Editore"s Note
Tilting at Windmills

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March 31, 2009

TUESDAY'S MINI-REPORT.... Today's edition of quick hits:

* Reversing Bush, the Obama administration announced today that the U.S will join the U.N. Human Rights Council.

* A first step: "Top U.S. diplomat Richard Holbrooke had a brief but cordial meeting with Iran's deputy foreign minister Tuesday at an international conference on Afghanistan, marking another modest step in unlocking 30 years of tense relations."

* Ugh: "Home prices sank by the sharpest annual rate on record in January, and the pace continues to accelerate, but there were a handful of battered metro areas where price declines slowed, according to data released Tuesday."

* Bankruptcy is now "more probable" for GM.

* Benjamin Netanyahu said the Obama administration must stop Iran from acquiring nuclear weapons, or Israel will attack Iran's nuclear facilities itself.

* I'd feel a whole lot better about the Geithner Justice Treasury* Department if officials paid more attention to Elizabeth Warren.

* Ayman Saeed Abdullah Batarfi, a Yemeni doctor, will be released from Gitmo. The Bush administration had accused Batarfi of being part of an al Qaeda anthrax program.

* Apparently, waterboarding is torture -- when the Khmer Rouge does it.

* Virginia Gov. Tim Kaine, who also happens to be the chairman of the DNC, is on the wrong side of some culture war issues, both on symbolic and substantive grounds.

* Waxman swings for the fences with his own cap-and-trade proposal.

* Treasury Department unveils FinancialStability.gov

* An interesting shift in emphasis: "Stepping into the political minefield of immigration reform, Homeland Security Secretary Janet Napolitano soon will direct federal agents to focus more on arresting and prosecuting American employers than the illegal laborers who sneak into the country to work for them."

* I don't know what Doug Feith is so surprised about.

* The Christopher and Dana Reeve Paralysis Act is now law.

* It looks like Olbermann repeats will keep the 10 p.m. slot on MSNBC. (Sorry Sam Seder, I've been pulling for you.)

* O'Reilly is none too pleased with UPS.

* And finally, Glenn Beck described himself as a "rodeo clown," adding, "[I]f you take what I say as gospel, you're an idiot." I knew if he just talked long enough, Beck would say something I agree with.

Anything to add? Consider this an open thread.

* Entry corrected. Really. --Mod

Steve Benen 5:30 PM Permalink | Trackbacks | Comments (27)

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IT'S NOT SUPPOSED TO BE THIS WAY.... There's a common misunderstanding in politics, especially among political reporters, that the Senate has always required a 60-vote supermajority to pass every meaningful piece of legislation. That's nonsense.

As Matt Yglesias recently noted, "Simple logic indicates that this is false -- it used to require a unanimous vote to end a filibuster and, obviously, non-unanimous bills passed. But there are more examples. For example, before the 1970s you needed two-thirds of the Senate to end a filibuster, but the Lend-Lease Act went through the Senate on a 60-31 vote (according to the rules of the day, you would have needed 66 as there were only 98 Senators) without the minority obstructing the bill.... [R]outine filibustering is a new tradition and not a time-honored principle of American government."

And yet, it's treated as if it were a historical norm, instead of a bizarre fluke with no foundation in the American legislative or political tradition. We're supposed to have a process in which legislation becomes law after passing both chambers of Congress and receiving the president's signature. Now, however, after no discussion or formal debate, we somehow got stuck with a system in which 41 senators can block a vote on almost anything they choose.

It is, as this chart from Norm Ornstein makes clear, an entirely modern creation.

filibusterchart.jpg

If you're having trouble making out the years, note that as recently as the 1960s, filibusters were rare (and as it turns out, largely inconsequential). Now, they're an assumed hurdle for practically every bill. The last Congress broke a record, and there's every reason to believe Republicans' obstructionist tactics will break the record again in the 111th Congress that ends next year.

This distorts the legislative process to an unrecognizable degree. There is no justification for this. None.

As Ezra Klein explained, "If you want to understand why the earth is likely to heat and why comprehensive health reform is unlikely to pass and why the government is increasingly letting the Federal Reserve govern its response to the financial crisis, that graph basically tells the story."

Elected leaders have to do better than this. The American electorate can give a party the White House and sizable majorities in both chambers, but that party will still struggle badly to pass its agenda, due entirely to a distortion of institutional constraints. A 41-member minority party can block legislation -- controversial or not -- by abusing an obscure procedural tactic that was never intended to be used to necessitate supermajorities on literally every piece of legislation.

What was once an exceedingly rare challenge, used under extraordinary circumstances, has become -- after no public discussion at all -- a mandatory supermajority simply to govern. Without reform, necessary legislation on life-or-death policies may enjoy the support of the House majority, the Senate majority, the president, and most Americans, and still may not pass because a small Senate minority says so.

Steve Benen 4:35 PM Permalink | Trackbacks | Comments (40)

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PRISON REFORM GETS OFF TO A GOOD START.... Sen. Jim Webb (D-Va.), speaking from the Senate floor last week, said, "Let's start with a premise that I don't think a lot of Americans are aware of. We have five percent of the world's population; we have 25 percent of the world's known prison population. There are only two possibilities here: either we have the most evil people on earth living in the United States; or we are doing something dramatically wrong in terms of how we approach the issue of criminal justice."

And with that, Webb unveiled his National Criminal Justice Act, which he and his aides began crafting late last year. It's easy to remember a time that a politician even broaching the subject -- especially a Democrat -- would set off all kinds of alarms. Predictable conservative rhetoric about being "soft" on crime and/or "coddling" criminals would knock down the policy discussion before it could begin.

Ryan Grim reports, however, that Webb hasn't faced any of this so far, and the Virginia senator's initiative seems to be off to a good start.

Jim Webb stepped firmly on a political third rail last week when he introduced a bill to examine sweeping reforms to the criminal justice system. Yet he emerged unscathed, a sign to a political world frightened by crime and drug issues that the bar might not be electrified any more.

"After two [Joint Economic Committee] hearings and my symposium at George Mason Law Center, people from across the political and philosophical spectrum began to contact my staff," Webb told the Huffington Post. "I heard from Justice Kennedy of the Supreme Court, from prosecutors, judges, defense lawyers, former offenders, people in prison, and police on the street. All of them have told me that our system needs to be fixed, and that we need a holistic plan of how to solve it."

Webb's reform is backed by a coalition of liberals, conservatives and libertarians that couldn't have existed even a few years ago.

Under the predictable scenario based on previous norms, Democrats would see Webb face right-wing pushback, and they'd quietly back away. Last week, however, the entire Senate Democratic leadership announced their co-sponsorship of Webb's commission proposal. The response from the right has been mild, and in some cases, even positive.

Maybe there's something unique about Webb -- a decorated Marine combat veteran and former Navy Secretary under Reagan -- that makes him immune to questions about "toughness." Or perhaps this is one of those issues in which everyone can agree, regardless of politics, that the status quo costs too much and doesn't work.

Either way, kudos to Webb for getting the reform discussion started, despite being a first-term senator from a state that's hardly progressive on criminal justice issues. As Glenn Greenwald explained the other day, "There are few things rarer than a major politician doing something that is genuinely courageous and principled, but Jim Webb's impassioned commitment to fundamental prison reform is exactly that."

Steve Benen 4:10 PM Permalink | Trackbacks | Comments (10)

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POLLING A POLICY THAT DOESN'T EXIST.... Last week, Rep. Michele Bachmann (R-Looneyville) convinced herself that U.S. currency is under attack (it isn't) and the threat of a "global currency" is real (it isn't). What sparked the paranoia was a Chinese proposal to replace the dollar as the world's reserve currency, which of course has nothing to do with Bachmann's bizarre ideas.

So, naturally, Rasmussen put a poll in the field to ask Americans how they feel about a policy that exists solely in the twisted imagination of an unhinged House Republican.

Eighty-eight percent (88%) of Americans say it is important for the dollar to remain the currency of the United States, including 70% who say it is Very Important.

Only three percent (3%) say it is not at all important if the dollar remains America's currency, according to a new Rasmussen Reports national telephone survey.

China's top government banker and a United Nations panel have both proposed that the dollar be replaced with a new global currency. However, only 21% of American adults believe the proposal is intended primarily to help the global economy.

Forty-nine percent (49%) think the proposal for a new global currency is designed to weaken the economic power of the United States. Most investors (54%) hold that view.

First, I'm quite surprised the majority was only 88%. Second, there's a big difference between "a new global currency," and a new global reserve currency, but Rasmussen's poll fudged the details.

The pollster eventually concedes, "At issue is not replacing the money in Americans' wallets but what currency will be the world standard against which all other monies are measured." The problem, of course, is that the respondents to the Rasmussen poll weren't told about this, making the poll results measuring public opinion about proposals that don't exist rather useless.

It reinforces an observation Matt Yglesias made in February: "Rasmussen is a pretty good pollster whose results are within the range of accuracy one wants from a pollster. But polling is a crowded business. And Rasmussen doesn't also have a daily newspaper or a television network to tout his results. His business, however, requires attention. So how does he get that attention? Well in part he gets it with issue polling that, while basically methodologically sound, has question-wording that's designed to lead to conservative-friendly results. Then the results come out and conservatives tout the results as vindicating their position. It's free PR for Rasmussen, it's a morale booster and message-driver for the right."

Or, as Ali Frick put it today, "The fact that Rasmussen even polled on Bachmann's insane legislation banning the replacement of the dollar with a fictional currency shows just how unconcerned Rasmussen is with truth, accuracy, or intellectual honesty."

Steve Benen 3:25 PM Permalink | Trackbacks | Comments (17)

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HOW SPECIAL IS THE SPECIAL ELECTION?.... Today's special election in New York's 20th congressional district, filling a vacancy left by Sen. Kirsten Gillibrand (D), is getting quite a bit of attention. For election junkies going through withdrawal, the race offers a very competitive contest.

But as voters head to the polls, it's probably wise to consider what this race isn't. CNN reports today that the special election has "national implications." CQ notes that campaign "has been described as a litmus test, a referendum and a bellwether for Democratic agendas and Republican political fortunes."

The NYT's Adam Nagourney walks back the hype a bit.

Even before a vote was cast, the contest has been freighted with all kinds of political significance -- an early test of President Obama's political strength, a verdict on the stimulus package, a do-or-die moment for a new Republican national chairman, an early sign of how the 2010 midterm elections are going to go (never mind that they are 20 months way). [...]

In truth, special elections tend to get more attention and analysis than they deserve (guilty, your honor), and while they might briefly raise or lower the political temperature, they tend not to be predictive of much at all. And in this case, there are many extraneous factors at play, and there is enough conflicting data about the political dynamics of the race to permit either side to make at least a plausible argument that it will win.

"The first thing you can count on is this thing is going to be way overspun," said Tom Davis, a former Virginia congressman and onetime head of the Republican campaign committee in the House. "I don't think it portends a thing for the midterms. But it emboldens whoever wins."

Realistically, Jim Tedisco has to be considered the favorite for one simple reason: he's the Republican in a Republican district. As recently as 2006, GOP voter registrations in the district outnumbered Democratic registrations by 15 points. Sure, Gillibrand won, but she ran as a very moderate Democrat, and only eked out a victory after news surfaced that the Republican incumbent's wife had called 911 to report domestic violence.

What's more, the GOP, desperate for some good news, have invested heavily in this special election, in support of a well-known leader in the state legislature (the Democrat, Scott Murphy, moved to the district three years ago and has enjoyed far less name recognition).

The race is too close to call, which necessarily makes it pretty interesting. It becomes all the more fascinating to watch with national figures and the national parties weighing in. That said, it's a stretch to think the results will offer key insights into the larger political landscape.

No matter who wins, it's a local special election with low turnout, not a national referendum.

Steve Benen 2:50 PM Permalink | Trackbacks | Comments (12)

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SO MUCH FOR BEING AN 'ALBATROSS'.... In January, Fox News contributor Juan Williams went after Michelle Obama, describing her as a political "liability" for the president. As Williams argued, the First Lady has "got this Stokely Carmichael-in-a-designer-dress thing going," which may make her "something of an albatross."

So much for that idea. The Washington Post's Lois Romano reports:

At first, they didn't like the way she was talking about her husband's dirty socks. Then, they said she always looked angry. Later, they questioned her patriotism when she commented that she only recently became proud of her country. They even made hay over her biceps when she dared show up sleeveless for her husband's address to Congress in January.

Now, two months into her husband's presidency, as Michelle Obama embarks on her maiden official overseas trip, the first lady is enjoying a second look from the American public -- particularly from those who were put off by her as a candidate's wife, but are warming to her as the president's wife.

A Washington Post-ABC News survey conducted over the past few days shows a dramatic turnaround: Her favorability ratings are at 76 percent, up 28 points since summer. The number of people who view her negatively has plummeted.

Now, I think Romano's assumptions about previous public attitudes are a stretch. She writes, matter of factly, that Americans didn't like the way Michelle Obama spoke, looked, or dressed. I've seen no evidence to support this. There are plenty of members of the political elite in D.C. who felt this way, but to say this is how "the American public" felt is dubious, at best.

That said, the larger point is certainly true -- most of the country likes what they see from the First Lady, and she's getting more popular as time goes on. In June, 48% had a favorable impression of Michelle Obama, while 29% had an unfavorable impression. Now, 76% feel good about the president's spouse, and only 16% don't.

It seems efforts to smear Michelle Obama (see Bruce, Tammy) aren't connecting.

Steve Benen 2:10 PM Permalink | Trackbacks | Comments (45)

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THE OTHER F-BOMB.... Just two months after the inauguration, so many conservatives throw around "fascism" and "fascist" to describe the White House, I already feel more or less desensitized. After seeing David Henderson join the club, Megan McArdle suggests it's time for a moratorium.

All this does is drag the specter of Hitler into the conversation. And the problem with Hitler was not his industrial policy -- I mean, okay, fine, Hitler's industrial policy bad, right, but I could forgive him for that, you know? The thing that really bothers me about Hitler was the genocide. And I'm about as sure as I can be that Obama has no plans to round up millions of people, put them in camps, and find various creative ways to torture them to death.

If he does, look, I take it all back. Use the F-word freely. Hell, I'll hide you in our spare bedroom when the state police squads come looking for you. But until then, can we stick to less inflammatory terms? Surely creative and intelligent adults can find ways to critique Obama without pointing out that Hitler was also a very effective speaker.

Oddly enough, Glenn Beck, Fox News' deranged media personality, has been telling a national television audience that the Obama administration might be setting up secret "concentration camps" to lock up conservatives. The president, Beck believes, may be using FEMA in this conspiratorial drive towards "a totalitarian state," so at least one prominent right-wing voice disagrees with McArdle's assumption.

But I digress.

James Joyner raises a fair point about the nature of fascism -- one need not be a fascist to be guilty of genocide, and one need not be genocidal to be a fascist. It's probably best not to blur the historical/ideological lines.

That said, I think McArdle's right about this larger trend having a Godwin's Law kind of quality. For any thinking person, President Obama is obviously not a fascist. There's nothing about his agenda that in any way resembles fascism. The term seems to have become popular with unhinged conservatives because screaming about a red scare became tiresome, and for lazy right-wing voices, there's an attack ladder -- "fascist" is one rung higher than "communist."

There's no reason to think conservative activists are concerned about being taken seriously, but these constant references to "fascism" are obvious conversation-enders. By casually throwing the word around, prominent conservative voices a) appear even more ridiculous than usual; and b) cheapen what fascism actually means, making it little more than an insult directed at popular leaders conservatives don't like.

Steve Benen 1:40 PM Permalink | Trackbacks | Comments (40)

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POST-POST-PARTISANSHIP.... In the weeks leading up to Inauguration Day, and in the first month or so afterwards, President Obama not only talked a good game on bipartisanship, but actually seemed willing to engage the minority party directly. Slate's John Dickerson argues that the White House has effectively given up on the idea.

At a recent lunch with reporters, Budget Director Peter Orszag was asked if he could name a useful idea submitted by Republicans. He couldn't -- and didn't even pretend he'd considered many. When House Republicans put out a budget last week, Press Secretary Robert Gibbs said, "The party of no has become the party of no ideas."

Gibbs probably wouldn't have said that 40 days ago, when the White House was treating the issue of bipartisanship more carefully. But after party-line votes in the House and Senate and minimum flexibility from GOP leaders, Obama aides say that Republicans are not "acting in good faith." Which leads them to two conclusions: One, their acts of conciliation buy them nothing in negotiations with the GOP; two, and more important, they've decided they'll pay no political price for acting in a more partisan fashion.

Both of those assumptions appear entirely right. The president has reached out, repeatedly, to congressional Republicans. It hasn't generated any concessions from the GOP; it hasn't produced any meaningful policy recommendations; and it hasn't tempered over-the-top Republican rhetoric.

Likewise, as the political disputes become more contentious, rank-and-file Republicans take a more antagonistic attitude towards Obama, and voters in general see the president as more of a partisan. At the same time, though, there's no penalty for this development.

Given all of this, it would be far more troubling if the White House didn't give up on the idea of Republicans working as credible governing partners. We're talking about a minority party that's been soundly rejected by voters, but more importantly, it's also a minority party that isn't even trying to be credible on public policy (see Republicans, alterative budget).

By any reasonable measure, Republicans just don't have anything constructive to offer right now. By their own admission, GOP lawmakers want to mount an insurgency and consider their top goal to be driving down Democratic poll numbers.

So, why pretend? The parties disagree with one another. They want to take the country in very different directions. The majority party will offer proposals, and the minority party will criticize the proposal with varying degrees of rage.

If the White House really is done taking Republican outreach seriously, it's about time.

Steve Benen 12:40 PM Permalink | Trackbacks | Comments (26)

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TUESDAY'S CAMPAIGN ROUND-UP....Today's installment of campaign-related news items that wouldn't generate a post of their own, but may be of interest to political observers.

* It's election day in New York's 20th, in the special election to fill the House seat left vacant by Sen. Kirsten Gillibrand (D). I'll have more on the race later today.

* The DSCC launched a new ad today accusing Senate Republicans of a "hit and run with our economy."

* The DNC has unveiled its new anti-Limbaugh billboard in the talk-show host's hometown in Florida. After an online contest, the winning phrase appears on the sign: "Americans didn't vote for a Rush to failure."

* Democratic leaders in Connecticut are worried about Sen. Chris Dodd's (D-Conn.) future, and wonder whether he should seek re-election.

* Speaking of Connecticut, former Rep. Rob Simmons is considered the leading Republican contender in next year's Senate race, but he will likely face a primary opponent or two.

* Rep. Pete Hoekstra (R) announced yesterday that he'll run for governor in Michigan next year.

* Kentucky Gov. Steve Beshear (D) endorsed Lt. Gov. Daniel Mongiardo's (D) Senate campaign late last week. State Attorney General Jack Conway (D), a likely primary opponent for Mongiardo, seemed unfazed.

* With Rep. Neil Abercrombie (D) running for governor in Hawaii next year, former Rep. Ed Case (D) will run for the open seat.

* Rep. Tim Ryan (D-Ohio) will reportedly give up his House seat next year to run for lieutenant governor. Ohio's current lieutenant governor, Lee Fisher (D), is running for the Senate.

* Apparently, Mitt Romney plans to run for president in 2012. What a shocker.

Steve Benen 12:00 PM Permalink | Trackbacks | Comments (18)

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THE POLICY MATTERS MORE THAN THE PHRASE.... It seems like the decision to move away from a "war on terror" rhetorical framework is causing more of a stir than it should.

The phrase "war on terror," for seven years a signature expression of the Bush administration, has been shelved, Secretary of State Hillary Rodham Clinton acknowledged Monday.

Clinton said there had been no directive from her office or within the Obama administration, but she said officials had stopped using the term.

"The administration has stopped using the phrase, and that speaks for itself, obviously," Clinton told reporters aboard her plane on the way to a meeting in the Netherlands. [...]

The Obama administration has said that it has not officially banned the phrase. "It's just not being used," Clinton said.

Now, if the Obama administration were prepared to stop aggressive counter-terrorism measures, that would be a significant development. But we're really just talking about a rhetorical shift -- and it's hardly a major loss. Anthony Cordesman, a national security analyst at the Center for Strategic and International Studies, recently told the AP the "war on terror" has "became associated in the minds of many people outside the Unites States and particularly in places where the countries are largely Islamic and Arab, as being anti-Islam and anti-Arab."

The move away from the phrase is not only overdue, it also reflects the thinking of Adm. Michael Mullen, the chairman of the Joint Chiefs of Staff, who banned the use of the phrase "Global War on Terror" last October, according to instructions from his office.

Indeed, a few weeks ago, Fox News' Chris Wallace pressed Mullen on why officials in this White House "seldom talk about the 'war on terror.'" Mullen explained that the president is "very focused on the terrorist extremist threat" and one of Obama's "top priorities" is to "focus on the terrorism and terrorists and the extremists that are out there who would do us harm." Wallace appeared unsatisfied. Mullen didn't care.

One hopes that a sound counter-terrorism strategy is infinitely more important than the label policymakers give the strategy, but our political discourse can get awfully silly.

Steve Benen 11:20 AM Permalink | Trackbacks | Comments (15)

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BARONE DEFINES 'NORMAL'.... Jon Chait had a great piece yesterday about the "fecklessness" and "parochialism" that too often interferes with the Democratic Party's ability to advance its agenda. U.S. News' Michael Barone argued in response that the Democratic Party also struggles because it's made up of constituencies who aren't "normal."

[T]he Republican Party is the party of people who are considered, by themselves and by others, as normal Americans -- Northern white Protestants in the 19th century, married white Christians more recently -- while the Democratic Party is the party of the out groups who are in some sense seen, by themselves and by others, as not normal -- white Southerners and Catholic immigrants in the 19th century, blacks and white seculars more recently. Thus it's natural for the Democrats to be more fissiparous.

Someone is going to have to help me out with this one. Democrats experience more intra-party fissures than Republicans because African Americans and white secularists aren't "normal"? Republicans join in lock step because it's the party of married white Christians -- who necessarily are "normal"?

To hear Barone tell it, diversity leads to conflict, which somehow explains why center-right Democrats like Ben Nelson and Evan Bayh are undermining the White House domestic agenda.

Except, it's not only bizarre to characterize blacks and secularists as less than "normal," it doesn't even the real causes behind the intra-party challenges facing Democrats. As Chait noted, Barone's argument "would make sense if the Democrats were cracking up over social policy. In fact, they're cracking up over economics -- or, specifically, the fact that Democrats tend to be in hoc to local business interests. There is a structural assymetry between the parties at work, but it lies in the fact that Republicans draw all their economic support from business and back the business agenda, while Democrats draw support from labor and environmentalists along with business and must navigate compromises between the two. But Barone was probably just trying to find another way to work in his oft-stated belief that Democrats are a bunch of freaks disconnected from middle America."

Barone has long been a far-right columnist, but he seems to be heading off the ideological cliff. He recently told a roomful of journalists, for example, that the media took a skeptical attitude towards Sarah Palin because "she did not abort her Down syndrome baby." (He'd argued during the campaign that Palin had "foreign policy experience" because Alaska "is the only state with a border with Russia.")

Like a lot of political junkies, I've spent many an hour referencing the "Almanac of American Politics," which wouldn't exist were it not for Barone. Given this, it's genuinely sad to see what's become of him.

About a year ago, Mark Schmitt had a terrific item on Barone, noting that he'd embraced "a strange kind of conservatism, which seems based largely on the conviction that liberals are soft and stupid."

If Barone wasn't considering retirement before, maybe now would be a good time.

Steve Benen 10:30 AM Permalink | Trackbacks | Comments (49)

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PAST IS PROLOGUE.... In an analysis piece about the Obama administration's plan for the auto industry, the New York Times' David Sanger writes, "In the past, the United States government had briefly nationalized steel makers and tried to run the railroads, with little success."

This seems to internalize Republican talking points about the benefits of government intervention. When the feds intervene in private enterprise, the argument goes, it tends to come up short, so Obama is making a mistake trying again.

But this is based on a faulty assumption.

[H]ere's the funny thing: any honest reading of history suggests that the federal government has quite an impressive record of rescuing institutions considered too big to fail. In addition to almost routine workouts of failed banks conducted in good and bad times by the Federal Deposit Insurance Corporation and other regulators, the list includes many large industrial companies as well. In 1971, for example, Congress extended emergency loans to failing aircraft builder Lockheed and wound up not only saving a company vital to America's national defense and export manufacturing base, but earning a net income for the Treasury of $5.4 million in loan fees.

In 1980 it did the same for Chrysler, this time extending loan guarantees in exchange for stock warrants that, after the company returned to health and paid back its loans, yielded the government a cool $311 million in capital gains. More recently, in the aftermath of 9/11, Congress granted airlines $5 billion in direct compensation for lost business and up to $10 billion in loan guarantees, again in exchange for stock warrants. That wasn't enough to save many individual airlines from having to undergo restructuring plans imposed by bankruptcy judges, but when Americans took to the air again they found the industry intact and offering plenty of flights. Moreover, by February 2007, airline stocks had recovered enough that the Treasury was able to sell its warrants for a net profit of $119 million, with no loans left outstanding.

More to the point, the U.S intervened -- twice -- to re-engineer the railroad industry, and not only produced very positive results but helped turn around the industry around.

What do Conrail's and Woodrow Wilson's forays into socialism tell us? For one, they contradict the doctrinaire idea that government will always and everywhere mess up if it gets hands-on control of a private industry -- even if in both instances other government policies largely contributed to the crisis that government control ultimately solved. The dramatic improvements to rail technology and logistics achieved by the USRA during the Great War also belie the notion that market forces alone will always be a sufficient spur to innovation and maximum efficiency. When government takes responsibility for an ailing industry, it also gets a combination of a hands-on learning experience and a strong incentive to do the job right: with public money at stake in the industry's success, politicians pay more attention to the ways in which their own past decisions are making its problems worse.

These are vitally important truths to keep in mind as Washington considers how best to help an ailing Detroit avoid catastrophe. The auto industry's problems, like the railroads', are not solely the fault of arrogant, out-of-touch executives flying to and from begging sessions on Capitol Hill in private jets; government policies have shaped the environment in which automakers must produce and sell vehicles, often for the worse. Antiquated state laws forbid Detroit from streamlining its distribution networks by closing unneeded dealerships -- a hindrance that advantages foreign automakers, who entered the U.S. market later and accordingly built fewer dealerships. Similarly, foreign car companies have an edge in producing smaller, more fuel-efficient cars because they have eager domestic markets for such vehicles thanks to government policies in those countries that keep the price of gasoline high. In America, by contrast, decades of cheap-oil policies out of Washington -- many wrangled at the behest of the auto industry -- brought it short-term profits from gas-guzzling SUVs, but long-term ruin.

Simply throwing vast sums of money at Detroit, then, is unlikely to save the American auto industry, no matter how many strings are attached to that money. Better for the federal government to take direct, if temporary, control of U.S. automakers, as it did with the railroads. Only at that point will Washington have both the leverage to force needed management reforms as well as the incentive to change its own policies -- increasing gas taxes, preempting state dealership laws, and easing Detroit's high health care costs by, among other things, passing universal health care.


Steve Benen 10:15 AM Permalink | Trackbacks | Comments (25)

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ABOUT THAT ALTERNATIVE GOP BUDGET.... There were, we were told, two main reasons for Republican lawmakers to present an alternative budget. In the face of near-constant criticism from the White House and Democratic leaders on the Hill, the GOP's first goal was to prove that it had serious, credible ideas of its own. Republicans then said they wanted to demonstrate that the government could re-embrace fiscal responsibility, pursuing goals while reducing the deficit.

So far, the minority party is failing badly in both categories.

The first point quickly fell apart when Republicans unveiled a budget with no numbers in it. The second point isn't looking any better.

Last week, the House GOP presented its alternative budget proposal. Members of the media, including conservative commentators, widely panned the document for being scant on details and appearing more as "campaign-style talking points." Rep. Paul Ryan (R-WI), ranking member of the House Budget Committee, has said he will release yet another budget proposal, but this time with more specifics.

Though Ryan has been most critical of the deficit impact of Obama's budget, he has been unable to assess the deficit impact of his own budget. After being repeatedly asked this weekend by Bloomberg's Al Hunt about "how large" the deficit would be under the Republican plan, Ryan finally respond, "A lot."

This is only marginally better than Rep. Mike Pence (R-Ind.), who stammered and stumbled last week when pressed on how big the deficit would be under the Republican plan.

Remember, according to Republican lawmakers, the principal criticism of the Obama administration's budget is that it runs large deficits in the short term. In response, the GOP proposes a massive tax cut for everyone earning more than $100,000, a deficit that would be "a lot," and has not (or cannot) offer any details on the proposal itself.

At the same time, we have one leading Republican senator saying the party is "working very hard" to produce a budget "with numbers" in it, while another leading Republican senator says the caucus won't bother to produce a document at all.

Can't anybody here play this game?

The GOP really didn't think this one through.

Steve Benen 10:00 AM Permalink | Trackbacks | Comments (14)

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OPTIMISM?.... The new poll from the Washington Post/ABC News covers a fair amount of ground, and the Post emphasizes the public's willingness to place blame for the economy on almost everyone except the president.

The number of Americans who believe that the nation is headed in the right direction has roughly tripled since Barack Obama's election, and the public overwhelmingly blames the excesses of the financial industry, rather than the new president, for turmoil in the economy, according to a new Washington Post-ABC News poll.

At this early stage in his presidency, Obama continues to benefit from a broadly held perception that others should bear the bulk of responsibility for the severe economic problems that confront his administration. Americans see plenty of offenders, but only about a quarter blame the president and his team for an economy that's in the ditch.

That won't last indefinitely, but two months into the Obama administration, these results are probably welcome at the White House.

Digging through some of the internal numbers, I was struck by an odd sense of growing optimism among poll respondents.

For example, the poll asked, "Do you think things in this country are generally going in the right direction or do you feel things have gotten pretty seriously off on the wrong track?" Given the crises, it's not a surprising that a clear majority (57%) believe we're on the wrong track. But the number of people who believe we're going in the right direction is up to 42% -- up from 8% in October, and at the highest level since April 2004.

Similarly, the same poll also asked, "Do you think the nation's economy is getting better, getting worse or staying the same?" A total of 27% believe it's getting better, which doesn't sound like much, but it's the highest number since 2004. Likewise, 36% believe the economy is getting worse, but that's the lowest number since January 2007.

As for partisan confidence, asked who they trust to do a better job handling the economy, President Obama or congressional Republicans, 58% trust the president, while 25% favor GOP lawmakers.

Steve Benen 9:30 AM Permalink | Trackbacks | Comments (13)

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MURTHA'S 'DEFENSE'.... Rep. John Murtha (D-Pa.) has been confronted with some unpleasant questions of late. In late January, the FBI raided the offices of a defense contractor linked to the Pennsylvania Democrat. A few weeks later, we learned about another FBI raid, this time of the PMA Group -- a lobbying firm founded by a former Murtha aide, which specializes in winning earmarks -- touching off a series of questions about corruption.

The other day, in an interview with the Pittsburgh Post-Gazette, Murtha defended himself against allegations of wrongdoing.

"If I'm corrupt, it's because I take care of my district," Mr. Murtha said. "My job as a member of Congress is to make sure that we take care of what we see is necessary. Not the bureaucrats who are unelected over there in whatever White House, whether it's Republican or Democrat. Those bureaucrats would like to control everything. Every president would like to have all the power and not have Congress change anything. But we're closest to the people." [...]

What he says he does know is that without earmarks, "Johnstown would have been like Detroit is today. We would have been a ghost town."

I suspect this isn't the defense Murtha's lawyer -- or, for that matter, Murtha's press secretary -- would have chosen. It sounds a bit like Murtha's saying he engaged in corruption, but only because his district would benefit from his alleged wrongdoing.

If memory serves, there was a very real possibility after the 2006 elections that Democrats would make Murtha the House Majority Leader, though he was later defeated. In retrospect, that probably worked out well for the majority party.

Steve Benen 8:30 AM Permalink | Trackbacks | Comments (16)

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HARD TO ARGUE WITH LOGIC LIKE THAT.... It was certainly discouraging that Rep. John Shimkus (R-Ill.) argued, publicly and with a straight face, that if we limit carbon emissions, we're "taking away plant food from the atmosphere." But I was also impressed by Shimkus' theological argument against combating global warming.

Shimkus explains -- well, perhaps "explains" is a strong word -- his belief that we need not worry about the effects of global warming, because his interpretation of the Bible suggests planetary changes are solely in the hands of the Christian God. "The Earth will end only when God declares it's time to be over," the Illinois Republican said. "Man will not destroy this Earth. This Earth will not be destroyed by a flood.... God's word is infallible, unchanging, perfect."

What's more, be sure to watch to the end of the video clip, at which point Shimkus argues that we're not pumping enough carbon into the atmosphere: "There is a theological debate that this is a carbon-starved planet, not too much carbon."

I've heard a few conservatives over the years argue, "Kill 'em all and let God sort 'em out." I didn't expect, however, to hear an elected member of Congress apply this thinking to environmental policy.

Shimkus' "insights" came around the same time as Rep. Joe Barton's (R-Texas) argument that we need not worry about global warming, because in a pinch, humanity can simply pursue an "utterly natural reflex response to nature," by finding "shade."

There's a genuine policy discussion to be had about climate change. If policymakers like Shimkus and Barton represent the mainstream of House Republican thought, this discussion won't be bipartisan. Indeed, for humanity's sake, it can't be.

Steve Benen 8:00 AM Permalink | Trackbacks | Comments (47)

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BACK IN THE SADDLE.... My most sincere thanks to dday, publius, and of course my trusted partner Hilzoy, for going above and beyond during my little spring break. They did some really amazing work.

To read more from them on a regular basis, dday blogs at Hullabaloo, Calitics, and his own site, D-Day. You can find publius blogging regularly at Obsidian Wings, and Hilzoy, of course, is a regular contributor right here.

Thanks again to the guest posters for their time and words of wisdom. And now, back to the news....

Steve Benen 7:30 AM Permalink | Trackbacks | Comments (7)

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March 30, 2009
By: dday

MONDAY'S MINI REPORT... I'm going to take a shot at this. Here's today's edition of quick hits:

* The market did not take kindly to the President's plan for the auto industry, with the Dow dropping a little over 3%.

* Another terrorist strike in Pakistan, as militants dressed as policemen stormed a police academy and left at least 20 dead. Pakistani authorities blamed Taliban-aligned elements. These brazen attacks have occurred with increasing frequency in Pakistan in recent weeks.

* The White House released a report today called The Cost of Inaction, detailing the perilous state of the US health care system and the need to act immediately to control costs and provide maximum coverage. Some good facts and figures inside this document.

* Mitch McConnell keeps saying that Obama is turning America into France. Sacre bleu! Now McConnell is one person I wouldn't mind to see "going Galt."

* Nearly 7 in 10 major weapons-buying programs were over-budget in 2008. When the President talks about reining in the contracting process, this is what he's talking about.

* DougJ caught this moment of clarity from Evan Thomas in his largely substance-free profile of Paul Krugman: "If you are of the establishment persuasion (and I am), reading Krugman makes you uneasy ... Members of the ruling class have a vested interest in keeping things pretty much the way they are. Safeguarding the status quo, protecting traditional institutions, can be healthy and useful, stabilizing and reassuring. But sometimes, beneath the pleasant murmur and tinkle of cocktails, the old guard cannot hear the sound of ice cracking." That's a good thing to know about the establishment media. It should be in every single one of their stories as a boilerplate at the top.

* Is the current chair of the DNC, Virginia Governor Tim Kaine, really going to sign a ban on stem cell research funding in his state?

* One of the lawyers in the Spanish case against Bush Administration members, Gonzalo Boye, had a good retort to Douglas Feith's complaining about the possible indictment: "I would recommend that Mr. Feith first of all read the complaint, and secondly that he get a very good lawyer ... If he is so sure of what he is saying - then the address of the national court is #22 Genova Street, second floor.”

* President Obama signed the omnibus lands bill today providing for 2 million more acres of protected wilderness.

* I do indeed hope that at the very least we can relax the travel ban with Cuba, as it serves no legitimate purpose for either nation. Neither does the embargo.

* Talks on reducing nuclear arsenals between the United States and Russia is also change I can believe in.

* Fox News launched a conservative Web site today called "Fox Nation". I guess that they won't be offering comments, since Andrew Breitbart explained today that Obama supporters have been unleashed on right-wing comment sections, forcing sites like Instapundit to close them retroactively years before Obama became President. This is something that John McCain would never pay supporters to do.

* And for those uninitiated to Twitter, and inclined to, well, hate it, you will find this cartoon amusing and educational.

Anything to add? Consider this an open thread. And thanks again to Steve for having me here these past few days; I hope he comes back refreshed and rarin' to go. I would be remiss without mentioning the sites you can find me posting on a daily basis:

Hullabaloo with the incomparable Digby;
Calitics, a state progressive blog covering California;
and my own site, D-Day.

Thanks!

dday 7:45 PM Permalink | Trackbacks | Comments (25)

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By: publius

OUR DUMB SENATE.... To echo dday and Ezra Klein, I tend to think that the problems with the Senate described in Chait's new TNR article are structural. That is, the problem with the Senate is the Senate itself rather than the individual Senators.

The fact that the Senate kills and waters down legislation is no accident -- it's the whole point. Legislative failure is written into the DNA of our constitutional system. It's a great system for blocking ambitious legislative changes, but it's a horrible one for enacting major national reform. Hell, African-Americans in the South couldn't vote 100 years after the Civil War -- or even publicly eat with whites -- largely because of the Senate. As Sanford Levinson's most excellent book illustrates, our Constitution simply has a lot of very dumb provisions. The Senate is one of them.

Anyway, as dday noted, this is a structural problem that requires a structural solution. The more appropriate solutions -- e.g., getting rid of 2 Senators per state; adopting a more parliamentary system -- aren't going to happen. We could, however, take more ambitious steps to reforming the Senate even while accepting some of its more permanent flaws. It's at least conceivable, for instance, that we could "constitutionalize" internal Senate procedure to make the body more legitimate -- e.g., limit the filibuster; eliminate "holds"; curtail the power of committee chairs.

I realize none of this will happen soon. And who knows -- maybe Obama's ambitious agenda will be wildly successful, thus rehabilitating the Senate. But Senate reform should be added to the longer-term progressive agenda. Indeed, the other big-ticket items on that agenda -- things like health care reform and cap-and-trade -- might not be possible without it. I guess we're about to find out.

publius 7:00 PM Permalink | Trackbacks | Comments (16)

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By: dday

PARTY OF NO NUMBERS... The GOP's "budget" was roundly mocked throughout Democratic circles and even in the suddenly-caring-about-policy traditional media for not having any numbers, the way that, you know, a budget does. Yesterday, John McCain sought to calm the waters by claiming that the Senate GOP would put together, in fact, an actual budget with hard numbers instead of just a pamphlet with a bunch of circles and positive affirmations.

DAVID GREGORY: Do you think that Republicans should provide a detailed budget alternative?

McCAIN: Yes.

GREGORY: With numbers?

McCAIN: Yes.

GREGORY: Will that happen in the Senate?

McCAIN: We're working on it, working very hard on it.

Rick Klein reports that Sen. McCain is mistaken.

According to a spokesman for Senate Minority Leader Mitch McConnell, R-Ky., the Senate GOP's plan remains the same: Republicans are planning to offer individual amendments to the Democratic budget but not a detailed, comprehensive budget of their own.

Sen. Judd Gregg, R-N.H., the top Republican on the Senate Budget Committee, has pointed out that if the GOP amendments are accepted en masse (which will not happen), the amended budget would be the Republican alternative. Senate GOP leaders have also pointed out that Senate Democrats didn’t offer a detailed alternative budget in 2005 and 2006, when Republicans last controlled the Senate.

In any event, a full budget alternative may be what McCain wants, but it's not going to be what happens.

This comes after GOP leaders immediately blasted their own superiors in the House after the negative reaction to the non-budget, and after Rep. Paul Ryan conceded that, with actual numbers, the non-budget would in all likelihood increase the deficit.

These guys really have no idea what they're talking about, do they?

dday 6:30 PM Permalink | Trackbacks | Comments (7)

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By: dday

MORE ON THE AUTO PLAN... Things are moving fairly quickly on the auto company front. Within an hour or so of President Obama's announcement about two struggling automakers, Chrysler announced the framework of a deal with Fiat, while GM's new leaders immediately stepped into their positions. Clearly the President's call for Chrysler to find a merger partner or be forced into bankruptcy focused their minds a little bit.

Obviously, there is concern that a double standard is being applied to the auto companies when compared with the larger banks, and I agree. On the substantive merits of this proposal, however, I think Obama had few alternative options. Emptywheel, who lives in Michigan and has worked for auto companies in the past, had a good take.

...here's what Obama seems to be announcing today:

• Chrysler will be forced into a marriage with Fiat in the next month or be denied any additional aid--which will surely put it into bankruptcy
• GM (which failed to get the required concessions from the UAW and bond-holders) will have 60 days to come up with a new, more aggressive turn-around plan
• At the end of 60 days, the government may require a "quick rinse" bankruptcy (one month) to get GM's stakeholders to take their losses

Thus far, it's tough to tell whether this is a good plan or not. As far as Chrysler, they can't survive alone. So the forced marriage gives it one chance to avoid bankruptcy that otherwise seems inevitable. I don't think Fiat will take the deal, so I expect Chrysler to enter bankruptcy within the next month.

As for the GM plan, they are finally talking about dealer concessions (which a "quick rinse" bankruptcy would help, too), which was the element that everyone had thus far ignored. And some of this tough love with GM seems to be a logical next step given bond-holders' intransigence since December. GM had been, thus far, unable to get its bond-holders to accept the losses they had told GM, in November, they would take, so Obama is threatening to use a court to make them do so--followed by UAW concessions [...]

In other news, here are the assessments of the GM and Chrysler plans. They strike me as eminently reasonable assessments. My biggest complaint, thus far, is that the Administration does not mention "health care" in either of the assessments. They mention legacy costs, but not health care. So thus far, they seem unprepared to deal with the fundamental competitive disadvantage that we're asking our manufacturing companies to shoulder.

It seems to me that the UAW - and by extension line workers - have been making nothing but concessions throughout this ordeal. Heck, even Brian Kilmeade on Fox and Friends admitted that the salaries for domestic auto workers are in line with the Japanese, and the main differences come in health care costs. The facts are that manufacturing industries in this country remain at a competitive disadvantage because we are the only industrialized nation where employers are burdened so excessively with the cost of health care, and productivity does not fill the gap. So forcing dealers and bondholders to the table so that the costs of restructuring are shared makes sense, as does reforming health care to increase global competitiveness.

A few other parts announced by Obama were intriguing - he put a government guarantee on warranties of GM and Chrysler cars, which could help them keep customers should they fall into a quick rinse bankruptcy; he assigned a Director of Auto Recovery to "support the workers, communities and regions that rely on the American auto industry"; and he sought to revive the "cash for clunkers" proposal that has succeeded in other nations, particularly Germany, in boosting auto sales:

As he rolled out one last reprieve for the nation's troubled automakers, President Obama also restarted a legislative push that ran out of gas during last month's stimulus talks: a $10,000 rebate offer to car owners who traded in their old models for more fuel-efficient wheels.

The "cash for clunkers" plan was originally proposed by Sens. Dick Durbin (D-IL) and Tom Harkin (D-IA), at a total cost of about $16 billion. It was dropped from the stimulus amid GOP opposition, but Obama said today that he would "work with Congress to identify parts of the recovery act that could be trimmed to fund such a program and make it retroactive starting today."

Senate leaders sounded warm to this idea today. Increasing fuel economy at the low end by getting the biggest emitters off the streets actually does more to reduce greenhouse gas emissions than moving someone from a moderately efficient vehicle into a hybrid. So this makes some sense economically as well as environmentally.

I think a lot of people hope that the President would show the same tough love to the banking industry that he did with the auto industry today, and that is the main headline. However, there is an outline of how this can possibly work for the better for the auto industry and the workers who rely on it.

dday 5:46 PM Permalink | Trackbacks | Comments (11)

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By: dday

THE PROBLEM OF THE SENATE... Last week saw a paroxysm of opposition to Barack Obama's budget plan from leading Senate Democrats. Evan Bayh formed his moderate working group, and Kent Conrad whittled down the budget proposal (in many respects by reinstating helpful budget fictions that make the deficit look smaller). And opposition to the Administration-supported cram-down proposal may scuttle that piece of the housing bill.

Jonathan Chait senses a pattern.

The last Democrat who held the White House, Bill Clinton, saw the core of his domestic agenda come to ruin, his political support collapse, and his failure spawn a massive Republican resurgence that made progressive reform impossible for a decade to come. The Democrat who last held the White House before that, Jimmy Carter, saw the exact same thing happen to him [...]

