Mojo - May 2009

An American VAT? Don't Bet On It.

| Wed May 27, 2009 11:31 AM EDT

The Washington Post has an article today arguing that the value added tax (VAT), which is popular in Europe and used in more than 130 countries, is getting a "fresh look" in the United States. Hogwash.

A value added tax is like a sales tax that applies at every stage of the production cycle. The tax is collected from wholesalers and raw materials suppliers, not just retailers, but the end result for consumers is the same, since the businesses pass their tax costs down the supply chain. Other countries have found VAT useful because the costs of collecting it fall largely on businesses, not government, and because its structure discourages the black markets that high sales taxes often create. And economists say VAT doesn't discourage work, savings, or production as much as some other taxes do. But most liberals don't like VAT because, like sales taxes, it's regressive—its burden falls disproportionately to the poor.

According to the Post, Kent Conrad, the Democratic chair of the Senate budget committee, is giving the VAT a look-see because the Dems are hoping to find a way to pay for universal health insurance. Well, it may be "on the table," as Conrad said, but VAT isn't going anywhere soon. When you consider the politics of the situation, it seems pretty clear that the Dems are trying to look like they're considering all the options. But any sort of significant VAT isn't really in the cards. "While we do not want to rule any credible idea in or out as we discuss the way forward with Congress, the VAT tax, in particular, is popular with academics but highly controversial with policymakers," Kenneth Baer, a spokesman for White House Budget Director Peter Orszag, told the Post. That's a long way of saying that VAT is an interesting idea that isn't politically viable right now. Consumption taxes raise the final prices of goods and services. Consumers would definitely notice even a modest VAT when they bought their apple pie, beer, and baseball tickets. Do the Democrats, now at the height of their power, really want to be blamed for instituting a new regressive consumption tax in the middle of a recession? Don't bet on it.

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Novel Theories of History

| Wed May 27, 2009 11:09 AM EDT

Over at In These Times, David Sirota advances a new theory of American history:

The birthing of the most famous political periods and the success of their transformative agendas almost always hinge on struggles between Radical Teabaggers and Establishment Douchebags. And typically, the teabaggers of a prior era have defined the next epoch’s politics.

The point that Sirota's trying to get at is another riff on his familiar refrain—progressives need to embrace populism, or, as he puts it in this piece, "stop spending their time ridiculing teabaggery and start co-opting it through their own brand of full-throated populism." But couching such an argument in the language of UrbanDictionary is a new twist. It's definitely an attention-grabber.

The Best Places to Live in America

| Wed May 27, 2009 10:50 AM EDT

Kiplinger's magazine has just named its ten best cities to live in America, and San Francisco isn't on the list. Washington, DC, however, is number three. Why, you ask? This year's list is "all about jobs," Kiplinger's says, and DC is a great place to find and keep a job in a recession:

For better or worse, the federal government is big and getting bigger. And for the Washington, D.C., area economy, that means for the better. "The government just keeps spending and adding jobs," says city spokesman Sean Madigan.

Only about one in eight workers in the Washington area—spanning D.C. proper and big chunks of adjoining Virginia and Maryland—are employed directly by the feds. Still, the government fuels nearby companies in almost every industry, especially law firms, lobbyists, and aerospace and defense companies.

We'll try to keep an eye on all of them for you.

Why Grover Norquist Is Happy With Sotomayor

| Wed May 27, 2009 9:57 AM EDT

Yesterday, as the political and media world was processing President Barack Obama's nomination to the Supreme Court of federal appellate judge Sonia Sotomayor, I noted that his decision could split the right. Social conservatives immediately called a crusade against Sotomayor, but Senate Republicans and GOP chair Michael Steele were keeping their powder dry, obviously concerned about the political consequences of attacking the first Latina nominated to the highest court.

And more evidence of a possible split between the party's base and its leadership in Washington is emerging. I asked conservative strategist Grover Norquist if he believes the Sotomayor nomination would revive conservatives and become a rallying point for the right. "Is the organizer in you happy this happened?" I asked. Norquist emailed a reply: "Yes. Unifies the right. She said what conservatives fear liberals really think--on judges making the law, racial quotas, personal interests trumping the law." In other words, Sotomayor is the right's bogeywoman. And Norquist wants to see his side go after her.

Richard Viguerie, a founder of the modern conservative movement, also yearns for an anti-Sotomayor crusade. The day after her nomination was announced, he declared:

Reid Flip-Flopping on Gitmo Detainees in US Prisons?

| Tue May 26, 2009 4:15 PM EDT

President Barack Obama is scheduled to visit Nevada on Tuesday to participate in a Las Vegas fundraiser for Sen. Harry Reid, who hopes to raise $25 million to fend off possible GOP challenges to his 2010 reelection campaign. The trip coincides with a sudden—and convenient—change of heart by Reid on the thorny issue of what to do with Guantanamo Bay detainees once the facility is shuttered.

