defense Department official said. "He redefined during his tour in Iraq what it means to be a commanding general. He broke the mold. The traditional responsibilities were not enough anymore. You had to be adroit at international politics. You had to be a skilled diplomat. You had to be savvy with the press, and you had to be a really sophisticated leader of a large organization. When you judge McKiernan by Petraeus's standards, he looked old-school by comparison."

There's more to the story than just this, and given the importance of the Afghanistan campaign it was hardly unreasonable for Gates and Mullen to install a new commander they thought was better suited to the job — even if this was based primarily on personal chemistry and even if it involved some level of unfairness to an existing commander who hadn't done anything especially wrong.  That's just the way it goes with top level executive positions sometimes.  What's more, there's evidence in Chandrasekaran's piece that quite a few people in the Pentagon were objectively unimpressed with some of McKiernan's planning, though he's pretty vague about just why that was.

Still, even with all that said, it's a little disturbing that Gates and Mullen apparently placed such a strong emphasis on "charisma and political savvy."  That's only a thin line away from "boot licking empty suit," after all, and it wasn't so very long ago that we were complaining that the Army promoted too many politically savvy generals and too few real warriors.  That's probably not what happened here — McKiernan's replacement, Gen. Stanley McChrystal, has a good reputation — but there's still a slight whiff to the whole thing.  And there's also this:

Before McChrystal left Washington, Gates asked him to deliver an assessment of the war in 60 days. Instead of summoning a team of military strategists to Kabul, McChrystal invited Washington think-tank experts from across the ideological spectrum.

....There were few revolutionary ideas in the document, but McChrystal may have received something far more important through the process: allies in the U.S. capital, on the political left and right, to talk about the need for more troops in Afghanistan — in advance of his assessment to Gates, which will probably be submitted this month.

As Spencer Ackerman points out, this is indeed politically savvy.  Whether it was the right thing to do is another question entirely.

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Empty Pockets

| Mon Aug. 17, 2009 1:27 PM EDT

The New York Times reports that Asian stock markets are down and the rest of the world is following:

“It’s almost an Asian flu that the markets caught today,” said Art Hogan, the chief markets analyst at Jeffries & Co. “Creeping into the conversation now is, when do we see top-line revenue growth? When is the consumer going to take over from government stimulus? But the answer is consumer data has been less than spectacular.”

Well, yeah.  That's always been the problem.  Eventually, recovery has to be fueled by consumer demand, and it's just not clear where that's going to come from.  Rising middle class wages?  Nope.  More credit card borrowing?  Obviously not.  Drawing down savings?  Just the opposite is happening.  Tapping into home equity?  Forget it.  Neil Irwin sums things up in the Washington Post today:

"Credit fuels housing. It fuels consumer durable goods. It fuels business investment. It's in every part of the economy," said [Carmen] Reinhart, an economist at the University of Maryland. "Credit makes recessions after a financial crisis longer, and all the signs are that [it] is happening this time as well."

A related head wind comes from American consumers. The financial crisis and recession are reversing a 30-year trend carrying Americans toward a high point in debt. The ratio of consumer debt to the nation's total economic output rose to 97 percent in the first quarter of this year from 45 percent in 1975.

Currently, Americans are saving more and paying down debt; the savings rate was 1.2 percent of disposable income in early 2008. By the second quarter of this year, that rose to 5.2 percent.

"The household sector has never been so stressed," said RGE Monitor Chairman Nouriel Roubini, who predicted the crisis and recession. "Savings has to go much higher, and that is going to slow growth of consumption even once incomes start growing."

Every dollar that Americans save is one fewer dollar for consumption, which means less economic output. When the savings rate goes up by a percentage point, spending decreases by more than $100 billion, according to the McKinsey Global Institute.