George W. Bush came to office having lost the popular vote, with only 50 Republicans in the Senate. After his disputed election, pundits insisted Bush would have to scale back his proposed massive tax cuts for the rich. Instead, Bush managed to enact several rounds of tax cuts that substantially exceeded those in his campaign platform, along with two war resolutions, a Medicare prescription drug benefit designed to maximize profits for the health care industry, energy legislation, education reform, and sundry other items. Whatever the substantive merits of this agenda, its passage represented an impressive feat of political leverage, accomplished through near-total partisan discipline.

Obama has come into office having won the popular vote by seven percentage points, along with a 79-seat edge in the House, a 17-seat edge in the Senate, and massive public demand for change. But it's already clear he is receiving less, not more, deference from his own party. Democrats have treated Obama with studied diffidence, both in their support for the substance of his agenda and (more importantly) their willingness to support it procedurally.

I'm of two minds on this. On the one hand, no co-equal branch of government SHOULD be a rubber-stamp (certainly the Hastert/DeLay/Frist Congress under George W. Bush shouldn't be emulated), and Congress has every right to carry out their legislative agenda under their own terms. At the same time, the endless whining from Democratic "moderates" to modify the Obama agenda, not out of any principle or belief that a middle course makes the most sense from a policy standpoint, but because they have been seduced by the high Broderist idea that the middle distance between two points is a virtuous end in itself, is both grating and irresponsible. The moderates use selective outrage - we must close the deficit, but we can't cap subsidies to wealthy agricultural interests to save money, just to use one example - to frustrate progress and make recovery more difficult.

However, Ezra Klein argues that the peculiar structures of the Senate are a far greater obstacle than the glory-seeking Senate moderates:

Which isn't really to argue with the substance of Jon's article: The Senate is a broken branch. If we don't properly respond to the financial crisis or avert the crushing blow of rising health costs or slow the advance of catastrophic climate change, it will be because the institution is no longer capable of governance. But that is not, as Chait would have it, a purely Democratic problem. It's an institutional issue. The local obsessions that Chait attaches to Conrad and Nelson are similarly prevalent among Republican Senators. The tremendous power of swing senators is as undeniable and capricious when Republicans rule as when Democrats hold power. The allure of obstruction is an compelling to minority Democrats as minority Republicans (the early Bush accomplishments were actually more bipartisan than Obama's, though that was because Democrats controlled the chamber rather than because Bush was the gracious and cooperative type).

I don't argue this point to be churlish. You can understand the problems of the Senate in two ways. The first is that it's a problem of party discipline. The second is that it's a problem of rules. If you think it's the first, the answer is to put resources and effort into mounting a primary challenge against Ben Nelson. If you think it's the second, then the answer may be to put time and energy into repealing the Byrd Rule, or lowering the filibuster limit, or making it easier to replace chairman, or otherwise transforming the structural incentives that makes legislative success such a delicate and unlikely outcome and thus allows individual Senators to exert so much control over it. Moreover, if you think it's the second, you can actually make something of a bipartisan argument, rather than a purely partisan one. The Senate, as currently composed, doesn't work for Republicans any better than it works for Democrats. And it really doesn't work for the country. And that's probably an easier argument than trying to convince Nebraskans that Ben Nelson's incredible power isn't good for them.

We have already seen and may yet see more progress from this Congress - the ConservaDem backlash to using budget reconciliation, for example, may just be a pose to force Republican compliance. But I think I lean more toward this being a structural problem requiring structural solutions, particularly in the Senate. The country really cannot afford a set of rules that tilt so heavily in favor of the status quo, especially in this time of profound challenges. In fact, the resultant reaction we've seen continually by the executive branch is to usurp the power of the Congress in the name of getting something done, which is unadvisable. Only by empowering Congress to actually act can we really have equal branches of government.

dday 4:40 PM Permalink | Trackbacks | Comments (26)

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By: dday

PENSION GUARANTEE MONEY SET ABLAZE ON WALL STREET.... From the Boston Globe, a terrifying report about how the Pension Benefit Guaranty Corporation, the agency that insures retirement funds, decided to play in the stock market at precisely the wrong time:

WASHINGTON - Just months before the start of last year's stock market collapse, the federal agency that insures the retirement funds of 44 million Americans departed from its conservative investment strategy and decided to put much of its $64 billion insurance fund into stocks.

Switching from a heavy reliance on bonds, the Pension Benefit Guaranty Corporation decided to pour billions of dollars into speculative investments such as stocks in emerging foreign markets, real estate, and private equity funds.

The agency refused to say how much of the new investment strategy has been implemented or how the fund has fared during the downturn. The agency would only say that its fund was down 6.5 percent - and all of its stock-related investments were down 23 percent - as of last Sept. 30, the end of its fiscal year. But that was before most of the recent stock market decline and just before the investment switch was scheduled to begin in earnest.

The PBGC is a backstop against major losses by private pension funds and the parent companies slipping into bankruptcy. Especially at this time, with the economy struggling, the PBGC could be called on more than ever to help protect pensioners. Just as an example, a structured bankruptcy by GM or Chrysler would mean that huge liabilities would be passed on to this agency. Which apparently gambled and lost tons of money. That's exactly the opposite investment strategy that should be taken by what amounts to an insurer.

David Kurtz is blunt and right on the money.

A finance professor who had previously advised the agency not to make the switch away from bonds compared the move to an insurance company writing policies to cover hurricane damage and then investing the premiums in beachfront property.

Bush was able to do for the PBGC what he tried and failed to do for Social Security.

Josh Marshall concurs. These were Bush Administration officials who, in the wake of losing their battle to privatize Social Security, had this big pot of money - close to $64 billion - that they sunk into stocks, providing more money to Wall Street for them to keep pushing asset values higher. The timing of it happening just at the time before the market began to crash suggests that the Administration viewed this as perhaps a last-ditch effort to prop up Wall Street. The director of the PBGC, who advised and directed this strategy, is Charles E.F. Millard, a former managing director at LEHMAN BROTHERS, just to give you some more assurance. In the article he practically admits that he was just taking a whirl at the casino with public money:

He said the previous strategy of relying mostly on bonds would never garner enough money to eliminate the agency's deficit. "The prior policy virtually guaranteed that some day a multibillion-dollar bailout would be required from Congress," Millard said.

He said he believed the new policy - which includes such potentially higher-growth investments as foreign stocks and private real estate - would lessen, but not eliminate, the possibility that a bailout is needed.

Asked whether the strategy was a mistake, given the subsequent declines in stocks and real estate, Millard said, "Ask me in 20 years. The question is whether policymakers will have the fortitude to stick with it."

I don't think policymakers will be sticking with it, because there's probably almost no money left in that portfolio. Money that was designed to insure pensions.

This is a crime.

dday 3:45 PM Permalink | Trackbacks | Comments (27)

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By: dday

IF IT'S SUNDAY, IT'S JOHN MCCAIN.... John McCain appeared on Meet the Press this Sunday, and while the content was unremarkable, a little portion at the end was pretty revealing.

DAVID GREGORY: This is your 54th appearance on Meet the Press. Now I know you're a competitive guy. Bob Dole still holds the record at 63. And so we've been doing the calculations here. We think we can make this up, maybe within a year's time. If you're game for that.

JOHN MCCAIN: I'd love to try. Thank you, David.

DAVID GREGORY: Sen. McCain, thank you very much for being here.

David Gregory was making a joke. And yet there's still much to this that's remarkable. John McCain has appeared on Meet the Press - just one of the multiple Sunday morning talk shows - 54 times, and I would guess that most of them have come in the years since announcing for President in 1999, since before that he was a more obscure figure in Washington. I can't imagine there's anyone else even close to that number. And yet McCain is an easy guy to find on the Rolodex and get to appear on your show. It points to a staleness in the official discourse.

And while this was McCain's inaugural appearance on Meet The Press this year, he has done Face the Nation in 2009, Fox News Sunday on two occasions, and sat down with John King of CNN as well, not to mention the celebrated Twitter-view with George Stephanopoulos. That's 5 appearances and counting and we're only at the end of March. McCain is actually crushing the once-a-month appearance schedule that Gregory jokingly set out for him.

I should mention at this point that McCain lost the 2008 Presidential election.

dday 2:45 PM Permalink | Trackbacks | Comments (50)

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By: dday

OBAMA SPARS WITH THE WORLD... On the eve of the G20 summit. McClatchy looks at whether Europe will embrace the President the way they did during the campaign.

Obama leaves on Tuesday on a whirlwind eight-day tour. He remains enormously popular in Europe, and the throngs that greeted him last summer as a candidate are likely to grow. With first lady Michelle Obama along, Obama's debut on the world stage as president already is inspiring anticipation of the kind of rock-star reception that greeted John and Jackie Kennedy on their first trip a first couple to Europe in 1961.

Yet Obama also heads into his first overseas trip with grand goals _ looking to forge a coordinated global response to the Great Recession, hoping Europe will send more of its sons and daughters to help in an escalating war in Afghanistan, and seeking to restore international cooperation that he thinks suffered in the Bush years.

That will be a tough sell. Publicly, European and world leaders will embrace Obama. But privately, they likely will say no to some of his requests, most notably sending combat troops to Afghanistan, or simply avoid the subject.

Certainly that's the case with regard to global stimulus, which the Obama Administration has pushed but which has caused such pushback that the US has backed off. Europe appears to prefer increased regulation of financial markets and to resist the United States trying to encourage additional spending. The Guardian writes that Europe has won the debate:

European leaders, led by Germany's chancellor, Angela Merkel, come to the crucial Docklands summit on Thursday believing they are winning or have won the argument about how to tackle casino capitalism.

The case pushed by Merkel repeatedly in recent weeks, and echoed by France and the European commission, is that there is no point now in more tax cuts and deficit spending to boost demand since it is not yet clear whether the huge fiscal stimuli packages already launched are actually going to work.

Rather, the Europeans argue, the focus should be on fixing a European and global system that is broke - through a new supervisory and regulatory regime. This option, Merkel declared at the weekend, offers the best chance of avoiding similar crises erupting once a decade, as has been the cycle since the 1980s.

While this is a noble goal, the problem is that the "regulatory reform" elements of the G20 communique look toothless - additional boards and structures composed of the same people who missed this crisis. One point of concurrence could spell the end of offshore tax havens, althought the changes could also be cosmetic. In short, the G20 could result in nothing done on the fiscal and monetary levels, and nothing of substance on the regulatory level. Simon Johnson suggests how Obama can salvage the summit, but only on the issue of funding and staffing for the IMF.

The larger issue is the lack of coordinated action among the world in addressing a truly global crisis. America's tarnished reputation through the Bush era has lessened the influence on these matters, as Paul Krugman notes:

The details of our current crisis are very different, but the need for cooperation is no less. President Obama got it exactly right last week when he declared: "All of us are going to have to take steps in order to lift the economy. We don't want a situation in which some countries are making extraordinary efforts and other countries aren't."

Yet that is exactly the situation we're in. I don't believe that even America's economic efforts are adequate, but they're far more than most other wealthy countries have been willing to undertake. And by rights this week's G-20 summit ought to be an occasion for Mr. Obama to chide and chivy European leaders, in particular, into pulling their weight.

But these days foreign leaders are in no mood to be lectured by American officials, even when - as in this case - the Americans are right.

The financial crisis has had many costs. And one of those costs is the damage to America's reputation, an asset we've lost just when we, and the world, need it most.

The summit begins on Wednesday, April Fool's Day. Stay tuned.

dday 1:55 PM Permalink | Trackbacks | Comments (10)

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By: Hilzoy

Don't Cave On Cramdowns

From CongressDaily, via the Wonk Room:

"Senate Majority Leader Reid said today he would drop a cram-down provision from a House-passed banking bill if the language threatened to keep the Senate from passing the overall bill. The provision would allow a bankruptcy judge to reduce a homeowner's mortgage principal. "If we can't get the votes for that, and I am hopeful we can -- I am semiconfident we can -- then what I'll do is take that off [the bill] and do the other banking provisions," Reid said at a Christian Science Monitor breakfast. Reid said he would work to keep the package intact, but raising the prospect of pulling the provision seemed to acknowledge assertions by Sen. Evan Bayh, D-Ind., and others that the cram-down bill cannot pass due to opposition from Republicans and some Democratic moderates."

As I've said before, caving on cramdowns would be a big mistake. Presently, every other form of secured debt can be written down to its present value in bankruptcy, provided the borrower can make payments on it at its new, reduced value. Allowing cramdowns would simply treat mortgages like any other form of secured debt. This matters for a number of reasons.

Often, the alternative is foreclosure. Foreclosures are not good for anyone: not the homeowner, not the neighborhood, not the bank. Banks are now starting to walk away from foreclosures: this means that after a homeowner has gotten a foreclosure notice and moved out, after the now-vacant property has been vandalized or turned into a crack house and lost a lot of its value, the bank refuses to take title, and the homeowner is stuck with both the house and the debt s/he can't pay.

One reason this happens is that if the mortgage has been securitized, it's very hard to locate all the people who now own a tiny little piece of it, let alone to get them all to sign off on renegotiating it. Cramdowns would get around this problem: bankruptcy judges can write a mortgage down to the present value of the home unilaterally, without having to get all the people who own some part of the mortgage to sign off.

Another is that banks are sometimes unwilling to write down a mortgage because they do not want to have to write down any comparable mortgages they might have on their books. If the mortgage is, in fact, not worth as much as they value it at, then they ought to write it down, along with any comparable mortgages. Bankruptcy judges do not take into account banks' desire not to acknowledge losses they have already taken, nor should they.

Besides all that, though, there's a good economic case for allowing cramdowns. We seem to be rescuing a lot of companies lately. But it's no good trying, for instance, to save GM if we don't have customers who are able and willing to buy cars. As any number of commenters have said, we need to shore up the not just businesses' balance sheets, but consumers', since if they are not able and willing to spend, then even the best-run businesses will fail.

Some ways of doing this -- e.g., putting people to work doing things that need doing -- don't involve problems of moral hazard. But any attempt to try to reduce people's debts does. However, in the case of cramdowns, these concerns are a lot smaller than they would be otherwise, since in order to get this kind of debt relief, you need to declare bankruptcy. And no one likes declaring bankruptcy. No one declares bankruptcy just for fun. So the problem of moral hazard is, in this case, a lot smaller than it would be otherwise.

Allowing cramdowns is good for everyone. It's good for homeowners, since if they could make payments on their house if it were written down to its present value, they get to stay in it. It's good for the neighborhoods in which these homes are found, since it prevents abandonment and blight. It's good for the housing market, since it means fewer foreclosed homes for sale. It's good for the banks, except that they will have to acknowledge losses they ought to acknowledge anyways.

Caving on this would be a serious mistake. If your Senator is among those who are wavering, let him or her know how you feel.

Hilzoy 1:39 PM Permalink | Trackbacks | Comments (24)

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By: dday

"YEARS"... It's already astounding that the Norm Coleman-Al Franken Senate recount has taken this long to resolve. Franken has won the first recount and Coleman's lawyers even acknowledge that he will win the case before the Minnesota Supreme Court when the verdict comes down shortly. But this is the first time I've heard the word "years" to describe the timeframe for resolution.

Texas Sen. John Cornyn is threatening "World War III" if Democrats try to seat Al Franken in the Senate before Norm Coleman can pursue his case through the federal courts.

Cornyn, the chairman of the National Republican Senatorial Committee, acknowledges that a federal challenge to November's elections could take "years" to resolve. But he's adamant that Coleman deserves that chance - even if it means Minnesota is short a senator for the duration.

The big question concerns certification of the election. Democrats say that the Minnesota Supreme Court will grant certification after their ruling, regardless of an appeal. Cornyn thinks that Minnesota will be unable to certify if Coleman seeks a review from the US Supreme Court on the matter. Of course, the real "decider" in this case may be Republican Governor (and possible 2012 Presidential candidate) Tim Pawlenty.

It could takes months - or longer - to resolve a petition for review from the U.S. Supreme Court and even longer if the loser before the Minnesota Supreme Court files a new case in a U.S. District Court.

What happens in the meantime could come down to Minnesota Gov. Tim Pawlenty, a Republican who was on John McCain's vice president shortlist and is contemplating a run for the GOP presidential nomination in 2012.

So far, Pawlenty isn't saying what he'll do once the court rules.

"The recent Minnesota Supreme Court decision indicated that an election certificate could be issued once the state courts process is complete," said Brian McClung, a spokesman for the governor. "However, if one of the parties appeals to a federal court, a question will arise whether the federal court might stay the issuance of a certificate.

"We'll see what the courts determine," he said.

20 guesses what the guy who may want to top the GOP ticket in 2012 will decide.

I've been saying for a while that this recount battle obstructing Franken from the Senate was a sweet deal for Republicans. They get to expend some resources and shockingly little political capital in exchange for denying Democrats a key vote on issues like health care and energy and the Employee Free Choice Act. There was some hope that the "losers pay" law in Minnesota, combined with Norm Coleman's campaign inadvertently revealing thousands of their donors' personal information online, would make it difficult to raise the necessary funds to continue the court battle. However, a little-remarked-upon FEC ruling allows both candidates to return to former maxed-out donors to pay up to $30,400 per individual into a party recount and trial fund. Even PACs can give up to $15,000. So it would take a relatively small amount of wealthy donors to keep this going as long as possible.

What I cannot understand is why Coleman has taken such little heat for prolonging what by all accounts appears to be a losing battle, and for nakedly political reasons besides. Once the Minnesota Supreme Court rules in a matter of days, Democrats need to loudly call for Franken's seating at every possible opportunity.

...Ian Milhiser at Overruled Blog has an interesting strategy for Franken - AGREE to let the Supreme Court hear Coleman's appeal in an effort to fast-track the case.

dday 1:07 PM Permalink | Trackbacks | Comments (30)

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By: dday

A NEW DAY ON CLIMATE CHANGE.... Juliet Eilperin reports on the sweeping changes being made by the Obama Administration on environmental policy:

After the United States voiced support for the idea of a new, binding mercury treaty, the world community embraced it in Nairobi.

The rapid policy reversal is just one of more than a dozen environmental initiatives the new administration has undertaken in its first two months. In nearly every case, the decisions were based on extensive analysis and documentation that rank-and-file employees had prepared over the past couple of years, often in the face of contrary-minded Bush administration officials.

After years of chafing under political appointees who viewed stricter environmental regulation with skepticism, long-serving federal officials are seeing work that had been gathering dust for years translate quickly into action.

Some of these proposals include the creation of a national greenhouse gas registry, to put real numbers on emissions so industry can account for them; a halt to plans for mountaintop removal; real resources for prosecuting coal-fired power plants under the Clean Air Act for violations; a fresh look at granting a waiver to California and other states to regulate their own tailpipe emissions; and study of whether the EPA will regulate greenhouse gas emissions on their own. For all of this, the EPA is drawing on the work of career officials they were unable to put forward in the eight long years of the Bush Administration. Finally, employees of the EPA are allowed to write the rules again.

And the President has followed this up by announcing a series of global meetings over the next few months to discuss climate change and renewable energy issues, leading into the negotiations for a new global treaty in Copenhagen in December. While the Bush Administration also set up meetings, there was a sense by stakeholders that the plan was to talk the issue to death. Just looking at the work of the EPA, the Obama Administration is primed for action.

dday 12:15 PM Permalink | Trackbacks | Comments (6)

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By: publius

MUCH ADO ABOUT NY-20.... The big news tomorrow will be the special election in NY-20 to replace Senator Gillibrand. As you know by now, the election has become a proxy war for larger national battles over the stimulus. So there will inevitably be a lot of ink spilled on what the election means. Personally though, I think the answer is "not much," regardless of who wins.

The main reason is that the political battle over the stimulus is better understood as long-term positioning, rather than as short-term news cycle battles. What people think today -- or on Wednesday -- about the political success of the stimulus simply doesn't matter that much. What matters is how the economy looks down the road.

Remember that the GOP opposed the stimulus not so much to reap short-term success, but to position themselves for the future. If things don't improve, then the GOP will have drawn a sharp political contrast and can pound the Dems over the head with it. If, however, things get better, the GOP will be in serious trouble for opposing the stimulus pretty much unanimously. (On an aside, it's worth noting that the GOP's rational interests are no longer aligned with the health of the economy -- though I suppose that's true for all minority parties).

Anyway, the NY-20 election will be big news for several days -- and the spin will come fast and furious. But at the end of the day, it won't really affect the long-term picture. The GOP has already made its decision -- and a loss on Tuesday won't help or hurt them in the grand scheme of things.

Plus, the demographics make it hard to draw any strong conclusions one way or the other. If the Republicans win, it's hard to see what the big deal is. It's a Republican district that went for Bush in 2000 and 2004 (average +7.5). If the Democrats win, it's a somewhat bigger deal -- but not much. Obama won the district 51-48, and still has strong popularity as a new president. All in all, the election will signal very little about the battles to come.

Don't get me wrong -- I will clearly enjoy watching the RNC try to spin a loss. But it's worth remembering -- before results start coming in -- that there's little at stake here other than short-term bragging rights (which are admittedly fun to have).

publius 11:42 AM Permalink | Trackbacks | Comments (5)

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By: Paul Glastris

MADNESS IN DETROIT... The big news today is that the Obama administration is taking a heavier and more direct role in the restructuring of the auto industry--including demanding the resignation of GM chairman and CEO Rick Wagoner. The markets may not like this more hands-on approach by government, and it's not hard to understand the concern. But as Phillip Longman of the New America Foundation explains in the new issue of the Washington Monthly, there is a bright shining example from not so long ago of government bureaucrats engineering the revival of an industry easily as troubled as today's automakers and, if anything, more central to the economy.

In 1976 Washington took over Penn Central and five other bankrupt railroads and folded them into a government-sponsored entity, Conrail. New management was recruited, federal dollars pumped in, major structural reforms instituted. A decade later, a thriving Conrail was sold off in what was, at the time, the largest IPO in U.S. history. A fluke? Hardly. During World War I, Woodrow Wilson put the entire railroad industry under government control, and later placed it back in private hands in much better shape than when he got it.

While the parallels with yesterday's railroads and today's auto industry are not exact, they are close enough to provide many useful lessons. The most important is this: as the automakers return to Washington for a second round of assistance, the greatest danger may well be not that government will intervene too much, but that it won't intervene enough.

Read Longman's article, "Washington's Turnaround Artists," here.

Paul Glastris 10:33 AM Permalink | Trackbacks | Comments (28)

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By: dday

JUST ONE MORE FILL-UP FOR THE AUTO INDUSTRY?... The government had until March 31 to assess the restructuring plans for GM and Chrysler and decide whether or not to give them more loans until they can sustain themselves. Obviously, the Obama Administration didn't much like what they saw.

President Barack Obama is sending a blunt message to Detroit automakers: To survive - and win more government help - they must remake themselves top to bottom. Driving home the point, the White House ousted the General Motors chairman as it rejected GM and Chrysler's restructuring plans.

Obama is set to elaborate on that message Monday when he announces what his White House told reporters over the weekend: Neither GM nor Chrysler submitted acceptable plans to receive additional federal bailout money [...]

Frustrated administration officials, speaking on condition of anonymity ahead of Obama's announcement, said Chrysler has been given a 30-day window to complete a proposed partnership with Italian automaker Fiat SpA. The government will offer up to $6 billion to the companies if they can negotiate a deal before time runs out. If a Chrysler-Fiat union cannot be completed, Washington plans to walk away, leaving Chrysler destined for a complete sell-off [...]

For GM, the administration offered 60 days of operating money to restructure. Officials say they believe GM can put together a plan that will keep production lines moving in the coming years.

There's a lot to unpack here.

First of all, the most high-profile fallout is that GM CEO Rick Wagoner was forced out. Michigan Gov. Jennifer Granholm described Wagoner, who was with GM for 31 years, as a "sacrificial lamb." He admittedly was at the helm when American automakers failed to adjust over the last decade, making SUVs and losing market share to Toyota and Honda. The company has lost $82 billion over the past 4 years.

And obviously, bailouts of any kind are unpopular at this point, and must be met with major concessions. However, one must be struck by the dichotomy of the President and bank CEOs making nice-nice on Friday, and forcing Wagoner out today. As Atrios put it, "apparently the real economy is less important than the paper one." Josh Marshall digs a bit deeper:

Citi does not have the same CEO it did at the start of the crisis. And the government installed a new CEO at AIG after the initial bailout. Another rejoinder might be that the automakers' plight is of a much more longstanding vintage than that of the finance barons, though I suspect, as we learn more, we'll be revisiting those assumptions. And even after getting substantial government aid, I think Wagoner's the first auto industry CEO to get the boot. So perhaps we should be asking why it is that something like this hasn't happened sooner.

All that said, though, after that meeting of the major bank CEOs at the White House last week, it's hard for me not to think that, for all that has happened, their clout in Washington is just on a scale where they are accepted as peers of the realm. And simply immune to certain sorts of treatment.

The White House may believe that anger over the initial auto bailout, and bailouts in general, force them to be tough. And certainly the government should not throw good money after bad if there's no hope of viability. But with millions of jobs at stake, certainly a good bit of people are going to notice that the auto industry is being forced into concessions that practically no bank has had to make.

...President Obama will announce the government's plan later this morning.

dday 10:09 AM Permalink | Trackbacks | Comments (15)

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By: publius

GEORGE WILL'S LEGAL EXTREMISM.... Noted climatologist George Will shifted gears to constitutional law yesterday, arguing that the Emergency Economic Stabilization Act of 2008 (EESA) (i.e., the bailout) is unconstitutional. The specific claim is that it violates the nondelegation doctrine, which holds that "legislative" acts cannot be "delegated" to other entities, particularly the executive branch.

There are at least two interesting aspects of Will's column. First, it reminds us why it's always important to understand the logical implications of Will's (and his ideological comrades') seemingly innocent legal arguments. The column sounds reasonable enough on first read. The EESA, Will argues, is too broad, and it gives the executive too much power. Fair enough.

However, the doctrine that Will wants to use to kill the EESA would have the added benefit of effectively destroying the post-New Deal administrative state. It's always the New Deal with these people.

Today, the doctrine is essentially toothless -- and hasn't been used to invalidate a statute since the New Deal. (Good short summary on the doctrine here). But for decades, the more extreme elements of the legal conservative world have been trying to revive it from the dead. As the summary above indicates, both Thomas and Rehnquist have tried -- but no such luck thus far.

It's also no surprise that Will cites law professor Gary Lawson for support. In addition to being a "founding member" of the Federalist Society, Lawson thinks the post-New Deal administrative state is unconstitutional. And that's the whole point -- it's not about the bailout, but about federal regulation more generally.

In short, this is a doctrine with extreme implications that has been pushed by the most extreme members of the conservative legal community. (And, rather wankerishly, by Cass Sunstein).

Moving on, the second interesting aspect of the column is that it illustrates the tension -- if not schizophrenia -- in conservative legal thought with respect to deference to the political branches.

On the one hand, the rise of "the movement" was inspired by the view that liberals had circumvented the legislature. People like Bork argued that, because liberals can't win things like abortion rights at the ballot box, they politicized the Constitution and imposed their preferences into its text. So this strain of conservative thought emphasizes the political process.

At the same time, however, there's a deeply anti-democratic strain running through legal conservatism as well. As illustrated by Will and Lawson, this strain wants to ignore the political branches entirely and invalidate big pieces of the regulatory state. (Thomas is the most extreme on this issue -- Roberts and Alito have been much more respectful of precedent).

In short, legal conservatives like Will can't make up their mind about whether they like the ballot box. For instance, in yesterday's column, Will offers a hypothetical about a truly absurd and vague statute (the Goodness and Niceness Act) that would delegate a lot of undefined power to the executive.

And yes, I would disagree with that statute -- but that doesn't mean it's necessarily unconstitutional. The political branches play a role here too in protecting us from such absurd statutes. We don't necessarily have to rely on courts for protection from this terrible statute. One would hope that this bill wouldn't make it very far.

Anyway, the point is that Will's example shows virtually no faith in the political process -- the glorification of which is, ironically enough, the raison d'etre of the modern conservative movement.

publius 7:20 AM Permalink | Trackbacks | Comments (28)

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QUICK REMINDER.... For readers who didn't check in over the weekend, I'm on a brief spring break, but will be back tomorrow morning. In the meantime, Hilzoy, dday, and publius will be here -- they had some fantastic posts over the weekend -- with plenty of items for your reading pleasure.

See you in 24 hours.

Steve Benen 7:15 AM Permalink | Trackbacks | Comments (14)

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By: Hilzoy

Rod Dreher Says Strange Things

Rod Dreher has a very puzzling post about gay marriage. There are some bits I will not engage with -- for instance, while believing that gay sex is sinful might be part of Dreher's religious tradition, I do not think it's at all integral to the Bible; in fact, I have always thought that one could make a decent case for allowing gay marriage on the basis of Paul's claim that it is better to marry than to burn.

What interests me more is this:

"If homosexuality is legitimized -- as distinct from being tolerated, which I generally support -- then it represents the culmination of the sexual revolution, the goal of which was to make individual desire the sole legitimate arbiter in defining sexual truth. It is to lock in, and, on a legal front, to codify, a purely contractual, nihilistic view of human sexuality. I believe this would be a profound distortion of what it means to be fully human. And I fully expect to lose this argument in the main, because even most conservatives today don't fully grasp how the logic of what we've already conceded as a result of being modern leads to this end."

Let's start with the "purely contractual, nihilistic view of human sexuality" that is supposed to be the danger here. I take it that there's nothing wrong with a contractual view of human sexuality -- that is, a view according to which sex is only OK if both parties consent. The problem has to be with a purely contractual view, according to which the only question one needs to ask before having sex is: has the other person consented? This is akin to the 'nihilistic' part: a nihilistic view of sex would be one according to which you don't even have to ask about the consent part. Anything -- literally anything -- goes.

Offhand, there would seem to be lots of ways not to be a nihilist about sex. Sex in some situations, or in some ways, can be cruel: e.g., sex with someone you know is in love with you and with whom you are not the least bit in love. It can be disrespectful, or callous, or mean, or irresponsible. It can show a lack of self-respect -- e.g., if you have sex with someone just to get them to stop pestering you to have sex with them. It can be self-destructive or a way of avoiding issues or, well, any number of bad things. Or it can be, so to speak, the wrong good thing, e.g. if you have sex with someone whom no one else wants to have sex with, out of some kind of misplaced compassion. Or it can be wonderful.

Dreher seems to think that if we "legitimize homosexuality", all the ways in which we might morally criticize or praise sex would go flying out of our heads. The alternative to opposing gay marriage, in his view, seems to be one in which "the only rule guiding people's sexual behavior is their own desire". But why on earth should that be true? Why, for instance, would I suddenly find myself unable to figure out what's wrong with seducing someone else's partner just to spite that person, or having sex with people just to rack up conquests, or not being able to muster the energy to say no? Why should I suddenly become unable to say: sex is deep magic from before the dawn of time; it is strange and powerful and should not be entered into lightly; but done right, it is one of the most glorious things there is -- as opposed to just: I want some?

It would be one thing if Christian morality were the only morality in existence. But it's not. There are other religions. There are secular moralities. Those of us who are not Christians manage to deploy moral concepts all the time without difficulty. I think that I can coherently say that torture is wrong, that I should not be wholly indifferent to the needs of others, and so forth. Does Dreher think that I am wrong -- not just wrong about my specific morality, but wrong to think I can talk coherently about this at all? Or is there something about sex in particular that makes it impossible for non-Christians to make moral judgments? In either case, why?

And what on earth does any of this have to do with gay marriage? Here I'm curious about two things. First, what do one's views about homosexuality have to do with one's views about whether or not there is anything to be said about sex other than: I want it or: I don't? I would have thought that the question: can we make moral judgments about sex? was distinct from the question: is 'homosexuality is wrong' one of the moral judgments we ought to make?

Second, supposing (for the sake of argument) that I were to conclude, for some unfathomable reason, that unless I disapprove of homosexuality I cannot make any moral judgments about sex at all, why should I take this to mean that I ought to try to prevent gay men and lesbians from being able to marry? What makes it appropriate for me to try to legislate views about the morality of sex between consenting adults?

Andrew Sullivan makes a good point:

"With Catholics, the obvious counterpoint is civil divorce. Catholics do not recognize such divorces within the church nor the second and third marriages that follow them (leaving aside the rank hypocrisy of the annulment scam). But they are prepared to live in a civil society that allows for it as a civil secular matter, just as they live easily with infertile married couples, or post-menopausal couples getting married. Until Rod explains why homosexuals as such represent a unique threat, even while they make up a tiny section of society, his singling out of gays in order to uphold his views of natural law in the civil law will look and smell like animus, not reason."

Dreher regards "a commercialized, consumerist, individualized culture that believes in no authority but the desiring individual will" as a threat to himself and his children. It is not clear to me why the sight of two people in love making a public commitment to one another might be thought to strengthen that culture.(Sullivan again: "The culmination of the sexual revolution was at 4 am in the Mineshaft in the late 1970s. It is not the civil marriage of two elderly lesbians in a town hall in California in 2008.") But if Dreher disagrees, it is a lot to ask of those two people that they give up the chance to marry one another to protect him from that threat.

Far better, I would have thought, to find a way to resist our commercialized, individualist culture on his own, and to bring up his children to have more self-respect than the Lost Children of Rockdale County. If Dreher cannot manage to govern his own life, and to give his children a decent moral compass, without requiring that other people sacrifice their love and their happiness, he has bigger problems than our commercialized culture.

Hilzoy 2:21 AM Permalink | Trackbacks | Comments (32)

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March 29, 2009
By: Hilzoy

When You Assume, You Make an Ass of U and Me

Andrew Klavan in the LA Times:

"If you are reading this newspaper, the likelihood is that you agree with the Obama administration's recent attacks on conservative radio talker Rush Limbaugh. That's the likelihood; here's the certainty: You've never listened to Rush Limbaugh.

Oh no, you haven't. Whenever I interrupt a liberal's anti-Limbaugh rant to point out that the ranter has never actually listened to the man, he always says the same thing: "I've heard him!"

On further questioning, it always turns out that by "heard him," he means he's heard the selected excerpts spoon-fed him by the distortion-mongers of the mainstream media. These excerpts are specifically designed to accomplish one thing: to make sure you never actually listen to Limbaugh's show, never actually give him a fair chance to speak his piece to you directly.

By lifting some typically Rushian piece of outrageous hilarity completely out of context, the distortion gang knows full well it can get you to widen your eyes and open your mouth in the universal sign of Liberal Outrage. Your scrawny chest swelling with a warm sense of completely unearned righteousness, you will turn to your second spouse and say, "I'm not a liberal, I'm a moderate, and I'm tolerant of a wide range of differing views -- but this goes too far!""

I started listening to talk radio in 1985. (Gene Burns: he endeared himself to me by beginning every show by saying: "The Gene Burns show is brought to you by the First Amendment of the United States Constitution.") I first heard Rush Limbaugh in late 1988 (possibly early 1989.) He was substituting for someone else, and I remember thinking: this guy is too obviously an idiot even for talk radio. Plainly, I was wrong.

I can't say I have often listened to his show in its entirety, but that's because for the past decade or so, I have mostly listened to talk radio in the car, and I very rarely drive for three straight hours. I have, however, listened to a lot more than snippets I get from "distortion-mongers".

Also, I'm not a guy, I don't have a second spouse, and my chest is not scrawny.

Since Klavan is "certain" I have not listened to Limbaugh, he wants to know why not:

"Let me guess at your answer. You don't need to listen to him. You've heard enough to know he's a) racist, b) hateful, c) stupid, d) merely an outrageous entertainer not to be taken seriously or e) all of the above.

Now let me tell you the real answer: You're a lowdown, yellow-bellied, lily-livered intellectual coward. You're terrified of finding out he makes more sense than you do.

I listen to Limbaugh every chance I get, and I have never heard the man utter a single racist, hateful or stupid word. Do I always agree with him? Of course not. I'm a conservative; I think for myself. But Limbaugh, by turns insightful, satiric, raucously funny and wise, is one of the best voices talking about first principles and policy in the country today.

Therefore, I am throwing down my gauntlet at your quivering liberal feet. I hereby issue my challenge -- the Limbaugh Challenge: Listen to the show."

Been there. Done that. Don't particularly feel the need to do it again.

However, I have a few questions for Mr. Klavan, starting with the most obvious: What makes you so certain you know all about me?

Moreover: your contempt for your imagined audience drips off the page: my chest is scrawny, my feet quiver (??), I am "spoon-fed", I don't think for myself, I make little moues of outrage on command, and, of course, I am "a lowdown, yellow-bellied, lily-livered intellectual coward." Why my second spouse has anything to do with me is a mystery that passeth all understanding, or would be if I had a second spouse.

If this were accurate, we would not need to ask why you think this way about me. However, truth is one, but error is infinite; and since you're wrong, it is worth asking why, of the infinitely many misconceptions available to you, you chose this one in particular. Unlike you, I don't care to make pronouncements about people I don't know, but I'll venture a few guesses.

For one thing, you are "certain" you know all about a large number of people you've never met. You could have written this piece about many of your readers, or liberals you have met; instead, you chose to write about all your readers, and to claim certainty about us. That was unwise -- I mean, what are the odds that not one of your readers has listened to Limbaugh? -- but you either didn't notice or didn't care about the likelihood that you were wrong. I imagine, then, that you do not make epistemic caution your watchword.

Nor does it seem likely that you make it a habit to be generous, or to give people the benefit of the doubt. You certainly didn't do so in this case, and it seems unlikely that you would exercise charity towards people most of the time, but then abruptly switch to contempt when you get an opportunity to publish your thoughts before a very large audience.

You probably don't listen very well, if this essay is anything to go by. Listening well requires not assuming that you know in advance everything the person you're talking to is going to say. Again, most people start by not listening to individuals, and only gradually work their way up to not listening to the entire readership of a major national newspaper. So I'm guessing this is not an isolated episode.

By the same token, I'd guess that you do not have the kind of intellectual curiosity that would lead you to listen, above all, to people you disagree with. Those are the people who challenge you; the people from whom you are most likely to hear something you would never have thought of on your own. You dismiss them out of hand -- an odd thing to do in an op-ed devoted to lecturing others on their closed-mindedness.

Which is why I'd also guess that you do not have a lot of insight into yourself. If you did, it might have occurred to you to notice the rather striking fact that your column displays the very intellectual failings you are complaining about. You might also have noticed the hatred that jumps off the page, and wondered what it says about you, and how you found yourself in a position in which you are so much as tempted to insult a large group of people who are, for the most part, quite unknown to you.

Maybe you picked it up from Limbaugh. He is certainly the most obvious source for your view of liberals. Since you're a conservative and you think for yourself, though, I'm sure you didn't just accept it because you were 'spoon-fed'. There are any number of other possible explanations: hasty overgeneralization from a few liberals you met at parties, a projection of your own flaws onto others, unacknowledged anger, or a need to think of yourself as a lonely island of reason in a sea of idiocy. The one thing I do know is that you could not possibly have arrived at your certainty about what your entire readership is like based on careful reflection and close examination of the evidence. Because it's just not true.

***

Why go on about this? Because it's a danger for all of us, on any side of the political spectrum. It's easy to see what's wrong with making uncharitable assumptions about people you don't know when someone else is making assumptions about you. But it's always worth stopping and asking yourself: do I ever do this to the people I disagree with?

Because it's no more justifiable to do this to conservatives than it is to do it to liberals.

Hilzoy 10:35 PM Permalink | Trackbacks | Comments (73)

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By: publius

GIVE BAYH A CHANCE?.... Evan Bayh's working group hasn't exactly taken the liberal blogosphere by storm. The reaction has been critical, and the most common complaint is that it's simply a tool for business interests. That fear may prove correct. But let me be devil's advocate for a moment and at least try to present a more palatable explanation. In short, the group's primary benefit may be to provide political cover at home to perennially vulnerable Senators.

As an initial matter, let me clarify that I disagree with forming the group. Yes, the business agenda worries me -- but that agenda worries me with respect to all Senators. My bigger gripe is that the mere formation of the group undermines the "optics" of the progressive agenda. That is, by creating a self-described "moderate" group, it necessarily creates the perception that the rest of the Democratic Senate is a bunch of wild-eyed Bolsheviks wearing berets and smoking cloves.

Nothing could be further from the truth, but the Bayh group's mere existence will reinforce that narrative. In doing so, the group will inevitably pull the overall political center of gravity to the right on any given issue. And of course, the media will use any and all means necessary to play up the moderate/liberal division that has featured so strongly in its coverage of Pelosi's House.

So that's my gripe. My hope, though, is that the group will turn out to be relatively harmless. And that question -- are they harmful? -- will turn on why these Senators joined the group. If it's to extract more money for and from businesses, then yes -- it's a bad development.

But it's possible that most members of the group have signed on simply for political cover at home. In other words, maybe this group affirmatively wants to push progressive policies, but needs cover to avoid being painted as too liberal at home. That view is generally consistent with the types of people who have joined. While people like Bayh and Carper are safe, most come from predominantly Republican or toss-up states like Arkansas, Louisiana, North Carolina, Alaska, Colorado, Missouri, Nebraska, Florida, and New Hampshire.

This is a point that people sometimes miss with the Blue Dogs in the House -- membership in the group is a political asset in conservative districts. It's something that legislators can and do emphasize to dull the perception that they're out of touch with their districts.

Obviously, that's not always how it works. And the Blue Dog leadership often pushes a lot of terrible policies for terrible reasons. But my hunch is that a lot of modern Democratic legislators (following the Southern realignment) are actually more liberal than they can admit, and groups like the Blue Dogs can -- somewhat ironically -- help them be more liberal.

The ultimate proof will be in the pudding. If Bayh decides that his mission in life is to help corporate interests, then he deserves sharp criticism. But if the point is simply to shave 5% off of anything Obama proposes to maintain "moderate" perceptions in vulnerable districts, I don't have much of a problem with that. Besides, although Bayh was pretty terrible on Iraq, his legislative record is generally solid.

So maybe it's worth holding fire for a bit to see.

publius 6:38 PM Permalink | Trackbacks | Comments (32)

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By: dday

AVOIDING SLOW-MOTION ESCALATION IN AFGHANISTAN... Barack Obama's appearance on Face The Nation provided the first opportunity to quiz him on his new policy for Afghanistan and Pakistan (Af-Pak, in the preferred foreign policy nomenclature. He categorically ruled out the kind of practices that would greatly expand the war, while simultaneously characterizing the mission of disrupting and dismantling Al Qaeda safe havens, most of which are in Pakistan.

As he carries out a retooled strategy in Afghanistan, President Barack Obama says he will consult with Pakistan's leaders before pursuing terrorist hideouts in that country.

Obama said U.S. ally Pakistan needs to be more accountable, but ruled out deploying U.S. troops there. "Our plan does not change the recognition of Pakistan as a sovereign government," the president told CBS' "Face the Nation" in an interview broadcast Sunday.

One wonders if that sovereignty extends to the continued drone attacks on suspected Al Qaeda inside Pakistan, which under this construction Pakistan's leaders must have knowledge of. What Obama appears to be saying is that he will offer tools to the Pakistanis in exchange for them carrying out the goal of helping the international community minimize the extremist threat inside their borders.

In addition, Obama rejected the premise pushed by those seeking a maximalist strategy that more troops always equals more stability.

OBAMA: What I will not do is to simply assume that more troops always result in an improved situation. […]

But just because we needed to ramp up from the greatly underresourced levels that we had doesn’t automatically mean that, if this strategy doesn’t work, that what’s needed is even more troops.

There may be a point of diminishing returns in terms of troop levels. We’ve got to also make sure that our civilian efforts, our diplomatic efforts and our development efforts are just as robustly encouraged.

I have to note that I find this Af-Pak strategy decidedly mixed. So much of it depends on the participation of the Pakistani government, and yet they have not been trustworthy to this point about going after militant elements in the tribal regions. Obama seems mindful of the dangers of mission creep and a slow escalation, and yet there's no articulated exit strategy to deal with the possibility that the Afghan government is too corrupt and unpopular to sustain itself against a popular insurgency. I appreciate the more comprehensive civilian-military strategy that understands more troops will not complete the job by themselves, yet there has been an explosion of civilian population-inflaming airstrikes inside Pakistan, the very actions that necessitated additional troops in Afghanistan, according to some. Obama praised the work of the Afghan National Army today, calling them "effective fighters" with "great credibility," and yet credible reports have shown the army to be ill-disciplined and addicted to drugs at rates of 75% or more. Afghanistan has been perilously neglected over the past 7 years, and this strategy may represent the best chance to turn around flagging fortunes. But the more you look at the intractable problems that exist in the region, the harder it is to find a vision of success.

dday 5:43 PM Permalink | Trackbacks | Comments (11)

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By: dday

DON'T ASK ABOUT DON'T ASK DON'T TELL... Robert Gates, on Fox News Sunday, argued for a delay in implementing any change to the Don't Ask Don't Tell policy on gays in the military.

Don't expect any change soon to the "don't ask, don't tell" policy about gays in the military.

Defense Secretary Robert Gates says both he and President Barack Obama have "a lot on our plates right now." As Gates puts it, "let's push that one down the road a little bit."

The White House has said Obama has begun consulting with Gates and the chairman of the Joint Chiefs of Staff on how to lift the ban. Gates says that dialogue has not really progressed very far at this point in the administration.