Senate Democrats have clashed with Obama over his plan to close the prison and perhaps relocate some of the detainees to a facility in the United States. Last week, Reid was telling reporters in no uncertain terms that he rejected just such an idea, even though there is a long list of terrorists already in US prisons. David Corn and Steve Aquino explained the issue:

Senate Democrats, including Reid, moved to strip the Gitmo shutdown money after the Republicans initiated a scare campaign, warning that the worst will happen if Obama transfers Gitmo detainees to federal prison facilities in the United States. Looking for a winning political issue, Republican House members and senators have been sending letters to Obama and declaring, "Not in my state." Though Reid's home state of Nevada has no federal prisons, he joined this chorus, saying: "Part of what we don't want is [terrorists] be put in prisons in the United States. We don't want them around the United States."

But in advance of Obama's visit to Sin City, Reid's singing a different tune. He told Las Vegas journalist Jon Ralston on Monday that he is open to moving some Guantanamo Bay detainees to US prisons. Here's the relevent portion of the transcript of Reid's conversation with Ralston:

"A maximum security prison in the United States, there has never been a single escape."

JR: "You think eventually the plan is going to be to put them in maximum security prisons here in this country, correct?"

"I think some. Keep in mind, Jon, there's so many different issues. There's no question that a number of these people who are there are not guilty of anything. The Uighurs, these are a group of Muslim Chinese who are guilty of nothing. They were arrested, put in there. They are there. They are doing nothing. We're going to have to find someplace to put them. We can't send them back to China. Should they go into a maximum security prison? Probably not."

Could the need to raise $25 million—and the prospect of more help from the extremely popular Obama—be influencing Reid's rhetoric on Guantanamo? If not, this is definitely an interesting coincidence.

(h/t Marc Ambinder)

How Many Nuke Tests Until North Korea Matches the US?

| Tue May 26, 2009 3:08 PM EDT

Talk abounds of North Korea's decision to conduct a second nuclear test over the weekend. The old thinking on Pyongyang was that it was just a problem child that used nukes to get attention. But as Glenn Kessler points out in the Washington Post, in the form of the Obama administration Kim Jong Il has found a negotiating partner whose stated goal is to "demonstrate that engagement with hostile nations is more effective than antagonism."  That, apparently, is not enough to keep him from rattling his saber, and has intelligence analysts all over Washington working to attribute new motivations to North Korea's antagonistic behavior. For their part, the North Koreans issued an official statement, saying "the nuclear test will contribute to protecting the sovereignty of the country and the nation and socialism, and ensuring peace and security on the Korean peninsula and neighboring region." We'll see about that. South Korea and Japan certainly didn't view the test as a peaceful gesture. 

Beneath all the hub-bub, though, is an interesting statistic. The AP reports that nuclear weapons have been detonated 2,054 times since 1945. How many will it take for North Korea to catch up with the the world's most prolific tester of doomsday weapons, the United States? Answer: 1,030. Consider the AP's numbers:

UNITED STATES - 1,032

RUSSIA (SOVIET UNION) - 715

FRANCE - 210

CHINA - 45

BRITAIN - 45

INDIA - 3

PAKISTAN - 2

NORTH KOREA - 2

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Is Trojan Squeezing Out The Competition?

| Tue May 26, 2009 12:53 PM EDT

Condoms are not things people tend to linger over before buying, comparing prices and such. Unlike greeting cards, these purchases tend to be more of the grab and go variety. So the condom maker that can command the best real estate on store shelves is definitely going to have the upper hand. A quick survey suggests that the ubiquitous Trojan wins that battle, hands down. Apparently, this is no accident.

According to the trade pub FTC: Watch, the Federal Trade Commission wants to know whether Church & Dwight, the maker of Trojan condoms, has made illicit deals to ensure that its battery-powered vibrating rings and other products get the best possible store placement. The FTC is investigating whether the condom maker is unlawfully squeezing out Lifestyles and other smaller competitors through such arrangements.  Who'd a thought a company so perennially linked to safe-sex campaigns and public restroom quickies could also be a ruthless corporate actor? If the FTC finds the condom-maker violated anti-trust laws, condom-buyers everywhere might be treated to a better variety of latex behind the counter at their local 7-11--without having to linger.
 

Breakdown of Prop. 8 Decision

| Tue May 26, 2009 12:36 PM EDT

At 10 a.m. this morning, the California Supreme Court ruled 6 to 1 to uphold Proposition 8. In doing so, they ruled that the 18,000 gay marriages already performed in California would be valid, but that going forward, "marriage" in California will only be between "a man and a woman." The judges' decision is about 50,000 words, so in summary, they said they based it on two main issues: 1) whether Proposition 8 was a constitutional amendment or a constitutional revision, and 2) if Proposition 8 would significantly infringe upon gay people's constitutional rights.