My Netroots Nation panelists might have all broken my heart by not opposing the reappointment of Ben Bernanke, but they were also unanimous in calling for a second stimulus.  Politically, that's not in the cards right now, and I think it's defensible to suggest that we wait for the current stimulus to really kick in before considering a new one anyway.  Still, even if the worst is over, no one has been able to point to a mechanism that will cause consumer demand to grow significantly over the next few years, and without that we have a very long, very swampy slog ahead of us.  Until the debt overhang goes away and middle class incomes start to rise, the U.S. economy is going to stay fragile and vulnerable to shocks.  It's hard to see much of a silver lining here.

Making Sense of the Public Option

| Mon Aug. 17, 2009 12:37 PM EDT

Joe Klein on the public option:

I never had much interest in a public option. I think the perils of government-delivered (as opposed to funded) services are obvious and immense....On the other hand,  I am very much in favor of a single-payer system in which the government gives everyone a tax credit, scaled according to income, that enables people to select from an array of government approved and regulated health insurance choices.

There's something very odd going on with the debate over the public option.  Granted, it means different things to different people, but I'm pretty sure that nobody in a position of legislative authority has ever proposed a public option that provides "government delivered" healthcare.  There are various versions of the public option, but all of them are alternatives to the private insurance industry, not the private medical industry.  In some form or another, a public option would be a federally run insurance program, similar to Medicare, that pays for medical services you get from the private sector.

In effect, a public option is a backstop.  The basic point of the healthcare plans currently on the table is to reform the insurance industry (community rating, no recission, no rules about preexisting conditions, out-of-pocket caps, etc.) and then to provide subsidies to low-income households so they can afford to buy this reformed insurance.  But all those new regulations have to be enforced, and a public option would be a way of keeping insurers honest via competition even if the rules turn out to be imperfect.  Ideally, though, the regs would work and very few people would have an incentive to sign up for the public plan in the first place.

Personally, I still think that backstop is pretty important.  New rules never work perfectly, regulatory capture is always right around the corner, and a public option would provide competitive pressure that would keep costs lower.  On the other hand, there's also a downside: a public option provides a kind of safety valve for private insurers.  Maybe they can no longer flatly turn down someone with an expensive preexisting condition, but they can probably slow roll an application pretty effectively — and the victim of the slow rolling is a lot less likely to complain about it if he has the option of just throwing in the towel and signing up for the government plan instead.

So as much as I'd like to have a public option (primarily for its ability to force more robust price competition), I just don't see it as something to threaten nuclear destruction over.  If insurance reforms are robust and low-income subsidies are decent, that's a huge win for millions of people, and it's a win we can build on.  And contra Atrios, social legislation does have a history of getting better after it's first passed.  Just ask Henry Waxman.

There's more to say about this.  For example: most European countries rely on regulated private insurers of one kind or another to provide universal coverage, and they've managed to make this work.  And: a credible threat only works if the opposition is afraid you might carry it out.  But as near as I can tell, the folks who oppose the public option aren't really all that afraid of the possibility that healthcare reform sinks completely.  Plus: the only way to get it is via reconciliation, and various comments to this post make it pretty clear that trying to pass a huge healthcare bill via reconciliation is probably impossible.

It's worth fighting for a public option.  But it's not worth sinking healthcare reform over it.  That would hurt too many real flesh-and-blood people who need this, and a second chance wouldn't come along for a long time.  We've failed on the healthcare front too many times to accept failure again.

Staying a Step Ahead

| Mon Aug. 17, 2009 11:30 AM EDT

Should Democrats have foreseen the pushback against Medicare funding of advance care counseling and struck it from the House bill before it ever saw the light of day?  A couple of weeks I argued no.  After all, if conservatives hadn't gone crazy over that, they just would have found something else to go crazy over.

Now, I have to admit that the death panel frenzy we've been subjected to since then has shaken my confidence in this.  Maybe this was a uniquely vulnerable provision and we should have foreseen the reaction.  But no.  Amy Sullivan writes in Time this week about a completely different right-wing freakout over an even more innocuous provision in the bill: prenatal parenting counseling for expectant mothers.