Of course we're in the midst of two wars right now, but I have to agree with Matt Yglesias - this is a truly weak excuse.

It's simply the nature of the military that this "a lot on our plates right now" excuse will almost always be available. In retrospect, the 1990s were a period of relative peace and quiet for the military, but at the time it was seen as a stressful period of multiple deployments (to Haiti, Somalia, Bosnia, Kosovo, Macedonia) around the world mixed with efforts at containment in the Gulf and the Korean peninsula. The Joint Chiefs are never going to say "eh . . . we don’t really have much going on these days."

As Matt notes, racial desegregation policies were carried out by the military at the height of the Cold War. The "we have a lot on our plates" excuse is too commonly used to delay important changes, particularly with respect to civil liberties. And let's flip this on its head. At a time when troops are stressed by multiple deployments, don't we have too much on our plate right now to dismiss willing soldiers for no other reason than their sexual orientation?

dday 4:00 PM Permalink | Trackbacks | Comments (18)

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By: dday

GEITHNER MEETS THE PRESS... President Obama sat down with Bob Schieffer on Face the Nation today, but I was actually more interested in Timothy Geithner's back-to-back appearances on Meet The Press and This Week With George Stephanopoulos. These were his first two appearances on the Sunday shows, coming out of a week where he announced major initiatives to engage in a public-private partnership to buy up toxic assets, and to re-regulate the financial sector. Both interviews had some interesting moments.

On both shows, Geithner was asked about the potential flaw in the plan for toxic assets, that the banks simply won't sell at the prices set by private investors, because taking losses would reveal the banks to be insolvent. Geithner didn't have the best answer for this other than to urge the banks to "take risk again." Indeed, there is no mechanism to force the banks to sell. In addition, on the issue of counter-party payments from AIG, Geithner demurred at any potential efforts to recover money from Goldman Sachs and other banks who were paid out whole on their credit default swaps instead of being forced to negotiate, pivoting instead to the need for more tools to step in and take over a firm like AIG:

GEITHNER: George, we came into this crisis as a country without the tools necessary to contain the damage of a financial crisis like this. In a case of a large, complex institution like AIG, the government has no ability, had no meaningful ability to come in early to help contain the fire, contain the damage, prevent the spread of that fire. Restructure the firm, change contracts where necessary, and helped make sure that the financial system gets through this...

STEPHANOPOULOS: But it would have been the right thing to do, right?

GEITHNER: If we had the legal authority, that's what we would have done. But without that legal authority, we had no good choices. We were caught between these terrible choices of letting Lehman fail -- and you saw the catastrophic damage that caused to the financial system -- or coming in and putting huge amounts of taxpayer dollars at risk, like we did at AIG, to keep the thing going, unwind it slowly at less damage to the ultimate economy and taxpayer.

STEPHANOPOULOS: So how about now, Goldman Sachs is taking other government money. They got this $13 billion whole from AIG. Congressman Brad Sherman and others have said, they should give that $13 billion back.

GEITHNER: George, the important thing is, we have no legal ability now. That's why I went to Congress last week, to propose a broad change in resolution authority so that we have the capacity to do what we do with banks now.

I suspect that will be a less-than-satisfying answer to most people. Basically Geithner is trying to keep the past in the past, particularly with respect to AIG.

On some other fronts, however, Geithner displayed a definite concern to reel in the massive financial sector and build a broad-based economy that can better manage systemic risk. Here is an answer from Meet the Press on his regulatory proposals:

SEC'Y GEITHNER: Core thing is to make sure that the institutions at the center of our financial system are subject to much more conservative, much tougher requirements on capital and leverage that are applied more evenly and more effectively, frankly. We need to make sure that hedge funds and derivatives come within a framework of oversight so we protect the system from the risks they may present. And we need to make sure the government has the authority it needs to come in more quickly, to help contain the damage, restructure the system, so we can have a stronger system going forward [...] We need a better model. What we're proposing to do is use a model that exists for small banks that was designed by the Congress in the wake of the S&L crisis, build on that model and give the government a capacity to act more quickly, more effectively to contain the damage at least risk to the taxpayer and the economy as a whole.

Certainly, over-leveraging caused a good deal of this crisis; other countries where the banks are leveraged more conservatively are in better shape. Obviously, the devil is in the details - there are currently no capital requirements for hedge funds in the Geithner proposal, for example, and the real issue is whether the regulation will be strictly enforced. Our experience with bank regulators who are too cozy with the subjects they regulate recently suggest that the real problem is a lack of will.

But I thought Geithner's willingness to talk about the need to restructure the American economy, at the macro and the micro level, was interesting.

MR. GREGORY: Time magazine this week has its cover, and it's very interesting. I want to put it up on the screen for our viewers to see. "The End of Excess: Why the crisis is good for America." And there's a big red "reset" button. And everybody talks about reset. Obviously this is not a good crisis for America right now. But take a longer view. In the long run, is this crisis necessary for this economy?

SEC'Y GEITHNER: I think the adjustment to a period of excess is necessary. You never, you never want to have a crisis to remind people of the importance of living within your means, not borrowing too much or why regulation of the...(unintelligible)...is important. You never want to have a crisis that's damaging to make that point. But we're going to emerge stronger than this. When we get through this people are going to care less about what they make, more about what they do, what they achieve with what they make, and that will help make this country stronger.

MR. GREGORY: Will the economy be fundamentally different? Will people own fewer homes? I mean, home ownership, will that go down? Will consumption change? Will our lives change in a meaningful way?

SEC'Y GEITHNER: I think people will be living within their means more, which is helpful. We want to have, you know, a stronger, more sustainable recovery. Not a recovery based on a artificial boom that's not going to be sustained. We need to end this, this, this pattern of having booms and busts at the kind of frequency we've seen. That has to change. And that'll make the, that'll make this a better place to live and a more productive economy going forward.

Further, Geithner understands the importance of active engagement with the crisis, not to ease up on the pedal because of a few positive indicators. And he talks about the need for a broader segment of society to share in the benefits of recovery than the wide gap between the rich and poor we've seen explode in the past decade.

GEITHNER: Now, the important thing, though, is that we keep at it. You know, the big mistake governments make in recessions is they put the brakes on too early.

STEPHANOPOULOS: Is that what happened during the depression? Is that what Franklin Roosevelt did?

GEITHNER: That's one thing that happened in the depression. It's happened in Japan, too. It's happened in a lot of countries in the world. They see that first glimmer of light, and the impetus to policy fades and people are putting on the brakes, and we're not going to do that.

STEPHANOPOULOS: So income inequality goes down?

GEITHNER: It should go down. Again, you know, if you look at the record of performance in the '90s, you know, we had very strong productivity growth during a period of fiscal discipline, fiscal responsibility, strong private investment, and the gains were shared much more broadly.

We can do that as a country, but it requires getting this government to do a better job of doing things only governments can do. That's why I assume important we get better outcomes. That's why fixing our health care system and get costs growing more slowly is so important. That's why we need a better energy policy. And that's why infrastructure needs to be improved.

This mirrors what the President has been saying about sustainable growth rather than feeding into the same boom-and-bust cycles and propping up the same elites who took these tremendous gambles. Or in the words of Joe Biden - "We need to save markets from free marketeers."

Obviously, words are less important than actions. But this perspective can hopefully guide the Administration through this crisis, and provide the kind of investments needed to ensure that everyone has the opportunity to share in the recovery. I'm not convinced that Geithner is the best advocate for reducing inequality and stopping the casino on Wall Street, so from the outside the work continues to keep pushing for a newer, safer, more durable economy.

dday 2:53 PM Permalink | Trackbacks | Comments (13)

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By: dday

ENDING WORKSITE RAIDS... Immigration is one issue we haven't heard much about in the Obama Administration, for various reasons. But advocates have not stopped their push to take the undocumented out of the shadows and provide them a path to citizenship. The President has said little publicly on the issue since Inauguration Day, though he promised the Congressional Hispanic Caucus a statement of support in the spring. However, today's Washington Post reports on a policy shift toward punishing the businesses who hire the undocumented rather than the individual workers themselves.

Homeland Security Secretary Janet Napolitano has delayed a series of proposed immigration raids and other enforcement actions at U.S. workplaces in recent weeks, asking agents in her department to apply more scrutiny to the selection and investigation of targets as well as the timing of raids, federal officials said.

A senior department official said the delays signal a pending change in whom agents at U.S. Immigration and Customs Enforcement choose to prosecute - increasing the focus on businesses and executives instead of ordinary workers.

"ICE is now scrutinizing these cases more thoroughly to ensure that [targets] are being taken down when they should be taken down, and that the employer is being targeted and the surveillance and the investigation is being done how it should be done," said the official, discussing Napolitano's views about sensitive law enforcement matters on the condition of anonymity.

"There will be a change in policy, but in the interim, you've got to scrutinize the cases coming up," the senior DHS official said, noting Napolitano's expectations as a former federal prosecutor and state attorney general.

Worksite raids, particularly as they were used in the Bush Administration, were unnecessarily harsh, separated families and in some cases violated due process and other civil liberties. The employers are just as responsible for breaking the law, yet during the Bush years they were almost never charged. This shift in operations at DHS and ICE not only makes sense on a moral and ethical level, but is likely to be more successful in deterring companies from hiring and exploiting undocumented labor.

I know immigration isn't a front-burner issue right now, but there are better priorities than the government operating like commandos and taking workers away from their families, while recognizing that the only way to truly solve the problem is through comprehensive reform.

dday 1:15 PM Permalink | Trackbacks | Comments (14)

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By: dday

TAIBBI DELIVERS THE SMACKDOWN... Earlier this week, Jake DeSantis, an executive at the AIG Financial Products division, quit, and published his resignation letter in the New York Times. Matt Taibbi has the ultimate response.

DeSantis has a few major points. They include: 1) I had nothing to do with my boss Joe Cassano's toxic credit default swaps portfolio, and only a handful of people in our unit did; 2) I didn't even know anything about them; 3) I could have left AIG for a better job several times last year; 4) but I didn't, staying out of a sense of duty to my poor, beleaguered firm, only to find out in the end that; 5) I would be betrayed by AIG senior management, who promised we would be rewarded for staying, but then went back on their word when they folded in highly cowardly fashion in the face of an angry and stupid populist mob.

I have a few responses to those points. They are 1) Bullshit; 2) bullshit; 3) bullshit, plus of course; 4) bullshit. Lastly, there is 5) Boo-Fucking-Hoo. You dog.

There's the big piece of fiction, that DeSantis knew nothing about the exotic financial deals at his 377-person unit, but had to be retained (and compensated with a bonus) to unwind those very same exotic deals. Then there's this other fiction that DeSantis and other Wall Street bonus babies could have gotten all kinds of other good offers from competing firms, even though half of Wall Street is out of work at the moment. But Taibbi focuses on the third argument:

But all of this is really secondary to the tone of DeSantis' letter. He acts like he's a victim because he didn't get to keep his after-tax bonus of $742,006.40 in the middle of a global depression. And he really loses his fucking mind when he writes:

"None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house."

First of all, Jake, you asshole, no plumber in the world gets paid a $740,000 bonus, over and above his salary, just to keep plumbing. Second, try living on a plumber's salary before you even think about comparing yourself to one; you're inviting a pitchfork in the gut by even thinking along those lines. Third, Jake, if you were a plumber, and the electrician burned the house down -- well, guess what? If you and that electrician worked for the same company, you actually wouldn't get paid for that job.

Out in the real world, when your company burns a house down, you're not getting paid by that client. It's only on Wall Street, where the every-man-for-himself ethos is built into an insanely selfish and greed-addled compensation system, that people like you expect to get paid in a bubble -- only there do people expect their performance bonuses no matter how much money the shareholders lose overall, no matter how many people get laid off after the hostile takeover, no matter how ill-considered the mortgages lent out by your division were.

That sense of entitlement has sparked the public anger. It's part of a mindset that assumes the virtue of selfishness and striving for the most dollars as an end in itself. It leads to perversities like Goldman Sachs bailing out their own executives even while the company was being bailed out themselves. It leads to self-interest being valued over the public interest. And it's led, in a very real sense, to the current crisis.

dday 12:15 PM Permalink | Trackbacks | Comments (33)

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By: dday

SECTARIAN VIOLENCE IN IRAQ?... I know the Iraq war is over and everything, but this strikes me as a notable development:

Sunni militants staged a violent uprising in central Baghdad Saturday after Iraqi forces detained a leader of the Sons of Iraq, a mostly Sunni paramilitary force that until recently had received salaries from the United States and is now on the Iraqi government payroll.

Sixteen people were injured in the battle in the once volatile Fadhl neighborhood, and five Iraqi soldiers were missing - snatched Saturday night by members of the Sons of Iraq, a security official said.

The arrest of Adel Mashhadani, who leads the force in Fadhl, and his assistant, heightened fears among Sunnis that the Iraqi government plans to divide and disband the movements now that its taken control of all but a few thousand of the 94,000 members across the country.

Earlier in the week we learned that Sunni Awakening forces weren't receiving the jobs promised to them by the central government. Falling oil prices have lessened the funds for the government, and they are having trouble paying existing employees, so payouts and make-work jobs for Sunni militants are unlikely. And this has caused anger and distrust.

The point of the Sunni Awakening was one of reconciliation, to re-integrate former militiamen into Iraqi society. If each of them could be arrested for past criminal actions, is there any way to avoid massive resistance and a resumption of Sunni-Shiite conflict, as well as violence against US forces (which occurred yesterday as well)?

"They sold him," said Khaled Jamal Qaisi, Mashhadani's deputy, referring to the U.S. military.

"The Americans are vile people and they betrayed our trust," Qaisi said. "We are the ones who fought al Qaida. They want things to return as they used to be? If they don't release Adel al Mashhadani today, you will all be prisoners in your homes."

This could be a blip, and Mashhadani could be a legitimate criminal. But when I start to see pitched gun battles in the streets of Baghdad again, I get nervous.

dday 11:30 AM Permalink | Trackbacks | Comments (12)

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By: publius

THE "OTHER" REASON NOT TO TORTURE.... The Bush administration was fond of citing Abu Zubaida as evidence of the great success of its "interrogation" policy. Bush himself claimed that Zubaida was al Qaeda's "chief of operations," and that he was a fount of valuable information. Zubaida also has the dubious honor of being the first detainee waterboarded.

In 2006, Ron Suskind reported in his book that none of the administration's claims about Zubaida were true. Based on his interviews with intelligence officials, Suskind wrote that Zubaida was not only mentally ill, but also had little knowledge of al Qaeda's actual operations. He was apparently more like a travel agent -- and his stories sent the CIA and FBI down many an unnecessary goose chase. When Bush learned all this, he kept misleading the public anyway.

Today, the Post corroborates Suskind's account that Zubaida was essentially worthless -- and that we waterboarded him for nothing:

In the end, though, not a single significant plot was foiled as a result of Abu Zubaida's tortured confessions, according to former senior government officials who closely followed the interrogations. Nearly all of the leads attained through the harsh measures quickly evaporated, while most of the useful information from Abu Zubaida -- chiefly names of al-Qaeda members and associates -- was obtained before waterboarding was introduced, they said.

Moreover, within weeks of his capture, U.S. officials had gained evidence that made clear they had misjudged Abu Zubaida. . . . None of [their earlier claims] was accurate, the new evidence showed.

Although you should read the whole thing, the article provides a good example of the "administrative" case against torture. The moral argument is obviously clear - and it's one I believe in. Torture is wrong. Period. Full stop.

But there are other reasons to oppose torture. Even assuming you're morally ok with torturing (maybe because you like 24), you still have to show that it's possible to administer fairly.

In other words, another reason not to torture is that it's usually impossible to know whether it's being applied to the appropriate parties. Taking the extreme step of torture requires a level of epistemic confidence we just can't obtain -- particularly in times of rage and trauma, which is often when torture is used.

And this isn't an abstract policy debate. Unfortunately, we've seen torture in action and can make some empirical observations about its use. As it turns out, and just as anyone could have predicted, torture was applied too broadly to innocent people while we were blinded by our post-9/11 anger and thirst for revenge.

Zubaida is a high-profile example of exactly why the rule of law matters. Law isn't about helping bad people. It's about putting the procedural obstacles in place to make sure we don't lash out at the wrong people in fits of rage. It's the whole "Odysseus tied to the mast" point.

The Bush administration abandoned law -- and the results were inevitable, and tragic.

publius 10:34 AM Permalink | Trackbacks | Comments (22)

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JUDD GREGG'S QUEST FOR ATONEMENT.... I'm not exactly sure why Judd Gregg has decided to lead an increasingly nasty line of attacks against Obama. On a purely personal level, you would think that Gregg would be grateful for Obama's vote of confidence. But not so much. Yesterday, Gregg delivered the Republican weekly address and quite graciously noted the following:

He also is proposing the largest tax increase in history, much of it aimed at taxing small business people who have been, over the years, the best job creators in our economy[.] These are staggering numbers . . . and represent an extraordinary move of our government to the left.

Steve offered more examples last week. Again, what's strange is not so much Gregg's opposition, but his aggressive and gratuitous tone. So I have a few potential theories about why Gregg has gone the full Hannity on Obama.

First, maybe it's just something personal. We still don't know what exactly led Gregg to change his mind. Maybe he felt slighted in some way. Maybe Rahm didn't smile at him. Who knows. Given Obama's nature and willingness to accommodate, it's hard to believe he was personally stiffed (or if so, that it couldn't be remedied). But who knows. One thing I do know, though, is that the idea that Gregg was simply unaware that Obama had proposed more spending is absurd.

Second, maybe Gregg has simply been freed from political constraints and is now showing his true ideological colors. Perhaps his perceived moderateness has simply been a function of New Hampshire political realities. Because he is retiring, however, he no longer has to worry about pleasing the median New Hamsphire voter, and is therefore drifting right.

Still, this one seems unsatisfying. Presumably, he knew he would retire when he accepted the cabinet position. If he had been this desperate to escape his life of silent moderate desperation, why accept the position in the first place? Instead, he could have declined, announced his Senate retirement, and then started his new authentic life as a hardcore ideological conservative.

That's why the most likely explanation (to me) is simply that he suddenly realized that he still needs the good graces of Republicans in the future for some reason. Maybe he still has political ambitions (future appointments?). Maybe he wants to cash out and go make tons of money on K Street. Either way, he needs to show that he's "on the team" following his act of high treason.

Obviously, I'm speculating -- I don't know what's going on. But the over-the-top and ostentatious aggression seems more like someone who really really wants the public to know that he opposes Obama. It's just weird.

publius 9:31 AM Permalink | Trackbacks | Comments (30)

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By: Hilzoy

Populist Anger Made Simple

I wonder why people are so angry about bonuses. Do they hate the rich? Do they want to punish success?Are they eaten up inside with resentment? Do they just not want to admit that some people work harder and are more talented than they are?

Or could it be one too many stories like this (h/t)?

"Though the company teetered on the verge of bankruptcy at the time, this past December Philadelphia Media Holdings awarded bonuses to CEO Brian P. Tierney, vice president of finance Richard Thayer and Daily News publisher Mark Frisby. (...)

PMH filed for bankruptcy in February. Toll, of the homebuilding Toll Brothers company, confirmed that the PMH board knew the company¹s fiscal situation was dire. "The financial condition of the papers was obviously not good," said Toll. "We knew what was going to happen sooner or later."

It had earlier been revealed that Tierney received a raise in December, just before Christmas, boosting his pay roughly 40 percent to $850,000. The company initially defended the raise, which was revealed in its bankruptcy filing, by saying that Tierney had taken on extra responsibilities since his initial deal had been struck.

Tierney gave up the raise shortly after it was revealed. Frisby and Thayer simultaneously gave back smaller raises. Now comes news of the bonuses, which were awarded just two months after the company's unions voted to postpone $25-a-week raises for each of its members at the request of PMH."

The bonuses were originally reported to be $350,000 for Teirney and $150,000 for the other two, but the numbers are disputed.

Besides the union members postponing their $25/week raises, the Inquirer laid off 71 people in Jan. 2007, laid off 68 people in Feb. 2008, and laid off 35 more people last December. And those are just the layoffs I could find with a quick search. It also failed to pay a whole lot of bills that it was contractually obligated to pay:

"The filing estimated that $4 million in accrued wages, salaries, commissions, bonuses and reimbursable costs remains unpaid. Mr. Bykofsky told The Bulletin that at least the newsroom at the Daily News had been paid, and the checks had cleared. He said that the staff was given paychecks on Thursday, but nobody was told of the bankruptcy filing.

As part of its bankruptcy filing, PMH admitted to its failure to pay out the withholdings from employee paychecks to the proper third parties. The deductions include employee's shares of health benefits and insurance premiums, 401(k) contributions and union dues.

"Certain deductions that were deducted from regular employees' earnings may not have been forwarded to the appropriate third-party recipients prior to the petition date," reads the filing. "The debtors estimate that as of the petition date, $200,000 in deductions may not have been forwarded to the appropriate third-party recipients."

Further, PMH has also failed to forward employer payroll taxes to the proper authorities, even though they were properly deducted from employee paychecks. PMH estimates that the total number of fees and taxes owed to the authorities does not exceed $550,000."

So: they stiffed the federal government. They didn't pay their employees' 401k contributions and health insurance premiums, though they were deducted from their employees' paychecks. (We can only hope that none of those employees got sick and were denied care.) Hundreds of people have been laid off in the last two years, and workers have had to take several rounds of cuts. Now the company has filed for bankruptcy. And yet, strange to say, right before they filed for bankruptcy they found a way first to raise their CEO's salary by nearly 60%, to $850,000, and then to give him a bonus.

Maybe they did this because Mr. Tierney is a prince among men. Then again, maybe not:

"In early 2008, Tierney warned union representatives of "a dire situation" if costs weren't cut by 10 percent. The papers have slashed more than 400 staff members across all departments since he took over. According to Newspaper Guild representative Bill Ross, Tierney once shook up a management meeting by barking "I will not lose my f*cking house over this!" And Ross says a couple of people emerged from a private meeting with the CEO claiming that he'd spoken to them, in his 12th-floor office, with a baseball bat in his hands. Ross also adds that in January, Tierney took to patrolling the parking garage, watching to see what time employees were arriving to work and asking managers about those who were late. "That's what I'm getting calls about now," says Ross. "He's walking around the parking garage. If he gets hit by a car, it'll be his own fault.""

Heartwarming, isn't it? I can't imagine why anyone is upset.

Hilzoy 1:46 AM Permalink | Trackbacks | Comments (43)

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March 28, 2009
By: dday

KRUGMAN OPENS THE OVERTON WINDOW... The upcoming cover of Newsweek, the Village weekly reader, will feature Paul Krugman, or at least 60%-65% of his face, with the headline "OBAMA IS WRONG: The Loyal Opposition of Paul Krugman."

Krugman, who won the Nobel Prize in economics last fall, has been arguing that Obama is doing too little to respond to threats to the nation's banking and economic system, and he has contended that the $787 billion stimulus bill should have been bigger [...]

Newsweek Editor Jon Meacham explains the choice in a letter to readers: "Every once a while, ... a critic emerges who is more than a chatterer - a critic with credibility whose views seem more than a little plausible and who manages to rankle those in power in more than passing ways. As the debate over the rescue of the financial system - the crucial step toward stabilizing the economy and returning the country to prosperity - unfolds, the man on our cover this week, Paul Krugman of The New York Times, has emerged as the kind of critic who, as Evan Thomas writes, appears disturbingly close to the mark when he expresses his 'despair' over the administration's bailout plan. [...]

"There is little doubt that Krugman - Nobel laureate and Princeton professor - has become the voice of the loyal opposition. What is striking about this development is that Obama's most thoughtful critic is taking on the president from the left at a time when, as Jonathan Alter notes, so many others are reflexively arguing that the administration is trying too much too soon.

"A devoted liberal, Krugman hungers for what he calls 'a new New Deal,' and he prides himself on his status as an outsider. (He is as much of an outsider as a Nobel laureate from Princeton with a column in the Times can be.) Is Krugman right? Is the Obama administration too beholden to Wall Street and to the status quo, trying to save a system that is beyond salvation? Does Obama have - despite the brayings of the right - too much faith in the markets at a time when prudence suggests that they cannot rescue themselves? We do not know yet, and will not for a while to come. But as Evan - hardly a rabble-rousing lefty - writes, a lot of people have a 'creeping feeling' that the Cassandra from Princeton may just be right. After all, the original Cassandra was."

The full Newsweek article is here. Now, some supporters of the President might see this rise of Krugman as a negative development. I see it differently. Krugman has been remarkably consistent to his principles, praising Obama where warranted, even on economic issues. He appreciated Obama's budget and his very legitimate move toward health care reform. His is not a knee-jerk reaction in opposition. Rather, Krugman has taken a critical look at each Obama proposal and made his judgments on the merits based on his own expertise. He has consistently argued that we are in a crisis where the normal rules no longer apply, and we need to look to the past to use the principles of Keynesian economics to dig us out of this rut. And with respect to the banks, he has argued the increasingly consensus view that insolvent banks must be taken over temporarily, their management and bad assets cleared out, and their institutions sold off after the debts are resolved, rather than what he sees as the half-measure of the Geithner plan. In addition, he has the opinion that banks that are "too big to fail" are too big to exist, and we need to fundamentally restructure the financial sector instead of making the sector whole and just turning back the clock to a couple years ago.

Now, you don't have to agree with everything Krugman says - I've seen some very good critiques of things he's said recently. But he is a serious thinker and this is his area of expertise, and he performs an important function. It's an odd quirk of fate that Krugman has as big a megaphone as he does, and so using it to put pressure on the Obama Administration from the left does several things: 1) provides a counter-weight to the conservative critiques of the President, which are usually so nutty that they pale in comparison to reasoned dissent, 2) forces Obama to at least debate the merits of his proposals rather than dismiss all critics, and most important, 3) gives Obama space on the left to put out an more progressive agenda than otherwise. Bill Clinton sums up the dynamic:

I recently heard an interesting anecdote about the 1993 budget fight. While it is probably the most progressive piece of sizable legislation to pass into law in two decades, it was a grueling fight--passing both branches of Congress by a single vote--and it still could have been better. At the signing ceremony, President Clinton found then Representative Bernie Sanders, and told Sanders that he, Sanders, should have made a much bigger public display of how he, Clinton, wasn't giving enough to liberals in the new budget. Such a public display would have provided Clinton more room to maneuver on the left.

The moral of the story is that if no one is criticizing a Democratic administration from the left, then there is no rationale or political space for that Democratic administration to operate on the left. Such criticism is thus even useful to, and desired by, a Democratic administration. If the left stays quiet, it will not be relevant.

Krugman is fulfilling that role, opening what many have called the Overton window, moving the conversation away from the failed conservative ideas of the past.

I also appreciate Krugman's modesty in reacting to the cover story:

I've long been a believer in the magazine cover indicator: when you see a corporate chieftain on the cover of a glossy magazine, short the stock [...] Presumably the same effect applies to, say, economists.

You have been warned.

dday 8:00 PM Permalink | Trackbacks | Comments (41)

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By: Hilzoy

Not To Blame

From CNN:

"Thousands of buildings at U.S. bases in Iraq and Afghanistan have such poorly installed wiring that American troops face life-threatening risks, a top inspector for the Army says. (...)

"It was horrible -- some of the worst electrical work I've ever seen," said Jim Childs, a master electrician and the top civilian expert in an Army safety survey. Childs told CNN that "with the buildings the way they are, we're playing Russian roulette."

Childs recently returned from Iraq, where he is taking part in a yearlong review aimed at correcting electrical hazards on U.S. bases. He told CNN that thousands of buildings in Iraq and Afghanistan are so badly wired that troops are at serious risk of death or injury.

He said problems are "everywhere" in Iraq, where 18 U.S. troops have died by electrocution since 2003. All deaths occurred in different circumstances and different locations, but many happened on U.S. bases being managed by various military contractors. The Army has has reopened investigations in at least five cases, according to Pentagon sources.

Of the nearly 30,000 buildings the Army's "Task Force Safe" has examined so far, Childs said more than half "failed miserably." And 8,527 had such serious problems that inspectors gave them a "flash" warning, meaning repairs had to be completed in four hours or the facility evacuated.

He said the majority of those buildings were wired by contractor KBR, based in Houston, Texas. KBR has faced extensive criticism from Congress over its performance in the war zone. KBR has defended its performance and argued it was not to blame for any fatalities."

Let's see: inspections disclose "some of the worst electrical work I've ever seen", work that puts people's lives at risk, and has already killed 18 people. The majority of this work was done by KBR. And yet KBR is "not to blame". That's totally plausible! For instance, it could be that after KBR's crack electricians got done wiring the buildings, and after their quality control teams checked and double-checked every last circuit to make sure it was done right, bands of evil gnomes went burrowing around behind the wallboards and switched all the wires around.

I'll bet all you KBR bashers didn't think of that. But it could have happened! Blame the gnomes!

Seriously: can you imagine what it would be like to be the parents or spouse or child of someone serving in Iraq, hoping against hope that your loved one would make it home, learning that she had died, and then finding out that it wasn't an IED or a sniper that killed her; it was faulty wiring installed by an American company that hadn't bothered to do its job right?

On the other hand, can you imagine being the kind of person who would decide that despite your company's having gotten billions of dollars in contracts, despite its repeatedly overcharging the government, despite "an impossibly high cost overrun of $436,019,574 on one job, charges of $114,308 for an oil spill cleanup that failed to remove any oil and another set of tasks in which the overruns were 36.9 percent of all costs", you were not going to make sure your company did a good enough job to keep our soldiers from getting killed?

How, exactly, would you live with yourself?

***

Oops, I forgot to add this:
"Defense contractor KBR Inc., which is under criminal investigation in the electrocution deaths of at least two U.S. soldiers in Iraq, has been awarded a $35 million contract by the Pentagon to build an electrical distribution center and other projects there."

I've tried to find out whether it has been cancelled since then, but if it has, I can't find word of it.

Hilzoy 6:48 PM Permalink | Trackbacks | Comments (25)

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By: Hilzoy

Outing AKMuckraker

When John McCain nominated Sarah Palin for Vice President, I (along with a whole lot of other non-Alaskans) suddenly developed an interest in Alaskan politics, and one of the best political blogs I found was Mudflats, written by a blogger who went by the name of AKMuckraker. It didn't occur to me to wonder who AKMuckraker was, or why she was anonymous: she didn't purport to have any sort of inside knowledge about the things she wrote about, or claim any special authority; she was just an informed observer. As far as I was concerned, her identity was her business, as were her reasons for keeping it private.

Mike Doogan, a Representative in the Alaska State Legislature, apparently disagrees. He just outed her. AKMuckraker:

"After the initial surprise wore off, it really hit me. This is an elected State Representative, of my own political party, who has decided that it's not OK for me to control the information about my identity; that it's not OK to express my opinion on my own blog without shouting from the rooftops who I am.

If I were to appear, as many of you have, at a political rally and I were to hold up a sign that expressed my opinion, I don't have to sign my name on the bottom. And if someone wants to come online and read my diary, they are free to do so. And if they want to disagree, that's OK too.

It said in my "About" page that I choose to remain anonymous. I didn't tell anyone why. I might be a state employee. I might not want my children to get grief at school. I might be fleeing from an ex-partner who was abusive and would rather he not know where I am. My family might not want to talk to me anymore. I might alienate my best friend. Maybe I don't feel like having a brick thrown through my window. My spouse might work for the Palin administration. Maybe I'd just rather people not know where I live or where I work. Or none of those things may be true. None of my readers, nor Mike Doogan had any idea what my personal circumstances might be. But that didn't seem to matter. (...)

I don't need to remind Mudflats readers that Alaska is in a time of turmoil. We are facing unknown consequences with an erupting volcano that threatens to wipe out a tank farm on Cook Inlet holding 6 million gallons of oil. We have critical issues in the legislature, including Alaska's acceptance or rejection of hundreds of millions of dollars in federal stimulus money for education and other critical purposes. We have a governor who has just chosen an incredibly divisive and extreme right wing idealogue as our new Attorney General. And there are only three weeks left in the legislative session. It bothers me quite a bit that instead of focusing all his energy on doing his job, one of our elected representatives would rather spend his time stalking and harrassing a political blogger."

It would bother me too, but not as much as the idea that someone who allegedly represents citizens feels that he has the right to disregard their views about whether or not to share their identities. Whether or not AKMuckraker reveals her name ought to be her decision. No one else has the right to make it for her, any more than they would have the right to publish her medical records or her credit history.

It might be different had AKMuckraker made some claim to special inside knowledge. I have not read her entire blog, but as far as I can tell, that's not what she does. She follows Alaskan politics the way anyone might, and comments on what she sees. Her identity is irrelevant to her arguments, and anyone who disagrees with her can challenge them on their own terms, without having to discuss who she is.

I speak from experience here. My reasons for blogging under a pseudonym are pretty trivial: while I have never minded the idea that someone reading my posts could figure out who wrote them, I would rather that people, and in particular my students, not be able to google my name and find my collected political opinions. (I learned, to my surprise, that some students do google their professors around the time I started writing for Obsidian Wings.) I have been outed by several people, generally inadvertently; and while I have never minded all that much, I would rather have been able to make that choice for myself.

But it is a luxury to be able not to mind. I do not work in state government. I do not have an abusive ex-husband from whom I am hiding. My reasons for remaining anonymous are, as I said, pretty trivial. I have no idea whether the same can be said for AKMuckraker's. Nor, more importantly, does Mike Doogan. Did he stop to wonder whether she might have an abusive ex-husband, or a stalker? Or whether she has gotten threats because of her blog? (I have, and I'm Little Miss Reasonable.)

Somehow, I doubt it. If he had stopped to wonder, it might have occurred to him that some people might have very serious reasons for wanting to remain anonymous. But even if AKMuckraker's reasons are as slight as mine -- and if I were Mike Doogan, I'd be hoping that they are -- the fact that he thinks that bloggers should not be anonymous does not mean that he gets to make that choice for others.

Hilzoy 5:23 PM Permalink | Trackbacks | Comments (39)

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By: dday

SPANISH COURT OPENS TORTURE INQUIRY AGAINST GONZALES, ADDINGTON, YOO, OTHERS.... Just off the press from the New York Times:

A high-level Spanish court has taken the first steps toward opening a criminal investigation against six former Bush administration officials, including former Attorney General Alberto R. Gonzales, on whether they violated international law by providing a legalistic framework to justify the use of torture of American prisoners at Guantanamo Bay, Cuba, an official close to the case said.

The case was sent to the prosecutor's office for review by Baltasar Garzon, the crusading investigative judge who indicted the former Chilean dictator Augusto Pinochet. The official said that it was "highly probable" that the case would go forward and could lead to arrest warrants.

I would call this a big deal. As the report notes, Garzon indicted Augusto Pinochet, which led to his arrest and extradition. This would not immediately lead to arrest and trial, but it would certainly confine the six officials to the United States and increase the pressure for stateside investigations. Spanish courts have "universal jurisdiction" over human rights abuses, under a 1985 law, particularly if they can be linked to Spain.

In the case against the former Bush administration officials, last week Judge Garzon linked it to an earlier case in which he indicted five former Guantanamo Bay prisoners who were citizens or residents of Spain. The Spanish Supreme Court had overturned a conviction of one of them, saying that Guantanamo was "a legal limbo" and no evidence obtained under torture could be valid in any of the country’s courts.

The complaint was filed by a Spanish human rights group, the Association for the Dignity of Prisoners, to the National Court, which assigned the case to Judge Garzon. After the complaint is reviewed by the prosecutor, a criminal investigation would be likely to begin, the official said. If the case proceeds, arrest warrants could still be months away.

The 98-page complaint, a copy of which was obtained by The New York Times, was prepared by Spanish lawyers who have also relied on legal experts in the United States and Europe. It bases its case on the 1984 Convention Against Torture, which is binding on 145 countries including the United States.

The six officials in the inquiry are:

• former Attorney General Alberto Gonzales
• John Yoo, the Justice Department attorney who authored the infamous "torture memo"
• Jay Bybee, Yoo's superior at the Office of Legal Counsel, also involved in the creation of torture memos
• David Addington, Dick Cheney's chief of staff and legal adviser
• Douglas Feith, the former undersecretary of defense for policy
• William Haynes, the legal counsel at the DoD

The amount of material connecting these six to the creation, authorization and direction of state-sanctioned illegal torture, based on perverse and discredited reasoning, is voluminous, and given the record of Garzon, I would imagine this will lead to arrest warrants.

This story shows once again the growing global unease with the implicit policy of the United States to conveniently forget the torture and other abuses of the Bush regime. In England, police are investigating whether British intelligence officers knew about and prolonged the torture of Binyam Mohamed, the recently released Guantanamo detainee. As Glenn Greenwald notes, other countries have not abandoned their commitment to the rule of law.

As The Guardian reported, the British Government was, in essence, forced into the criminal investigation once government lawyers "referred evidence of possible criminal conduct by MI5 officers to home secretary Jacqui Smith, and she passed it on to the attorney general." In a country that lives under what is called the "rule of law," credible evidence of serious criminality makes such an investigation, as The Guardian put it, "inevitable." British Prime Minister Gordon Brown has clearly tried desperately to avoid any such investigation, yet as The Washington Post reported this morning, even he was forced to say in response: "I have always made clear that when serious allegations are made they have got to be investigated."

Wouldn't it be nice if our government leaders could make a similar, extremely uncontroversial statement -- credible allegations of lawbreaking by our highest political leaders must be investigated and, if warranted, prosecuted? In a country with a minimally healthy political culture, that ought to be about as uncontroversial as it gets. Instead, what we have are political leaders and media stars virtually across the board spouting lawless Orwellian phrases about being "more interested in looking forward than in looking backwards" and not wanting to "criminalize public service." These apologist manuevers continue despite the fact that, as even conservative Washington Post columnist Anne Applebaum recently acknowledged in light of newly disclosed detailed ICRC Reports, "that crimes were committed is no longer in doubt."

The end of the NY Times article shows why the US can hardly claim that Spain is acting irresponsibly beyond its own borders and violating the soveriegnty of other nations, because in one recent case we did almost exactly the same thing:

The United States for the first time this year used a law that allows for the prosecution in the United States of torture in other countries. On Jan. 10, a Miami court sentenced Charles Taylor, the former Liberian leader, to 97 years in a federal prison for torture, even though the crimes were committed in Liberia.

Last October, when the Miami court handed down the conviction, Attorney General Michael B. Mukasey applauded the ruling and said: "This is the first case in the United States to charge an individual with criminal torture. I hope this case will serve as a model to future prosecutions of this type."

So do I.

dday 4:00 PM Permalink | Trackbacks | Comments (22)

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By: publius

OMINOUS CANARY SONGS.... Count me among the skeptical of Obama's new Afghanistan strategy. What really worries me is what I'll call the "reverse canary" problem. Simply put, the wrong people are too happy.

You're all familiar with the phrase "canary in the coal mine." The idea was that miners would bring canaries down into the mines as warning signals. When the air became toxic, the canaries would be affected first -- thus warning the miners of imminent danger.

With respect to the Afghanistan policy, the problem isn't that the "signaling" canaries are dropping dead. The problem is that they're too happy -- they're chirping with excessive mirth. Specifically, when Max Boot, Robert Kagan, Bill Kristol, and the Post editorial board are all excited about the policy.... well, it might be time to get out of the mine.

More substantively, my fear isn't so much with the policy announced yesterday. For the short term, Obama's policy strikes a reasonable balance between the "minimalist" and "maximalist" camps, which are helpfully described by Ilan Goldenberg. I'm ok with giving a "middle ground" strategy of regional diplomacy and reconciliation a chance -- but only for the short term. If things don't go well, then I agree with Goldenberg that we need to change course:

If a middle ground strategy shows little to no progress within the next 12-18 months than it would be wise for Obama and his advisors to reconsider and move to a [minimalist] strategy.... This will be extraordinarily difficult as once you commit to a strategy changing course involves admitting failure and reevaluating -- something American administrations have been historically bad at.

Precisely -- and that's what worries me. This strategy seems extremely susceptible to morphing into an open-ended, long-term commitment without clear objectives. Frankly, I didn't see any exit strategy yesterday. I saw no verifiable metrics for determining whether we're achieving our objectives (and on that -- is the objective to disrupt al Qaeda, or to stabilize the government?). I've heard promises of benchmarks -- but nothing yet. And even assuming concrete benchmarks emerge, it's hard to believe we'll really pack up and leave if they're not met.

Let's be clear -- this is an escalation. It's a reasonable one, for now. But these things tend to snowball. To echo Robert Frost, way leads on to way. And if things deteriorate, or if our allies depart, it's easier to imagine that additional escalation (rather than minimalism) will follow. It's not that I don't believe in the goal -- I'm just skeptical that increased military efforts are capable of achieving these goals.

And that brings me to the canaries. The problem with the neocon foreign policy view is (among other things) its excessive overreliance on military force. Escalation and more force is the answer to most any question. Some sincerely believe in this policy -- others are probably playing out some Freudian drama because they were teased on the playground. But anyway, for whatever reason, more force is always the answer with them -- and it's almost never the right choice.

And that's frankly what worries me about their enthusiasm for Obama's strategy. They recognize not only that it's an escalation, but also how readily the policy lends itself to future escalations.

The past few years have shown us that these people are drawn to failed policies like moths to burning flames. The fact that they are finding this one so attractive should give us pause.

publius 2:09 PM Permalink | Trackbacks | Comments (21)

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By: dday

RED RIVER FLOODING AND NATIONAL SERVICE... A spate of winter storms in the Fargo, ND/Moorhead, MN area have threatened homes and businesses as the Red River rises and increases the potential for a catastrophic flood. Thousands of volunteers reinforced dikes and levees, raising the floodwall level to roughly 43 feet, and many communities already submerged have been evacuated. On Friday the water level in the river rose to a level approaching 41 feet, with cresting expected in the next 48 hours. But this morning, freezing temperatures have slowed the rise of the river, as snow has not melted, and the National Weather Service cautiously announced that the river crested at a lower level than predicted. This is positive news suggesting that the levees will hold, but the situation remains dangerous, with more storms in the forecast for next week and the water level still at a record high.

In his weekly radio address, President Obama expressed his support for those affected by the flooding, citing his disaster declarations for North Dakota and Minnesota, the FEMA response and the US Army Corps of Engineers support in coordinating the building of makeshift levees. It's good to see this kind of coordination and attention in the midst of the emergency, not after it.

In addition, the President also connected the situation to the theme of national service that Steve discussed yesterday.

For at moments like these, we are reminded of the power of nature to disrupt lives and endanger communities. But we are also reminded of the power of individuals to make a difference.

In the Fargodome, thousands of people gathered not to watch a football game or a rodeo, but to fill sandbags. Volunteers filled 2.5 million of them in just five days, working against the clock, day and night, with tired arms and aching backs. Others braved freezing temperatures, gusting winds, and falling snow to build levees along the river's banks to help protect against waters that have exceeded record levels.

College students have traveled by the busload from nearby campuses to lend a hand during their spring breaks. Students from local high schools asked if they could take time to participate. Young people have turned social networks into community networks, coordinating with one another online to figure out how best to help.

In the face of an incredible challenge, the people of these communities have rallied in support of one another. And their service isn't just inspirational – it's integral to our response.

It's also a reminder of what we can achieve when Americans come together to serve their communities. All across the nation, there are men, women and young people who have answered that call, and millions of other who would like to. Whether it's helping to reduce the energy we use, cleaning up a neighborhood park, tutoring in a local school, or volunteering in countless other ways, individual citizens can make a big difference.

This is the tradition of national service that conservative commentators have likened to Hitler Youth. This is the call to sacrifice that Chuck Todd doesn't seem to understand because it doesn't involve cutting Social Security or Medicare benefits. Obama's support of national service represents a continuum throughout his campaign and his public life, that we have a responsibility to one another, that we can do our part for change as neighbors and fellow citizens. I would ask those naysayers on the right if they asked the residents of these communities in North Dakota and Minnesota their opinion.

dday 2:08 PM Permalink | Trackbacks | Comments (5)

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By: dday

A NEW BRAND OF STUPID ON CLIMATE CHANGE... Today is the second annual Earth Hour, a worldwide campaign to raise awareness on the issue of climate change. At 8:30pm local time, major businesses, local and national points of interest, and individual homes will dim their lights for one hour. Already today, sites ranging from the Sydney Opera House to the Egyptian Pyramids have lowered their lights in recognition, and 4,000 cities in 88 countries will participate in the event. Sponsored by the World Wildlife Fund, Earth Hour will provide, in the words of UN Secretary General Ban Ki-moon, "a way for the citizens of the world to send a clear message: They want action on climate change."

It will also provide a new way for conservatives to show what hardcore rebels they are.

Tomorrow is something called Earth Hour. Take the official RedState Pledge:

I do solemnly swear that I will honor Earth Hour by turning on every light in my residence at 8:30 p.m. on March 28, 2009, for one hour. God said, "Let there be light." Who are we to argue?

Yeah, they want you to turn your lights off, but everybody knows darkness leads to crime.