In the first issue, the court referenced the large number of amendments to the California constitution that have been passed since the 1800s and determined, using the requirements for both a revision and amendment, that Proposition 8 was just one of many amendments, not the larger, rarer, revisions. (You can read the entire decision here). The second issue is far more contentious. The judges found that allowing only opposite-sex partners to have the designation of the term "marriage" was not in itself an abrogation of gay citizen's rights. As they wrote:

"Contrary to petitioners’ assertion, Proposition 8 does not entirely repeal or abrogate the aspect of a same-sex couple’s state constitutional right of privacy and due process that was analyzed in the majority opinion in the Marriage Cases—that is, the constitutional right of same-sex couples to “choose one’s life partner and enter with that person into a committed, officially recognized, and protected family relationship that enjoys all of the constitutionally based incidents of marriage”  (Marriage Cases, supra, 43 Cal.4th at p. 829). 

Essentially, the judges said that because same-sex couples have so many rights in California already, they don't need the official designation of "marriage." Protection of gay people's rights under California law, the judges ruled, "has not generally been repealed or eliminated by Proposition 8." While the judges did say that they understood same-sex couples' desire for the term "marriage," they emphasized that their task was "not to determine whether the provision at issue is wise or sound as a matter of policy or whether we, as individuals, believe it should be a part of the California Constitution."

The crowds in San Francisco, however, who started gathering at the city's Civic Center early this morning, were not satisfied with the judges' opinion that they don't need the term "marriage" to define their unions. As of about 30 minutes ago, 200+ protesters were blocking traffic in downtown San Francisco. Protesting is all well and good, but what's next? Most likely, a new ballot measure in 2010 that would overturn Proposition 8. One good thing from the ruling: now that the judges have ruled that Proposition 8 was an amendment, next year's pro-gay marriage ballot measure would also likely be ruled an amendment and could supplant Proposition 8. For the 90-second YouTube explanation of what's next, filmed on location in San Francisco, click here.

 

Gun Owners Stockpiling Ammo in Anticipation of Tougher Regulation

| Tue May 26, 2009 9:51 AM EDT

The economy is in the toilet, but there's at least one industry that appears to be going great guns (sorry...): the firearms business, particularly the firms that manufacture ammunition for American gun owners. You may have read Yasha Levine's piece about the surge in ammo sales in Victorville, California, where, Levine reports, fears of tighter gun regulations under the Obama administration have given way to a new kind of arms race.

The same phenomenon exists in Montana. According to the Missoulian, ammo is racing off the shelves at a record pace. Darren Newsom, owner of Bitterroot Valley Ammunition's three local manufacturing facilities, told a reporter that his company produces 300,000 rounds a day, but is still unable to meet demand. "We probably have about six months of back orders right now," he said, adding that he sold more than 300,000 rounds in just two hours at a recent gun show. "It's just unreal... Somewhere in lots of basements around the country, there are millions of rounds of ammunition being stored." 

Pelosi Considering Republican for Commission Investigating Financial Crisis

| Tue May 26, 2009 9:36 AM EDT

Is House Speaker Nancy Pelosi acceding to Republican demands that the membership of a special commission to investigate the global economic crisis be evenly divided between Republicans and Democrats? The 10-member commission was originally slated to have a 6-4 split in favor of the Democrats. Earlier this month, Rep. Darrell Issa (R-Calif.), the ranking member of the House Oversight and Government Reform Committee, urged Pelosi to follow the model of the 9-11 Commission and the Iraq Study Group, on which both parties were equally represented. He may be getting his wish: at her weekly press briefing on Friday Pelosi suggested that she had a Republican in mind for one of her two picks.   

Previously, a Pelosi spokesman had been quick to defend the idea of a panel made up of six Democrats and four Republicans. While asserting that the speaker would choose the "most qualified" people regardless of political affiliation, the spokesman argued that 50-50 commissions have been the exception, not the rule, in recent years. He even sent Mother Jones a detailed set of commission-related statistics:

Counting all the commissions identified by CRS Report R40076 and subtracting out the commemorative commissions (such as the Ben Franklin Tercentenary Commission), there are a total of 23 congressional commissions created by legislation between the 107th and 110th Congress (2001-2008).

Of these 23 commissions:

7 had an even partisan split

4 had a one-appointment advantage to the majority party

8 had a super-majority advantage to the majority party

4 were appointed entirely by the executive branch, with only recommendations or consultation with congressional leaders

Pelosi's spokesman, Nadeam Elshami, also noted that two other bills introduced by House Republicans would have created similar bodies with majority-Democratic memberships. Plus, Sen. Johnny Isakson (R-GA), who sponsored the original Senate amendment creating the commission, has said he thinks Republicans are already getting a fair shake, even if they're outnumbered on the panel.

So why is Pelosi bowing to Issa's demands?  Maybe she has come around to the view that an even split would help the commision's credibility. Or maybe she just thinks she's found the best person for the job.