Now conservative opponents of health reform have found a new threat: home nurse visits to low-income parents. "We are setting up a situation where Obama will be invading parent's [sic] homes and taking away their children," one columnist warned on RightWingNews.com. That something as harmless as home nurse visits has become a target of conservative ire is surprising because of its longstanding popularity with both Republican and Democratic lawmakers. But health reform advocates are scratching their heads at the attacks for another reason: funding for home nurse visits was largely included in health reform legislation to accommodate social conservatives.

....The home visitation provision in health reform legislation was modeled on a bill authored by Republican Senator Kit Bond of Missouri. Bond went through a parenting education program in Missouri when his son was born three decades ago and has been a fan of the idea ever since. "Being a parent is hard work," he says, "and babies don't come with directions."....Home visits have been so popular with conservatives that the idea kept coming up during conversations White House aides hosted with pro-life advocates earlier this year in an effort to find common ground on abortion. And when Democratic Reps. Tim Ryan and Rosa DeLauro drafted the abortion reduction bill they introduced last month, they specifically included funding for home nurse visits as a way of accommodating pro-life preferences for policies that support women who decide to give birth instead of having abortions.

Home nurse visits are about as bipartisan an idea as it's possible to have.  Conservatives like it because it reduces the incentive to get an abortion and liberals like it because it's good social policy.  Everyone likes it!

But has that stopped the lunatic fringe from attacking it as a secular plot to indoctrinate the mothers of America?  Nope.  It hasn't gotten a ton of attention yet, but that's only because the loonies have been obsessed with death panels instead.  If that weren't in the bill, Sarah Palin would have dubbed the home nurse program as the Baby Brainwashing Brigades and everyone would be going nuts over that instead.

So I'm sticking to my guns.  It wouldn't have mattered what was in the bill, just like it didn't matter that we elected Obama instead of Hillary Clinton.  The loons would have found something crazy to scream about no matter what, and the media would have covered it.  That's just the reality we have to deal with.

Cutting off Al-Qaeda

| Mon Aug. 17, 2009 10:51 AM EDT

Alex Rodriguez of the LA Times reports that the time is right for a major push against the Taliban:

For years, Al Qaeda and the Pakistani Taliban have nurtured a symbiotic relationship that has paid off for both militant groups. The Taliban provided Al Qaeda and its leaders sanctuary within the rugged wasteland of Pakistan's tribal areas along the Afghan border. In turn, Al Qaeda trained and helped finance its host.

Now, with the purported death of Taliban leader Baitullah Mahsud and his organization temporarily rudderless, Al Qaeda finds itself made vulnerable by the disarray plaguing its patron, experts and Pakistani intelligence sources say. It's a window of opportunity that neither Pakistan nor the United States can afford to neglect.

....With the Taliban mired in disarray, experts say Pakistan and the U.S. need to ratchet up their bid to track down and eliminate other top Taliban commanders. The aim, they say, is not just to dismantle the Taliban, but to cut off Al Qaeda from the entity that keeps it insulated and secure deep within the badlands of Waziristan.

Italics mine.  Although the word "Afghanistan" is barely mentioned in this piece, it's pretty obvious that amping up the pressure on the Afghan Taliban is the flip side of all this.  So the question is: is it really true that the Pakistani Taliban is in disarray and al-Qaeda is vulnerable?  Or is this all part of a finely tuned media campaign to build support for a troop buildup in Afghanistan?  After all, we've been hearing that the Taliban is this close to defeat on pretty much an annual basis for the past five years.

And who knows?  Maybe it's true this time.  But even given the inherent difficulties in knowing what's really going on in the border regions, I think I'd still like to see some more concrete evidence.  As the article implies, one part of that would be evidence that the Pakistani army can actually fight effectively against the Taliban and al-Qaeda on its side of the border, something it really hasn't been able (or perhaps willing) to do in the past.  I'd like to see that happen first before we make any decisions about building up NATO and U.S. troop strengh.