It's amusing to see Erick Erickson so terrified of possible boogeymen infiltrating his house from 8:30 to 9:30, as well as the wingnut tendency to go after all the most important targets, like symbolic light-dimming actions. But this has now become a cliche. My local wingnut radio hosts were making the same "jokes" last night: "I'll turn on every light in the house!... I'll keep my car running for an hour!" And of course, Glenn Beck devoted an entire show to running his car in the parking lot a couple months ago.

Conservatives are allowed to show their ignorance of sound science any way they want, but they ought to at least liven it up a bit. The "I'm going to turn on every light in the house" bit is getting about as hackneyed as jokes about airline food and Gilligan's Island ("all those clothes for a three-hour tour?"). Let me introduce you to a Republican with innovative and novel thinking about climate change. It's embarrassingly wrong, but at least it's new:

We've repeatedly documented Rep. John Shimkus' ridiculous positions on climate change. During a House Subcommittee on Energy and Environment hearing earlier this week, the downstate Republican was in rare form. Speaking to British global warming denier Lord Christopher Monckton, Shimkus made a novel argument that because plants need carbon dioxide for photosynthesis, limiting our man-made carbon dioxide emissions would actually kill the world's plants. Watch the exchange here:

SHIMKUS: It's plant food ... So if we decrease the use of carbon dioxide, are we not taking away plant food from the atmosphere? ... So all our good intentions could be for naught. In fact, we could be doing just the opposite of what the people who want to save the world are saying.

I've always wanted to use this line on Steve's site, and now it's appropriate: Shimkus did not appear to be kidding.

Shimkus basically maps out a world where, prior to the Industrial Revolution, no plant life existed, because we hadn't yet set into motion mass production of their "food." In this scenario, plants actually sprung to life shortly after the invention of the Watt steam engine in the 18th century.

Now THAT'S a new one! Relentlessly stupid, sure, but new.

dday 12:50 PM Permalink | Trackbacks | Comments (35)

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By: dday

WHEN THE PRESS CORPS ATTACKS... The White House Press Corps has had it. They're tired of the games, the evasions, the disrespect. They will boldly stand up for their profession and not hold back any more. Now the truth can be told. They will ask the penetrating, uncomfortable questions that no Press Secretary wants to hear.

They are going to finally call out the Administration for their lies in the run-up to Iraq!

No, scratch that, they're going to be pissy about Robert Gibbs walking in 20 minutes late to a briefing.

As the daily press briefing began this afternoon at 2:07pmET, several members of the White House press corps spoke up to press secretary Robert Gibbs about his tardiness.

FishbowlDC reports that the briefing began about 20 minutes after the two minute warning was given and that ABC's Jake Tapper "had taken charge with two visits to the Lower Press office to complain during the long wait."

By the time Gibbs arrived, members of the press corps could be heard complaining saying things like, "it irritates everybody here."

We hear the late briefings are a pattern, and that it was not an issue during the Bush administration.

On one level, reporters have deadlines, and this particular breed of reporters needs Gibbs to do their job. So fine. On another level, Gibbs was apparently late this time because he was talking to the President about an issue sure to come up in the briefing. Also, of all the things to finally blow their stack about, the press corps reaches their limit on punctuality? Lie to them, fine, just don't make them sit in an air-conditioned room for an extra five minutes. Show some respect for the office like George W. Bush did.

By the way, if Gibbs were prompt, maybe the press would have more time for scintillating, piercing questions like this.

MS. ROMANO: The teleprompter changed last night.

MR. GIBBS: Mm-hmm.

MS. ROMANO: What was that about that? It's a big jumbotron now.

MR. GIBBS: You know can I tell you this?

MS. ROMANO: Yes.

MR. GIBBS: I am absolutely amazed that anybody in America cares about who the President picks at a news conference or the mechanism by which he reads his prepared remarks. You know, I guess America is a wonderful country.

MS. ROMANO: You're saying this is all Washington Beltway stuff?

MR. GIBBS: I don't even know if it's that. I don't think I should implicate the many people that live in Washington.

MR. GIBBS: No, I you know, I don't think the President let me just say this: My historical research has demonstrated that the President is not the first to use prepared remarks nor the first to use a teleprompter.

I'm all for a vigorous press fighting for their rights to access, but when they continually take their cues from Matt Drudge headlines, isn't Gibbs' tardiness a virtue and not a vice?

dday 12:09 PM Permalink | Trackbacks | Comments (28)

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By: dday

TEDISCO, DUCK.... It has been notable to see the President and the Vice President get fairly involved in the special election in NY-20 over the last week or two, despite the dynamics of the district presumably favoring a Republican. Obviously something flipped and they feel like Scott Murphy can take the seat (incidentally, liberal netrooters, Murphy has announced his intention to join the Blue Dogs, so caveat emptor). And if you want to know why, just check out what Eric Sundwall, the Libertarian candidate who was kicked off the ballot at the last minute after having his signatures challenged, had to say about Republican Jim Tedisco:

Mr. Tedisco denies any involvement with the concerted effort by his supporters to knock me off the ballot. I don't believe him. The ruthless effort by his supporters to knock me off the ballot without a word of protest by him proves his unfitness for any office let alone Congress in these critical times.

I will be voting for Scott Murphy on Tuesday. While we disagree on some important issues, I find him to be a man of honor, a good family man and successful businessman. Unlike Tedisco, he actually lives in the District. And, unlike Mr. Tedisco, I view Scott's business success as a virtue, not a vice.

I urge my supporters and all those who believe in open and free elections to show their disgust at the tactics of the Republican political machine to win at all costs. Please join me in voting for Scott Murphy on Tuesday.

Obviously, the Libertarian candidate dropping from the ballot and throwing his support to the Democrat means little on a practical level. But the fact that Tedisco's tactics so angered him that he decided to blast him clearly shows how Tedisco is making friends and influencing people in the district. And the slow-motion winnowing of the GOP into a small regional party in the South continues apace.

dday 11:14 AM Permalink | Trackbacks | Comments (7)

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By: dday

OBAMA AND THE BANKERS... Hello all, and thanks to Steve for the opportunity to fill in. Because he is more machine than man it takes two of us to do so. Anyway, let's get to it.

President Obama met with the nation's top bankers yesterday, and I think "jovial" would best describe the atmosphere, at least from press reports. The White House has calmed their rhetoric toward Wall Street of late, and after the meeting the bank CEOs were all smiles. They even might do us all the favor of keeping taxpayer money, which is awful nice of them.

Obama apparently did impress upon them the need to curb their excesses, at least in public.

Sitting at the center of a round table in the state dining room, Mr. Obama spoke firmly about how there had been a "cultural shift" regarding executive bonuses and Wall Street pay. He said that Americans had a right to be angry. "The anger is real," the president said, according to people who attended the meeting. "The industry needs to show that they get it on the compensation issue."

"Excess is out of fashion," Mr. Obama added, noting that pay must be linked to performance.

The bankers nodded, but made no firm commitments.

As to any real change in compensation rules, I'm not from Missouri but they'll have to show me.

But I agree with Moe Tkacik that JP Morgan CEO Jamie Dimon might have offered a bit too much truth in the post-meeting press scrum:

"One of the main root causes [of the crisis], and this has been going on for a long time, was the huge trade and global financing imbalances which fueled very low rates and excess consumption, and over a long period of time I do not believe you can run those kind of trade deficits..."

Dimon was getting at one of the root structural causes of the current crisis -- America takes, the world (China especially) makes, an unsustainable situation sustained above all by an increasingly usurous financial services industry. As the CEO of PNC Financial Services just pointed out, banking is the biggest sector of the American economy -- and it's been to the detriment of everything else.

...it was precisely Wall Street and corporate America that relentlessly lobbied the government over that very long period of time to enable those gaping imbalances to gape ever wider. What both Barack Obama and Jamie Dimon implicitly understand is that publicly traded corporations are not engineered to look out for their long-term interests. By allowing the financial sector to bloat "too big to fail", the country lost the kind of industries that are too vital to fail -- which is to say, manufacturing.

This is the point that my father, he of the 40 years in the textile industry, has made repeatedly to me since he lobbied Congress to save his industry - in 1979, mind you. A society that loses its industrial base at the expense of, in this case, the financial services sector, puts itself in great peril. The size and the increasingly lucrative nature of an overgrown financial sector combined with the desire for perpetual growth creates just the kind of bubble-based economy, and dangerous aftermath, that we see today.

I don't think Dimon was actually calling for the shrinking of his own industry, but that was the effect, at least on me.

dday 10:20 AM Permalink | Trackbacks | Comments (15)

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By: publius

THE EDUCATION OF HARRY REID.... These comments from Reid fall into the category of "one can only hope he's BSing":

Senate Majority Leader Harry Reid said Friday that John Roberts misled the Senate during his confirmation hearings by pretending to be a moderate - and that the United States is now "stuck" with him as chief justice.

Ah yes, no one could have predicted.... Please. The Senate isn't the most discerning bunch of people in the world, but it was pretty clear to all that Roberts was strongly conservative.

Anyway, what really bothers me about Reid's comments is that they reinforce the idea that confirmation hearings matters. They don't -- and we'd all probably be better off ignoring them entirely.

Reid is suggesting that Senators based their vote on what Roberts said during the confirmation hearings. Again, I'm just hoping that's BS, because the alternative (that Senators actually voted based on his confirmation promises) is pretty depressing.

But the focus on confirmation hearings is consistent with how the media builds these things up. Following a Supreme Court nomination, the dramatic "conflict" focuses too heavily on whether the nominee can survive the hearings. If so, he or she is golden. That's the great test for life tenure in our time (at least for people who are minimally qualified -- unlike Harriet Miers).

What's funny, though, is that "surviving" means successfully not answering questions from lots of different people over long periods of time. The more you fail to do, the greater you succeed. It's a completely pointless exercise.

Actually, it's worse than pointless because it distracts us from looking at what really matters -- the nominee's past record. There's simply no better predictor than past performance. And if we didn't have the Kabuki theater of confirmation hearings hogging the spotlight, the political focus would hopefully shift to the nominee's record where it belongs.

Anyway, it's all moot now -- I'm guessing I'll like the next nominee better. But I'll still be annoyed by the pointless hearings process. Errr.... I mean that the absolute most critical test for Obama's nominees should only be whether they can survive the grueling nomination hearings.

publius 10:08 AM Permalink | Trackbacks | Comments (25)

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By: publius

A UNIFIED THEORY OF BENEN.... I wanted to briefly introduce myself and thank Steve for his probably foolish decision to trust me with the keys. I write as publius at Obsidian Wings along with Hilzoy and other questionable characters like Eric Martin and Von.

Anyway, I've been a longtime fan of Steve's -- and I was a loyal reader of Carpetbagger (his old blog) for years. During that time, I concluded that he's actually a machine -- a non-carbon based Terminator-like entity. It's the only plausible explanation.

Seriously, he's the hardest working man in the blogosphere, so I hope he actually takes a much-deserved break.

publius 9:26 AM Permalink | Trackbacks | Comments (9)

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RECHARGING THE BATTERIES.... Regular readers know that I'm a shameless workaholic loath to take time off from blogging, so it may come as a surprise to learn that I'm stepping away from the keyboard for a few days.

While I'm gone, Hilzoy will be around, and I've recruited dday from Hullabaloo and publius from Obsidian Wings to help out, too. (That all of them write pseudonymously is just a coincidence.)

I'll be back on Tuesday morning, rested and ready. Be nice to the substitutes -- everything from the guest posters will be on the final exam, so pay close attention.

Steve Benen 8:00 AM Permalink | Trackbacks | Comments (26)

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March 27, 2009

FRIDAY'S MINI-REPORT.... Today's edition of quick hits:

* President Obama's new policy for Afghanistan and Pakistan has been generally well received.

* Best wishes to everyone in Fargo, North Dakota, and the surrounding areas, where the Red River has swelled to 40 feet, threatening the dikes fortifying the city.

* Consumer spending went up in February?

* UPS is dropping its sponsorship of Bill O'Reilly. I'm inclined to reward good behavior.

* Sometimes, we get lucky and suicide bombers accidentally blow themselves up without hurting any innocent people.

* The DNC is milking the House Republicans' "budget" for all it's worth. I can't say I blame them.

* And speaking of the House Republicans' "budget," meet Ian Dobbin.

* A new threat to the lives of U.S. troops is ... poorly installed electrical wiring by Halliburton?

* Unemployment keeps getting worse in South Carolina. Unfortunately for those who are losing their jobs, they have a governor who opposes economic recovery efforts.

* Sen. Dianne Feinstein (D-Calif.), for reasons I can't understand, may oppose EFCA, too.

* A growing number of Americans are just now starting to think the economy might be getting better.

* Good: "Jurors have acquitted one of the nation's few late-term abortion providers of violating Kansas law requiring an independent second opinion for the procedure. Dr. George Tiller was found not guilty Friday of 19 misdemeanor charges stemming from some abortions he performed at his Wichita clinic in 2003."

* Also good: "Pennsylvania's highest court on Thursday overturned hundreds of juvenile convictions issued by a corrupt judge who took millions of dollars in kickbacks from youth detention centers."

* Marriage equality advances in New Hampshire, but it's prospects remain iffy.

* Spakovsky wins the Irony Award for the day.

* Tammy Bruce helps keep zombie lies going.

* I don't think conservatives understand why Bush's constant talk about 9/11 was problematic.

* It's a shame to see the Christian Science Monitor wrap up its print edition.

* The Homeless Veterans Reintegration Program deserves to be extended.

* And finally, davenoon imagines what it's like for CNN's Ed Henry to visit a fast-food establishment. Hilarity ensues.

Anything to add? Consider this an open thread.

Steve Benen 5:30 PM Permalink | Trackbacks | Comments (25)

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EXPANDING NATIONAL SERVICE.... The Senate easily approved legislation last night that would "broadly expand national community service programs." Naturally, the far-right is livid.

The bill will increase the number of positions available in AmeriCorps from 75,000 to 250,000, and will create "new cadres of volunteers focused on education, clean energy, health care and veterans." The House is expected to endorse the Senate version next week, and will be signed into law by President Obama soon after.

What's more, this has become largely a bipartisan issue. While President Clinton's AmeriCorps initiative in 1993 was largely rejected by Republican lawmakers, last night's vote wasn't close -- 79 senators supported the expanded national service opportunities, including a majority of the Senate Republican caucus. Indeed, there were even a half-dozen GOP co-sponsors.

So, now that both parties see the value in national service, the issue can be added to the (short) list of policy areas where there's widespread agreement? Not quite yet.

Consider the reaction this week from right-wing bloggers. One compared community service programs to "Hitler youth." Malkin called this a "left-wing slush fund." WorldNetDaily said, well, the kind of nonsense WorldNetDaily always says.

Before Drudge and Fox News convince gullible news consumers -- and a little too much of the media establishment -- that "national service" is code for authoritarianism, let's point out two key observations. First, there's nothing in the legislation requiring public service. It's about expanding service opportunities for those who choose to pursue them.

Second, it's a bipartisan bill. It passed the Senate with 79 votes, and passed the House with 321 votes. Why on earth would conservative Republican lawmakers vote for a "left-wing slush fund" that would create some kind of "Hitler youth"-style program?

Steve Benen 4:45 PM Permalink | Trackbacks | Comments (17)

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CORNYN'S 'POWER GRAB'.... The non-partisan Congressional Research Service reported last year that historically, when a president is of one party and both of a state's senators are of a different party, "the primary role in recommending candidates for district court judgeships is assumed by officials in the state who are of the President's party."

That makes sense. For example, when Bush was president and he needed recommendations for the federal bench in a state with two Democratic senators, there was no point in asking them for a list of names -- the Bush White House wouldn't approve of the jurists the Democrats had in mind. In those cases, Bush would turn to either House Republicans from those states, or Republican officials at the state level.

With this in mind, the Obama White House stated plainly this week that it would work with the Democrats in Texas' House delegation when selecting judges, U.S. attorneys, and U.S. marshals.

Yesterday, Sen. John Cornyn (R-Texas) denounced this and described it as wholly unacceptable. And what kind of process does Cornyn prefer?

Cornyn says he intends to send Obama candidates who have been screened by the committee he and Hutchison have always used for making nominations -- a committee he admits is "heavily stacked with Republican lawyers."

And why is that? Because he doesn't want the selection process "to be viewed as a partisan exercise" and this is the only way he can "depoliticize the nomination process."

So when there was a Republican in the White House, Cornyn, Hutchison, and a bunch of Republican lawyers controlled the judicial selection process because that is what the people of Texas elected them to do ... but now that there is a Democrat in the White House, Cornyn, Hutchison, and a bunch of Republican lawyers must maintain control over the process in order "depoliticize the nomination process."

And Cornyn wonders why it's so difficult to take anything he says seriously.

Steve Benen 3:50 PM Permalink | Trackbacks | Comments (13)

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GIBBS PUSHES BACK.... After the president's prime-time press conference this week, two of the more popular topics of conversation in major media outlets were Obama reading an opening statement -- I still have no idea why this is a "story" -- and the president not calling on reporters from major daily newspapers.

Chatting yesterday with the Washington Post's Lois Romano, White House Press Secretary Robert Gibbs responded to the media's inordinate interest in these topics. (via Jamison Foser)

MS. ROMANO: The teleprompter changed last night.

MR. GIBBS: Mm-hmm.

MS. ROMANO: What was that about that? It's a big jumbotron now.

MR. GIBBS: You know can I tell you this?

MS. ROMANO: Yes.

MR. GIBBS: I am absolutely amazed that anybody in America cares about who the President picks at a news conference or the mechanism by which he reads his prepared remarks. You know, I guess America is a wonderful country.

MS. ROMANO: You're saying this is all Washington Beltway stuff?

MR. GIBBS: I don't even know if it's that. I don't think I should implicate the many people that live in Washington.

MR. GIBBS: No, I you know, I don't think the President let me just say this: My historical research has demonstrated that the President is not the first to use prepared remarks nor the first to use a teleprompter.

I've been watching presidential press conferences for about as long as I can remember, and seeing presidents begin with an opening statement is hardly unusual. The difference this week, I suppose, is that Obama read from a screen, while his modern predecessors read from pieces of paper. This, for odd reasons I'll never understand, has caused quite a stir among most of the media establishment.

Given this, Gibbs' response to Romano sounds about right.

Steve Benen 3:00 PM Permalink | Trackbacks | Comments (40)

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THE RNC POLLS ITS SUPPORTERS.... The Republican National Committee emailed a survey to its supporters this morning. The questions are broken up into two categories: "Domestic and Social Issues" and "Homeland Security and Defense Issues."

Of course, the wording a survey uses can have some influence on the results. Consider how the RNC worded some of their more notable questions. (thanks to readers GB and CR for the tip)

* A recent national poll reported that nearly 25% of Americans want the government to pass more socialism. Do you agree or disagree?

* Which do you believe creates more jobs for the American economy: Government Programs and Spending or The American Free Enterprise System?

* Should Republicans unite to block new federal government bureaucracy and red tape that will crush future economic growth?

* Should we do everything we can to block Democrats who are trying to shut down conservative talk radio with the so-called "fairness doctrine"?

* Should we resist Barack Obama's proposal to spend billions of federal taxpayer dollars to pay "volunteers" who perform his chosen tasks?

* Should bureaucrats in Washington, DC be in charge of making your health care choices instead of you and your doctor?

* Do you think U.S. troops should have to serve under United Nations' commanders?

These are actual questions from the survey, not paraphrases intended to make the RNC appear silly.

Chances are, the RNC just sends out a survey like this to encourage supporters to send in a donation, and maybe to help bolster the mailing list. I suspect the party doesn't even bother to tally the data.

But I'm trying to imagine the loyal Republican activist who got an email this morning from Michael Steele, and proceeded to sit down and answer all of the many questions in this obviously-bogus "survey." Scary thought.

Post Script: Before getting into these specific issue areas, the survey asks respondents, "What are the weaknesses of the Republican Party?" There are five choices: "Bad Messaging," "Poor Response to Democrats, "Republicans who don't vote like Republicans," "Standing Up for Principles," and "Need to Lead in Congress."

Respondents are encouraged to check all that apply, but there isn't a field for "other."

Steve Benen 1:55 PM Permalink | Trackbacks | Comments (49)

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REID SEES LIBERAL PRESSURE AS 'NOT HELPFUL'.... Harry Reid covered quite a bit of ground at a breakfast briefing this morning hosted by the Christian Science Monitor, but of particular interest were his comments about progressive ad campaigns from groups like MoveOn.org and Americans United for Change.

Senate Majority Leader Harry Reid said Friday that liberal groups targeting moderate Democrats with ads should back off, saying pressure from the left wing of his party won't be helpful to enacting legislation.

"I think it's very unwise and not helpful," Reid said Friday morning. "These groups should leave them alone. It's not helpful to me. It's not helpful to the Democratic Caucus."

Reid, who said he hadn't seen or heard the ads, added that "most of [the groups] run very few ads -- they only to do it to get a little press on it."

Now, in fairness, I haven't seen a complete transcript of Reid's remarks, so maybe he added some details and context to this. But given the report, I still have no idea why Reid would find progressive pressure to be "very unwise and not helpful."

Take the budget fight, for example. The White House presented Congress with a progressive and ambitious plan. Reid likes the plan, as do MoveOn and Americans United for Change. Some members of Reid's caucus want to water down the budget and make it worse, so MoveOn and Americans United for Change are encouraging them not to.

What's unhelpful about that?

Reid added, "Legislation is the art of compromise. Consensus-building." Fair enough. But legislating is also about responding to public pressure. Democratic lawmakers are already facing plenty of pressure -- some from within the caucus itself -- to move away from the popular and progressive agenda proposed by the administration. MoveOn and Americans United for Change are helping to add some balance to the equation.

Reid should be sending them "thank you" notes.

Steve Benen 1:20 PM Permalink | Trackbacks | Comments (41)

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BACHMANN WANTS A REVOLUTION.... Rep. Michele Bachmann (R-Minn.) -- who is, by the way, mad as a hatter -- appeared on a radio show earlier this week, describing elected Democratic officials as the "enemy" and encouraging her constituents to be "armed and dangerous." Soon after, appearing on Sean Hannity's radio show, Bachmann went even further.

"We are headed down the lane of economic Marxism. More quickly, Sean, than anyone could have possibly imagined. It's difficult for us to even keep up with it day to day....

"[I]t's like Thomas Jefferson said, a revolution every now and then is a good thing. We are at the point, Sean, of revolution. And by that, what I mean, an orderly revolution -- where the people of this country wake up get up and make a decision that this is not going to happen on their watch. It won't be our children and grandchildren that are in debt. It is we who are in debt, we who will be bankrupting this country, inside of 10 years, if we don't get a grip. And we can't let the Democrats achieve their ends any longer.

"If Tim Geithner is successful under President Obama, and they move us to an international currency. Then we have no hope of standing on our own as a sovereign nation with our own economic system. It's over. We can't do that."

She went on to decry "tyranny" being "enforced upon the people," adding that "our very freedom" is at stake.

Now, Bachmann simply isn't well. Were she not an elected member of the U.S. Congress, she'd probably be shouting conspiracy theories and holding cardboard signs on some sidewalk somewhere. But what I find especially interesting is that her paranoid delusions are so detached from obvious truths. If Bachmann wanted to complain that a 39.6% top rate was the epitome of Marxism, she'd be just another conservative. But she's convinced herself that the Obama administration will "move us to an international currency," due entirely to her breathtaking stupidity.

My fear, at this point, is that lunacy from deranged politicians and their media allies is going to end up getting someone hurt. Republican officials believe they should emulate the insurgency tactics of the Taliban. They see themselves as "freedom fighters" taking on the "slide toward socialism." They want a "revolution" because Americans "can't let" Democrats succeed in taking away "our very freedom."

This is obviously madness, not from some right-wing blog, but from elected federal officials. But I worry it's more than that. Incendiary rhetoric like this leads strange people to do strange things.

Republicans, it's time to lower the temperature. In the midst of multiple crises, America deserves more than hollow, partisan rage.

Steve Benen 12:40 PM Permalink | Trackbacks | Comments (79)

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FRIDAY'S CAMPAIGN ROUND-UP....Today's installment of campaign-related news items that wouldn't generate a post of their own, but may be of interest to political observers.

* In the wake of Arlen Specter's flip on EFCA, Senate Majority Leader Harry Reid is no longer interested in seeing the Pennsylvania Republican switch parties.

* Sen. Chris Dodd (D-Conn.) got a little good news for a change, when a new Research 2000 poll showed him with a five-point lead over his likely Republican challenger, former Rep. Rob Simmons, 45% to 40%.

* According to a Republican pollster, Missouri Secretary of State Robin Carnahan (D) has an early lead in the open Senate race in Missouri next year. She leads former House Minority Whip Roy Blunt (R) by four, 47% to 43%.

* Massachusetts Gov. Deval Patrick (D) will apparently start his re-election bid facing an uphill climb. A Suffolk University shows only 34% of Massachusetts voters want to give Patrick another term, while 47% believe it's time for someone else. Patrick's approval rating stands at just 40%.

* The DNC seems to really enjoy picking fights with Karl Rove.

* Some prominent conservatives in Louisiana decided to skip a primary challenge to Sen. David Vitter (R) recently, but Louisiana Secretary of State Jay Dardenne (R) is still mulling the possibility.

* Former Sen. Lincoln Chafee is reportedly poised to launch a gubernatorial run in Rhode Island. Chafee, a Republican until he was defeated in 2006, would reportedly run as an independent.

* South Carolina Gov. Mark Sanford (R) is lining up far-right friends for 2012.

* And Sarah Palin told Alaska Republicans this week that she couldn't find McCain campaign staffers during the 2008 race with whom to worship. "[N]obody I could find that I wanted to hold hands with and pray," the Alaska governor said. McCain campaign aides are, of course, pushing back.

Steve Benen 12:00 PM Permalink | Trackbacks | Comments (22)

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OBAMA UNVEILS AFGHAN PLAN.... President Obama, as expected, fleshed out a new U.S. policy towards Afghanistan this morning, emphasized a renewed effort at combating al Qaeda, and set benchmarks for the conflict for the first time. The new policy is the result of a two-month review that began almost immediately after the president's inauguration.

President Obama said on Friday that he plans to further bolster American forces in Afghanistan and for the first time set benchmarks for progress in fighting Al Qaeda and the Taliban there and in Pakistan.

In imposing conditions on the Afghans and Pakistanis, Mr. Obama is replicating a strategy used in Iraq two years ago both to justify a deeper American commitment and prod governments in the region to take more responsibility for quelling the insurgency and building lasting political institutions.

"The situation is increasingly perilous," Mr. Obama told government officials, top military officers and diplomats in remarks at the White House, warning that Al Qaeda and its allies are entrenched in Afghanistan and Pakistan, that they control parts of both countries, and that they are actively planning further attacks on the United States and its interests and allies.

His goal, he said, is "to disrupt, dismantle and defeat" them in both countries. That requires a strategy that is both "stronger and smarter," he said, and a commitment to Afghanistan that is not hobbled by the continuing costs of the war in Iraq.

Part of the new strategy, not surprisingly, will be 4,000 additional U.S. troops in Afghanistan, specifically for the purpose of training Afghan security forces. Though some military leaders called for 30,000 more American troops on the ground, Obama decided not to send additional combat forces.

The NYT added, "[T]he strategy he endorsed today effectively gives Mr. Obama full ownership of the war." It's a point that's been widely emphasized this morning, including by GOP lawmakers. (Bush may have screwed up Afghanistan, but now that Obama is pursuing a new course, it's apparently "his war" now.)

As for the policy itself, the benchmark component is arguably the most important. Matt Yglesias had a good item on this.

For one thing, I think clear benchmarks actually make short-term success more likely since they focus the mission on objectives. But more importantly I've been worried for months now that Obama's plan might get the administration caught up in the vicious logic of escalation, where you start escalating because you think there's a chance it'll work, and then if it doesn't work all you can do is keep on escalating. I think the odds of the multi-modal influx of military forces, civilian development and governance experts, and money working are pretty good. But any honest person is going to have to concede that this is uncertain ground and that our fortunes depend in part on the actions of people we can't control. It's important to have some policy off-ramps, some points at which we might conclude that we can't achieve our biggest goals and need to radically scale back.

Ultimately, the administration believes violence can be curtailed and the insurgency can be defeated by "building local governments, wooing the civilian population with aid and providing more help to the Afghan army." Stay tuned.

Update: Joe Klein has a good item on the president's speech, and highlights some additional points of the policy. He calls it "a sober, well-reasoned policy."

Steve Benen 11:15 AM Permalink | Trackbacks | Comments (21)

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EVEN AT REGENT.... When TV preacher Pat Robertson created Regent University in Virginia Beach 30 years ago, he had a rather specific idea in mind. He'd show the "elites" a thing or two about education, and offer politically conservative evangelical Christians degrees shaped by a specific worldview -- the kind found on his Christian Broadcasting Network. Everyone on the faculty is not only of the same faith, but is required to sign a statement acknowledging the infallibility of the Bible.

For the most part, Robertson has had some success, and his school has trained prominent religious right-style Republicans who served in positions of influence in government, including the Bush White House.

With that in mind, I can't help but find it fascinating that Robertson's Regent University will now, believe it or not, be home to Regent Democrats.

It's not as daring as, say, Pat Robertson's Republican run for the White House in 1988. But there's no denying that starting a Democratic student group at Robertson's Regent University seems a bit audacious.

"Here, it is definitely a startling idea," said Kalila Hines, a government major and one of the founding members of Regent Democrats.

Regent, where Robertson is president and chancellor, has long had a student Republican group. The university approved Regent Democrats as an official student organization in late January, and the group now counts about 30 members.

Brandon Carr, a law student and vice president of Regent Democrats, described the group as "Democrats and independents who want to be Christian leaders to change the world ... explaining to others how you can be a Christian and agree to some Democratic principles as well."

I never thought I'd see the day.

In the bigger picture, this not only reflects changes at Regent, it also speaks to key shifts among younger evangelicals. For Robertson's generation and these students' parents, to be politically active was to be a conservative Republican. To care about "moral issues" was to focus exclusively on gays and abortion.

All of that's changing, slowly but surely. The GOP lock on evangelicals is loosening. Poverty and global warming are just as serious for many younger evangelicals as whether two consenting adults of the same gender can get married.

And Pat Robertson's Regent University has an official student organization for Democrats.

Steve Benen 10:25 AM Permalink | Trackbacks | Comments (37)

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RACE HEATS UP IN NY 20.... The closely watched special election in New York's 20th district, in the race to fill the House vacancy left by Sen. Kirsten Gillibrand, is getting increasingly interesting. Take a look at this new Siena poll (pdf), published this morning.

As the special election in the 20th C.D. enters the final weekend, Democrat Scott Murphy has reversed a four-point deficit and turned it into a four-point lead over Republican Assembly Minority Leader James Tedisco. Murphy leads 47-43 percent, having trailed two weeks ago by a 45-41 percent margin, according to a new Siena (College) Research Institute poll of likely voters. Tedisco's campaign is viewed by voters as more negative by a 44-25 percent margin, while Murphy's campaign is seen as more positive. Regardless of who they are supporting, by a 45-35 percent margin, voters think Tedisco will win the election.

"While the percentage of likely voters supporting Murphy has risen about three points per week for the last four weeks, the percentage supporting Tedisco has dropped three points. In the last four weeks, Murphy turned a 12-point deficit into a four-point lead," said Steven Greenberg, spokesman for the Siena New York Poll.

Every couple of weeks, it seems Tedisco's lead has shrunk just a little more, but this is Murphy's first lead.

The race certainly has multiple angles, but it's hard not to wonder if Tedisco's quick reversal on Rush Limbaugh criticism was one of those costly errors the candidate would love to take back. It also probably didn't help that Tedisco refused to take a position on the stimulus package, only to denounce it a month after it passed.

Obviously, it's still a very close contest, and even if the Siena poll is right, neither candidate is above 50%. Keep an eye on the significance of the White House's efforts in the district, with Obama having endorsed Murphy this week, Joe Biden recording a radio ad for the Democrat yesterday, and a new televised presidential endorsement set to air.

Also remember, there was quite a bit of speculation recently about whether RNC Chairman Michael Steele will be able to keep his job if Republicans lose this race. While Tedisco might still eke out a win here, it's something else to keep an eye on.

Steve Benen 10:00 AM Permalink | Trackbacks | Comments (10)

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NO LOVE FROM SANTORUM.... In 2004, Sen. Arlen Specter (R-Pa.) faced a very tough primary fight, and benefited from the support of this then-colleague, Sen. Rick Santorum (R-Pa.). Specter needed quite a bit of help convincing the party's far-right base that he deserved their support, and standing alongside Santorum no doubt helped.

Now, with Specter once again struggling with conservatives, can he expect Santorum to help him out once more? Santorum obliquely addressed the question in his newspaper column this week.

Pennsylvania's political Houdini has escaped similar predicaments in the past by burnishing his conservative credentials in the run-up to the primary -- hence the announcement on card check this week. So, too, his potentially crucial vote against Solicitor General Ellen Kagan, which conservatives are touting as a death knell for her chances of being named to the Supreme Court. [...]

In 2004, President Bush and a Senate colleague from Western Pennsylvania made the difference for Specter. Those dogs don't hunt anymore. This year, his help may come from Peg Luksic, Larry Murphy, and anyone else who helps split up the vote next spring - anyone other than Pat Toomey, that is.

It will be fun to watch. And watch I will.

The "colleague from Western Pennsylvania" that Santorum refers to is, of course, himself. And by concluding "watch I will," Santorum is making it pretty clear that he's not going to help out this time around.

Steve Benen 9:35 AM Permalink | Trackbacks | Comments (9)

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JUDD GREGG, PLEASE STOP TALKING.... I suppose we can learn a lot about a politician towards the end of his or her political career. Once an elected lawmaker announces an intention to retire, the official is freed, to a certain extent, from political pressure. He or she can do exactly what they really believe is right, without concern for how a decision might affect fundraising or poll numbers.

Sen. Judd Gregg (R-N.H.), for example, is preparing to leave the political stage after a long career. Any chance he might become more reasonable and sensible in advance of his departure? Apparently not.

The United States wouldn't even be eligible to enter the European Union if it wanted to because of its debt levels, Sen. Judd Gregg (R-N.H.) claimed Thursday.

"We won't even be able to get into the EU if we wanted to," Gregg said this morning on MSNBC, "because our government is so large and so huge."

The European Union's Stability and Growth Pact (SGP) adopted in 1997 requires a budget deficit to be less than three percent, and requires a national debt beneath 60 percent of Gross Domestic Product (GDP).

"We've been lectured by France on the fact that we're not fiscally responsible right now," Gregg, the would-be commerce secretary, noted with incredulity.

It's worth remembering that Gregg doesn't know what he's talking about. The EU offers flexibility to governments that are responding to economic crises -- note to Gregg: we're in the midst of an economic crisis -- and several EU members will run deficits well above 3% this year. Those countries will be expected to lower those deficits in the coming years, which not incidentally, is what the Obama administration plans to do in the U.S.

For that matter, Gregg repeatedly supported, enthusiastically, Bush budgets that ran deficits that were more than 3% of GDP. Gregg did not, at the time, run to the cable networks to whine about it.

But let's also note that Gregg is just popping off in the media a little too much lately. In addition to his confusion about the EU, he also told CNN the other day, "The practical implications of [the Obama administration's budget] is bankruptcy for the United States. There's no other way around it. If we maintain the proposals that are in this budget over the ten-year period that this budget covers, this country will go bankrupt. People will not buy our debt, our dollar will become devalued."

First, Gregg is completely wrong. Second, his wildly irresponsible claptrap undermines confidence in the United States on the global stage in the midst of an economic crisis. In other words, by making a series of nonsensical and unsupported claims about our economy, Gregg actually runs the risk of undermining our national interests.

Gregg has been wrong about nearly every major economic challenge of the last couple of decades. If he could take this moment to enjoy a little quiet time, instead of acting like a partisan hack, we'd all be better off.

Steve Benen 8:40 AM Permalink | Trackbacks | Comments (29)

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THE HOUSE GOP'S FIASCO... The rollout of the House Republicans' not-really-a-budget budget has been a fiasco. But let's not overlook the fact that it's not just Democrats who think the GOP's "Road to Recovery" document is ridiculous.

House Minority Whip Eric Cantor (R-Va.) and Rep. Paul Ryan (R-Wisc.) raised objections to an abbreviated alternative budget "blueprint" released today -- but were told by House Minority Leader John Boehner (R-Ohio) they needed to back the plan, according to several Republican sources. [...]

Ryan, the ranking Republican on the budget committee, plans to introduce a detailed substitute amendment for the Democrats' spending plan next Wednesday -- and still intends to do so.

But he and Cantor were reportedly told by Boehner and Republican Conference Chairman Mike Pence (R-Ind.) they needed to move more quickly to counter Democrats' charge they were becoming the "Party of No," according to House GOP staffers.

A Republican Hill staffer described as being "heavily involved in budget strategy," said, "In his egocentric rush to get on camera, Mike Pence threw the rest of the Conference under the bus, specifically Paul Ryan, whose staff has been working night and day for weeks to develop a substantive budget plan.... I hope his camera time was gratifying enough to justify erasing the weeks of hard work by dozens of Republicans to put forth serious ideas."

Glenn Thrush added that Cantor and Ryan were reportedly "embarrassed" by the document.

Stepping back, perhaps the only thing worse than the document was the strategy behind the document. Republicans were apparently deeply bothered by Democratic criticism about the GOP's inability to craft a credible agenda of its own. Cantor and Ryan thought it was better to take the hit than play the Democrats' game and offer up a new target of criticism. The leadership chose to ignore this. The result is a foolish document that will be the butt of jokes for quite a while.

Atrios raised a good point late yesterday: "It's been sort of weird watching the Republicans flail about. Those of us who began our political lives in the 90s have, I think, been assuming that if there's one thing the Republicans know how to do was be an opposition party."

Exactly. Republican officials have certain strengths and weaknesses. They're bad, for example, at governing. They're supposed to be good at attacking those who are good at governing.

If yesterday's fiasco is any indication, GOP lawmakers are slowly becoming bad at both.

Steve Benen 8:00 AM Permalink | Trackbacks | Comments (37)

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By: Hilzoy

Ugly Loans

When I read blog posts or comments complaining about people who should have known better than to sign up for mortgages they couldn't afford, I'm always of two minds. On the one hand, I'm quite sure that there are a decent number of people who knowingly gambled on the proposition that housing prices would go up forever. I am not inclined to be particularly sympathetic to such people, especially if they had other options. (People who took this gamble because it was their only way to get a roof over their heads are a different story.)

On the other hand, some people who make these complaints seem to me to underestimate just how complicated and ghastly some of the loans written during the last five years were. Those loans made it very, very hard for borrowers to see exactly what they were getting into. And I can't think of a better way to illustrate this point than to link to this explanation of negative amortization option ARMs by the late Tanta at Calculated Risk.

It's very long: I pasted it into Word and it clocks in at 15 pages and over 3500 words. But there's not a lot that's superfluous: Tanta was a very clear writer and thinker, and I think she explained this about as well as possible. But option ARMs are very complicated. And if you're tempted to discount the possibility that people could have truly not understood what they were signing up for, I'd encourage you to really try to work through it, the way you might if it were a mortgage you were actually considering taking out.

Tough, isn't it? I note a couple of points. First, the payments, and for that matter the entire structure of the loan, can change unpredictably. There are no tables of payments with this type of loan; it would be difficult to work out what was going to happen to the payments, and when, unless you not only knew how much you would choose to pay every month, but had a copy of the loan document, a pretty serious calculator, decent math skills, and a fair amount of time on your hands.

Second, it's hard to imagine a person for whom this would be a good type of loan. You'd need to be strapped for cash for the first few months, but thereafter able to pay considerably more than you would have had you taken out a different sort of mortgage. Maybe this would be a good idea if you knew you'd win the lottery six months from now, or were the sole heir of a millionaire who was at death's door. Otherwise, this mortgage might have been designed to get people into a lot of trouble very fast. It's a sort of equity-extracting machine, and it's ugly.

And yet, strange to say, someone created this type of loan, and others adopted and marketed it. Funny thing, that.

Third, this type of mortgage is just plain hard to understand. I had a hard time wrapping my head around its resets and recasts and so on, and I construe texts for a living. Tanta:

"Has your head exploded yet?

But that's the real point, isn't it? If your head just exploded, and you're the kind of person who usually reads CR, just imagine what the kind of person who doesn't usually read CR makes of all this during some ten-minute spiel by some loan officer."

Fourth, about that loan officer: Tanta notes one case she's heard of in which a loan officer just did not understand this kind of loan, and misrepresented it to her clients. Given how complicated this type of loan is, this cannot be an isolated case. But besides simple misunderstandings, there's also active obfuscation. Here's a story on how Wachovia instructed its employees to sell their option ARMs (also via CR; bear in mind that this is a negative amortization loan, in which the amount you owe can go up):

"So if I'm paying that minimum payment, I'm not actually putting a dent in my principal though right? My principal and interest they're just going to keep climbing up right?" the borrower asks in the video tape. "It's optional," the broker in the video replied.

"What kind of answer is that?" said Brown [a housing advocate, ed.] after watching the video. "The answer would really be 'Yes.' That's the right answer, that to me would be the true clear straightforward truthful simple answer."

Now: one might think that people who take out mortgages should not rely on what their loan officer or mortgage broker says. They should read the documents for themselves, and if they don't understand what they read, they shouldn't take out the mortgage. I am tempted to agree with this. I have taken out a number of mortgages, and I always do read all the documents. My various loan officers have always reacted to this quaint habit of mine with astonishment, the way they might respond if I arrived at their office in a coach and four accompanied by liveried footmen. Some of them indulge my archaic eccentricities with good humor. Others, however, start conspicuously looking at their watches and tapping their fingers as I settle in with the Flood Plain Report, and make it very clear that they do not regard watching me wade through the details of the arbitration provisions as a productive use of their time. It takes a thick skin to keep reading despite that.

Besides, a lot of people find it hard to understand long, dry, complicated legal documents. We might wish this weren't true, but it is. Their only options are to trust someone to summarize a mortgage accurately, or not to take out a mortgage at all. And if the summaries they get are wrong, whether because the loan officers themselves do not understand the mortgages they are selling or because of outright deception, then those people are screwed.

There are quite a few of these loans out there: "According to UBS, gross issuance of securitized OA pools was $18.5 billion in 2004, $128 billion in 2005, and $175 billion in 2006." In the various debates about who is at fault for what, it's worth bearing in mind that some of the people whose mortgages are in trouble took out loans like these, loans that should never have been marketed outside very special circumstances, and that no normal human being should ever have to understand.

Hilzoy 1:31 AM Permalink | Trackbacks | Comments (42)

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March 26, 2009
By: Hilzoy

The Republican "Budget"

I've been trying to figure out what to say about the House Republicans' new "budget". I think it's pretty neat that they decided to use those cute bubbles instead of numbers. Maybe next week they'll present their budget using interpretive dance or little animated jelly beans.

I also like the way they say serious-sounding things like this:

"Republicans believe that future generations should not be burdened by mountains of debt for the misguided choices made by Democrats today. Instead, working families should be able to keep more of what they earn and pass those savings to future generations." (p. 10)

-- and then go on to propose a whole raft of new tax cuts and only one specific spending cut, "ending the bailouts". The whole thing has a sort of Dada quality to it that's almost endearing. But I wasn't sure what level of ridicule could possibly be adequate to it.

Luckily, Nate Silver has the answer:
Photobucket

Via John Cole, a Fark thread has some interesting suggestions:
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There are lots more where that came from. Enjoy!

Hilzoy 10:35 PM Permalink | Trackbacks | Comments (18)

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THURSDAY'S MINI-REPORT.... Today's edition of quick hits:

* President Obama started to sketch out his policy today on U.S. troops in Afghanistan. Senate Republican leaders didn't show up.

* Treasury Secretary Tim Geithner presented Congress with his ideas about re-regulating the financial industry today.

* The administration has some ideas about how to help the U.S. auto industry, but I don't think the companies are going to like them.

* This isn't exactly new, but a secretive wing of Pakistan's military intelligence agency continues to provide direct support to the Taliban.

* The president is poised to sign an important conservation bill, which is "the largest expansion of the wilderness system in 15 years."

* Obama will not legalize marijuana to help the economy.

* "Campaign against extremists who wish to do us harm" doesn't exactly roll off the tongue.

* We thought the economy shrank at 6.2% pace in the fourth quarter of 2008. It was actually 6.3%.

* R.I.P., John Hope Franklin.

* Gingrich sees Obama as a "dictator." Limbaugh prefers "tyrant."

* Happy Blogoversary, Blue Girl.

* Why anyone would look to an unlicensed, non-union plumber for guidance on federal labor policy is a mystery.

* I think it's fair to say that ThinkProgress has gotten Bill O'Reilly's attention.

* Quote of the Day: "Two novels can change a bookish fourteen-year old's life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other involves orcs."

Anything to add? Consider this an open thread.

Steve Benen 5:30 PM Permalink | Trackbacks | Comments (26)

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'HERE IT IS'.... When House Republicans unveiled their not-really-a-budget budget this morning, House Minority Leader John Boehner (R-Ohio) sounded like he had something real to offer.

"Two nights ago, the president said, 'We haven't seen a budget yet out of the Republicans.' Well, that's not true, because here it is, Mr. President," Boehner told reporters. "Today, we're introducing a detailed 'Road to Recovery' plan and our plan curbs spending, creates jobs, and cuts taxes while controlling the debt." (The House GOP leader liked this so much, his office posted the comments to YouTube.)

It's only three sentences, but can you count all of the errors? It's not a "budget." It's not "detailed." And it doesn't actually do anything of the thing Boehner assures it does.

Ryan Grim noticed one key proposal from the document: "a huge tax cut for the wealthy."

House Republican leaders called a press conference Thursday to unveil their "alternative budget." While it was thin on specifics, it does include one major policy proposal: a huge tax cut for the wealthy.

Under the Republican plan, the top marginal tax rate would be slashed from 35 to 25 percent, facilitating a dramatic transfer of wealth up the economic scale. Anyone making more than a $100,000 would pay the top rate; those under would pay 10 percent.

No, seriously, that's the plan. It's right there on page 10: "Republicans propose a simple and fair tax code with a marginal tax rate for income up to $100,000 of 10 percent and 25 percent for any income thereafter."

So, Bush/Cheney lowered the top rate from 39.6% to 35%, which cost hundreds of billions of dollars and helped create the largest budget deficits in American history. Now, the very same GOP lawmakers want to send the top rate from 35% to 25%, at a cost of hundreds of billions of dollars, all in the name of deficit reduction.

How much would this cost? The "detailed budget" doesn't say. What it would do to the deficit? The "detailed budget" doesn't say. What would Republicans cut to pay for this massive tax cut for the wealthiest Americans? The "detailed budget" doesn't say. How much would Republicans raise or spend over all? The "detailed budget" doesn't say.

When might GOP leaders flesh out the details in their "detailed budget"? Boehner told reporters today that some numbers will probably be available sometime next week. So, right around the time House lawmakers are voting on the budget, the minority party will offer an alternative budget that no one's seen.

If Republicans aren't going to take their own ideas seriously, why should anyone else?

Update: Some emailers are suggesting GOP leaders deserve some slack because they'll get to the details eventually. When Obama first sketched a budget outline, his plan didn't include a lot of numbers, either.

It's a weak defense. First, Obama's initial bluerpint had plenty of budget estimates (i.e., numbers). Second, Republican leaders promised specifics today, but didn't deliver. Indeed, while offering no details, they patted themselves on the back for offering details.

Even the National Review concluded: "I was not the only reporter in the room during the delayed press conference who had expected to see some numbers, at least ballpark. Today's press conference did not provide further details."

Steve Benen 4:45 PM Permalink | Trackbacks | Comments (35)

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WEBB EYES PRISON REFORM.... Back in December, Sen. Jim Webb (D-Va.) said he'd launch an initiative to reform the U.S. prison system in the spring. Here we are in late March, and Webb is right on time.

Sen. Jim Webb (D-VA) will launch an effort to reform the nation's prison system today at noon, his staff says, introducing a bill -- the National Criminal Justice Act of 2009 -- that would create a bipartisan commission no reform. The commission would undertake an 18-month review of the U.S. prison system, offering recommendations at the end.

Prison reform is a difficult thing to achieve, politically. Nearly every politician wants to be perceived as "tough on crime," and suggesting that too many Americans are being incarcerated can seem to run against that. (Webb has, in fact, pointed out that the U.S. has attained the highest incarceration rate in the world.) Add tough discussions of prison conditions, inmate crime, and abuse, and it's not an easy task for a politician to undertake.

That's certainly true, but if anyone is well positioned to try, it's Webb. If and when the right goes after Webb as "soft," one assumes the senator -- a decorated Marine veteran and former Navy Secretary under Reagan -- won't have to waste too much time proving otherwise.

Webb has reportedly considered this a key issue for many years, and is taking an approach that sounds a lot like common sense. He told the Washington Post in December, "I think you can be a law-and-order leader and still understand that the criminal justice system as we understand it today is broken, unfair, locking up the wrong people in many cases and not locking up the right person in many cases."

In speeches and in a book that devotes a chapter to prison issues, Webb describes a U.S. prison system that is deeply flawed in how it targets, punishes and releases those identified as criminals.

With 2.3 million people behind bars, the United States has imprisoned a higher percentage of its population than any other nation, according to the Pew Center on the States and other groups. Although the United States has only 5 percent of the world's population, it has 25 percent of its prison population, Webb says. [...]

Webb aims much of his criticism at enforcement efforts that he says too often target low-level drug offenders and parole violators, rather than those who perpetrate violence, such as gang members. He also blames policies that strip felons of citizenship rights and can hinder their chances of finding a job after release. He says he believes society can be made safer while making the system more humane and cost-effective.

It's obviously a crowded policy landscape, so no one should expect sweeping proposals anytime soon. Indeed, Webb's National Criminal Justice Act wouldn't recommend specific reforms, but rather, would establish a commission to launch an investigation and then recommend specific reforms.

That said, Webb is not only right to tackle the issue, he's showing political courage in addressing a problem most would prefer to ignore. Good for him.

Steve Benen 4:10 PM Permalink | Trackbacks | Comments (18)

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BAYH AND THE BLUE DOGS 'HAVE NO AGENDA'.... Sen. Evan Bayh (D-Ind.) has noticed some of the progressive pushback to his new working group, compromised of "centrist" Democrats, who want to water down make President Obama's popular domestic policy agenda more palatable to a small Republican minority. Apparently, he's not happy about it.

Sen. Evan Bayh (D-Ind.) is also unhappy with the friendly fire. Bayh announced last week that a group of centrist Democrats had come together to negotiate as a bloc with the White House and party leaders on major legislation. He promptly found himself targeted by an ad accusing him of "standing in the way of President Obama's reforms."

"We literally have no agenda," Bayh shot back. "How can they be threatened by a group that has taken no policy positions?"

I don't know, senator, why would you create a working group and host a series of closed-door meetings if you "literally have no agenda"?

The problem, of course, is that people feel "threatened" because Bayh and the Blue Dogs do have an agenda, and we've already seen some of their policy positions. The Wall Street Journal noted this morning that the working group's stated goal is to "protect business interests."

Ryan Powers highlighted some of these Democrats' other recent exploits:

* Shrinking Economic Recovery: The group's first significant "success" was "paring down the more than $900 billion economic stimulus bill to $787 billion," reducing the government's ability to spur economic recovery quickly. [Roll Call, 3/12/2009]

* Preserving The Bush Tax Cuts: Regarding Obama's plan to allow the Bush tax cuts to expire, Bayh said, "I do think that before we raise revenue, we first should look to see if there are ways we can cut back on spending." [Politico, 3/3/2009]

* Delaying Cap-and-Trade: Bayh coalition member, Sen. Claire McCaskill (D-MO), explained that the group might "push for a more lenient phase-in period for a cap-and-trade system and revenue-raising offsets to pay for expensive mandates." [CQ Politics, 3/9/2009]

* Weakening Bankruptcy Protection: Centrist Democrats "forced changes to a House bill that would allow bankruptcy judges to modify mortgages, ensuring that the legislation better reflected the concerns of the financial-services industry." [WSJ, 3/25/09]

Americans elected Democrats to hold a 58-seat majority in the Senate, and yet, the majority party will struggle to pass it's agenda -- a popular agenda, mind you -- because of Republican obstructionism, and Democrats who prefer to drive with their foot on the brake.

Steve Benen 3:30 PM Permalink | Trackbacks | Comments (33)

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THE PARTY OF NO (IDEAS).... About nine years ago, then-Gov. George W. Bush was asked about his budget experience. Bush said he was proud of what he'd put together: "It's clearly a budget. It's got a lot of numbers in it."

Keep that quote in mind when considering the "budget" House Republicans unveiled this morning.

Stung by their stereotyping as the "party of no," House Republicans eagerly promoted the unveiling of their alternative to President Obama's budget today -- but when they finished speaking, reporters had one big question: Where's the actual budget? You know, the numbers that show deficit projections and discretionary spending?

There certainly was no hard budgetary data in the attractively designed 18-page packet that the House GOP handed out today, its blue cover emblazoned with an ambitious title: "The Republican Road to Recovery." When Minority Leader John Boehner (R-OH) was asked what his goal for deficit reduction would be -- President Obama aims to halve the nation's spending imbalance within five years -- Boehner responded simply: "To do better [than Obama]."

And that's really all we got. House GOP leaders held a press conference this morning to prove a) they could put together a budget; b) that they could be the "party of yes"; and c) that their agenda is about more than just saying the opposite of whatever President Obama wants.

Instead, they unveiled a "budget" with no numbers or even budget estimates, and spent most of the press conference criticizing the president.

Republican leaders posted their "Road to Recovery" report online, and it's more or less a joke. Apparently -- I hope you're sitting down -- the minority party believes the nation will thrive if we cut taxes, stick with Bush's energy policies, and pursue more deregulation. How much would this cost? They don't say. How would this affect the deficit? They don't say.

All of this, as we discussed earlier, plays into the Democrats' hands. Republicans are not only playing by the White House's rules, they're doing it badly.

DNC National Press Secretary Hari Sevugan, not surprisingly, took a swing at the ball that Republicans set on a tee: "I'm all for changing the way we do business in Washington, but proposing a 'budget' that doesn't use numbers may be too much for me. After 27 days, the best House Republicans could come up with is a 19-page pamphlet that does not include a single real budget proposal or estimate. There are more numbers in my last sentence than there are in the entire House GOP 'budget.'"

The GOP was on the offensive, pointing to vulnerable points in the Obama administration's agenda and pressuring center-right Democrats to break with their party. Now, they're on the defensive, pretending to have credible ideas and presenting a bizarre "budget" with no numbers in it.

Republicans really didn't think this one through.

Steve Benen 2:30 PM Permalink | Trackbacks | Comments (69)

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THE NEOCONS DON'T KNOW WHEN TO QUIT.... Their ideas discredited, and their arguments left on the trash-heap of history, neoconservatives should, ideally, enjoy some quiet time right about now. Instead, some of the movement's leaders are getting together to form yet another organization to promote the same misguided agenda that's already failed.

It's called, innocuously enough, the Foreign Policy Initiative. It will spread its wings next week with a panel discussion on Afghanistan, led in part by John McCain. (President Obama is scheduled to explore his own Afghanistan policy in more detail around the same time. What a coincidence.)

Matt Duss strikes the right note in dismissing the latest neocon endeavor.

The Foreign Policy Initiative lists Robert Kagan, Bill Kristol, and Dan Senor on its board of directors, so no prizes for guessing what they're about (more power, less appeasement, stronger wills.) Kagan and Kristol need no introduction, they're the Tick and Arthur of disastrously counterproductive military adventurism. Given the staggering costs in American blood, treasure, security, and reputation incurred by their boundless enthusiasm for blowing stuff up, you might think they'd have had the decency to retreat to a Tibetan monastery by now, but sadly no. The way it works in Washington is, if you're willing to argue for more defense spending, you'll always find someone willing to fund your think tank. [...]

On March 31, FPI holds its first public event, Afghanistan: Planning For Success, though, given the heavy representation of Iraq war advocates, I think a far better title would be Afghanistan: Dealing With The Huge Problems Created By Many Of The People On This Very Stage. The broad consensus among national security analysts and aid officials is that the diversion of troops and resources toward Iraq beginning in 2002 was one of the main reasons the Taliban and Al Qaeda were able to to re-establish themselves in the Afghanistan-Pakistan border areas, facilitating the collapse of the country back into insurgent warfare. Having failed to complete the mission in Afghanistan, Bush and the Iraq hawks handed the Obama administration a war that promises to be as difficult and costly as Iraq has been -- if not more. It's deeply absurd that some of the people most responsible for the crisis in Afghanistan would now presume to tell us how to deal with it.

At this point, I shouldn't be surprised by the shamelessness of Kristol, Kagan, et al. But I'd hoped they'd feel a little more chastened by their failures than this.

Steve Benen 1:55 PM Permalink | Trackbacks | Comments (22)

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BACHMANN KEEPS PUSHING THE ENVELOPE.... For a while, it was fun to watch Republican lawmakers offer legislation to resist the non-existent push on the Fairness Doctrine. Maybe now we can shift to the Republicans' fears of a non-existent push for a global currency.

The madness continues as Michelle Bachmann introduces legislation that "would bar the dollar from being replaced by any foreign currency."

What the Chinese were proposing, of course, was to replace the dollar as the world's reserve currency. I would take the view that a move away from near-exclusive reliance on the dollar is probably inevitable irrespective of what we do. But whether or not you agree with me about that, this isn't something congress can ban -- it's a decision by foreign countries about what they do with their reserves.

There's no way Democratic leaders are going to let Bachmann's proposal go forward, but the Minnesota Republican is apparently quite serious about this. She issued a press release this morning "demanding" that President Obama categorically rule out "abandoning" the U.S. dollar "for a multi-national currency." (That the president already addressed this in his prime-time press conference this week was apparently insufficient.)

Given that the real policy discussion here is about a foreign reserve currency, Greg Sargent asked Bachmann's press office whether Congress has the authority to legislate the financial decisions of foreign countries.

"She's talking about the United States," Bachmann's spokesperson said. "This legislation would ensure that the U.S. dollar remain the currency of the United States."

Since no one is suggesting anything to the contrary, it seems odd that the congresswoman would be raising such a fuss.

Honestly, if Michele Bachmann didn't exist, we'd have to invent her.

Steve Benen 1:10 PM Permalink | Trackbacks | Comments (59)

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WHAT A DIFFERENCE A WEEK MAKES.... Last week, Nevada Gov. Jim Gibbons (R) became the latest Republican governor to resist accepting federal stimulus aid, specifically relating to unemployment funds. Though the move was opposed by lawmakers in both parties and the state's Chamber of Commerce, Gibbons said the unemployment aid was too generous, would help too many people, and undermine Nevada's sovereignty.

Gibbons, arguably the nation's least popular and most scandal-plagued governor, didn't stick to that position very long.

Mr. Gibbons -- who like several of his Republican counterparts in the nation's governors' mansions who are considering rejecting or have said no thanks to the unemployment funds -- found that the state's legislature was poised to override him, which they are statutorily permitted to do, to get the expansion of benefits.

After weeks of denouncing the extension, Governor Gibbons officially changed his mind Wednesday afternoon.

In a statement, he said: "As our economic crisis deepens, Nevadans are suffering because of layoffs, business closings and other cutbacks. We have the responsibility to do everything we can to help our unemployed workers get through these difficult times, even if that means passing legislation that we would not necessarily approve during prosperous times."

Of course, Nevadans were suffering because of layoffs, business closings, and other cutbacks last week, too, when Gibbons opposed the federal assistance.

In any case, it's good to see Nevada will get the help. The state's economy has been very hard hit, and rejecting unemployment funds would have made a bad situation considerably worse.

Here's hoping Bobby Jindal, Rick Perry, and Mark Sanford follow Gibbons' lead and take the recovery money their constituents need.

Steve Benen 12:35 PM Permalink | Trackbacks | Comments (12)

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THURSDAY'S CAMPAIGN ROUND-UP....Today's installment of campaign-related news items that wouldn't generate a post of their own, but may be of interest to political observers.

* Organizing for America is launching its first television ads. The goal, not surprisingly, is to rally support for the president's budget.

* Sen. Arlen Specter (R-Pa.) says he's not worried about trailing in next year's Republican primary in Pennsylvania. He's putting on a brave face, but if Specter weren't afraid, he wouldn't have flipped on EFCA.

* Vice President Joe Biden is also helping out in the special election in New York's 20th, appearing in a radio ad in support of Democrat Scott Murphy. The election is Tuesday.

* Speaking of New York's 20th, Democrats are also exploiting public revulsion of Rush Limbaugh.

* Sen. Richard Burr (R-N.C.) has been rumored as one of the Republicans' vulnerable incumbents, and there's new polling data to back up the talk. A poll from the conservative Civitas Institute shows Burr trailing state Attorney General Roy Cooper (D), 41% to 38%, even though Burr has better name recognition.

* Speaking of vulnerable incumbents, a Public Policy Polling survey in Arkansas shows Sen. Blanche Lincoln with a modest 45% approval rating, but reasonably solid leads over her likely Republican challengers.

* Is Arnold Schwarzenegger going to run for the Senate? Yesterday, the California Republican said, "I'm not running for anything." Asked if that meant he is ruling out a race against Sen. Barbara Boxer, Schwarzenegger added, "When I say I'm not running for anything, that's exactly what I mean ... until you change the Constitution."

Steve Benen 12:00 PM Permalink | Trackbacks | Comments (18)

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TAKING THE BAIT?.... The Obama White House and congressional Democrats have hardly been subtle about what they want from Republicans. As the president told donors at a party fundraiser last night, "To a bunch of the critics out there, I've already said, 'Show me your budget!' I'm happy to have that debate."

Dems have been asking, practically begging, Republicans to put up or shut up. Every single time the minority party attacks the administration's budget, Democrats respond, "At least we're governing. Republicans have no ideas of their own." The charge has started to stick, and GOP leaders haven't come up with a compelling retort.

This week, it seems the Republican Party is taking the bait.

House Republicans have begun unveiling detailed alternatives to President Barack Obama's policies -- a concerted effort to push back against Democratic efforts to label them "the Party of No."

On Wednesday, it was a housing plan. Thursday, it will be a big, TV-friendly stack of budget blueprints, "The Republican Road to Recovery." That's to match the president's own platitudinous budget title, "A New Era of Responsibility."

The House Republicans' budget document, provided to POLITICO ahead of its release, makes sure no one can miss the point: Each chapter begins "The Republican Plan," and each section is divided into "The President's Budget" and "Republicans' Solution."

House Minority Whip Eric Cantor (R-Va.) said the housing proposal that he rolled out with eight other House Republicans on Tuesday was "in response to the administration -- and the president himself, who continues to say that Republicans don't have any ideas." ... The documents -- and the showmanship in releasing them -- are the result of frustration by GOP leaders who repeatedly hear on TV that they have no alternatives.

In other words, Republicans are letting the White House set the terms of the debate, and they're struggling to keep up.

Mike Pence (R-Ind.), chairman of the House Republican Conference, said at the news conference with Cantor, "Welcome to the next installment of the party of yes." It's the kind of comment that reflects playing defense -- Obama and his allies kept pushing Republicans to come up with some ideas of their own, so GOP leaders are doing what Democratic leaders have asked. Pence told reporters yesterday, "Contrary to the administration's straw man diversions, Republicans do have our own ideas," reinforcing the defensive nature of their approach.

As far as the larger strategy, this is exactly what Democrats wanted to see. Indeed, there's a reason the White House and Democratic leaders kept pushing to see the GOP's alternative budget, and it's not because the majority party was sincerely looking for good ideas to incorporate into the finished product.

Rather, there's two parts to this. The first is that Republicans defending their agenda have less time to attack the Democratic agenda. The second is that the Republican agenda is a series of old and ineffective cliches -- tax cuts, entitlement cuts, and drilling American coasts for oil. The Democratic plan looks pretty good, but it'll look especially good when compared to the GOP's proposal.

The White House team was likely worried that Republicans would forgo an alternative agenda and force the president and his allies to focus on controversial parts of the Obama budget. If the GOP is now worried about proving that they have their own ideas, and are prepared to debate them, those White House worries are no doubt dissipated.

Note to party activists everywhere: when your top rivals are begging you to do something, it's rarely a good idea to take their advice.

Steve Benen 11:10 AM Permalink | Trackbacks | Comments (32)

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AN EXCESSIVE PLAY BY PLAY.... There are plenty of circumstances in which a professional journalist is justified in not only reporting on a story, but exploring the work that went into the story. Woodward and Bernstein, for example, not only broke Watergate, but went on to write at length about their legwork behind the scenes. Many war correspondents will do the same thing -- report on the conflict, and then later reflect on the process of reporting.

But asking a question at a White House press conference probably doesn't meet the same standard.

CNN's Ed Henry was one of several reporters to ask President Obama on Tuesday night about the deficit. In a follow up, he pressed Obama for an explanation as to why he didn't immediately express outrage about the AIG bonuses when the story broke two weeks ago. "Well," the president said, "it took us a couple of days because I like to know what I'm talking about before I speak."

Yesterday, Henry followed up on this with a 659-word essay, not about AIG or the story itself, but about what he was thinking on Tuesday night. We learn that he intended to ask something else, and he had "several provocative questions" on hand.

[O]n Tuesday night, as I sat in the front row nervously reviewing my hypothetical questions written out in longhand (decidedly old school), I kept thinking back to a conversation I had with Wolf Blitzer Saturday night at the Gridiron dinner.

He said that when he was CNN's Senior White House correspondent, he liked following up on a question the president had ducked earlier in the newser.

When you press a second time, you may be surprised with the second answer. And then rather than call on me 10th, the president called on me at about sixth. [...]

The pressure was on now because the president had called on me. Someone handed me a microphone, millions were watching, and it's scary to think about changing topic in a split second because you might get flustered and screw up.

But it's fun to gamble and like any good quarterback (though I was never athletic enough to actually play the position), I decided to call an audible.

Henry went on to talk about having gone "hard on the AIG question," having "waited patiently," and his decision "to pounce with a sharp follow-up." The CNN correspondent took pride in making the president "perturbed."

Now, I suppose if you're a student of journalism, this kind of essay may be of some use. It's like listening to a director's commentary on a DVD -- we now know what this journalist is thinking when prepping for a White House press conference. If one is preparing a career as a member of the White House press corps, perhaps a play-by-play could be helpful.

But like Steve M., I found it kind of self-indulgent to see Ed Henry characterize himself as the hero of his own story. He's the one who didn't buckle under pressure. He's the one who acted like the quick-thinking quarterback. He's the one who cleverly asked a question -- two, actually -- the president didn't want to hear.

Note to the White House press corps: you guys really aren't the story.

Steve Benen 10:35 AM Permalink | Trackbacks | Comments (56)

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GOT SHADE?.... Rep. Joe Barton's (R-Texas) record on environmental issues has bordered on comical for quite a while. In 2005, for example, Barton, then the chairman of the House Energy and Commerce Committee, used not-so-subtle pressure to intimidate the Intergovernmental Panel on Climate Change, the National Science Foundation, and independent scientists who dared to publish accurate data showing a sharp spike in global temperatures in the 20th century.

More recently, Barton took a leadership role in support of pollution, and in opposition to the Clean Air Act.

The good news is, Rep. Joe Barton (R-Texas) is now willing to concede that the climate is, in fact, changing. The bad news is, his proposal on what to do about it is ridiculous. Consider his comments yesterday during a congressional hearing on climate change:

"I believe that Earth's climate is changing, but I think it's changing for natural variation reasons. And I think man-kind has been adopting, or adapting, to climate as long as man has walked the Earth. When it rains we find shelter. When it's hot, we get shade. When it's cold, we find a warm place to stay. Adaptation is the practical, affordable, utterly natural reflex response to nature when the planet is heating or cooling, as it always is."

In recent months, Republican lawmakers, especially in the House, have made it practically impossible to have a serious bipartisan dialog on economic issues. If Barton's comments are in any way reflective of his caucus' approach to global warming, discussions with Republicans on environmental policy will be just as fruitful.

Steve Benen 9:50 AM Permalink | Trackbacks | Comments (22)

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DOUGLAS PLAYS THE DUNCE.... I don't get to talk much about my adopted home state, but Vermont Gov. Jim Douglas' (R) misguided announcement yesterday warrants all kinds of attention.

Gov. Jim Douglas of Vermont said Wednesday that he would veto a same-sex marriage bill if it reached his desk, setting a new hurdle for a measure that had been moving swiftly through the legislature.

But Mr. Douglas, a Republican, also said that "legislative leaders would not have advanced this bill if they did not have the votes to override a veto."

The issue of marriage equality, the governor said, "diverts attention from our most pressing issues," which is why he announced his intention to veto the bill.

The argument doesn't stand up well to scrutiny. Douglas tends to avoid blatant bigotry and culture-war crusades -- he is, after all, the Republican governor of one of the nation's "bluest" states -- so he can't very well reject the pending legislation on homophobic grounds. But the "distraction" argument is a cheap cop-out -- the sooner this common-sense legislation becomes law, the sooner it moves off the Vermont political world's radar.

By announcing his intention to veto, Douglas puts the issue of two consenting adults getting married at the forefront of the state's political debate. By daring state lawmakers to override his veto, the governor is prolonging the process. If the goal were to end the "distraction," Douglas would be moving in the opposite direction.

For what it's worth, the veto override remains a real possibility. The marriage bill passed the state Senate 26 to 4. It will pass the state House fairly soon, but the margin remains unclear.

I'll let you know what happens.

Steve Benen 9:20 AM Permalink | Trackbacks | Comments (23)

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TOPOLANEK OFFERS LITTLE ENCOURAGEMENT.... The current recession is, unfortunately, a global phenomenon, and the strength of the European economy matters a great deal to international recovery. Paul Krugman recently explained that the continent has so far failed to "respond effectively" to the financial crisis, adding, "Europe has fallen short in terms of both fiscal and monetary policy: it's facing at least as severe a slump as the United States, yet it's doing far less to combat the downturn."

Making matters worse, we apparently shouldn't expect too much in the way of leadership from the current E.U. president when it comes to a way forward.

The president of the European Union on Wednesday ripped the Obama administration's economic policies, calling its deficit spending and bank bailouts "a road to hell."

The comments by Prime Minister Mirek Topolanek of the Czech Republic, which holds the E.U.'s rotating presidency, startled some U.S. and European officials, who are preparing for President Obama's visit next month to several European cities, including Prague, the Czech capital.

There are, of course, a few key caveats to all of this. Perhaps most importantly, there's some question as to whether Mirek Topolanek speaks with any real authority -- his government was "toppled by a no-confidence vote by opposition lawmakers in the Czech Parliament" on Tuesday, the day before his rant about economic policy.

What's more, some European Parliament legislators were quick to rebuke Topolanek's comments, and Czech officials told reporters his remarks had been translated poorly, and were not as harsh as they may have seemed.

Nevertheless, Topolanek's tirade reflects a significant difference in the way the United States and many European countries perceive the economic crisis and how to address it. Germany, for example, opposes the idea of investing heavily in stimulus, and other leaders believe they've already done enough to respond to the downturn. (Krugman added yesterday, "[T]he utter unwillingness of many European leaders to come to grips with the scale of this crisis is a very real obstacle to action.")

President Obama will head overseas for a G20 summit next week, and economic recovery is at the top of the to-do list. Should be interesting.

Steve Benen 8:40 AM Permalink | Trackbacks | Comments (14)

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MICHAEL STEELE'S MASTER PLAN.... Republican National Committee Chairman Michael Steele went into a temporary, self-imposed exile recently, after a series of humiliating mistakes that put his job in jeopardy. After insulting, annoying, and frustrating nearly every member of the party establishment, Steele cancelled media interview and decided to try running the RNC for a while.

Yesterday, Steele reemerged. He probably would have been better off hiding a little longer.

After talking a bit about his possible presidential plans -- he said "it'll be the plan" if God directs him to run -- Steele told CNN yesterday that he's made bizarre comments on purpose, as part of an elaborate strategy that only he understands.

Steele: I am very introspective about things. I don't do -- I am a cause and effect kind of guy. So if I do something, there's a reason for it. Even, it may look like a mistake, a gaffe. There is a rationale, there's a logic behind it.

Lemon: Even with the current events in news--

Steele: Yeah.

Lemon: There's a rationale behind Rush, all that stuff?

Steele: Yup. Yup.

Lemon: You want to share it with us?

Steele: Sure, I want to see what the landscape looks like. I want to see who yells the loudest, I wanted to know who says they're with me but really isn't.

Lemon: How does that help you?

Steele: It helps me understand my position on the chess board. It helps me understand, you know, where the enemy camp is and where those who are inside the tent are.

Lemon: It's all strategic?

Steele: It's all strategic.

Does this make any sense at all? Steele embarrasses himself on purpose? His mistakes are part of some secret, deliberate scheme?

It's like listening to a child.

Steve Benen 8:00 AM Permalink | Trackbacks | Comments (32)

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AHEAD OF THE CURVE.... If you watched the "Rachel Maddow Show" on MSNBC last night, you saw a great segment with Sen. Byron Dorgan (D-N.D.) about those who got deregulation terribly wrong -- and the small handful who saw the disastrous consequences coming a decade ago. The name of a certain political magazine came up twice.

Dorgan and Maddow covered quite a bit of ground, including a helpful discussion on the repeal of Glass-Steagall, but of particular interest was Dorgan's reference to a Washington Monthly cover story he wrote in 1994 on the dangers of derivatives.

The Monthly's online archives don't go back quite that far, but Dorgan's prescient piece is available online.

Obviously, Dorgan deserves a lot of credit for getting this exactly right, especially when nearly everyone in the political establishment was completely wrong about deregulation. We might also give credit to the estimable Charles Peters, who had the wherewithal to publish Dorgan's piece when the political winds were blowing in the other direction. (Charlie's nonprofit, Understanding Government, has an annual prize for what he calls "preventive journalism." He ought to give himself one.)

For more on Dorgan's foresight and the larger issue of getting the dangers of derivatives right, also note this fine post that CJR ran earlier this month.

Steve Benen 7:30 AM Permalink | Trackbacks | Comments (15)

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TIPPING BACK THE SCALES.... The politicization of the federal judiciary -- the courts, the Deparment of Justice, U.S. Attorneys' offices -- was one of the more offensive outrages of the Bush era. It's also one of the most consequential.

In a fascinating new piece in the print edition of the Washington Monthly, Rachel Morris explores what went wrong as "loyal Bushies" pushed justice to the right, and what President Obama will have to do to correct the imbalance.

The cronyism and ineptitude that pervaded the Justice Department in the past eight years may have dealt this project a mortal blow -- thanks to the [Bradley Schlozman, former deputy assistant attorney general of the Civil Rights Division], a stint in the Bush DOJ will probably not be considered a stepping stone to greater things. But even if the conservative legal movement advances no further, its successes will reverberate for years to come. Republican appointees now comprise more than 60 percent of appeals court judges, with majorities on ten of the thirteen appellate courts, while Democratic appointees control just one. Many of these Republican appointees are not moderates or pragmatists, but talented, unbendable conservatives. A study by the law professor (and now Office of Management and Budget official) Cass Sunstein found that the judges appointed by Republican presidents from Reagan onward were more consistently conservative in their rulings than those appointed by Eisenhower, Nixon, or Ford. Already the Supreme Court has lurched to the right since the arrival of John Roberts and Samuel Alito, both Reagan DOJ alumni.

Since Barack Obama won the election, many have wondered what he will do to repair the damage that Schlozman and his allies inflicted on the DOJ's integrity. But there is another important question to be asked. Meese's inventive use of the Justice Department ultimately set American jurisprudence on a rightward course. Could Obama use his Justice Department to turn it back?

For all of our sake, he better.

It's a great piece. Take a look.

Steve Benen 12:30 AM Permalink | Trackbacks | Comments (6)

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March 25, 2009
By: Hilzoy

Hoovervilles

From the NYT:

"As the operations manager of a outreach center for the homeless here, Paul Stack is used to seeing people down on their luck. What he had never seen before was people living in tents and lean-tos on the railroad lot across from the center.

"They just popped up about 18 months ago," Mr. Stack said. "One day it was empty. The next day, there were people living there."

Like a dozen or so other cities across the nation, Fresno is dealing with an unhappy deja vu: the arrival of modern-day Hoovervilles, illegal encampments of homeless people that are reminiscent, on a far smaller scale, of Depression-era shantytowns. (...)

The surging number of homeless people in Fresno, a city of 500,000 people, has been a surprise. City officials say they have three major encampments near downtown and smaller settlements along two highways. All told, as many 2,000 people are homeless here, according to Gregory Barfield, the city’s homeless prevention and policy manager, who said that drug use, prostitution and violence were all too common in the encampments."

This is Guillermo Flores:

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"Guillermo Flores, 32, said he had looked for work in the fields and in fast food, but had found nothing. For the last eight months, he has collected cans, recycling them for $5 to $10 a day, and lived in a hand-built, three-room shack, a home that he takes pride in, with a door, clean sheets on his bed and a bowl full of fresh apples in his propane-powered kitchen area."

And here's Doug Brown:

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"Doug Brown, a freelance electrical engineer, moved to the shelter at Village of Hope in October after losing his job. He shares his tool shed with another person."

The tool sheds are made available by a local non-profit. They're those little prefab sheds, maybe 8x10 feet. I'm glad Doug Brown can stay in one. But I wish I didn't have to read, about someone who has skills and is willing to work: "He shares his tool shed with another person."

Hilzoy 11:59 PM Permalink | Trackbacks | Comments (19)

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WEDNESDAY'S MINI-REPORT.... Today's edition of quick hits:

* House Dems unveil their budget.

* Lawmakers in Alaska are preparing to override Gov. Sarah Palin's opposition to economic stimulus.

* Secretary of State Hillary Clinton noted today that "America's 'insatiable' demand for illegal drugs and its inability to stop weapons from being smuggled into Mexico are fueling an alarming spike in violence along the U.S.-Mexican border."

* On a related note, Clinton enjoys very strong support from Americans on her job performance.

* Howard Dean is poised to enter the fight over health care reform in a big way.

* The U.S. military is taking suicide prevention seriously.

* In case you needed another reason to be skeptical of electronic voting machines.

* In a surprise move, Vermont Gov. Jim Douglas (R) said he will veto a gay marriage bill that enjoys strong support in the state House and Senate. He said the effort is a distraction from the economy (though his veto will only make this a bigger distraction). Whether there are enough votes to override the veto remains to be seen.

* Former Washington Gov. Gary Locke was confirmed yesterday as the new Commerce Secretary.

* ThinkProgress' Amanda Terkel did a great job on "Countdown" last night, talking about the harassment she received from Bill O'Reilly staffers.

* On a related note, ThinkProgress is ratcheting up the pressure on O'Reilly's sponsors, asking them to stop subsidizing harassment.

* James Fallows tackles the right-wing nonsense about the president and teleprompters.

* The White House gets slightly better in the gift-giving department.

* Jamison Foser has some very compelling advice for the LA Times' Andrew Malcolm.

* CNBC adding Howard Dean to the team is a good move. CNBC adding Fred Malek to the team isn't.

* Apparently, the right is worked up about an Obama teleprompter gaffe that didn't happen.

* Listening to Rep. Jeb Hensarling (R-Texas) talk about the economy, I keep thinking about this quote from Matt Yglesias: "Something I think most liberals don't understand is exactly how stupid many conservative leaders are."

* What Washington Post readers should have been told about Martin Feldstein.

* Why it doesn't really matter if the major dailies felt left out of the White House press conference last night.

* As stop-motion animation goes, I found this pretty damn impressive:

* And finally, the White House is "open for questions." I tend to think initiatives like these are a pretty good idea.

Anything to add? Consider this an open thread.

Steve Benen 5:30 PM Permalink | Trackbacks | Comments (35)

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STUPID IS AS STUPID DOES.... Over the last couple of years, it seemed like Barack Obama's conservative detractors had thrown just about every criticism imaginable at the guy. If recent commentary on far-right blogs is any indication, they've come up with a new one: they're convinced the president isn't very bright.

Just to be clear, they're talking about the current president.

Now, this always seemed like one of the few attacks the right would go out of its way to avoid. For one thing, they defended George W. Bush, despite his, shall we say, intellectual limitations. For another, I had assumed even die-hard Republicans would grudgingly acknowledge Obama's intelligence, much the same way a liberal lawyer might reluctantly respect Justice John Roberts' intellect, even while disagreeing with him on everything.

Apparently, though, that's not the case, and quite a few of the leading far-right bloggers have convinced themselves that the president, all evidence to the contrary notwithstanding, is a dim bulb. Take this item, for example, published yesterday by Powerline's John Hinderaker:

Everyone knows that Barack Obama is lost without his teleprompter, but his latest blunder, courtesy of the Milwaukee Journal Sentinel, via the Corner, suggests that the teleprompter may not be enough unless it includes phonetic spellings. [Obama apparently mispronounced the name of the company "Orion"]

So evidently we have to add astronomy to history and economics as subjects of which Obama is remarkably ignorant. I'm beginning to fear that our President has below-average knowledge of the world. Not for a President, but for a middle-aged American.

Just in case there's any doubt, there was no indication that Hinderaker was kidding or being deliberately ironic. (With conservative blogs, it's often hard to tell.)

This is, of course, coming from the same blogger who was not only impressed by Sarah Palin's intellectual prowess, but also once lauded George W. Bush as "a man of extraordinary vision and brilliance approaching to genius."

A.L. concluded, "The alternative universe that these folks manage to create for themselves is really quite something to behold.... What's really sad is that Hinderaker is not alone in this belief. If you read the right wing blogs, it's just an accepted fact that Obama is a moron. It's as if they think that if they say it over and over again, it will somehow catch on with the public at large. "

If that's the goal, I'm going to go out on a limb here and say that it fails. Call it a hunch.

Steve Benen 4:40 PM Permalink | Trackbacks | Comments (66)

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THE NEW MEME TAKES ROOT.... Eugene Robinson had a column a couple of weeks ago in which he argued, in relation to media criticism of President Obama, "It didn't work to shout 'socialism,' so now they're yelling 'overload' and 'lack of focus.'"

Except, that didn't work either, so now they're yelling "over-exposed."

CNN's Anderson Cooper last night spoke at some length about the idea of the president of the United States being "over-exposed." Cooper compared Obama's media appearances, including his press conference, to ABC airing "Who Wants to be a Millionaire" too much, to the point that Americans got "sick of it."

Cooper's hardly the only one. Indeed, Jason Linkins had a good piece yesterday on the media's "obsession" with this idea of Obama benig "over-exposed."

Chris Rovzar's take rings true.

As hard as certain members of the media have tried to make this "overexposure" meme into a legitimate story, it's just not.... It's not even that Obama is trying to earn the obvious positives that come with campaign-style selling of his positions (which no doubt he is). It's that he's doing very basically what a president should do -- explaining the problems facing the country to a nervous public, going above and beyond to appear like he knows what he's doing, and trying to make his decisions as transparent as possible. If it smells at all of desperation, consider the context: For the past eight years we had a president notorious for opaque governing. George Bush wouldn't address the country even in times of need, and when he did, his answers to questions in press conferences were often simple, evasive, and even touchy. After that, of course it seems like Obama is going above and beyond the call of duty with a handful of candid appearances. [...]

In a month, the media will forget this overexposure meme as the public gets used to being regularly reminded of Obama's steady hand on the wheel. In fact, you can bet that if a week or two go by without a public appearance by the president, you'll eventually see headlines shouting, "WHERE'S BARACK?" Can we just skip ahead to that, now?

Honestly, I'm not even sure what the "over-exposed" meme is supposed to mean. Americans will somehow like the president less if he's on television, talking about national crises?

As Michelle Cottle noted, "Overexposure is what happens to some twitty starlet who winds up on the cover of all the tabloids 10 weeks running for doing little more than changing her underwear (or, just as often, for not wearing any). Obama is the newly minted president confronted with extraordinary crises. People need to see him and hear what he's trying to do to get the country back on track early and often."

As is often the case, there may be a disconnect between the public and what the media thinks the public wants. Early estimates suggest more than 40 million Americans tuned in to last night's press conference -- not including those who tuned in via the cable networks.

Some pundits may mind Obama's willingness to talk publicly about the issues, but quite a few Americans feel differently.

Steve Benen 3:35 PM Permalink | Trackbacks | Comments (41)

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ECHO CHAMBER CASE STUDY.... Once in a while, we can watch a conservative talking point follow a predictable trajectory. What may start as a strange and obscure claim will soon work its way to more conservative blogs. Soon after, Drudge will pick up on it, which usually leads to Limbaugh. From there, it's a Fox News story, and then accepted conventional wisdom by the Republican Party.

We saw this clearly in February the bizarre fight over the National Coordinator of Health Information Technology. Around the same time, the infamous (and non-existent) high-speed rail between Disneyland and Las Vegas offered another case study.

Ali Frick reports on the latest theory, which actually managed to make its way into the White House last night.

Earlier this week, China's Central bank Governor Zhou Xiaochuan suggested the need for a "super-sovereign reserve currency," a move most passed off as China trying to "flex some muscle." And yet, within days, Fox News' Major Garrett was demanding whether President Obama supported a "global currency."

So how did a story that has effectively no basis in reality -- and has nothing to do with a global currency -- end up as one of the few questions posed to President Obama last night? It started with a blaring banner on the instigator of conservative and media memes, the Drudge Report.

Within hours, right-wing fanatic Rep. Michele Bachmann (R-MN) was demanding that Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke pledge to never adopt a "global currency." Soon, Fox News' resident conspiracy theorist Glenn Beck was ranting that a U.N.-imposed global currency was the first step toward world government.

Last night, Fox News' Major Garrett raised the profile of this nonsense by asking the president directly whether he supports a move to a "global currency."

The president responded, "I don't believe that there's a need for a global currency."

Will this put far-right minds at ease? I doubt it. Obama's response was probably all part of an elaborate ruse, quite possibly involving the U.N. The president just wants us to think he opposes a global currency as part of an effort to lure us into a false sense of security.

Don't worry, Glenn Beck and Michele Bachmann know what's really going on.

Steve Benen 2:40 PM Permalink | Trackbacks | Comments (38)

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SCHOOL VOUCHERS LOSE ANOTHER ROUND.... The Arizona Constitution says, in no uncertain terms, "No tax shall be laid or appropriation of public money made in aid of any church, or private or sectarian school, or any public service corporation." State officials nevertheless created a private school voucher system that directs public money to private and sectarian schools.

Naturally, there was a lawsuit. Today, the Arizona Supreme Court struck down the funding.

The Arizona Supreme Court has ruled that two school voucher programs violate the state's constitution.

The vouchers have helped cover the cost of private school for foster children and disabled students. The justices ruled Wednesday that the programs run afoul of the Arizona Constitution's bans on using tax dollars to support private schools.

The state Supreme Court's ruling was unanimous.

Americans United for Separation of Church and State noted in a press release, "Arizona is one of 37 states with strong constitutional provisions that bar the diversion of tax funding to religious schools." It's quite an impediment to public funding of private religious institutions.

I realize there are some conservatives who hold out hope, but it's time to give up on this misguided idea. Vouchers have lost in the courts, they've lost in the ballot initiatives, and when tried, they've failed to produce the desired results. Some on the right have given up on the voucher agenda altogether. Here's hoping the remaining holdouts do the same.

Steve Benen 2:05 PM Permalink | Trackbacks | Comments (20)

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ORSZAG APPRECIATES CONGRESS' HANDIWORK.... By most accounts, Sen. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee, wasn't doing the White House any favors with his work on the federal budget. Conrad looked to cut a lot of spending, scale back the president's middle-class tax cut, and restore "some of the money-saving budget gimmicks" Obama sought to eliminate.

Brian Beutler noted reports that suggested Conrad and his House counterpart, Rep. John Spratt (D-S.C). "are taking machetes to Obama's proposal."

But as it turns out, the administration has seen what the Budget Committees have been working on, and seems rather pleased.

Congressional Democrats advanced budget outlines Wednesday that largely mirror President Barack Obama's spending priorities, even while pushing marginal changes designed to tame ballooning deficits.

A version put forward by the House Budget Committee foresees a $598 billion federal deficit after five years. And there would be a $1.2 trillion red-ink figure for the 2010 budget year, as opposed to $1.4 billion under Obama's plan as scored by the Congressional Budget Office.

Budget director Peter Orszag said the companion fiscal blueprints would bolster administration efforts to give a higher priority to education and clean energy programs as well as taking into account Obama's desire to overhaul health care.

In a briefing for reporters in advance of Obama's visit to the Capitol Wednesday, Orszag said the plans were "fully in line with the president's key priorities." Obama has said that he understands the process will necessitate considerable give and take, but that he doesn't want to lose sight of the overall goals. He characterized them as "98 percent the same as the budget proposal the president sent up in February."

What about health care? Conrad and Spratt are apparently presenting blueprints with some kind of health reserve to finance comprehensive reform. Their blueprint won't include money for the reserve fund. While that certainly sounds like a bad thing, Jonathan Cohn explains otherwise.

If you're interested in seeing more about Orszag's take on the budget committees' work, I'm including a portion of the transcript below.