Healthcare Bleg

| Sun Aug. 16, 2009 8:28 PM EDT

On the flight home from Pittsburgh I sat next to Jane Hamsher and we chatted about healthcare reform.  Our conversation got me wondering about something.

As you may know, there's a group of liberal Democrats in the House who are threatening to vote against any bill that doesn't include a public option.  Obviously they're hoping that this threat will be enough to force the conference committee to include a public option in its final report.

But even if this works, no one thinks that such a bill can get 60 votes in the Senate.  This means the only way to pass it would be via reconciliation.

So here's my question: supposing this happens, what are we likely to lose if we go down the reconciliation road?  The basic rule is that anything that doesn't affect the budget is off limits and would have to be discarded, but in practice only an expert could tell us which provisions are likely to fall foul of the reconciliation rules.  So who's an expert on this kind of thing?  I don't have a clue.  But before I decide what I think of this whole idea, I'd sure like to have a better sense of what I'm likely to get out of it.  On one side, I lose the public option but the rest of the bill has a pretty good chance of passing.  That's straightforward.  On the other side, I get a bill that includes a public option but loses a bunch of other stuff that can't survive reconciliation.  Like, say, community rating, which I suspect doesn't have enough budgetary impact to stay intact.  Ditto for just about everything else that reforms the private sector insurance industry.

So this is kind of a bleg.  Who knows enough about this stuff to give us the lay of the land?  If I have a choice between a bill that ditches the public option vs. a bill that keeps the public option but ditches a bunch of other stuff, which is better?  It all depends on what the "other stuff" is.  If anyone has any idea how to go about figuring this out, let me know in comments.

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Reappointing Ben

| Sun Aug. 16, 2009 7:42 PM EDT

Video of my session at Netroots Nation doesn't seem to be available anywhere, which means that I can't watch it to see how it went.  However, I got this from a friend who watched it live:

I thought you might enjoy the attached screen capture.  You couldn't see it, but throughout there were ads on the screen, most of which keyed off your name.  We got ads for Canon toner DRUMS and oil DRUMS and all sorts of musical DRUMS and don't you just love the way "targeted" advertising works on the Internet?  I'm watching Kevin Drum so it follows that I might be in the market for a good oil drum.

Ain't the intertubes great?  On a more substantive note, not a single one of the panelists was opposed to reappointing Ben Bernanke.  Not even Dean Baker!  Et tu, Dean?  This suggests to me that Bernanke is a shoo-in for winning a second term.  If you can't even get a bunch of liberals at Netroots Nation to oppose him, what are the odds that anyone else is going to lead the fight?

Podcast: NetRoots Nation Dispatch

| Sat Aug. 15, 2009 4:14 PM EDT

If you didn't get a chance to watch Kevin's NetRoots Nation keynote live, this week's MoJo podcast is a short Pittsburgh dispatch from him. In it, we talk about the NetRoots Nation male-to-female ratio, Arlen Specter on the "death panels," and how fellow attendees are feeling about Obama. Listen to the podcast here.

Get Your Kevin Fix

| Sat Aug. 15, 2009 11:49 AM EDT

Hey Drum fans—today at noon Kevin is set to moderate the keynote Netroots Nation panel on "Building a 21st Century Economy" with New Jersey Gov. Jon Corzine, Change to Win Chair Anna Burger and economist Dean Baker. Rumor has it that C-Span may pick up the feed; you can also check out the live video below. While you wait, why not browse some of MoJo's fine economics coverage—Kevin's pieces on cap and trade and bank nationalization, James Galbraith on why the stimulus isn't big enough, David Corn's expose of Phil Gramm's role in bringing about the financial crisis, Nomi Prins' timeline of the debacle, and last but not least David Cay Johnston's modest proposal for fixing the tax code.

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Friday Cat Blogging - 14 August 2009

| Fri Aug. 14, 2009 2:00 PM EDT

Just because I'm in Pittsburgh doesn't mean you don't get Friday catblogging.  Today I present "Still Life With Cat – 2009."  Clearly a masterpiece.