From Orszag's teleconference with reporters this morning:

"First, we are very pleased that the House and Senate Budget Committees are taking up resolutions that are fully in line with the President's key priorities for the budget. Not only do they embody the four key principles that the President has put forward for the budget, but they are 98 percent the same as the budget proposal the President sent up in February. "With regard to the four principles, as the President said last night and as we have emphasized since the budget was sent up, we want to make sure that the budget reflects key investments in health care, in energy, in education and cuts the deficit in half. And both the House and Senate Chairmen's marks do precisely that. First, with regard to cutting the deficit in half, the House Budget Committee's resolution hits $586 billion in 2013; the Senate Budget Committee's resolution hits $570 billion in 2013. Both of those meet the standard of cutting the deficit in half. "With regard to health care, exactly as under our budget submission, both the House and Senate include deficit-neutral reserve funds to kick-start the health reform process. I think there's been some misunderstanding about what a budget resolution does. The way the budget resolution implements the proposals that the President put forward and the concept that the President put forward is through a deficit-neutral reserve fund. The reserve fund that we had in our budget was also deficit-neutral, and so, again, the budget resolution is just reflecting precisely the approach that the President put forward in our budget. "With regard to energy, again, exactly as under the President's budget. We had a deficit-neutral reserve fund, and both the House and Senate marks also have a deficit-neutral reserve fund for clean energy. "With regard to education, in addition to the $100 billion that was in the Recovery Act, the Chairmen's marks in both the House and Senate include funding for the proposed increases in Pell Grants that the President put forward, albeit they do it on the discretionary side rather than the mandatory side. And in addition to that, they create a deficit-neutral reserve fund, which would permit mandatory proposals in the education sphere, including perhaps making the Pell Grant mandatory. "Now, clearly there were some adjustments that were made, but let's examine what the adjustments are. With regard to discretionary spending, out of the 18 functional categories in the budget, 13 are exactly the same in the Senate; 12 are exactly the same in the House. And even when you incorporate the differences, if you look at overall discretionary spending, the difference relative to the House compared to the President's budget proposal is 0.6 percent, and in the Senate it's 1.2 percent. So, again, some differences, but relatively modest. "Another thing that has been noted is that we had tied the extension of Making Work Pay to revenue from cap and trade. The House and Senate budget resolutions do adopt a different approach. I would note with regard to Making Work Pay that we have already in the Recovery Act gotten two years of that tax credit. So we have two years to figure this out."

Steve Benen 1:35 PM Permalink | Trackbacks | Comments (2)

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DULL.... The New York Times, reflecting on the president's news conference last night, described Obama as "placid and unsmiling," sounding too much like "the teacher speaking in the stillness of a classroom where students are restlessly waiting for the ring of the bell." The president, the Times added, was "more enervating than energizing."

John Cole noted that this was a common observation among conservative bloggers this morning:

Jonah Goldberg- Longwinded and boring!

Andrew Malcolm- I slept through my college classes and last night was bored!

Rove, Hannity, and O’Reilly: The press conference was boring!

Hugh Hewitt- Snorefest!

Perhaps the president should have laughed a bit more. Oh wait, that wouldn't have worked either....

Steve Benen 1:05 PM Permalink | Trackbacks | Comments (31)

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THEY STILL DON'T GET IT.... A couple of weeks ago, Thomas Friedman had a pretty good column about, among other things, Republican leaders' inability to appreciate the seriousness of the times. The GOP, Friedman said, "behaves as if it would rather see the country fail than Barack Obama succeed."

Rush Limbaugh, the de facto G.O.P. boss, said so explicitly, prompting John McCain to declare about President Obama to Politico: "I don't want him to fail in his mission of restoring our economy." The G.O.P. is actually debating whether it wants our president to fail. Rather than help the president make the hard calls, the G.O.P. has opted for cat calls. It would be as if on the morning after 9/11, Democrats said they wanted no part of any war against Al Qaeda -- "George Bush, you're on your own."

Two weeks later, Republican leaders still don't get it.

It's OK for Republicans to want President Obama to fail if they think he's jeopardizing the country, Louisiana Gov. Bobby Jindal told members of his political party Tuesday night.

Jindal described the premise of the question -- "Do you want the president to fail?" -- as the "latest gotcha game" being perpetrated by Democrats against Republicans.

"Make no mistake: Anything other than an immediate and compliant, 'Why no sir, I don't want the president to fail,' is treated as some sort of act of treason, civil disobedience or political obstructionism," Jindal said at a political fundraiser attended by 1,200 people. "This is political correctness run amok."

It's not just Jindal.

Count former GOP presidential candidate Fred Thompson among the growing chorus of prominent Republicans who want President Obama's policies to fail. [...]

Thompson told CNN's John Roberts Wednesday that he agreed with some of his fellow Republicans who have said publicly they do not want the president's policies to be successful.

"I want his policies that I believe take us in the wrong direction to fail," Thompson told Roberts on CNN's American Morning.

In the midst of multiple generational challenges, some of the Republican Party's most prominent voices continue to explore whether they can get away with rooting for the president's failure -- a debate initiated two months ago by a right-wing, drug-addled radio host, who seems to enjoy a little too much influence over the direction of one of the nation's major political parties.

There's a real policy debate underway at the big kids' table. If Republicans want to participate, they're going to have to get serious for a change.

Steve Benen 12:35 PM Permalink | Trackbacks | Comments (36)

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WEDNESDAY'S CAMPAIGN ROUND-UP....Today's installment of campaign-related news items that wouldn't generate a post of their own, but may be of interest to political observers.

* A new Quinnipiac poll in Pennsylvania shows Sen. Arlen Specter (R-Pa.) in pretty big trouble, trailing his likely Republican primary challenger, Pat Toomey, by 14 points, 41% to 27%. In general, incumbent below 50% are considered vulnerable. But under 30%?

* Sen. Jim Bunning (R-Ky.) continues to be furious at, well, pretty much everyone. In his latest tirade, Bunning lashed out at Senate Minority Leader Mitch McConnell (R-Ky.) for raising money when Bunning says he needs the money more.

* Americans United for Change is launching a new television ad campaign in 12 states (Maine, North Dakota, Nebraska, Virginia, Indiana, Arkansas, North Carolina, Alaska, Louisiana, Pennsylvania, Arizona, and New Hampshire) in support of President Obama's budget. Also, MoveOn.org is kicking off a radio and web ad campaign targeting "centrist" Democrats who may oppose the administration's budget.

* Obama is weighing in on next week's special election in New York's 20th. An email featuring the president's signature was sent to DNC and Organize for America activists, encouraging them to support and organize on behalf of Democrat Scott Murphy.

* Conservative CNBC commentator Larry Kudlow announced yesterday that he will not be a Senate candidate in Connecticut next year.

* An appeals court panel ruled yesterday that the Texas Democratic Party can demand that candidates seeking the party's presidential nomination vow to support the party's eventual nominee.

* The race to replace Rep. Ellen O. Tauscher (D-Calif.), who is headed for Obama's State Department, is on. The early leader appears to be state Sen. Mark DeSaulnier (D).

Steve Benen 12:00 PM Permalink | Trackbacks | Comments (10)

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BAYH AND THE BLUE DOGS EXPLAIN THEMSELVES.... I've been critical of efforts from Sen. Evan Bayh (D-Ind.) and other "centrist" Democrats to organize a new working group to water down President Obama's domestic agenda. I tried to keep an open mind, though, while reading an op-ed from the group's leadership -- Sens. Bayh, Tom Carper, and Blanche Lincoln -- in the Washington Post today.

The three said they "feel compelled to set the record straight," because their goals, they say, have been misconstrued.

As moderate leaders, it is not our intent to water down the president's agenda. We intend to strengthen and sustain it. Moderation is not a mathematical process of finding the center for its own sake. Practical solutions are practical because they offer our best chance to make a difference in people's lives today without forcing our children to pick up the tab tomorrow.

The stakes are too high for Democrats to fear a policy debate. Such debates produce better legislation. On nearly all important votes, a supermajority of 60 senators will be needed to pass legislation. Without Democratic moderates working to find common ground with reasonable Republicans, the president's agenda could well be filibustered into oblivion.

So, Bayh & Co. will water down make legislation less progressive so Republicans will be less inclined to oppose key bills. Is this a recipe for success? We saw this play out during the stimulus debate, and the result was a weaker and insufficient bill. (Indeed, the same Democrats want to make it easier for Republicans to filibuster health care and energy bills. I wonder why that is?)

This is built on a faulty premise of negotiating from weakness. Democrats start off with a popular president, a popular agenda, and a 58-vote majority. Instead of wondering how to make good legislation worse to make Collins, Snowe, and Specter happy, perhaps the majority party should consider a) reforming the filibuster rules; or b) pressuring Republican "centrists" to vote for good bills that will make them more popular back home.

In 1993, the three of us, as much younger politicians, stood with great expectations as the last Democratic president was sworn in with big plans, a head of steam and a Democratic Congress ready to begin a new progressive era. In less than two years, it all came crashing down, with disillusioned moderate voters handing the GOP broad congressional victories in 1994.

Um, guys? 2009 is not 1993. The party would be wise to start realizing this. Obama has more support than Clinton did 16 years ago, Democrats have more seats than they did 16 years ago, and the broader political dynamic has flipped -- Republicans were in ascension then, and are in decline now. Bayh and the Blue Dogs are acting shell-shocked, and it's clouding their judgment.

Tim Fernholz noted, "It's a good sign, at least, that Bayh et. al. have faced enough political pressure that they felt it necessary come forward and reiterate their support for the president." It's a good point. Perhaps those pressuring the Blue Dogs should keep doing what they're doing.

Steve Benen 11:15 AM Permalink | Trackbacks | Comments (47)

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WAS IT WORTH IT FOR SPECTER?..... It's pretty obvious that Sen. Arlen Specter (R-Pa.) flipped on the Employee Free Choice Act because he wants to win his Republican primary next year. If continued to support EFCA, as he did in 2007, his party's far-right base would have yet another reason to see Specter as overly concerned with the interests of working people.

So, to make himself appear more conservative, Specter flipped. And has he impressed his far-right detractors with his change of heart? Apparently not.

For instance, Specter's announcement drew only mockery and scorn from former GOP Rep. Ernest Istook, the chair of the anti-EFCA group Save Our Secret Ballot.

"Specter enjoys being the center of attention," Istook said. "There has probably been more money spent to influence his vote on this issue than on any other vote, from any other senator, at any other time. He wants to continue enjoying the attention and the fundraising opportunity."

Doug Stafford of the anti-EFCA National Right to Work Committee added in a statement that Specter's move should be "viewed with some skepticism," adding that other labor-oriented proposals championed by Specter remain "totally unacceptable" and will enable "Big Labor to corral more workers into forced unionism."

Specter's potential primary challenger, Club for Growth president Pat Toomey, has kept up the attacks, blasting Specter's vote for the "big government stimulus bill" and dismissing Specter's opposition to EFCA as merely the result of "a threat in the Republican primary."

This reminds me a bit of congressional Democrats who used to cave to Bush/Cheney on national security issues because, as they saw it, standing up to the GOP would mean attack ads accusing them of being soft on national security. The problem, of course, was that Republicans were going to make the accusations anyway.

It's a similar problem here. Specter knows EFCA is a good idea, and knows it would benefit working people. He doesn't want to be accused by his own party of "moderation," so Specter is toeing the party line, hoping to avoid the attacks. But, like the Dems on national security, the attacks will come anyway.

This time, though, when the Republican base continues to blast Specter's "centrism," he'll also get blasted from the other side for betraying labor.

It's quite a calculation Specter made.

Steve Benen 10:35 AM Permalink | Trackbacks | Comments (22)

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INSEPARABLE.... Perhaps one of the more provocative comments from the president's press conference last night came early on, shortly before Obama open things up to questions:

"At the end of the day, the best way to bring our deficit down in the long run is not with a budget that continues the very same policies that have led us to a narrow prosperity and massive debt. It's with a budget that leads to broad economic growth by moving from an era of borrow-and-spend to one where we save and invest.

"And that's why clean-energy jobs and businesses will do -- all across America. That's what a highly skilled workforce can do all across America. That's what an efficient health-care system that controls costs and entitlements like Medicare and Medicaid will do.

"That's why this budget is inseparable from this recovery, because it is what lays the foundation for a secure and lasting prosperity."

This will no doubt strike some as hyperbole. If recovery is a short-term goal, and the administration's budget is about laying the groundwork for long-term prosperity, then it may be excessive to suggest the budget proposal and recovery are "inseparable."

But I tend to think the president is right about this. This isn't just a cyclical economic downturn, that will resolved fairly soon with low interest rates and a jolt by way of a stimulus package. Rather, the White House budget approaches the economy as if it has fundamental structural shortcomings.

Obama, in effect, is saying the recovery won't be a real recovery -- producing prosperity that is both lasting and broadly applied -- without an ambitious budget that deals with his policy priorities.

Doesn't that necessarily bolster the "inseparable" claim?

Steve Benen 10:15 AM Permalink | Trackbacks | Comments (14)

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FOURNIER'S PREOCCUPATION.... If you read far-right blogs, you've probably noticed conservatives' fascination with President Obama and teleprompters. The argument, in a nutshell, is the president can speak on substantive issues, but only if he's reading from a screen.

As arguments go, it's pretty silly. Over the course of the last two years, Obama has spoken without notes in hundreds, if not thousands, of town-hall meetings, candidate debates, and media interviews. The notion that the president can't communicate without a teleprompter is absurd.

And yet, the meme has made its way from far-right blogs and talk radio to analysis pieces from Ron Fournier, the Washington bureau chief for the Associated Press. Here's Fournier take on last night's White House press conference.

What kind of politician brings a teleprompter to a news conference?

A careful one.

President Barack Obama took no chances in his second prime-time news conference, reading a prepared statement in which he took both sides of the AIG bonus brouhaha and asked an anxious nation for its patience. [...]

One of the few times he summoned raw emotion came after a reporter demanded to know why it took him so long to express outrage over the AIG executive bonuses.

"It took a couple of days because I like to know what I'm talking about before I speak."

Even better, he likes to have it up on the teleprompter.

This is an "analysis" piece? From where, the Republican National Committee?

Look, it's not at all unusual for a president to read a prepared text at the start of a press conference. Modern presidents have done this many, many times. Last night, Obama had some specific things to say about a pressing international crisis, and instead of reading from note cards at the podium, he read from a screen. It's hardly exciting, and it's hardly worth obsessing over. And yet, here's the Washington bureau chief for the AP insisting that the president is overly reliant on a "crutch."

A.L. concluded, "The truth is, Fournier is a hack. The only reason to use the word 'teleprompter' five times in a 100 word write-up of a presidential press conference is in order to push a meme, a meme that just happens to be popular right now on right wing blogs. As usual, Fournier's agenda is transparent."

The five-in-100 ratio is a bit of an exaggeration, but you get the point.

Steve Benen 9:35 AM Permalink | Trackbacks | Comments (53)

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SACRIFICE.... The strangest question from President Obama's press conference last night came by way of NBC News' Chuck Todd. Twelve hours later, I'm still not sure what he was thinking.

"Some have compared this financial crisis to a war, and in times of war, past presidents have called for some form of sacrifice. [...]

"Why, given this new era of responsibility that you're asking for, why haven't you asked for something specific that the public should be sacrificing to participate in this economic recovery?"

When the president responded by pointing all of the many ways in which Americans are already sacrificing in the midst of an economic crisis, Todd wasn't satisfied. In a follow up, the NBC White House correspondent asked why Obama has called on "specific" sacrifices from Americans. And again, the president explained, "[T]he American people are making a host of sacrifices in their individual lives."

We seem to get this from the media establishment quite a bit lately. The Washington Post's Jackson Diehl argued earlier this month that Obama isn't calling on Americans to "sacrifice" enough. Newsweek's Howard Fineman recently said journalists at traditional news outlets would be more impressed with the president were it not for his "failure to call for genuine sacrifice on the part of all Americans."

I suppose I know where these media figures are coming from. After 9/11, then-President Bush had an opportunity to call Americans to make genuine sacrifices. He could have urged more Americans to sign up for military service. He could have launched a drive to national volunteer initiative. He could have asked wealthy people who didn't need a tax cut to give up tax breaks the nation couldn't afford to help pay for two wars and renewed investment in domestic security. Instead, Bush urged the nation to shop.

But the problem with Chuck Todd's question and the media's general assumptions is the equating of the two crises. The questions are based on a faulty assumption -- Bush faced a crisis and failed to call for sacrifices, so Obama, facing a crisis, should show more leadership.

Here's the thing they're missing: these are different kinds of crises. Millions of Americans have lost their jobs, homes, savings, and health care. President Obama is trying to make things better for a nation that's already sacrificed quite a bit. If he asks Americans to sacrifice more, it's likely to make the economy even worse.

But the media seems to believe the president is going about this all wrong. Obama should ask us to sacrifice more during the crisis. The administration, out of some misguided notion of nobility, should make conditions even more difficult for Americans.

These assumptions are completely backwards -- and more than a little bizarre.

Steve Benen 8:35 AM Permalink | Trackbacks | Comments (81)

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DEFICITS DON'T MATTER (RIGHT NOW).... Following up on Hilzoy's overnight comments on President Obama's prime-time press conference, what jumped out at me had less to do with the president's responses and more to do with the questions themselves.

For example, I had assumed that the Treasury Department's plan on the banking industry and toxic assets ("legacy" assets, whatever) would be a major topic of conversation. Its success or failure will have a significant impact on the economy, and one assumes, the president came prepared to discuss the plan in some detail. I was actually anxious to hear what he had to say.

But no one asked. We heard questions about stem-cell research and Fox News' concerns about a "global currency," but the bank rescue plan was ignored completely. Indeed, after a week of obsessing over Tim Geithner, there was only one passing reference to the Treasury Secretary from reporters last night. How odd.

So, what did the reporters want to talk about? Deficits and debt. From the transcript:

* "[U]nder your budget, the debt will increase $7 trillion over the next 10 years. The Congressional Budget Office says $9.3 trillion.... Isn't that kind of debt exactly what you were talking about when you said 'passing on our problems to the next generation'?"

* "[E]ven under your budget, as you said, over the next four or five years, you're going to cut the deficit in half, then, after that, six years in a row, it goes up, up, up."

* "You keep saying that you've inherited a big fiscal mess. Do you worry, though, that your daughters, not to mention the next president, will be inheriting an even bigger fiscal mess if the spending goes out of control?"

All of these questions came from different reporters, suggesting that the White House press corps has more or less internalized Republican talking points (again). In the midst of a dangerous global recession, journalists are desperate to know when this administration will start moving towards a more balanced budget -- which is exactly what congressional Republicans are focusing on (and, come to think of it, what congressional Republicans focused on in the 1930s, too).

Note to the White House press corps: under these circumstances, deficits aren't our most pressing problem. This preoccupation with the issue isn't helping anyone.

Steve Benen 8:00 AM Permalink | Trackbacks | Comments (24)

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CULTURE SHOCK.... Charles Homans' piece in the new issue of the Washington Monthly on Culture11 caused a bit of a stir yesterday, and with good reason. It's a fascinating story about what happened when a conservative web site ventured outside the conservative movement's bubble.

It was a grimly funny coincidence that around the time Culture11's financial well was running dry, another Web site sharing its subject matter debuted to much greater fanfare in the right-wing media than Kuo's project ever received: Big Hollywood, an entertainment and politics blog created by Andrew Breitbart, a conservative Los Angeles-based Internet entrepreneur who helped launch both the Drudge Report and Huffington Post. Beneath an angry vermillion-colored banner, the blog offers recurring features like the "Celebutard of the Week" -- tracking the latest vapidly liberal political utterances from the likes of Cher -- and clips of the best conservative moments in film interspersed with rote breaking news from the entertainment industry. It's supposed to eventually host cultural musings from such notable film critics as House Minority Leader John Boehner and Minority Whip Eric Cantor; commenting on a scene in the new thriller The International in which the characters shoot it out in the Guggenheim Museum, one Big Hollywood contributor coos approvingly, "I love seeing modern (phony) art destroyed."

But for all the bluster of all-caps headlines like "GLOBAL WARMING PROPAGANDA SINKS 'UNDER THE SEA 3D,' " it's a far less courageous site than the comparably nonconfrontational Culture11; beneath the patina of combativeness, it's really just a support group for 24 fans. What Big Hollywood does isn't criticism, or reporting -- it's ideological accounting. And its failure to get its arms around the culture in which it is swimming is symptomatic of the broader failures of the conservative movement.

For decades, the Nixonian notion of the silent majority created a strong temptation for conservatives to simply wall off the parts of society that they didn't like or understand, secure in the belief that there were more people on their side of the wall. Ballot for ballot, this may have been true in the 1970s and '80s, and even into the '90s. But if you build a border fence, it's difficult to see what's happening on the other side of it. Which is why in 2008 the Republican Party awoke to a world in which it was losing every politically important demographic battle and had essentially ceded the field on issues like education, where it hadn't contributed a new policy idea since the school voucher, and energy, where the best plan it could come up with was a renewed push for offshore drilling. Big Hollywood's mania for ideological categorization stems from the same mind-set -- shared even by some of the smarter reform conservatives -- that produced the Bush administration's disastrous loyalty-over-performance hiring practices: the instinct to see everything, from the Sundance Film Festival to NASA's atmospheric research programs, as just another battleground. What Culture11's editors got right was the observation that, regardless of what you think of the world as it is, you can't figure out how to wrestle with it until you understand what's actually happening in it.

Andrew Sullivan called the piece "a really smart reported essay, with some great lines and a deep understanding of how conservatism's inability to understand contemporary popular culture is a huge liability in relating to the young."

Take a look.

Steve Benen 2:30 AM Permalink | Trackbacks | Comments (9)

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By: Hilzoy

Press Conference: Minor Notes

I saw Obama's press conference, and I thought it was quite good, in a sober, unremarkable way. I just wanted to note two minor points that struck me

First, everyone who asked a question had the chance to ask a follow-up. I don't have the heart to go back and look at Bush's old press conferences, but I don't remember his allowing reporters to ask follow-up questions; in fact, if I recall correctly, he sometimes got annoyed when people tried. This matters, of course, since while a President can just refuse to answer a question twice, it's a lot more obvious when he does so. Allowing follow-up questions makes it harder for a President to be flatly unresponsive, and this is a very good thing.

Second, you might have noted a question from Fox that began:

"QUESTION: Good evening, Mr. President. Thank you. Taking this economic debate a bit globally, senior Chinese officials have publicly expressed an interest in an international currency. This is described by Chinese specialists as a sign that they are less confident than they used to be in the value and the reliability of the U.S. dollar. European countries have resisted your calls to spend more on economic stimulus."

Obama didn't answer this bit in his initial response, so the Fox reporter followed up:

"QUESTION: Is there a need for a global currency?

PRESIDENT OBAMA: I don't believe that there's a need for a global currency."

If you've been read Steve's earlier post on Michele Bachmann, you might recall that she asked a similar question in the hearings today:

"Bachmann: Would you categorically renounce the United States moving away from the dollar and going to a global currency as suggested this morning by China and also by Russia. Mr. Secretary?

Geithner: I would, yes.

Bachmann: And the Federal Reserve Chair?

Bernanke: I would also."

You might be wondering: what is this global currency business? As best I can tell, this is what Fox and Bachmann are talking about:

"China's call for a new international reserve currency may signal its concern at the dollar's weakness and ambitions for a leadership role at next week's Group of 20 summit, economists said."

Of course, their question wouldn't make sense even if China and Russia had called for the adoption of a new global currency. If they did, we'd just answer 'no', and that would be the end of it. But that's not what Russia, China, and "Khazakistan" called for. Somehow, Michele Bachmann and the Fox reporter seem to have missed that little word 'reserve'. Calling for a new reserve currency is not remotely the same as calling for the US or any other country to abandon the dollar and adopt something else as its currency. It's just saying: maybe countries should consider holding their reserves in a different currency.

You can almost hear them thinking: currency, reserve currency: what's the difference? Sigh.

Hilzoy 1:58 AM Permalink | Trackbacks | Comments (26)

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March 24, 2009

TUESDAY'S MINI-REPORT.... Today's edition of quick hits:

* President Obama's second prime-time conference starts tonight at 8 p.m. eastern.

* According to New York Attorney General Andrew Cuomo, nine of the top 10 AIG employees who received controversial retention bonuses have agreed to give the money back. The Senate, meanwhile, is slow-walking the House bill on bonuses.

* Good: "Dozens of mountaintop coal-mining permits are being put on hold until the projects' impacts on streams and wetlands can be reviewed, the Environmental Protection Agency said Tuesday."

* Obama had an op-ed today arguing for "the urgent need for global economic cooperation." In an unusual twist, it appeared in more than 30 newspapers around the world.

* Nice to see some of those Treasury Department vacancies getting nominees.

* The president and some school kids called space today. I love stuff like this.

* There's plenty of blame to go around for AIG, but very few are blaming the president.

* The latest in a series of reasons to be suspicious of Zogby poll results.

* Al Gore will have a new book out later this year on climate change.

* The state Senate in Vermont approved legislation yesterday in support of same-sex marriage. The final vote was 26 to 4.

* NPR experiences a ratings boom.

* Interview of the Day: Benjamin Sarlin talks to Bo Lundgren, Sweden's minister for fiscal and financial affairs.

* Remember David Vitter's airport trouble? He's in the clear.

* Bill O'Reilly's ridiculous hatchet job on Amanda Terkel.

* And finally, on a housekeeping note, the articles in the latest issue of the Washington Monthly are now online. Additionally, note that there's now a sign-up box on the home page allowing readers to sign up for notifications on web-only stories, sneak previews, and other notable releases.

Anything to add? Consider this an open thread.

Steve Benen 5:30 PM Permalink | Trackbacks | Comments (26)

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WHEN BACHMAN HAS THE MIC.... Watching Rep. Michele Bachman (R-Minn.) speak has a certain car-wreck quality. It's painful and disturbing, but it's just so difficult to look away.

Take Bachman's questioning today of Treasury Secretary Tim Geithner and Federal Research Chairman Ben Bernanke. (via Karen Tumulty, who noted that Bachman seems confused about how a bill becomes a law)

It's a five-minute clip, but it's worth watching. Bachmann starts by asking Geithner if the United States is "jettisoning free-market capitalism."

From there, the Minnesotan asks where the Treasury Department received the legal authority to intervene in the financial markets. When Geithner explains that Congress gave the Treasury the authority, she pressed on, asking "where in the Constitution" Geithner is given the authority to act. (Apparently, she was making some kind of constitutional argument. It didn't make any sense.)

And finally, Bachmann insisted that China, Russia, and Kazakhstan (she really doesn't know how to pronounce Kazakhstan) are moving towards a "global currency." She wanted to hear Geithner and Bernanke "categorically" rule out the United States giving up on the U.S. dollar. Both did, though Bernanke's body language suggested he couldn't believe how silly the question was.

Granted, this isn't exactly new, and Bachmann's difficulties are well documented. But that doesn't make today's performance any less entertaining.

Steve Benen 4:45 PM Permalink | Trackbacks | Comments (63)

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TOO MANY POLICIES?.... For a while, one of the principal criticisms from President Obama's detractors was that he's trying to take on too many policy challenges at once. The criticism never really stuck, and the White House did a reasonably good job of explaining why the president sees the various issues as interconnected.

The argument has, apparently, evolved into a new-but-related criticism.

The chief spokesperson for GOP Senate Leader Mitch McConnell just said in an interview that leading Republicans are going to ratchet up their criticism of the Obama administration for releasing too many big plans on the economy -- with too little sense of how they mesh with or impact each other.

The comments from McConnell spokesperson Don Stewart amount to a preview of what we'll likely be hearing from Senate Republicans and other Republican leaders in the days ahead.

"We can't help but notice the numerous and sundry plans that seem to come out at a rate of one a week without any clear picture of how they interact and whether they interact well or not," Stewart told me. "That's a very real concern among Senate Republicans."

Frankly, the talk-and-chew-gum argument made more sense.

In fact, putting aside the merit of the Obama administration's agenda, and overlooking the fact that the president is acting on the same agenda he offered during the campaign, I've long thought the White House has gone out of its way to emphasize how these seemingly disparate issues directly relate to each other. Obama has a governing vision, and all of the pieces fit together to shape the larger picture, especially on the three main domestic policy areas (health care, energy, and education). McConnell's new argument seems to have it backwards.

What's more, this new criticism was like setting a ball on a tee for the DNC:

Democratic National Committee spokesman Hari Sevugan ... emails over a response amplifying the "party of no ideas" attack that Dems have been waging on the GOP:

"I guess when you have no new ideas, anything more than zero must seem overwhelming. But, if the Republican party thinks that attacking new ideas is a winning answer, they're more out of touch than we all thought."

I suspect McConnell and GOP leaders on the Hill are probably just experimenting with messages. They try one rhetorical tack, and when it fails to resonate, they move on to the next. When it fails, they try another. With that in mind, my hunch is the "too many policies" line won't last long.

Steve Benen 4:15 PM Permalink | Trackbacks | Comments (13)

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SCHUMER ENDORSES GAY MARRIAGE.... Good for him.

At a private risotto dinner last night with gay leaders and elected officials at Gramercy Tavern last night, Sen. Chuck Schumer reversed himself on the issue of same-sex marriage, saying he not only now supports it but also backs a full reversal of the Defense of Marriage Act.

Schumer's office confirmed the meeting and also the senior senator's change of heart, issuing the following statement from the Brooklyn Democrat (who is traveling upstate today): "It's time. Equality is something that has always been a hallmark of America and no group should be deprived of it. New York, which has always been at the forefront on issues of equality, is appropriately poised to take a lead on this issue."

Ben Smith, reporting on Schumer's announcement, noted, "It's a big deal because it represents support for same-sex marriage moving toward becoming the default, mainstream position of the Democratic Party. Schumer's a New York senator, but he's also always been extremely careful to protect his right flank on issues like crime and gay rights."

It's true, Schumer has been quite cognizant of conservative culture-war attacks. He has long said that marriage "should be between a man and a woman" and joined the majority in voting for the Defense of Marriage Act. It's what makes his latest pronouncement so encouraging.

As for whether this position is "moving toward becoming the default, mainstream position of the Democratic Party," I'd like to think that's true, but I suspect we're still a few years from seeing this become a reality. I haven't seen a list of Democratic senators and/or governors who are on record supporting gay marriage -- if anyone has such a list, let me know -- but I suspect it's still fairly short.

That said, here's hoping Schumer's announcement is a sign of things to come.

Steve Benen 3:35 PM Permalink | Trackbacks | Comments (14)

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SPECTER FLIPS ON EFCA.... Sen. Arlen Specter (R-Pa.) has supported the Employee Free Choice Act in the past, and his vote on the measure this year would make passage far more likely. Of course, Specter also knows that sticking to his position on the issue will cost him dearly in a Republican primary next year, a contest he'll enter as the underdog.

Apparently, Specter felt like he had no choice, so he's flipping.

Some big news emerged Tuesday in regards to the debate over the Employee Free Choice Act, with a prominent Republican strategist declaring that Sen. Arlen Specter will vote against cloture on and passage of the bill.

Americans for Tax Reform president Grover Norquist broke the news during a speech at the Capital Research Center Labor Summit, saying that Specter's chief of staff had let it be known that he would oppose the legislation, which would make it easier for unions to organize. Norquist's remarks were subsequently reported on the Twitter account of Larry Farnsworth -- the former Speechwriter and Deputy Press Secretary to Speaker Dennis Hastert -- and seconded by Dave Weigel of the Washington Independent.

If true, it represents a major blow for EFCA supporters. Specter was the one Senate Republican to vote for cloture when the bill came to the floor in 2007. And with 60 votes needed to avoid a filibuster, his defection presents a major parliamentary hurdle for the legislation's passage.

Now, a few caveats here. Grover Norquist, a fierce right-wing opponent of EFCA, is not exactly a reliable source. As of this minute, neither Specter nor his office has made an official announcement.

But it's not just Norquist. CongressDaily and Politico are reporting the same thing.

It's probably premature to say all hope is lost on EFCA -- there may be some other open-to-persuasion Republican who could help break a filibuster -- but as of this afternoon, the odds of passage just got worse.

Update: Specter makes it official: he'll oppose EFCA, and support the filibuster.

Steve Benen 2:50 PM Permalink | Trackbacks | Comments (17)

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WHAT IS CHUCK GRASSLEY TALKING ABOUT?.... While the political world has come to expect a certain amount of transparent, mind-numbing nonsense from House Republicans, it's worth remembering that Senate Republicans are often just as ridiculous.

Take Sen. Chuck Grassley (R-Iowa), for example. A five-term senator from a blue-ish state, Grassley is the ranking member of the Senate Finance Committee. He's also purportedly the leading Republican in the chamber working with the majority on health care reform.

And when it comes to the basics of the economic crisis, Grassley has now embraced neo-Hooverism with both arms.

The top Republican on the Senate Finance Committee on Monday said an across-the-board freeze on federal spending is needed to reel in President Obama's massive budget plan, signaling a more active Republican stance in fighting the president's agenda.

Sen. Charles E. Grassley, Iowa Republican, also said the president is pursuing a "socialist" form of government that will stifle the free market.

Mr. Grassley told editors and reporters at The Washington Times that a spending freeze is necessary to get the federal deficit under control and to show voters that the government is capable of living within its means in hard times.

"What you get when you have an across-the-board freeze is everybody is seen as contributing something," Grassley told the conservative paper, adding that a three-year freeze can have a "very dramatic" effect.

That's true, in a Great Depression kind of way.

If I thought Grassley was just spouting nonsense to make the base happy, I could laugh this off as mere partisan stupidity. But I get the sense the ranking member on the Senate Finance Committee actually believes this. He seriously wants a spending freeze -- for three years -- in the midst of a deep and serious recession.

Even David Brooks recently said, "A lot of Republicans up in Capitol Hill right now are calling for a spending freeze in a middle of a recession/depression. That is insane." Responding to the last GOP officials to call for a spending freeze, Paul Krugman added, "I'm shocked by the total intellectual collapse of the Republican Party in the face of this economic crisis.... I'd really like to see some genuine bipartisanship in America. But that can't happen until we start having at least somewhat sane partisans."

And why is this such a spectacularly foolish idea? As Pat Garofalo recently explained: "The economic stimulus package's main purpose is to close the GDP gap and jumpstart the economy by spurring spending by households, government and the private sector. A spending freeze would act as an 'anti-stimulus,' cutting spending precisely when it's too low and the economy is moving too slowly."

It all comes back to what I call the Republicans' "pre-recession mindset." In the midst of a crisis, too many GOP policymakers, including Grassley, have not yet realized that things have changed.

Grassley's bizarre beliefs reinforce a point from a couple of weeks ago: it's time to leave the minority party out of the policy discussion until they're ready to sit at the big kids' table. The party, at this point, just aren't trying anymore. They deserve a lot of things -- ridicule, scorn, derision -- but a place at the policy negotiating table isn't one of them.

Steve Benen 2:00 PM Permalink | Trackbacks | Comments (34)

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PERHAPS MCCASKILL NEEDS A REFRESHER COURSE.... Sen. Claire McCaskill (D-Mo.) attended a "bipartisan breakfast" this morning. That, in and of itself, doesn't have to be a bad thing. But Greg Sargent, pointing to the senator's Twitter feed, explained that McCaskill came away from the gathering "persuaded that Social Security -- which she described as 'entitlement reform' -- needed to be fixed ASAP."

McCaskill began by saying "entitlement reform" is "very hard, but absolutely essential." When pressed (by Atrios) on what that means, the senator argued:

Entitlemnt reform is making sure Medicare & Soc Sec don't devour every penny of our budget leaving nothing for education or other services.

Now, I'll concede that Twitter isn't necessarily the ideal medium for a senator to describe a policy position. That said, it doesn't take 140 characters to say, "Social Security does not need to be cut." There, that's only 39 characters.

McCaskill wasn't in Congress in 2005, so if we're being charitable, it's probably worth remembering that the senator wasn't involved in the last debate over Social Security. She probably missed the reports showing that Social Security is largely fine, and didn't see the work many did debunking conservative claims. McCaskill may simply be unaware of the fact that 2005 was a gut-check moment for the party, when Democrats realized that if the party stood for anything, it stood in support of Social Security.

With that in mind, let's call this a "teachable moment" for McCaskill. She's been led to believe that changing (read: cutting) Social Security is "very hard, but absolutely essential." Her allies, colleagues, and constituents should take this opportunity to help her understand why this simply isn't true.

And as for Medicare, the single best way to help get these costs under control is to work with the White House on a health care reform initiative. If McCaskill is worried about Medicare "devouring every penny of our budget," I assume she'll help to the heavy lifting on Obama's efforts to reform the system?

Steve Benen 1:25 PM Permalink | Trackbacks | Comments (28)

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OBAMA AND NOTRE DAME.... Major universities tend to be thrilled when sitting U.S. presidents agree to serve as commencement speakers. And last week, when President Obama agreed to appear at Notre Dame's graduation ceremony, it was a coup for the university.

Naturally, conservatives are outraged.

The National Right to Life Committee is calling on the University of Notre Dame to rescind its invitation to President Obama to speak at the university's May commencement.

In a letter sent to Notre Dame's president, Rev. John I. Jenkins, the pro-life group called President Obama the "Abortion president," and that the school's invite "is a betrayal of the University's mission and an affront to all who believe in the sanctity and dignity of human life."

It would be easier to laugh this off as trivia if it were only the National Right to Life Committee raising a fuss, but many on the right are really worked up about this. A longtime Notre Dame philosophy professor is calling the president's appearance "a deliberate thumbing of the collective nose at the Roman Catholic Church to which Notre Dame purports to be faithful." The conservative Cardinal Newman Society and CatholicVote.org are both demanding that Notre Dame rescind the invitation to Obama (the latter claims to have a petition with 50,000 names).

None other than Newt Gingrich -- the thrice-married supporter of the war and the death penalty, who isn't a Catholic but is about to convert -- called Notre Dame's decision "sad," and accused the president of embracing "anti-Catholic values."

For what it's worth, a university spokesperson said yesterday that it will stick with its invitation to Obama. Good move.

Steve Benen 12:35 PM Permalink | Trackbacks | Comments (57)

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TUESDAY'S CAMPAIGN ROUND-UP....Today's installment of campaign-related news items that wouldn't generate a post of their own, but may be of interest to political observers.

* The National Republican Senatorial Committee is circulating a new attack ad, which hopes to connect President Obama and the AIG bonuses.

* On a related note, the far-right American Issues Project is also planning new attack ads connecting Obama to AIG bonuses. The group, which intended to be a major player in 2008 before failing to line up the necessary finances, is reportedly prepared to spend "more than $500,000" on the new spot.

* The DNC is moving forward on a new commission "to study the party's primary and caucus calendar for the next election." Given that Obama is likely to seek re-election, the DNC process -- which will reportedly try to downplay the role of superdelegates and make caucuses more inclusive -- is eyeing changes with 2016 in mind.

* If New York Gov. David Paterson (D) expects to seek another term, he probably ought to think again. A new Siena College Research Institute poll show his approval rating down to just 19%, in a hypothetical primary match-up against state Attorney General Andrew Cuomo, Cuomo leads by a nearly four-to-one margin.

* Rep. Sandy Levin (D-Mich.), now in his 14th term, is considered one of Congress' safest members, but he'll nevertheless face a primary challenge next year from state Sen. Mickey Switalski (D), who can't seek re-election in Michigan due to term limits.

* California's gubernatorial race is still pretty far off, but San Francisco Mayor Gavin Newsom (D) has "already begun campaigning." He'll likely face state Attorney General Jerry Brown and Los Angeles Mayor Antonio Villaraigosa, among others, in a Democratic primary.

* Todd Herman, a former Microsoft executive, has joined Michael Steele's team as the RNC's New Media Director. (His task, apparently, will be to take Republicans "beyond cutting edge.")

Steve Benen 12:00 PM Permalink | Trackbacks | Comments (9)

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WHAT CONSTITUTES 'TRASH'.... We talked earlier about Tammy Bruce, guest hosting for Laura Ingraham's radio show, attacking the Obama family as "trash in the White House." I neglected to mention what Michelle Obama said to elicit Bruce's ire.

As a kid growing up on the south side of Chicago, Michelle Obama remembers being ridiculed for trying to be educated and get good grades.

"I wanted an 'A.' I wanted to be smart. I wanted to be the person who had the right answer. And I didn't care if it was cool -- 'cause I remember there were kids around my neighborhood who would say 'ooh -- you talk funny. you talk -- like a white girl.' I heard that growing up my whole life."

This is what prompted Bruce to go after the "trash in the White House," adding, "Trash are people who use other people to get things, who patronize others, who consider you bitter and clingy..."

Given controversial comments Bruce has made in the past, Adam Serwer added: "You start to get the impression that Bruce's hostility toward Michelle Obama really isn't personal at all. She just has a problem with black people, particularly black people who deign to rise above their station."

Or, as Ta-Nehisi Coates put it, "[T]he day of figuring out this black-white shit is coming. Hate, however, is eternal."

Steve Benen 11:20 AM Permalink | Trackbacks | Comments (31)

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CBS POLL.... The response to the controversial AIG bonuses last week included widespread public disgust. Republicans didn't have anything resembling a coherent policy response, but they seized on the issue anyway as a cudgel with which to beat the White House, Tim Geithner, and anyone else they could think of.

What kind of impact did this have in terms of public opinion? It's a bit of a mixed bag. There's bad news for the administration....

For the first time since he became president, a significant number of Americans are expressing disapproval of Barack Obama's actions in a specific area: His handling of the AIG bonus situation.

...and good news for the administration.

Despite the middling reviews for his handling of the bonuses, however, the president continues to get high marks overall for his job performance and his handling of the economy.

Forty-two percent of those surveyed disapprove of the president's handling of the AIG bonuses, while roughly the same percentage -- 41 percent -- approve. Another 17 percent don't know or aren't sure.

Yet President Obama's overall job performance rating appears unaffected by the AIG fallout. Sixty-four percent approve of the president's performance, roughly the same as last week.

And ratings for the president's handling of the overall economy are actually up slightly: Sixty-one percent now approve, up from 56 percent last week.

The CBS News poll suggests there's a reasonable explanation for the seemingly contradictory results: Americans disapprove of the AIG bonuses, and would have liked to see the administration block them, but voters don't hold the administration responsible for the payments.

The same poll found that Treasury Secretary Timothy Geithner, despite a week of fairly intense criticism, still fares relatively well with the public, with a majority (54%) expressing some level of confidence in Geithner. The results, though, showed a considerable partisan divide -- Democrats back Geithner (69% have confidence in him), Republicans don't (35% have confidence), and Independents are closer to the poll's top line (51%).

Steve Benen 10:40 AM Permalink | Trackbacks | Comments (5)

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QUOTE OF THE DAY.... The vitriol from the far right continues to get uglier.

Tammy Bruce, guest host for Laura Ingram's radio show, had some harsh words for First Lady Michelle Obama.

Discussing the first lady's visit to a Washington D.C. classroom last week, Bruce incredulously recalled Obama's story about wanting to get A's in school and called out her use of a "weird, fake accent."

"That's what he's married to," Bruce said. "...You know what we've got? We've got trash in the White House. Trash is a thing that is colorblind, it can cross all eco-socionomic...categories. You can work on Wall Street, or you can work at the Wal-Mart. Trash, are people who use other people to get things, who patronize others, who consider you bitter and clingy..."

It occurs to me the right has forgotten the virtues of pacing itself. President Obama has been in office for a grand total of two months. In that time, prominent right-wing voices have effectively gone through all of the standard attacks. In the midst of Bruce's "trash" talk, we've also heard plenty of talk about the president and communism, socialism, fascism, and Hitler.

If these unhinged folks are using their favorite attacks in early 2009, what are they going to be left with in, say, 2010? If they want to keep their hatred fresh and interesting, they're going to have to hold onto some of their favorite rhetorical rage for the future.

Steve Benen 10:05 AM Permalink | Trackbacks | Comments (65)

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ALIENATING ALLIES.... U.S. officials are intent on improving our diplomatic ties with nations around the world, including allies. Some friends of the previous administration aren't helping.

Greg Gutfeld, host of the Fox News programme Red Eye, has apologised to Canada for comments that were made about the country's military during a show on 17 March.

On one segment of the show, a panel talked about Canadian lieutenant general Andrew Leslie's assertion that the military would need a one-year break from fighting in Afghanistan after Canada's commitment ends in 2011.

Gutfield laughed at Leslie's suggestion saying: "The Canadian military wants to take a breather to do some yoga, paint landscapes, run on the beach in gorgeous white capri pants." "Isn't this the perfect time to invade this ridiculous country? They have no army," he added.

Gutfield's "joke" came the same week as Canada honored four more Canadian soldiers killed in Afghanistan. A total of 116 Canadian soldiers have died in Afghanistan since the war began -- more than any other U.S. ally.*

Canada's defense minister demanded the Fox News personality apologize. Yesterday, Gutfeld, through a Fox News publicist, said his comments "may have been misunderstood" and that he didn't intend to disrespect "the brave men, women and families of the Canadian military".

"May have been misunderstood"?

* U.K. has seen 152 fatalities in Afghanistan.

Steve Benen 9:20 AM Permalink | Trackbacks | Comments (15)

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AN UNDISCLOSED LOCATION BECKONS.... Jon Stewart joked last week, "I don't understand this. [Dick Cheney] is vice president for eight years, you barely see a whiff of him. He lives in some subterranean lair, literally has his house removed from Google Earth. Then, when he's no longer accountable to the American people, he's popping up everywhere. I can't get him off my TV. He's like the Mario Lopez of Doom now."

Republicans on the Hill have, apparently, noticed the same thing. They're not exactly pleased.

Congressional Republicans are telling Dick Cheney to go back to his undisclosed location and leave them alone to rebuild the Republican Party without his input.

Displeased with the former vice-president's recent media appearances, Republican lawmakers say he's hurting GOP efforts to reinvent itself after back-to-back electoral drubbings.

The veep, who showed a penchant for secrecy during eight years in the White House, has popped up in media interviews to defend the Bush-Cheney record while suggesting that the country is not as safe under President Obama.

Some of the GOP lawmakers were reluctant to criticize Cheney on the record, but a few didn't hold back. Rep. John Duncan Jr. (R-Tenn.) said Republicans would be better off if Cheney "wouldn't be so public." Rep. Mark Kirk (R-Ill.) would like to see Cheney stick to writing "a memoir." Rep. Zach Wamp (R-Tenn.) said Cheney "represents what's behind us, not what's ahead of us."

One gets the sense that the DNC would welcome the chance to become Dick Cheney's publicist. The more Cheney takes cheap shots at the president, the more Obama gets to respond. The result reinforces the notion that the political fight boils down to Obama's approach vs. the Bush/Cheney approach.

That, of course, suits the White House just fine.

Steve Benen 8:35 AM Permalink | Trackbacks | Comments (22)

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THE ADMINISTRATION THINKS AHEAD.... As part of the debate over the banking crisis, there's been a nagging question about the limits of governmental authority. Kevin Drum noted over the weekend, for example, "Legally, I'm not sure Obama has the statutory authority to take over a big bank. He may well need congressional authorization of some kind first."

The administration hasn't said whether it wants to temporarily seize financial companies, but according to a front-page piece in the Washington Post, administration officials are thinking ahead about steps that may become necessary. They may very well ask Congress to extend the authority now, just in case.

The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.

The government at present has the authority to seize only banks.

Giving the Treasury secretary authority over a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president's Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to the document. [...]

Besides seizing a company outright, the document states, the Treasury Secretary could use a range of tools to prevent its collapse, such as guaranteeing losses, buying assets or taking a partial ownership stake. Such authority also would allow the government to break contracts, such as the agreements to pay $165 million in bonuses to employees of AIG's most troubled unit.

Robert Waldmann added, "Sounds a bit like Bush and Iraq frankly. Asking for the authority while saying they don't want to use it, and going through the motions of trying something else.... Oh well you go to nationalization with the Senate you have not the Senate you want."

Steve Benen 8:00 AM Permalink | Trackbacks | Comments (8)

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BUILDING ON A TRACK RECORD.... If the most recent interview on "60 Minutes" is any indication, President Obama is giving a fair amount of thought to the U.S. auto industry's bleak future. As he conceded, there's little optimism for the industry, and further government intervention strikes many as dubious.

In the new issue of the Washington Monthly, however, Phillip Longman, a senior fellow at the New America Foundation, has a great piece drawing a key parallel policymakers would be wise to consider.

[A]ny honest reading of history suggests that the federal government has quite an impressive record of rescuing institutions considered too big to fail. In addition to almost routine workouts of failed banks conducted in good and bad times by the Federal Deposit Insurance Corporation and other regulators, the list includes many large industrial companies as well. In 1971, for example, Congress extended emergency loans to failing aircraft builder Lockheed and wound up not only saving a company vital to America's national defense and export manufacturing base, but earning a net income for the Treasury of $5.4 million in loan fees.

In 1980 it did the same for Chrysler, this time extending loan guarantees in exchange for stock warrants that, after the company returned to health and paid back its loans, yielded the government a cool $311 million in capital gains. More recently, in the aftermath of 9/11, Congress granted airlines $5 billion in direct compensation for lost business and up to $10 billion in loan guarantees, again in exchange for stock warrants. That wasn't enough to save many individual airlines from having to undergo restructuring plans imposed by bankruptcy judges, but when Americans took to the air again they found the industry intact and offering plenty of flights. Moreover, by February 2007, airline stocks had recovered enough that the Treasury was able to sell its warrants for a net profit of $119 million, with no loans left outstanding.

Now, however, comes the prospect of something much larger. Government has already thrown billions at the gigantic mess that is the American auto industry. With Detroit continuing to hemorrhage jobs and cash in a deeply troubled economy, it looks as if government will have to take a much more hands-on approach to reengineering the industry, if not through the bankruptcy courts then through direct executive supervision. Should we be worried that government will make a hash of it? Of course. But there is a bright shining example from not so long ago of government bureaucrats engineering the revival of an industry easily as troubled as today's automakers and, if anything, more central to the economy. And it all turned out better than anyone dared hope, with a dazzling return to profitability.

That bright shining example is the railroad industry. Longman's piece explains the similarities, and explores why the success can be repeated.

Take a look.

Steve Benen 1:30 AM Permalink | Trackbacks | Comments (12)

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By: Hilzoy

Shameful

Via TPM, a Wall Street Journal article that says, basically, that at first the Obama administration did not particularly seek out Wall Street's advice:

"In late January, as Treasury Secretary Geithner prepared his proposal for handling the banking crisis, administration officials avoiding seeking input from Wall Street. "Those people are tainted," said one aide at the time. "Why would we consult the very executives who got us into this mess?" (...)

The administration's initial approach contrasted with those of the last two White Houses. Robert Rubin left Goldman Sachs Group to become one of Bill Clinton's top economic advisers, and convinced the new president that what was good for Wall Street was good for America. Under President George W. Bush, the administration "looked up to and admired Wall Street," says one banker. "The Obama folks don't even like us.""

But then Obama decided that it was important to reach out more to Wall Street, and did. More Wall Street people were consulted; the administration worked harder to win them over.

Here are the passages from the article that really got to me. (Emphases added.) First:

"Meanwhile, Treasury Secretary Timothy Geithner and his colleagues worked the phones to try to line up support on Wall Street for the plan announced Monday. (...) Some bankers say they turned the conversations into complaints about the antibonus crusade consuming Capitol Hill. Some have begun "slow-walking" the information previously sought by Treasury for stress-testing financial institutions, three bankers say, and considered seeking capital from hedge funds and private-equity funds so they could return federal bailout money, thereby escaping federal restrictions."

Second:

"But as the furor intensified, Mr. Obama's words to Congress -- "we cannot govern out of anger" -- seemed to take on less importance. Last week, he was asked by reporters on the White House South Lawn whether anger was getting in the way of pushing through banking reforms. "I don't want to quell anger," he replied. "I think people are right to be angry. I'm angry."

Bankers were shell-shocked, especially when Congress moved to heavily tax bonuses. When administration officials began calling them to talk about the next phase of the bailout, the bankers turned the tables. They used the calls to lobby against the antibonus legislation, Wall Street executives say. Several big firms called Treasury and White House officials to urge a more reasonable approach, both sides say. The banks' message: If you want our help to get credit flowing again to consumers and businesses, stop the rush to penalize our bonuses."

I think it's important to be really, really clear about what this article claims. Both the stress tests and the attempts to get credit flowing again are essential parts of our attempt to solve the enormous economic problems we now face, problems that these very firms are largely responsible for. If the banks are "slow-walking" the stress tests and threatening not to help get credit flowing, that just is threatening not to help get the country out of the economic crisis.

That would be an absolutely appalling thing to do under any circumstances. It would be doubly appalling since these very people bear a lot of responsibility for that crisis. But the fact that they are making these threats not over some large issue of principle, but over their bonuses -- that's just breathtaking.

I'm with Ezra:

"Not to sound naive about this, but the absence of patriotism that galls. The lack of responsibility is sickening. These bankers delivered an almost mortal wound to the American economy. Their actions threw millions out of work and wrecked the retirement savings of tens of millions more. It is no exaggeration to say that they will cost us more than 9/11. (...)

That we even need a new raft of compensation regulations strains the boundaries of credulity. It makes you question the values of your countrymen. They were the principle beneficiaries of a decade-long bubble that they inflated. These Ivy League bundles of privilege were given every possible advantage and then took yet more than that. They took the advantages of high school seniors applying to college this year or entering the workforce next year. They took the advantages of seniors who had saved for retirement and parents who had invested to build their own business. And now they're refusing to help defuse the bomb at the center of our economy unless we pay them retention bonuses. Worse, they're threatening to flee the scene of the crime and make money off the carnage. That, it's been argued, is why we need to keep paying meeting their demands: Because we need them working for us rather than against us. It's chutzpah as the Yiddish define it: A child who kills his parents and then begs for lenience because he's a pitiable orphan. It's shameful."

Exactly.

Hilzoy 1:04 AM Permalink | Trackbacks | Comments (42)

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March 23, 2009

MONDAY'S MINI-REPORT.... Today's edition of quick hits:

* The major indexes on Wall Street were expected to soar in light of the new Geithner plan on toxic assets. And soar they did.

* On a related note, it probably helped that there was an unexpected boost in existing home sales.

* Bloodshed in Baghdad: "At least 25 people were killed and 45 were injured when a man walked into a tent of mourners and detonated himself in a town north of Baghdad on Monday evening. The death toll was expected to rise, hospital officials said."

* An encouraging move: "A federal court today ordered the Food and Drug Administration to reconsider the agency's controversial decision limiting non-prescription access to the morning-after pill Plan B to women age 18 and older."

* Sen. Sam Brownback (R-Kan.) is on a quixotic crusade against U.S. Ambassador-designate to Iraq Christopher Hill.

* From a tactical perspective, the U.S. drone campaign in Pakistan has been quite a success.

* Rep. Debbie Wasserman Schultz (D-Fla.) has successfully battled breast cancer over the past year, in a remarkable fight that included seven major surgeries, a double mastectomy and reconstructive surgery," while balancing motherhood, Congress and her roles as a chief fundraiser for House Democrats and a political surrogate, first for Hillary Clinton and then for Barack Obama."

* Introducing, "Financial Media Matters."

* Chris Matthews got the new contract he wanted from MSNBC.

* It's great to see the State Department embracing new media.

* JP Morgan should probably not talk about new corporate jets for quite a while.

* There are a lot of things Fox News needs to change, but hiring intelligent chyron writers would be a big first step.

* John Kerry tackles an interesting asylum case.

* Howard Dean is already making CNBC better. (He's not picking sides, though, between Jon Stewart and Jim Cramer.)

Anything to add? Consider this an open thread.

Steve Benen 5:30 PM Permalink | Trackbacks | Comments (33)

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STILL THINK 'VOLCANO MONITORING' IS FOOLISH?.... Of all the charges levied during the debate over the economic stimulus package, Louisiana Gov. Bobby Jindal (R) offered one of the most foolish. In a widely-panned national address, Jindal complained bitterly about "wasteful spending," and to prove his point, highlighted "$140 million for something called 'volcano monitoring.'"

Even at the time, it was an unusually foolish thing to say. A month later, Jindal's complaints look even worse.

An erupting Mount Redoubt exploded again at 4:31 this morning -- its fifth and strongest discharge yet -- sending an ash cloud to new heights, the Alaska Volcano Observatory reported.

Ash has now been detected at 60,000 feet above sea level, the National Weather Service reported.

The AP added, "Ash from Alaska's volcanoes is like a rock fragment with jagged edges and has been used as an industrial abrasive. It can injure skin, eyes and breathing passages. The young, the elderly and people with respiratory problems are especially susceptible to ash-related health problems. Ash can also cause damage engines in planes, cars and other vehicles."

A USGS geologist confirmed to Zachary Roth that "a portion of the stimulus spending for volcano monitoring that Jindal lampooned has been slated to go to USGS monitoring Redoubt."

Chris Waythomas, a geologist with the Alaska Volcano Observatory, a branch of the USGS, said that part of the money from the stimulus that Jindal was referring to would have been used to "shore up" monitoring of Redoubt, by adding new monitoring technology like real-time GPS. Redoubt, he said, was "very high on our list" of volcanoes that needed increased scrutiny.

In fact, thanks to its close monitoring of Redoubt, the USGS has known for months that it was on the point of blowing. The volcano had emitted ash and steam last week, alerting scientists to the likely imminence of a full eruption. Their efforts also meant they knew enough to raise the alert level to orange, or "watch" on Saturday, a day before Redoubt erupted. That, for instance, meant that the FAA received advanced warning that flight disruptions could occur, and it gave local officials time to draw up precautionary plans to evacuate people if needed.

So in this case, government scientists appear to have had access to enough information to anticipate the eruption, but there's no guarantee that that'll always be the case. Waythomas said that, because of funding shortfalls, monitoring efforts for several other volcanoes lacked some of the technologies that could be of crucial help to geologists.

To hear Jindal tell it, the very idea of federal funding for "something called 'volcano monitoring'" is on its face silly.

If this is what Jindal, a governor of state ravaged by natural disasters, calls "wasteful," he really doesn't know what he's talking about.

Steve Benen 4:15 PM Permalink | Trackbacks | Comments (39)

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MIND-NUMBING.... Ordinarily, there's simply no reason to scrutinize Michelle Malkin's blog posts. But this post from Malkin's site today is more frustrating than most, since a lot of people who don't know better find it compelling.

An ACORN fund-raiser on the 7th Circuit Court of Appeals?

I'm kidding, right?

Nope.

And a GOP Senator approves of this?

I'm kidding, right?

Alas, it is true.

Now, I suspect Malkin is genuinely confused, as opposed to deliberately misleading her readers, so let's once again set the record straight.

District Court Judge David Hamilton of Indiana, President Obama's first nominee for the appeals court bench, is a respected jurist who enjoys bipartisan support and is very likely to be confirmed. Describing him as "an ACORN fundraiser" is rather silly. In reality, Hamilton canvassed for ACORN in 1979. He spent a grand total of one month helping the group raise money the same year he graduated from college. He was 22 at the time. Three decades have since passed.

This isn't outrageous. It's not even interesting.

If the far right wants to go after Hamilton's nomination, the least the activists can do is come up with less ridiculous talking points.

Update: Looks like Adam Serwer got here first.

Steve Benen 3:45 PM Permalink | Trackbacks | Comments (31)

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PALIN'S BAD TIMING.... Alaska Gov. Sarah Palin (R), about 20 hours after President Obama apologized for his Special Olympics joke gone awry, condemned the president in a press release. "I hope President Obama's comments do not reflect how he truly feels about the special needs community," the controversial governor said, adding that she was "shocked" at the poor attempt at humor, which was "degrading" for "precious and unique people."

As Greg Sargent reports, her timing could have been better.

[L]ess than 24 hours before hitting Obama this way, Palin turned down nearly $40 million in Federal funding for programs catering to special education kids.

The funding for special needs kids, it turns out, is buried in all that stimulus money for Alaska that Palin drew national criticism for turning down last week.

Specifically, the recovery package passed by Congress and signed into law by the president would have directed around $36 million to Alaska in Individuals with Disabilities Education Act money, including funding for the same Americans who participate in the Special Olympics.

We can hope that Gov. Palin's position on this federal funding does not reflect how she truly feels about the special needs community.

For what it's worth, last week, around the same time Obama was talking to Jay Leno, Palin was talking about rejecting stimulus aid. Explaining her decision to turn down aid, Palin complained about the dangers of "growing government," and described recovery funds as "a bribe."

Today, facing public criticism, Palin's lieutenant governor said Palin isn't necessarily rejecting the stimulus aid, but just wants a public debate about the funding.

Funny, I thought the "bribe" line made her position rather clear.

Steve Benen 3:15 PM Permalink | Trackbacks | Comments (21)

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DETAILS THE 'TEA PARTIES' OVERLOOK.... I'd kind of forgotten about it, but apparently, far-right activists continue to organize "Tea Party" rallies and talk about "Going Galt." It's a little right-wing fad that hasn't quite gone away, as evidenced by this Orlando get together over the weekend. A local radio host, who helped make the event happen, called it a historic gathering of 4,000 "God-fearing patriots."

Reading over some of the quotes from attendees, one starts to get a sense of what's bothering these folks. For example, they don't like government spending. Or deficits. Or stimulus efforts. Some wanted to argue that Bush isn't to blame for the economic crisis. Others wanted to see the Federal Reserve eliminated altogether.

Perhaps the most striking quote came from a local man who'd recently lost his job at an electrical-equipment company. He wants to see the federal government spend less on economic recovery and focus more on "my grandchildren's money."

Oh my.

Outside the Beltway's Alex Knapp, a libertarian, took a look at some of these events and came up with some important observations. Knapp noted, for example, the fact that most "Tea Party" participants will get a tax cut from Obama, so it's kind of difficult to believe them when they say they feel put upon. For that matter, "Tea Party" cheerleaders didn't mind excessive government spending when it was going to an unnecessary war in Iraq. He concluded:

Let's call the "tea party" and "going Galt" nonsense what it is: unprincipled partisan hackery. If these were truly principled protests, they'd have been around all through the Bush and Republican-controlled Congress years, too.

Quite right. It's no doubt inconvenient for this crowd, but a Republican Congress and Republican White House worked together to increase the debt by $5 trillion, expand the size of government, increase spending, increase the tax burden on the middle class, and expand the powers of the executive to undermine civil liberties. The some people attending "Tea Parties" not only cheered these GOP policymakers on, but voted to keep them in office as long as possible. (Indeed, many condemned those who disagreed, accusing liberals of "treason" for failing to support elected leaders during a crisis.)

Literally just two months into a Democratic administration, far-right activists are now holding public protests? They're mad about deficits and a loss of "liberty"?

I almost feel sorry for the folks who get conned into believing this nonsense.

Update: I'd almost forgotten, at the Orlando rally, organizers distributed signs that read, "Obama Bin Lyin' -- IMPEACH NOW."

Steve Benen 2:20 PM Permalink | Trackbacks | Comments (36)

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By: Hilzoy

"Conservatism Is Formless Like Water"

Andrew Sullivan has found a fascinating meditation on the nature of conservatism. I reprint the parts Andrew quoted below, with the links that the author inexplicably omitted.

"Conservatism is "formless" like water: it takes the shape of its conditions, but always remains the same. This is why Russell Kirk calls conservatism the "negation of ideology" in The Politics of Prudence. It is precisely the formlessness of conservatism which gives it its vitality. Left alone, the spirit of conservatism is essentially what T.S. Eliot calls the "stillness between two waves of the sea" in "Little Gidding" of his Four Quartets. Conservatism is both like water and the stillness between the waves -- the waves are not the water acting, but being acted upon; stillness is the default state of conservatism:

Not known, because not looked for

But heard, half-heard, in the stillness

Between two waves of the sea.

Quick now, here, now, always --

A condition of complete simplicity

Like the Greek concept of kairos -- acting in the right way, for the right reasons, at the right moment -- this sort of waiting is simply careful conservatism. Conservatism is responsive, reactionary, reserved. Conservatism waits. Perhaps this is why conservatism is most needed in the modern age of mobility. Being careful, and above all patient is crucial to doing something right. Realizing that one does not know the best way of doing anything guarantees not that one will find the best way, but that one might not find the worst way. The same principle applies to knowledge: conservatism (hopefully) does not pretend to know the definitive way, but rather professes the virtue of ignorance with the quiet hope of finding knowledge."

Seriously: I think it's always dangerous to write something like "conservatism is formless like water": it invites responses like: well, I think that conservatism is more like motor oil, or peanut butter. If one must compare conservatism to water, it would be a good idea to acknowledge that water is not always benign. (Think of the fisherman whose boat founders in the North Atlantic, the lobster thrown into the pot, the child lost in the freezing rain.)

It would also be a good idea either to describe, explicitly, ideal conservatism or to acknowledge, in some way, that actual existing conservatives do not always fit your description. When I think of Rush Limbaugh or Newt Gingrich, stillness and patience are not the adjectives that leap to mind.

And it's worth asking whether this is a remotely plausible description even of ideal conservatism. Conservatism has not had much to do with the patient preservation of anything for several decades. Writing as though it has -- as though such acts of monumental hubris as the Iraq war never happened -- is like writing about Catholicism as though its record stopped with the early church fathers, and did not include the Inquisition.

Hilzoy 1:48 PM Permalink | Trackbacks | Comments (47)

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BACHMANN ON 'ENEMY LINES'.... It's obviously just rhetoric from overly-excited far-right lawmakers. It's no doubt intended to fire up the activists (and donors) who help Republicans succeed.

But when Rep. Michele Bachmann (R-Minn.) casually refers to elected Democratic officials as the "enemy," and nonchalantly refers to keeping her supporters "armed and dangerous," it's probably a good time to remind Republican lawmakers to turn down the temperature a bit. (via the University of Minnesota and the Dump Bachmann blog.)

Bachmann appeared over the weekend on the First Team radio show with John Hinderaker and Brian Ward, speaking about the horrible stuff that the Democrats are doing: "I'm a foreign correspondent on enemy lines and I try to let everyone back here in Minnesota know exactly the nefarious activities that are taking place in Washington."

Bachmann also spoke out against the cap-and-trade proposals currently making their way through Washington, and how she'll be distributing information against it at an upcoming event in the district. "I want people in Minnesota armed and dangerous on this issue of the energy tax, because we need to fight back," said Bachmann. "Thomas Jefferson told us, having a revolution every now and then is a good thing. And the people -- we the people -- are going to have to fight back hard if we're not going to lose our country."

On the one hand, it seems clear that Bachmann was speaking figuratively. On the other hand, is it appropriate for a member of Congress to speak in any context about being armed for revolution?

No, probably not. But this seems to fit in with a larger trend. We have one GOP lawmaker saying the party should emulate the insurgency tactics of the Taliban. We have another arguing the party should position itself as "freedom fighters" taking on the "slide toward socialism."

And now Bachmann is throwing fuel on the fire of right-wing rage.

Obviously, Bachmann and other unhinged conservatives have the right to say what they please. But at a minimum, I think it's fair to describe this kind of talk from elected leaders in positions of authority as irresponsible.

Steve Benen 1:30 PM Permalink | Trackbacks | Comments (42)

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WHEN O'REILLY SENDS STALKERS.... A few weeks ago, the Alexa Foundation, a group committed to supporting rape survivors, invited Fox News' Bill O'Reilly to speak at a fundraiser. ThinkProgress' Amanda Terkel questioned the choice, given his record on the issue.

In response, O'Reilly sought retaliation against Amanda.

This weekend, while on vacation, I was ambushed by O'Reilly's top hit man, producer Jesse Watters, who accosted me on the street and told me that because I highlighted O'Reilly's comments, I was causing "pain and suffering" to rape victims and their families. He of course offered no proof to back up this claim, instead choosing to shout questions at me.

The harassment was more than a little scary, apparently including staking out Amanda's home and following her for two hours.

Now, in some cases, O'Reilly will invite a target onto his show, so he can attack them on the air. If they decline, he'll retaliate by sending people after the target. In this case, Amanda wasn't even offered the opportunity to appear on the show -- O'Reilly didn't like her blog post, so he sent men to her apartment.

It's hard not to hear this and think of the segment on "The Daily Show" last month in which Jon Stewart showed O'Reilly ambushing private, largely unknown citizens, while at the same time, denouncing paparazzi as "scum" who "intrude" on peoples' lives, and who fail to recognize the importance of "the right to privacy."

To summarize, if you follow Brad Pitt with a camera for two hours and shout obnoxious questions at him, Bill O'Reilly thinks you're the "scum of the earth." If you follow Amanda Terkel with a camera for two hours and shout obnoxious questions at her, Bill O'Reilly thinks you're a patriot on the Fox News payroll.

It's worth noting, of course, that O'Reilly has a goal here, and it's not limited to bullying and corporate-sponsored stalking. Ultimately, I suspect the goal is to create an atmosphere of fear and intimidation -- don't criticize O'Reilly, or he might send some people to your home.

Under no circumstances is this acceptable.

Steve Benen 12:45 PM Permalink | Trackbacks | Comments (39)

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MONDAY'S CAMPAIGN ROUND-UP....Today's installment of campaign-related news items that wouldn't generate a post of their own, but may be of interest to political observers.

* The DNC's fundraising in February was surprisingly bad, due at least in part to Virginia Gov. Tim Kaine's day job.

* On a related note, the DCCC outraised the NRCC in February, $3.5 million to $2.9 million.

* Former Florida state House Speaker Marco Rubio (R) is moving forward with his Senate campaign, and in his announcement video, Rubio takes a veiled shot at Gov. Charlie Crist (R) for supporting the economic recovery package. Crist has not yet indicated whether he'll run for the Senate.

* Will Kentucky Attorney General Jack Conway (D) join the field of candidates hoping to challenge Sen. Jim Bunning (R)? It appears increasingly likely.

* Sen. Bob Bennett (R-Utah) is a pretty conservative Republican, but he's still likely to face a far-right challenge (or two) in his re-election bid next year.

* Rep. Charlie Dent (R-Pa.) should be vulnerable next year -- his district backed Obama pretty heavily -- but Democrats can't seem to recruit preferred candidates.

* California Gov. Arnold Schwarzenegger's (R) approval ratings have slipped, but he's still sending signals about a possible Senate campaign.

* Judd Legum, an accomplished blogger who helped create ThinkProgress, is running for the General Assembly in Maryland.

Steve Benen 12:00 PM Permalink | Trackbacks | Comments (5)

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POLICYMAKING WITHOUT LAWMAKING.... Matt Yglesias highlights a point that I've been mulling over: Geithner's toxic-asset plan can be implemented without Congress.

The reason is that there are federal agencies with a standing authority to make loans. And though the plan does have a potentially giveaway structure, technically what's being offered aren't subsidies but no recourse loans. Or to put it another way, the subsidies are in the form of no recourse loans rather than direct appropriations, so the government has the authority to move forward under existing TARP legislation and other laws. That, I think, clearly explains the somewhat byzantine structure of the plan's operations and is also, if you're sitting in the West Wing, a considerable advantage over a nationalization plan that would require large additional appropriations to cover the debts of nationalized institutions.

That's a good point. Nationalization probably would require both lawmakers' approval and Congress to pony up a whole lot of money. After talking to some administration officials over the weekend, Ezra Klein added, "Virtually no one thinks that Congress is willing to quickly offer either the legislation authorizing such an action nor the massive upfront money that receivership would require. Will Ben Nelson and George Voinovich vote to take control of the banks? And what happens to the market while Congress is debating? And to Congress if the market dives?"

And with that in mind, Kevin Drum makes the case that if nationalization is the last resort, and Treasury wants to show it tried everything else first, the Geithner plan may eventually put Congress in a position where it has no other credible choice.

Like it or not, there's only one way to get this support: show that (a) one or more of the big banks really is insolvent and (b) every other option for rescuing them has been exhausted. Geithner's plan does both. If it works -- well and good. But if it fails -- if nobody is willing to participate, or if the auction demonstrates that the market price for toxic assets really is accurate -- then banks will be forced to mark their assets to those prices. Plug in those marks to Geithner's stress tests and it's likely to prove to everyone's satisfaction that some of our big banks really are insolvent. At that point, even skeptics will be forced to accept nationalization as the only remaining alternative.

Politically, I don't see any other way forward. Bank nationalization will be complex, costly, and contentious. To work, it will almost certainly have to include a broad guarantee of all bank system obligations, something the public won't be happy about. Congressional support won't be easy to come by. Geithner's plan will either work or else it will pave the road for that support. It might not be pretty, but that makes it a plan worth trying.

Of course, Paul Krugman touches on that last point today, arguing, "You might say, why not try the plan and see what happens? One answer is that time is wasting: every month that we fail to come to grips with the economic crisis another 600,000 jobs are lost. Even more important, however, is the way Mr. Obama is squandering his credibility. If this plan fails -- as it almost surely will -- it's unlikely that he'll be able to persuade Congress to come up with more funds to do what he should have done in the first place."

While I find much of Krugman's critiques persuasive, I'm not sure about his argument relating to Congress.

Steve Benen 11:10 AM Permalink | Trackbacks | Comments (33)

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YOU SAY 'TOXIC,' HE SAYS 'LEGACY'.... In a Wall Street Journal op-ed this morning, Treasury Secretary Tim Geithner offers some analysis on his response to the banking crisis. He takes care to avoid the "t" word.

Today, we are announcing another critical piece of our plan to increase the flow of credit and expand liquidity. Our new Public-Private Investment Program will set up funds to provide a market for the legacy loans and securities that currently burden the financial system.

And what are "legacy loans and securities"? They're toxic assets, with a more pleasant sounding name.

As Jake Tapper asks, "Note that, branding experts?"

Likewise, the Treasury Department unveiled a new fact sheet on the new proposal, which uses the word "legacy" 40 times.

There are only so many ways to spin "toxic."

Steve Benen 10:00 AM Permalink | Trackbacks | Comments (54)

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DEAN JOINS CNBC TEAM.... If you happened to tune into CBNC this morning, you may have noticed an unexpected development: "Squawk Box" was co-hosted by none other than Howard Dean.

It was not, apparently, a one-time thing. Sources close to the former Vermont governor told Sam Stein that Dean will become a regular contributor to the business news network.

The move comes at a time when CNBC is under intense pressure to change its format and criticism for its failures to report or foresee much of today's economic crisis. In this regard, Dean -- who worked Wall Street after graduating college, has family ties to the financial sector, but was nevertheless been an early critic of the business practices that contributed to the current recession -- should be a refreshing presence, particularly for progressive economists.

But the decision to bring the recently departed DNC Chair on board, the source says, was finalized well before the current wave of CNBC-angst. So while grassroots groups have sprouted up in recent weeks petitioning the network to make wholesale changes, Dean's hiring can't be viewed as a direct result of public pressure.

I don't know if CNBC is just saying that or not. Either way, Dean is a welcome addition to the network.

Steve Benen 9:20 AM Permalink | Trackbacks | Comments (10)

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INTERROGATION MEMOS ON THE WAY?.... This should be interesting.

Over objections from the U.S. intelligence community, the White House is moving to declassify -- and publicly release -- three internal memos that will lay out, for the first time, details of the "enhanced" interrogation techniques approved by the Bush administration for use against "high value" Qaeda detainees. The memos, written by Justice Department lawyers in May 2005, provide the legal rationale for waterboarding, head slapping and other rough tactics used by the CIA. One senior Obama official, who like others interviewed for this story requested anonymity because of the issue's sensitivity, said the memos were "ugly" and could embarrass the CIA. Other officials predicted they would fuel demands for a "truth commission" on torture.

Because of an executive order signed by President Obama on Jan. 22 banning such aggressive tactics, deputies to Attorney General Eric Holder Jr. concluded there was no longer any reason to keep the interrogation memos classified. But current and former intel officials pushed back, arguing that any public release might still compromise "sources and methods." According to the administration official, ex-CIA director Michael Hayden was "furious" about the prospect of disclosure and tried to intervene directly with Obama officials. But the White House has sided with Holder.

Releasing these documents would, Newsweek concluded, "remove, at long last, the veil of secrecy about how detainees in the war on terror were actually treated."

Two weeks ago, Obama and Holder released nine Bush-era Justice Department memos, which documented many of the ways the former administration thought its counter-terrorism efforts trumped the rule of law. If the Obama administration follows up on this by releasing memos detailing the "enhanced" interrogation techniques approved by the Bush administration, it will show genuine follow-through on presidential rhetoric about transparency and accountability.

For that matter, those seeking investigations of Bush-era wrongdoing will have still more evidence to bolster their arguments.

Steve Benen 9:00 AM Permalink | Trackbacks | Comments (17)

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HE'S NOT 'PUNCH DRUNK'.... For a while, the lead story from Politico last night was the idea that President Obama chuckled a little too much during his interview with Steve Kroft on "60 Minutes." The headline on the piece read, "Kroft to Obama: Are you punch-drunk?"

"You're sitting here. And you're -- you are laughing. You are laughing about some of these problems. Are people going to look at this and say, 'I mean, he's sitting there just making jokes about money--' How do you deal with-- I mean: explain..." Kroft asked at one point.

"Are you punch-drunk?" Kroft said.

"No, no. There's gotta be a little gallows humor to get you through the day," Obama said, with a laugh.

When Politico started promoting the piece at 7:04 p.m., I hadn't seen the interview. Reading the headline and these paragraphs, I started wondering if the president had somehow laughed inappropriately at economic suffering. I imagined extensive discussion of "Laugh-Gate" on "Morning Joe" today. Drudge, naturally, ran with this, and far-right blogs pounced.

But then I saw the interview and realized the Politico's piece didn't exactly capture the context.


Watch CBS Videos Online

For most of the interview, Obama is dead serious. Occasionally, he'd chuckle at some absurdity -- hardly an unusual reaction for, you know, humans -- but for the most part, the president was hardly jocular.

About half-way through, Kroft brings up aid to the auto industry, and public opposition to additional government investment. The two share a laugh at the one-sided polling numbers, which led to Kroft's question about "laughing." As Steve M. explained, "[I]t's obvious -- the chuckling is mutual as they agree about the extraordinary unpopularity of bailing out the auto industry."

When you see reports today about the president laughing at economic hardship, keep this in mind.

Steve Benen 8:00 AM Permalink | Trackbacks | Comments (44)

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March 22, 2009
By: Hilzoy

The Geithner Plan, Part 2

In my last post I argued that the auctions Sec. Geithner is (by all accounts) about to propose as part of his plan to solve the problems with the banking industry might not work at all; that if they did work, they would do so by giving buyers an incentive to overpay, with both their dollars and ours, for troubled assets; and that the plan therefore represented an enormous gamble, with our money, on the proposition that those assets are presently undervalued.

In what follows, I want to describe a different and more troubling way in which these auctions might tempt people to overpay. This is a problem I have not seen discussed elsewhere, and I have wavered about whether or not I should write about it: it might be that the reason it hasn't been discussed elsewhere is that I just don't have any idea what I'm talking about, and this really won't be a problem. I decided to go ahead and write it up, but bear in mind: I'm a philosophy professor, not an economist. That said:

A lot of the "toxic assets" are very hard to value. They are not traded all that often, and there are not a lot of comparable sales to use as a guide. This means that the prices arrived at in an auction might serve several different functions. One function is obvious: when a buyer and seller agree on a price for some asset, that asset will change hands at that price.

In addition, though, for any asset of a kind that is (a) both rarely traded or otherwise hard to assign a price to, and (b) in some way comparable to other assets, the price that emerges from an auction might also be used as data for setting values for other, similar assets. If the auction price is low, regulators might force the owners of comparable assets to write those assets down. Thus, the owners of comparable assets would seem to have an interest in those prices being as high as possible.

If the private parties to the auction had to put up 100% of the money, then we wouldn't have to worry as much about those owners' trying to bid up the prices of the assets in order not to have to write down comparable assets: it would probably cost them too much and be too risky. But the less money they have to put on the line, the more likely it becomes that the amount they need to risk to drive prices up is less than the amount they would stand to lose if they had to write their comparable assets down.

We are about to ask private parties to put down very little money to participate in this auction. Worse, in some cases we will guarantee against losses, which would seem to remove the risk from bidding too high. This seems like an invitation to banks that are worried about the prices that might be discovered in such an auction to bid higher than they would if they had no concerns about the value of comparable assets. Possibly quite a lot higher.

The most obvious way to deal with this is to create rules about who can participate in the auctions. Clearly the original owners of the assets should not be allowed to bid on them. But it seems to me that for the reasons just outlined, no one who owns comparable assets should be allowed to bid on them either. Those people have a conflict of interest: as owners of comparable assets, they have an interest in having those assets seem to be more valuable than they actually are.

It would be fairly easy to exclude these two kinds of firms, and people employed by them, from participating in the auctions. But consider a third group: firms that do not own any such assets, but that do a lot of business with firms that do, and that stand to lose a lot if any of those other firms go under. Those firms also have an interest in overpricing those assets. They would probably be pretty hard to exclude. But if they overpay for these assets, we are all on the hook.

Moreover, excluding people from firms who own comparable assets, let alone people from firms with substantial exposure to those who do, would exclude a lot of the people who would, offhand, seem most interested in participating in such an auction, and most knowledgeable about the assets being auctioned off. I, for instance, have no conflict of the kind I've just described, but that's because I have no experience whatsoever in this kind of investment. For that reason, I'd be a terrible person for the government to invite to participate in these auctions. It's worth asking just how many unconflicted firms with the expertise to make this kind of investment and do well at it there are.

As I said at the outset: I'm sure you all normally bear in mind the possibility that I might be wrong, but I'm especially likely to be wrong about this point. I'd love to hear any views about whether, and how, I am. If I'm right, though, this is one more reason why we should expect the prices set by the auctions to be too high. And if they are too high, that means we, the taxpayers, are paying too much.

Hilzoy 2:44 PM Permalink | Trackbacks | Comments (58)

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By: Hilzoy

Some negative reactions to the Geithner plan: Krugman, more Krugman, Calculated Risk, Yves Smith, James K. Galbraith, Henry Blodget, Noam Scheiber. Brad DeLong, on the other hand, likes it, and whether you agree with him or not, he's made the strongest case I can think of for it, and it's absolutely worth reading, as is Krugman's response. All of these people actually know what they're talking about. I, on the other hand, do not: I'm just a reasonably informed non-economist like, I assume, most of you. Take what follows in that light, and if your time is short and you have to choose between reading me and reading, say, Krugman or DeLong, choose the latter. Also, if I get anything wrong, please let me know.

That said, several problems with this plan, and specifically with Geithner's proposal to create public/private partnerships which will bid against one another to buy various toxic assets, just leap out at me. For one thing, it might not work at all. From the NYT:

"Risk-taking institutional investors, like hedge funds and private equity funds, have refused to pay more than about 30 cents on the dollar for many bundles of mortgages, even if most of the borrowers are still current. But banks holding those mortgages, not wanting to book huge losses on their holdings, have often refused to sell for less than 60 cents on the dollar."

How, one might wonder, will holding an auction help here? If the banks are not willing to sell below 60 cents on the dollar, then absent nationalization or something similarly drastic, we can't force them to. If potential buyers are not willing to pay the price banks insist on, then the auction will simply fail, the assets will remain on the banks' books, and nothing will have been accomplished. And if the NYT is right about the gap between the price at which banks are willing to sell and what buyers are willing to pay, then the only way for an auction to work is if it somehow persuades one group to change its mind.

As it happens, some of the auctions Geithner plans to propose will do just that. From the WSJ:

"To target troubled securities, such as mortgage-backed securities, the government will create several investment funds. Treasury will act as a co-investor, in most cases contributing $1 for every $1 contributed by the private sector and sharing in the first-loss position.

To target troubled loans, the government will create a Disposition Finance Program with the FDIC. In that case, the government will be a co-investor, but could also agree in some cases to contribute 80% of the financing, with the government putting up $4 for every $1 in private financing. As part of that program, the FDIC would provide guarantees against losses on a pool of loans that a bank wants to sell. The program could guarantee as much as $500 billion in loan investments."

In the first sort of auction, we share the risk with private investors. In the second, however, we assume it all. Obviously, buyers will be willing to pay more for otherwise risky assets if the government guarantees any losses they might suffer. Why? Because any investment is worth more if you don't have to worry about losing money. As Ezra says:

"A private auction will not price the assets. It will price the potential upside of the assets given that taxpayers will assume the brunt of the losses. As illustration, imagine an art auction. Now imagine an art auction where Sotheby's loans money to the participants and promises to pay the losses if the paintings fall in value. Think the pricing will be the same?"

This means several things. First, one of the things you might think that an auction would do would be to help us to figure out what these assets are really worth. But while the auctions of troubled securities might do that, the auctions of troubled loans will not. They will, at best, help us to figure out what those loans would be worth if they had no downside risk. That's a different thing entirely. And it means that this auction will be useless for figuring out what those loans are actually worth.

Second, buyers will presumably pay more for these loans than they would have done had they had to assume their risks along with their potential gains. This might help overcome the gap between what buyers are willing to pay and what sellers are willing to accept. But it does so by artificially inflating the price of risky loans. Since we, along with the private investors, will be paying these artificially inflated prices, this is a subsidy to the banks, and should be recognized as such.

Third, it's worth reemphasizing this point: we, the taxpayers, assume a lot of the risks under this plan. This is one reason why, as Paul Krugman says, it's a huge gamble on the proposition that the assets in question are undervalued, and will regain their value as soon as the economy returns to normal. If that's true, then we will probably get our money back, though we won't do as well as we would have done had we paid market prices. But if it's not, then we will be left holding the bag. And it's a very, very big bag.

Hilzoy 1:00 PM Permalink | Trackbacks | Comments (30)

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GREGG.... Have I mentioned lately how fortunate we are that this guy isn't in the cabinet?

Even though he was almost a member of the new Obama administration, New Hampshire Republican Judd Gregg Sunday slammed President Obama's approach to handling the country's fiscal outlook.

"The practical implications of this is bankruptcy for the United States," Gregg said of the Obama's administration's recently released budget blueprint. "There's no other way around it. If we maintain the proposals that are in this budget over the ten-year period that this budget covers, this country will go bankrupt. People will not buy our debt, our dollar will become devalued. It is a very severe situation."

Gregg, known as one of the keenest fiscal minds on Capitol Hill, also told CNN Chief National Correspondent John King that he thought it was "almost unconscionable" for the White House to continue with its planned course on fiscal matters with unprecedented actual and projected budget deficits in the coming years.

Why CNN considers Gregg "one of the keenest fiscal minds on Capitol Hill" is a mystery. I can't think of any fiscal issues he's ever been right about.

In any case, the senator's underlying point -- that massive deficits necessarily mean we have to spend less during a deep recession -- is highly dubious. There's ample evidence to the contrary.

Also, as part of the same interview, Gregg defended Treasury Secretary Timothy Geithner and White House economic adviser Larry Summers, saying that the two are "doing the right things" and "moving in the right direction."

Given Gregg's track record, I almost wish he'd said the opposite.

Steve Benen 12:55 PM Permalink | Trackbacks | Comments (22)

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FEAR OF UP-OR-DOWN VOTES GONE AWRY.... This week, there was increased speculation that the Obama administration might pursue major healthcare and energy reforms through the budget reconciliation process. The point would be to make passage far easier -- Republicans can vote against reconciliation bills, but they can't filibuster them.

Sen. Judd Gregg (R-N.H.) blasted the idea, calling it "the Chicago approach to governing." Gregg added, "You're talking about running over the minority, putting them in cement and throwing them in the Chicago River."

A couple of Fox News personalities went even further yesterday.

During the March 20 edition of Fox News' Hannity, host Sean Hannity falsely claimed that "a parliamentary procedure called reconciliation" would allow the Obama administration to pass legislation "without any Republicans even having an opportunity to vote." Guest and fellow Fox News host Mike Huckabee replied that this is "horribly dangerous because it really does bypass the entire system of the American government, where we're supposed to have an honest debate."

Look, the budget reconciliation process isn't complicated. Indeed, it's called "majority rule." It doesn't deny Republicans from "even having an opportunity to vote." Just the opposite is true -- every member in both chambers gets to vote, up or down, after a floor debate. When Hannity talks about having an "opportunity" to vote, he means protecting a system in which 41 votes defeat 58 votes.

For that matter, Mike Huckabee believes it undermines the "entire system of the American government" if a piece of legislation passes with the support of congressional majorities. I have no idea what leads him to such a conclusion. Our "entire system of the American government" is not predicated on the notion that Senate super-majorities are necessary to pass any and all substantive pieces of legislation.

But this incredibly foolish rhetoric is nevertheless illustrative of policymaking gone awry. The administration is considering a process in which a bill receives majority support in the House, majority support in the Senate, and then becomes law with the president's signature. We've reached the point at which this very idea is literally offensive -- indeed, it's un-American -- to conservatives.

Steve Benen 11:00 AM Permalink | Trackbacks | Comments (25)

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OBAMA RESPONDS TO CHENEY.... Last Sunday, former Vice President Dick Cheney offered some odd and factually-challenged criticism of the White House. This Sunday, President Obama responds.

President Obama has hit back at former Vice President Dick Cheney, calling Bush administration policy on detainees at the military prison at Guantánamo Bay, Cuba, "unsustainable."

"How many terrorists have actually been brought to justice under the philosophy that is being promoted by Vice President Cheney?" Mr. Obama said Friday in an interview to be broadcast Sunday on "60 Minutes" on CBS.

The president was responding to recent charges by Mr. Cheney that the administration's decision to shut down the Guantánamo prison, along with other policies on the treatment of terrorism suspects, would make the United States more vulnerable to attacks.

Bush administration terrorism policy "hasn't made us safer," Mr. Obama said, according to excerpts of the interview released Saturday. "What it has been," he continued, "is a great advertisement for anti-American sentiment."

On a related note, Time's Bobby Ghosh reported the other day that Cheney's recent vitriol "has left many in Washington wondering if it was about more than just protecting his legacy."

Several observers think Cheney may be starting to feel the heat from Democrats' efforts to investigate the Bush Administration's counterterrorism policies -- policies Cheney advocated, and for which his proteges allegedly provided the legal basis. But if he was trying to deflect attention from Bush-era policies, Cheney's aggression will likely have the opposite effect. "If his goal was to tamp down talk of a truth commission, he has probably exacerbated the problem," a veteran Republican told TIME.

I'm a little skeptical of this -- talk of investigating the Bush administration's alleged crimes seems to have more heat than light. For that matter, Cheney doesn't need an excuse to take cheap shots at Obama; it just comes naturally. I'd pass this along, anyway, just as an FYI.

* typos fixed

Steve Benen 10:00 AM Permalink | Trackbacks | Comments (16)

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THE EQUIVALENT OF A CORRECTION.... George Will's recent commentary on global warming sparked an interesting controversy, not just over Will's errors of fact and judgment, but also on the reluctance of a major media outlet to correct mistakes, acknowledge missteps, and prevent these kinds of errors from taking place.

In Will's case, the Washington Post published a seriously flawed column about a pressing international crisis, and rejected calls for a correction. Yesterday, however, more than a month after Will's column first ran, the Post ran a related op-ed from Chris Mooney.

A recent controversy over claims about climate science by Post op-ed columnist George F. Will raises a critical question: Can we ever know, on any contentious or politicized topic, how to recognize the real conclusions of science and how to distinguish them from scientific-sounding spin or misinformation?

Congress will soon consider global-warming legislation, and the debate comes as contradictory claims about climate science abound. Partisans of this issue often wield vastly different facts and sometimes seem to even live in different realities.

In this context, finding common ground will be very difficult. Perhaps the only hope involves taking a stand for a breed of journalism and commentary that is not permitted to simply say anything; that is constrained by standards of evidence, rigor and reproducibility that are similar to the canons of modern science itself. [...]

Readers and commentators must learn to share some practices with scientists -- following up on sources, taking scientific knowledge seriously rather than cherry-picking misleading bits of information, and applying critical thinking to the weighing of evidence. That, in the end, is all that good science really is. It's also what good journalism and commentary alike must strive to be -- now more than ever.

Mooney proceeds to expose Will's demonstrable mistakes -- in an exceedingly polite way. Mooney doesn't make any assumptions about Will's intentions; he just explains why Will's observations were factually wrong.

It's not quite the same as the Post running a correction, or better yet, holding Will responsible in some way for his distortions, but at least Mooney's piece sets the record straight, and makes the case for more reliable coverage of these issues in the future.

Matt Yglesias added, "Mooney can't really bring any of that stuff up and point out that George Will is an enormous liar, because to do so would lead naturally to the point that it's grossly irresponsible of The Washington Post to keep running his columns. And if you do that, you can't get published in The Washington Post! So good for Chris -- it's a good piece -- but it's still a rotten system."

Steve Benen 8:55 AM Permalink | Trackbacks | Comments (17)

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EFCA 'COMPROMISE'?.... With the upcoming fight over the Employee Free Choice Act certain to be contentious, three companies with a fairly progressive reputation -- Costco, Starbucks, and Whole Foods -- are looking for a "third way."

The companies, calling themselves the "Committee for a Level Playing Field," not surprisingly, oppose EFCA. They have, however, put together an alternative that they see as a compromise measure.

Their proposal would maintain management's right to demand a secret-ballot election and would leave out binding arbitration. The proposal would keep the third main element of card check -- toughening the penalties for companies that retaliate against workers before union elections or refuse to engage in collective bargaining. But it would also toughen penalties for union violations, and it would make it easier for businesses to call elections to try to decertify a union.

To address labor's concern that businesses intimidate workers before elections, it would set a fixed period in which an election must be held, limiting the delays that give employers time to exert pressure. The proposal does not specify what the time period should be.

The proposal would also provide unions equal access to workers before elections -- for instance, by allowing organizers to address workers on a lunch break in the company cafeteria just as management can.

"We wanted to see what we can do to come up with a compromise position that is going to address the concerns of labor and also protect the sanctity of the collective bargaining process and secret ballot," said Costco Wholesale chief executive James D. Sinegal.

Lanny Davis, a former special counsel to President Clinton, is reportedly helping to push this compromise, and told the Post that he's received positive feedback from about 20 Senate offices. We don't know which 20, but not surprisingly, Sen. Mark Pryor of Arkansas, a right-leaning Democrat who may break with his party over EFCA, said the proposal "could result in a reasonable compromise."

It's too soon to say whether this measure will gain traction, but the anti-union forces have already denounced the compromise measure -- the Workforce Fairness Institute used phrases like "non-starter," "even worse," and "beyond absurd" -- almost immediately. The AFL-CIO was similarly wary, though obviously for different reasons.

Stay tuned.

Update: By the way, the proposal for the "Committee for a Level Playing Field" might sound familiar to regular readers of the Monthly. A couple of issues ago, we ran a provocative piece by T.A. Frank with a related recommendation:

"The question, then, is how much of a fight the card check provision merits. And the answer is probably a little, but not a lot. What most undermines the secret-ballot process is that employers can violate the law in numerous ways without consequences. Under EFCA, however, every illegal action has the potential to be costly, so firings, spying, threats, or other forms of intimidation would be less likely. Also, there is an alternative way to preserve the secret ballot while guarding against company malfeasance: expedited elections. Under current law, months can go by between when NLRB announces the results of a card check vote and when a secret-ballot election is held. If, however, this campaign window were reduced to just a few days, employers would have less opportunity to intimidate union supporters into changing their minds. Workers I spoke to in Lancaster seemed content with this alternative. And some savvy people in the labor movement I spoke to feel the same way -- provided that employers either refrain from captive-audience campaigning or else grant union members equal access to the workplace during a campaign."

Second Update: I spoke this morning with a committee aide that Democratic leaders on the House Committee on Education and Labor will not accept this compromise, because the arbitration element of EFCA cannot be removed. Something to keep in mind.

Third Update: A spokesperson for the House Education and Labor Committee further clarifies that Chairman Miller also continues to oppose dropping the provision that gives the choice of workers to organize through majority signup.

Steve Benen 8:05 AM Permalink | Trackbacks | Comments (18)

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March 21, 2009
By: Hilzoy

Hey Paul Krugman!

Somehow, this YouTube just seemed appropriate today:

(via Calculated Risk, who also notes Dr. Krugman's answer to a similar question.)

***

Update: I don't have any idea whether any of you share my interest in utterly weird music -- music that makes you think: someone actually went to some trouble to do this? -- but if you do, and if the idea of companies in the 60s and 70s recording musicals about their products seems at all interesting, you should check out the following links:

(a) American Standards' The Bathrooms Are Coming, about bathroom fixtures. I think the two best are 'It's Revolution! Bathroom Revolution!' and 'My Bathroom Is A Very Private Place'.

(b) GE's 'Got To Investigate Silicones'. The standout here is 'Paradox'.

(c) More.

Enjoy -- if that's the right word. ;)

Hilzoy 10:41 PM Permalink | Trackbacks | Comments (13)

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'ZOMBIE IDEAS'.... We've been waiting for a while to see the details of the Treasury Department's plan for dealing with the financial industry's toxic assets. The administration reportedly won't formally unveil the policy until Monday, but the New York Times and Wall Street Journal have obtained quite a few details about what to expect.

The trick, at this point, is finding someone -- anyone, really -- who thinks the Geithner plan is a wise, prudent approach to the problem.

Paul Krugman argues that "zombie ideas have won," and described what we know of the Geithner proposal as an "awful mess."

The Obama administration is now completely wedded to the idea that there's nothing fundamentally wrong with the financial system -- that what we're facing is the equivalent of a run on an essentially sound bank. As Tim Duy put it, there are no bad assets, only misunderstood assets. And if we get investors to understand that toxic waste is really, truly worth much more than anyone is willing to pay for it, all our problems will be solved.

To this end the plan proposes to create funds in which private investors put in a small amount of their own money, and in return get large, non-recourse loans from the taxpayer, with which to buy bad -- I mean misunderstood -- assets. This is supposed to lead to fair prices because the funds will engage in competitive bidding.

But it's immediately obvious, if you think about it, that these funds will have skewed incentives. In effect, Treasury will be creating -- deliberately! -- the functional equivalent of Texas S&Ls in the 1980s: financial operations with very little capital but lots of government-guaranteed liabilities. For the private investors, this is an open invitation to play heads I win, tails the taxpayers lose. So sure, these investors will be ready to pay high prices for toxic waste. After all, the stuff might be worth something; and if it isn't, that's someone else's problem.

Or to put it another way, Treasury has decided that what we have is nothing but a confidence problem, which it proposes to cure by creating massive moral hazard.

This plan will produce big gains for banks that didn't actually need any help; it will, however, do little to reassure the public about banks that are seriously undercapitalized.

Dean Baker is discouraged. Calculated Risk isn't happy. And John Cole summarized the big picture this way:

The Illness- reckless and irresponsible betting led to huge losses
The Diagnosis- Insufficient gambling.
The Cure- a Trillion dollar stack of chips provided by the house.
The Prognosis- We are so screwed.

Oh my.

Steve Benen 12:30 PM Permalink | Trackbacks | Comments (89)

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NEVADA'S GIBBONS TRIES TO JOIN THE CLUB.... Conservative Republican Govs. Sanford, Perry, Jindal, and Palin have already taken steps to reject federal stimulus aid. Apparently, Nevada Gov. Jim Gibbons (R), arguably the nation's least popular and most scandal-plagued governor, wants to join the club.

With Nevada suffering from some of the nation's highest unemployment and foreclosure rates, no one seems to understand what Gibbons is thinking rejecting funds for extended unemployment assistance. If the governor assumed taking an uncompromising conservative stand might rally the Republican base to his defense, he badly miscalculated -- GOP lawmakers and the state's Chamber of Commerce want him to cut the nonsense and accept the money.

While many states would have to change their laws to receive the cash -- the federal government's offer of $7 billion is contingent on states' expanding the eligibility for the benefits -- Nevada already meets the criteria, according to the State Department of Unemployment, Training and Rehabilitation, since it gives benefits to some part-time workers and those who quit their jobs under certain conditions.

Further, some governors have rejected the unemployment piece of the package because their unemployment levels are below the national average. With a 10.1 percent unemployment rate, according to the latest data released Friday, Nevada's rate is above the national average and rising, and the state's fund will be broke by the end of the year. That will trigger federal borrowing to replenish the fund, which Nevada has not had to do since 1974.

A spokesperson for Senate Majority Leader Harry Reid of Nevada told the NYT, "What makes this particular situation most extreme is the terrible situation the state is in. I mean, how do you look at someone in your state that has lost their job and tell them, 'No, we're not taking this money'? "

The governor's finance team hasn't been able to defend Gibbons' position. The state's Democratic Assembly speaker called Gibbons's position "incoherent."

With Sanford, Perry, Jindal, and Palin, there's the presidential angle to consider -- all four are rumored to be eyeing a race in 2012, and want to be able to tell Republican primary voters they took a firm line in opposition to economic recovery efforts. But Gibbons is, in political terms, a dead man walking, and stands little chance of winning a second term in Nevada, better yet seeking national office.

Maybe he thinks rejecting stimulus aid in the middle of a deep recession is trendy or something.

Steve Benen 11:40 AM Permalink | Trackbacks | Comments (16)

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THIS WEEK IN GOD.... First up from the God Machine this week is an unfortunate situation in which public officials with a religious agenda have cost their communities dearly. (thanks to Joanne for the tip)

A federal judge has ordered a pair of southern Kentucky counties to pay $393,798 in attorneys fees stemming from their defense of posting the Ten Commandments in courthouses.

The Lexington Herald-Leader reported that U.S. District Judge Jennifer B. Coffman ruled that Pulaski and McCreary counties must pay the funds to two attorneys from the American Civil Liberties Union of Kentucky.

The ACLU of Kentucky successfully challenged the displays in federal court in a legal battle that started a decade ago.

What's frustrating is that these Kentucky officials had to realize that their efforts to promote Christianity were unconstitutional. But instead of backing down, complying with the law, and leaving religious promotion to houses of worship and private individuals, they pushed forward anyway with a display that endorsed the Christian version of the Ten Commandments, an "In God We Trust" display, and a version of the Congressional Record declaring 1983 as the "Year of the Bible."

These are two of the poorest counties in Kentucky -- they're already hard pressed to cover county expenses -- and now local families are likely going to be stuck paying legal fees because their county officials thought it was their job to promote a faith tradition, even after lawyers explained they couldn't. They knew this was a likely outcome, but pushed ahead anyway. What a shame.

Also from the God Machine this week:

* Coral Ridge Presbyterian in Fort Lauderdale, one of the nation's leading megachurches, created and led by D. James Kennedy before his death in 2007, chose the Rev. Tullian Tchividjian as its new leader this week. Tchividjian is perhaps best known as Billy Graham's grandson.

* The Southern Christian Leadership Conference is planning a campaign this summer in the Mississippi Delta, as part of an effort to "draw attention to the poverty of a region where some Americans still live in homes with dirt floors and brown water flows from their faucets."

* The debate over the "I Believe" license plates in South Carolina rages on. South Carolina Attorney General Henry McMaster and Lt. Governor Andre Bauer are doing their part to rally religious right activism on the issue.

* And the Texas State Board of Education, already controversial for its efforts to undermine the state's science curriculum for religious reasons, sparked a new round of controversy this week when its chairman endorsed a new book that portrays scientists as "atheists," parents who want their children to learn about evolution as "monsters," and pastors who accept the science of evolution as "morons."

Steve Benen 11:00 AM Permalink | Trackbacks | Comments (25)

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SANFORD'S EXPLANATION.... Twice South Carolina Gov. Mark Sanford (R) has asked the Obama administration to let him undermine the economic recovery efforts. And twice, OMB Director Peter Orszag has respectfully declined.

So, yesterday, Sanford announced that he will officially reject $700 million in federal stimulus money for his state, a decision that isn't going over well among struggling families in South Carolina.

Today, the governor has an op-ed in the Wall Street Journal, explaining the rationale for his decision. It's a reasonably detailed, 900-word piece, but this summary sentence gets at the root of Sanford's thinking.

In the end, I just don't believe a problem created by too much debt will be solved by piling on more debt. This doesn't strike me as an unreasonable or extremist position.

That's exactly the explanation I wanted to see, because it makes clear where Sanford is coming from. Why would he reject stimulus aid in the midst of a severe recession? Because the governor believes the current crisis was "created by too much debt." And if the crisis were created by too much debt, Sanford's response would be perfectly sensible.

The problem, of course, is that Sanford is completely wrong. His analysis is not even close to reality, and it's unsupported by any evidence at all. But it at least offers us some insight into why a governor would deliberately choose to undermine the interests of his constituents -- he starts with a lack of economic understanding, follows it up by misdiagnosing the problem, and then concludes by making a misguided decision based on foolish assumptions.

Good to know.

Steve Benen 10:10 AM Permalink | Trackbacks | Comments (28)

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QUOTE OF THE DAY.... This administration really does seem serious about science.

Education Secretary Arne Duncan said Friday he wants to launch a "new era" of science education in the United States, one that encourages students to ask tough, challenging questions and brings more specially trained science and math teachers into the classroom.

Duncan told the National Science Teachers Association during a visit to New Orleans that President Barack Obama sees a need for inventors and engineers along with poets and scholars and "will not allow scientific research to be held hostage to a political agenda."

"Whether it's global warming, evolution or stem cell research, science will be honored. It will be respected and supported by this administration," he said.

It may be the soft bigotry of low expectations -- an administration vowing to take reason and evidence seriously; imagine that -- but I continue to find this rhetoric encouraging.

Steve Benen 9:30 AM Permalink | Trackbacks | Comments (8)

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ABOUT THOSE CBO NUMBERS.... The conventional wisdom about the discouraging new deficit projections from the CBO is that President Obama's ambitious agenda is necessarily in jeopardy. If budget deficits are poised to spiral out of control, the argument goes, then lawmakers will have to start making significant cuts.

Indeed, the NYT's Jackie Calmes noted today that the CBO deficit numbers "complicate" Congress' efforts of "achieving the president's priorities on health care, energy policy and much more."

But Ezra Klein raised a very good point about the "costs" associated with the administration's agenda.

[T]he $634 billion set aside for health reform doesn't contribute to the deficit at all. It's entirely offset by capping itemized deductions for the rich and squeezing private insurers in Medicare and a couple other policies. The cap and trade proposal is actually revenue-positive.

The stimulus package, by contrast, sharply increased the deficit, because there were no immediate offsets to pay for it. So too with Bush's tax cuts.

But the big new initiatives in Obama's budget don't necessarily affect the deficit at all. They're entirely paid for. There may be a political impact in which the size of the deficit saps political will for new initiatives and gives Ben Nelson a preening opportunity he can't pass on, but there's no debt-related reason that these numbers should affect those priorities. Indeed, quite the opposite: Cap and trade would raise revenue and health reform will cut the long-term deficit by about $3 trillion. It's only in the weird world that is Washington that budget projections showing the current fiscal path is unsustainable would be used to argue against policy changes that better the long-term outlook.

Exactly. The principal argument from the White House about health care and energy has been that these initiatives are necessary for long-term economic growth. That's certainly true. But critics reflexively respond that these reform efforts will have to wait until the budget deficits Obama inherited are significantly smaller. This is not only wrong, it misses the point -- the administration's health care and energy proposals save money over the long run.

It's why OMB Director Peter Orszag felt comfortable with sounding a relatively optimistic note yesterday. In a blog post, Orszag argued that the CBO report "only underscores the severity of the economic and fiscal crisis the Administration has inherited. There is need for urgent action to get our economy moving again, invest for the future, and put the nation on a sustainable fiscal path."

He presented four key challenges (invest in health care, invest in education, and invest in energy, while cutting the deficit in half by 2013), adding, "The new CBO numbers do not change our commitment to these goals or our ability to achieve them."

Lawmakers start debating the budget in earnest next week. It's bound to be interesting.

Steve Benen 8:45 AM Permalink | Trackbacks | Comments (13)

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IT'S STILL THE ONE LINE REPUBLICANS CAN'T CROSS.... Assemblyman Jim Tedisco, the Republican candidate in the special election in New York's 20th, made a seemingly innocuous comment about his priorities on Thursday.

"Rush Limbaugh is meaningless to me," Tedisco said in an interview with the Oneonta (N.Y.) Daily Star editorial board. "The only constituency I'm worried about are [sic] the residents of the 20th Congressional District.''

The interview was published yesterday morning. How long did it take for the Tedisco campaign to walk back the comments? A few hours. Here's the full statement from Tedisco's spokesperson:

Jim's comments were in response to a question about what voters are asking him about on the campaign trail. So far, the concerns he has been hearing from voters on the campaign trail have been local in nature, such as his support for lower property taxes, fiscal responsibility, and his opponents appalling support for the AIG bonus loophole. That was his point and any effort to characterize it otherwise is a distortion of the facts.

Did the point really need clarification? What Tedisco said was largely common sense. But his comments included a mild and indirect rebuke of a right-wing talk-show host, and Tedisco certainly couldn't let that stand.

For those keeping score at home, this is reversal #4 for Republicans who've been critical of Limbaugh recently. Rep. Phil Gingrey (R-Ga.) groveled for Rush's forgiveness in late January, and Gov. Mark Sanford's (R-S.C.) office quickly backpedaled after the governor said, "Anyone who wants [President Obama] to fail is an idiot." RNC Chairman Michael Steele, of course, humiliated himself a few weeks ago.

That Tedisco, Gingrey, Sanford, and Steele were all correct in their assessments is irrelevant. This isn't about accuracy; it's about making sure the blowhard and his followers are happy.

Steve Benen 8:00 AM Permalink | Trackbacks | Comments (14)

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By: Hilzoy

HR 1586

Even though I am furious at the people who brought down AIG, along with all the other Masters of the Universe, I do not support the House bill that passed yesterday -- the one that would tax bonuses at 90%. For starters, it's badly targeted. On the one hand, it leaves out the incredibly troubling Merrill Lynch bonuses, along with any other bonuses paid before Jan. 1 of this year. On the other hand, it hits people who were just writing life insurance policies at AIG. Moreover, it also hits anyone AIG hires now. Suppose, for instance, that AIG were to hire Paul Krugman to supervise the liquidation of its Financial Products Division. And suppose AIG wanted to pay him a bonus if he did his job quickly and well. His bonus would be taxed under this bill, even though he had nothing to do with the financial crisis (which is why I picked him), and is being given a bonus for helping to solve it.

The bill would also allow firms receiving TARP funds to avoid the tax by simply paying their employees exorbitant salaries. Bonuses are bad, but exactly the same amount of money paid to exactly the same employee in the form of a salary is apparently fine. This seems exactly backwards to me. Part of the problem with the AIG bonuses was precisely that they were not tied to performance in any way: the people at AIG-FP, who had gotten enormous amounts of money when times were good, supposedly on the basis of their performance, locked down the same level of compensation when it looked as though their trades were about to go bad. Now, apparently, we want to give people an enormous incentive to decouple their compensation from performance in exactly the same way. Oh goody.

If that weren't enough, it seems likely to drive down the value of AIG generally, which will make it much harder for us to get the rest of our money back.

Besides all that, it's spooking the banks needlessly. I want to emphasize the word 'needlessly' here. There are a lot of things I think we ought to do that would spook the banks. Nationalizing several of the large banks, for starters. Putting in place regulations that ensure that no company is "too big to fail", that depository banks and investment banks are different companies, that liquidity requirements are bigger and (preferably) countercyclical, etc. Regulating all types of financial services firms, including hedge funds, and all financial instruments, including derivatives. Setting up procedures to liquidate any companies that manage to become systemically important despite these regulations, procedures that ensure that their investors take a very serious haircut. Unless someone can explain to me why off-balance entities serve some useful purpose, I think they should be banned. So I am fine with spooking banks.

That said, no business does well when the rules are constantly changing all around them. A lot of the reforms I favor are aimed not just at making the rules better, but establishing predictable rules where none exist. The fact that we have been improvising ever since this crisis hit is a tremendous indictment of every preceding administration that could have set up mechanisms to deal with these sorts of problems but did not.

If we want to spook the banks, then, I think we ought to do it in some way that actually solves a genuine and serious problem, and does it in an intelligent and targeted way. This bill is neither intelligent nor targeted. Moreover, while the bonuses are outrageous, they are not on my list of the top 100 things we need to worry about right now.

I'd rather save my fury and use it to force serious, lasting reform of the entire financial industry, and save spooking the banks for something really worthwhile, like nationalizing Citi.

Hilzoy 1:40 AM Permalink | Trackbacks | Comments (31)

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March 20, 2009
By: Hilzoy

Mark Haines Doesn't Get It

If anyone on Wall Street is wondering: what is this "it" that we are supposed to "get"? Is it just that people are angry? Could I be one of those people who don't "get it"? If so, how would I know?, s/he could do worse than consider this YouTube of CNBC's Mark Haines interviewing Rep. Brad Sherman (D-CA) (via TPM). It's a pretty good diagnostic tool.

This is what "not getting it" looks like. At about 50 seconds in, Haines says: "You and people who share your opinions seem to feel that, you know, let's hold salaries on Wall Street to $100,000. Do you have any idea what Wall Street would look like if you did that?" If your immediate reaction is: that's telling him, Mark Haines!, then you don't get it.

A couple of years ago, it would have been hyperbole to suggest that we would all be better off if the senior executives at all our major financial firms were people picked entirely at random out of the phone book. Now, it's arguably true. People picked at random would, admittedly, be likely not to have been to business school. They might not know a lot about futures or derivatives or put options. But so what? At least they might have been more likely to know that they were clueless, and a few of them might have had the common sense to ask questions like: will housing prices really go up indefinitely?

In any case, what's the worst they could have done? Bankrupted their companies with ludicrously risky gambles that fell apart once markets went south? Destroyed trillions of dollars in value? Brought the world financial system to the brink of collapse? Left taxpayers across the globe on the hook for trillions of dollars? Bankrupted entire countries?

Oh, right.

"Getting it" means understanding that the entire story that some people on Wall Street have told themselves about why they got such obscene levels of compensation is false. As a group, they were not uniquely talented. They did not make a lot more money for their company than they earned, at least not in the long run. Their salaries were not fair compensation for the value they produced. It would not have been worse if they had been replaced by people chosen at random.

Look at the YouTube clip again. Mark Haines seems astonished and baffled by Rep. Sherman's comments. He acts as though he's dealing with some ignorant Yahoo who just doesn't see that when people on Wall Street and people on Main Street disagree, Wall Street is obviously right. That's why he takes "What do people on Main Street know about running a financial system?" to be such a killer response to Sherman.

A few years ago, it would have been a killer response. Normally, it makes sense to think that people on Wall Street know more about running a financial system than people chosen at random, just as it makes sense to think that a successful director knows more about making movies than I do. When people reach positions of prominence in a given field, it makes sense to think that their opinions about the field they work in are entitled to some deference*. It takes a lot to completely forfeit any right to that deference. But the people in the financial services industries have managed to pull it off.

And that's what Mark Haines doesn't get.

* Preemptive footnote: their opinions are entitled to "some deference", not "complete deference". Imagine me talking to a successful director about what really goes on in the movie industry: I don't think that I should slavishly abdicate my judgment just because the director is successful, but I do think that before I go spouting off, I ought to take seriously the possibility that that director might know more than I do. That's all I mean.

Hilzoy 9:42 PM Permalink | Trackbacks | Comments (52)

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FRIDAY'S MINI-REPORT.... Today's edition of quick hits:

* Iranian officials weren't moved by President Obama's Nowruz greeting. But what did the Iranian people think?

* On a related note, the right-wing response to the president's message was so embarrassingly predictable.

* Sen. Chris Dodd (D-Conn) is very unhappy.

* Some bailed out companies aren't paying their taxes, either?

* Alaska Gov. Sarah Palin (R) is getting slammed for her opposition to economic recovery. Apparently, screwing over one's constituents is controversial in some circles.

* On a related note, Palin waited until 20 hours had passed after Obama apologized before condemning the president's Special Olympics comments. Her press release neglected to mention the fact that Obama had already apologized.

* Sen. Sam Brownback (R-Kan.), ignoring the requests of military leaders, is planning to do everything he can to block Christopher Hill's nomination as U.S. ambassador to Iraq.

* Krugman isn't impressed with the AIG tax bill. Neither is Kevin Drum. Josh Marshall doesn't like it, either.

* The recent Israeli offensive into Gaza continues to draw scrutiny.

* Despite complaints from far-right activists, the Senate confirmed Elena Kagan as the solicitor general of the United States.

* The unemployment rate is bad. The unemployment rate for veterans of the wars in Iraq and Afghanistan is even worse.

* Marriage equality is making progress in Vermont.

* First Lady Michelle Obama broke ground today on the first White House vegetable garden since Eleanor Roosevelt tended to a victory garden during World War II. Obama's will include 55 varieties of organically grown vegetables and two honey hives.

* John Holdren can finally get to work as President Obama's top adviser on science and technology policy.

* Sen. Jim Inhofe (R-Okla.) believes "the Middle Eastern mentality" is "a little worse" than Nazism.

* Every Friday, I look forward to Steve M.'s take on Peggy Noonan's column.

* Attorney General Eric Holder issued new guidelines yesterday on making more public records available through the Freedom of Information Act.

* You know what the Obama White House is really bad at? Gift giving.

* And finally, Bernard Goldberg believes, "The dictionary is written by some liberal person." I know reality has a well-known liberal bias, but this is just silly.

Anything to add? Consider this an open thread.

Steve Benen 5:30 PM Permalink | Trackbacks | Comments (34)

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STILL PLAYING FAST AND LOOSE.... I had an item a couple of weeks ago noting an instance of the LA Times' Andrew Malcolm playing fast and loose with the truth as part of a slam job on Democrats. Since then, I've received quite a few emails from readers highlighting examples of Malcolm, a former press secretary for Laura Bush, not only being a rather blatant partisan, but being surprisingly sloppy with basic truths.

I mention this because the lead story on Memeorandum right now is this gem from Malcolm, criticizing President Obama's alleged lack of transparency.

We are not making this up:

Barack Obama was elected commander in chief promising to run the most transparent presidential administration in American history. This achievement and the overall promise of his historic administration caused the National Newspaper Publishers Assn. to name him "Newsmaker of the Year."

The president is to receive the award from the federation of black community newspapers in a White House ceremony this afternoon. The Obama White House has closed the press award ceremony to the press.... Maybe they'll let the newspaper people pass the award through the fence.

As is often the case with Malcolm's columns, this isn't even close to an accurate reflection of the facts.

To hear Malcolm tell it, the award ceremony is both ironic and an example of Obama hypocrisy. How can be rewarded for his transparency if he's attending an event with journalists that is closed to the media? Outrageous!

Except, it's not. In our reality, the president will be speaking to the National Newspaper Publishers Association, granting them an exclusive interview. There's obviously transparency, since the journalists will report on what Obama has to say. As Eric Boehlert explained, "Press members from the NPPA have been granted exclusive access to Obama and will write about their time with him. But the NPPA does not want other journalists to be in the room when they meet with Obama because that would rob the NPPA of its exclusivity."

Andrew Malcolm works for a major newspaper. One would like to think he'd understand this.

For that matter, one would also like to think he'd tell the LA Times' readers the truth.

Steve Benen 4:25 PM Permalink | Trackbacks | Comments (23)

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GINGRICH FINDS GOD.... Newt Gingrich doesn't like to talk about it, but back when he was Speaker of the House, he wasn't especially concerned with the Republican Party's religious right base. In fact, he largely ignored the movement, so much so that in the spring of 1998, James Dobson and a bunch of religious right heavyweights said they were prepared to abandon the GOP altogether and form a Christian conservative party.

Gingrich eventually talked the movement leaders out of it, brought them back into the fold by making a bunch of promises, and then proceeded to ignore the religious right all over again. All the while, Gingrich was conducting his personal life in ... how do I put this gently ... an ungodly kind of way.

With this in mind, Gingrich seems like an odd choice for this kind of endeavor.

At a time when many religious conservatives say the Republican Party is ignoring their issues and taking their support for granted, former House speaker and GOP idea man Newt Gingrich is turning his attention to the concerns of conservative Christians like never before.

Gingrich has launched an organization devoted to bringing conservative evangelicals and Catholics into the political process and to strengthening the frayed alliance between economic and religious conservatives. Called Renewing American Leadership, the group is led by Gingrich's longtime communications director and includes some of the country's top conservative Christian activists on its board.

This spring, Gingrich will speak to a handful of large gatherings for politically conservative clergy that have been organized by David Barton, an influential evangelical activist who spearheaded the Republican National Committee's rigorous outreach to pastors in 2004.

Barton, for those unfamiliar with him, is a pseudo-historian and religious right celebrity who gives speeches about the United States being founded as a "Christian nation."

Gingrich told U.S. News that his new initiative is necessary because of the "rising hostility to religious belief." What hostility?

Gingrich alleges that threats to religious liberty have multiplied under the Obama administration. He points to the recent economic stimulus package, which prohibits colleges from using federal funds to build or repair buildings used for worship or other religious purposes.

I see. Gingrich's evidence of anti-religious sentiment in government is based on an obvious, demonstrable, and blatant lie.

How anyone could consider this clown a "visionary" is a mystery.

Steve Benen 3:20 PM Permalink | Trackbacks | Comments (31)

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DEFICIT TO REACH $1.8 TRILLION.... The news from the Congressional Budget Office is discouraging, but hardly surprising.

The worsening economy is responsible for the even deeper fiscal mess inherited by Obama. As an illustration, CBO says that the deficit for the current budget year, which began Oct. 1, will top $1.8 trillion, $93 billion more than foreseen by the White House.

The 2009 deficit, fueled by the $700 billion Wall Street bailout and diving tax revenues stemming from the worsening recession, is four times the previous $459 billion record set just last year.

The CBO's estimate for 2010 is worse as well, with a deficit of almost $1.4 trillion expected under administration policies, about $200 billion more than predicted by Obama.

By the end of the decade, the deficit under Obama's blueprint would go back up to $1.2 trillion.

Long-term deficit predictions have proven notoriously fickle -- George W. Bush inherited flawed projections of a 10-year, $5.6 trillion surplus and instead produced record deficits -- and if the economy outperforms CBO's expectations, the deficits could prove significantly smaller.

And that last point is of particular interest. The AP report emphasizes deficit projections over the next 10 years, and refers to "dangerously high" budget shortfalls a decade from now. The same piece "throw a major monkey wrench into efforts to enact Obama's budget."

I was on a conference call with OMB Director Peter Orszag this afternoon, and he doesn't see it that way. Orszag emphasized the "uncertainty" in long-term projections, and doesn't believe there's any reason to scale back on the budget blueprint currently before Congress. This is especially true, he said, of the health care reform efforts, which the administration believes can be budget neutral over the long term.

What's more, the Washington Post's Steven Pearlstein responded to the CBO numbers by explaining that the projections confirm that "the recession is worse than they thought when they did these things last time," and thus it is "more urgent ... for us to spend more money to stimulate the economy."

Steve Benen 2:20 PM Permalink | Trackbacks | Comments (15)

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SECRET BALLOTS.... When criticizing the Employee Free Choice Act, conservatives tend to argue that the legislation would "eliminate secret ballots" for union elections. It doesn't; it's just another bogus talking point intended to scare people.

In fact, it came as a very pleasant surprise to see the Wall Street Journal editorial page, of all outlets, concede today that the bill "doesn't remove the secret-ballot option from the National Labor Relations Act." This comes as a welcome and rare example of honesty from the WSJ editors on the issue. It was, after all, the same editorial board that argued just nine days ago that EFCA would "eliminate secret ballots for union elections."

But in a fun little twist, Greg Sargent notes that the Republican National Committee -- which levies the bogus EFCA argument in its party platform -- itself "forbids the 'secret ballot' as a way for the committee to make many of its own decisions."

From the party rules:

"No votes (except elections to office when properly ordered pursuant to the provisions of Robert's Rules of Order) shall be taken by secret ballot in any open meeting of the Republican National Committee or of any committee thereof."

To be sure, this is fairly standard for committees like the RNC. But the point here is that even the RNC is implicitly acknowledging that the "secret ballot" is not the only fair or Democratic way to make decisions by vote. And yet the sanctity of the "secret ballot" is one of the RNC's central arguments against Employee Free Choice.

Good point.

Steve Benen 1:50 PM Permalink | Trackbacks | Comments (39)

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CHALLENGING LOCAL CONTROL.... Local control of public schools is rarely challenged, in large part because it's believed to be sacrosanct in the minds of most Americans. The latest CNN poll suggests that might not be true after all.

A new national poll indicates that most Americans would be willing to give up some control of their public schools to the federal government in return for more money from Washington for those schools.

Fifty-six percent of people questioned in a CNN/Opinion Research Corporation survey released Friday say they would like to see more federal money spent on the public schools in their communities, even if it meant increased influence by the federal government over the education policies those schools follow, with 43 percent opposed.

The most support for more government influence over local schools in exchange for more money comes from mothers of children under 18 (72%).

The same poll showed 52% support for increasing the length of the school year (but not the school day), and opinion was split on "merit pay" proposals, with 50% approving of the idea, and 48% disapproving.

These aren't the results I would have expected.

Steve Benen 1:25 PM Permalink | Trackbacks | Comments (15)

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TAPPER, TWITTER, AND ONLINE ETIQUETTE.... It was bound to be of interest to the political world anyway, but ABC News' Jake Tapper helped get the ball rolling on the Special Olympics/Obama story last night. He was first out of the gate with a news item and a report on the president's comment on his Twitter feed.

Not surprisingly, this generated the inevitable Drudge link. Tapper kept the discussion going with additional thoughts on potential Democratic hypocrisy (what if Bush had said the same thing) and potential Republican hypocrisy (conservatives usually hate political correctness).

My friend Adam Serwer noted some hypocrisy of his own:

Funny, I was thinking the same thing about press who moments ago believed the president had "too much on his plate" now deciding that the country should spend a whole day talking about an offensive joke.

In any case, you should know that Tapper's really disappointed about his 9 PM blog post getting picked up by Drudge, possibly driving the day and leading to all this "hypocrisy" when we have two wars and an economic crisis to deal with. That's the last thing Tapper wanted when he hyped this "breaking" news last night.

Soon after, Tapper blocked Adam from following his Twitter feed.

And around the same time, TPM was tweaking Tapper over his Twitter observations. So, Tapper blocked TPM from following his Twitter feed, too.

Now, I'm not going to pretend to be an expert on Twitter etiquette; I'm not even on Twitter. But blocking those who offer mild criticism seems kind of petty. When it comes from a journalist who frequently addresses the importance of transparency, it's especially bad form.

Update: It looks like Tapper realizes he'd made a mistake, and unblocked TPM. Good for Jake. No word, though, about lifting the block on the others, including Adam.

Second Update: All's well that ends well, and Tapper, to his credit, has unblocked those who'd been blocked.

Third Update: In the interest of a complete record, here's Tapper's explaination of what transpired, written before TPM, Adam, and others were unblocked: "I'm trying to use Twitter as a way to communicate with all sorts of people from all over the political spectrum, as a place for feedback, polite argument, and dialogue. I learned that the AP was taking Coach K's quote out of context from a Tweet; it ended up on Good Morning America this morning. I want this way to talk to people. I don't want it to turn into what the comment section of my blog has become. The only people who have been blocked are people who make ad hominem attacks. They're still fully able to read my Tweets -- I just don't care to read theirs."

For what it's worth, I don't think Adam or TPM made "ad hominem attacks" before getting blocked, but let's just move on, shall we?

Fourth Update: Apparently, the addendums weren't quite clear enough, so let's try this again.

To review, Tapper wrote a few items on Twitter. TPM, Serwer, and others wrote related items, which were critical of Tapper. Tapper then blocked TPM, Serwer, and others (though they, like anyone else could still log on to Twitter and read Tapper's tweets). When this generated some attention, Tapper unblocked TPM and said, "My bad." Soon after, Tapper unblocked Serwer and the others, too. I then credited Tapper for doing the right thing.

By late Friday, Tapper explained this had nothing to do with transparency, and was simply about blocking those who "make ad hominem attacks." (Blocking people on Twitter is a bit like blocking abusive blog commenters -- they can still read your content, but you don't have to read their responses.)

I sincerely hope this is the last we'll speak of this.

Steve Benen 12:45 PM Permalink | Trackbacks | Comments (69)

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FRIDAY'S CAMPAIGN ROUND-UP....Today's installment of campaign-related news items that wouldn't generate a post of their own, but may be of interest to political observers.

* Former Sen. Norm Coleman's (R-Minn.) lead attorney now assumes his client will lose its case pending before the three-judge panel. He also assumes that Al Franken's lead is going to get bigger. But the lawyer is nevertheless looking forward to additional litigation on appeal.

* The National Republican Senatorial Committee had a fairly strong fundraising month in February, and was able to bring down its post-election debt from $4 million to $2.7 million.

* Gentry Collins, a prominent Republican activist in Iowa and the former political director of the Republican Governors Association, is joining Michael Steele's team at the RNC as political director for the national party.

* Actor and former Sen. Fred Thompson (R-Tenn.) said a Republican victory in the special election in New York's 20th later this month would be "a very public repudiation" of the Democratic Party. Does Thompson realize it's a pretty conservative district that Republicans are supposed to win?

* Businessman and venture capitalist Rick Snyder, decrying "professional politicians," is eyeing a gubernatorial campaign in Michigan. If he runs, Snyder will join a crowded Republican field.

* California Gov. Arnold Schwarzenegger (R) seemed awfully impressed with President Obama yesterday.

* In the campaign to support the Employee Free Choice Act, labor activists are planning to use the "Rush Limbaugh strategy."

* Mitt Romney's political action committee has raised $571,000 this year, but he's only distributed $16,000 of the haul to Republican candidates.

* At least one Republican lawmaker, Rep. Ginny Brown-Waite (R-Fla.), is already running anti-Obama robo-calls in her district about an administration proposal -- charging insurance companies for troops' service-related industries -- that the White House has already dropped.

Steve Benen 12:00 PM Permalink | Trackbacks | Comments (6)

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A NEW CONSERVATIVE TAKE ON FDR.... Conservatives have argued repeatedly of late that there's no reason for the Obama administration to look to FDR as an example. The New Deal, according to many on the right, was a failure. FDR didn't help pull the United States out of the depression, they say, he made it worse.

It was curious, then, to see this item in the Wall Street Journal this week, arguing that Roosevelt's economic policies really did work, but only because they were actually conservative.

The piece from the University of Kansas' George Bittlingmayer and George Mason University's Thomas W. Hazlett present a novel argument:

Roosevelt initially tacked right on fiscal issues. On March 10, he asked Congress to slash the salaries of federal government employees by $100 million, with an additional $400 million sliced from veterans' pensions. This stunning cut -- total annual federal expenditures then running at $4.6 billion -- came in a measure called "A Bill to Maintain the Credit of the United States Government."

[Raymond Moley, an FDR adviser intimately involved in crafting the bank holiday and other 100 days policies] said the "psychological effect was electric. The bill [was] greeted with loud shouts of approval by all articulate conservatives. But I am confident that deep down in the consciousness of the average people of the country it found a similar response. Somehow or other . . . Hoover had always seemed to be an expensive President." [...]

Whatever is to come, an Obama administration reset that focused on investment incentives could stimulate confidence and give our economy a fighting chance to recover. That is the message being conveyed by pro-Obama business champions such as Warren Buffett -- and it was in fact the strategy executed by FDR.

I see. So, as far as conservatives are concerned, FDR was both an ineffective liberal who made the crisis worse in the 1930s and an effective conservative who helped address the crisis with conservative ideas. The New Deal failed because it was liberal and it succeeded because it was conservative.

Good to know.

Steve Benen 11:10 AM Permalink | Trackbacks | Comments (23)

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DEEP THOUGHT.... In November and December, I heard quite a few people asking liberal bloggers what they would do now that a) the presidential election was over; and b) a Democratic administration would replace Bush/Cheney.

What would there be to write about?

Funny, no one seems to be asking that anymore.

Steve Benen 10:40 AM Permalink | Trackbacks | Comments (15)

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IF EVEN DOUG HOLTZ-EAKIN IS SAYING IT.... It's seems difficult, at least in theory, to characterize bank nationalization as radical socialism when so many conservatives keep endorsing the idea.

Alan Greenspan recently said, "It may be necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring. I understand that once in a hundred years this is what you do."

Doug Holtz-Eakin, a top advisor to the McCain-Palin campaign last year, has joined the club.

"The right thing to do is to apply the principles of responsibility and competition, and the lessons of history to get this right. The most important lesson is that failed, insolvent banks cannot be permitted to continue to operate using taxpayers' subsidies. Letting these "zombies" walk the financial system was at the heart of the savings and loan crisis and the slow Japanese recovery from its financial crisis. These institutions should be taken over, their management and shareholders suffer the consequences of their failure, and the assets re-sold to private sector entities as fast as is feasible. That's good policy: discipline failure, promote real competition, and use assets effectively in the private sector."

If the Obama administration is scared of the political implications, maybe they can use these guys as cover?

Steve Benen 10:10 AM Permalink | Trackbacks | Comments (28)

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GOING HOLLYWOOD.... Apparently, no sitting president has ever appeared on one of the late-night talk shows, so President Obama's visit to "The Tonight Show" generated a little more attention than most presidential interviews.

If you missed it, here's the unedited appearance. (If you can't watch clips online, there's a full transcript available.)

Two quick thoughts. First, I've seen some suggest it's un-presidential for Obama to join Jay Leno for a chat. I find this largely unpersuasive. For one thing, the president spoke primarily about economic policy issues, which presumably is what the public wants to hear more of. For another, there is some precedent for these kinds of appearances: "After all, President Eisenhower was on The Colgate Comedy Hour and President Reagan did birthday specials for Bob Hope and George Burns, and yet democracy survived. And when it comes down to it, is appearing on America's top-rated, longest-running late-night show really any less dignified than throwing out a pitch at a baseball game or calling the winner of the Super Bowl?"

Second, if blog posts are any indication, the "important" take-away from the interview wasn't Obama's comments on the economy, AIG, the banks, or Tim Geithner, but rather, a joke gone awry.

Leno asked, in jest, about whether the president had destroyed the White House bowling alley. Obama noted that he'd practiced a bit and recently bowled a 129. Leno mocked him with good natured but sarcastic applause, and addressed him as if he were a child: "Yes. That's very good, Mr. President." Obama, laughing, replied that Leno made it seem as if "it was like Special Olympics or something."

Obama spokesperson Bill Burton told reporters on Air Force One after the taping, "The president made an offhand remark, making fun of his own bowling, that was in no way intended to disparage the Special Olympics. He thinks the Special Olympics are a wonderful program."

It was something Obama shouldn't have said, but if becomes the main media focus for the rest of the day -- which seems likely -- it will be a shame. Presidents let their guards down once in a while. If the political world obsesses over off-hand jokes that fall flat, it only encourages consultants who try to remove every moment of authenticity from politics.

Steve Benen 9:30 AM Permalink | Trackbacks | Comments (56)

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OBAMA EXTENDS NOWRUZ WISHES.... Nicely done.

Invoking art, history and "the common humanity that binds us," President Obama offered a "new day" in America's relationship with Iran, using an unusual videotaped message to appeal directly to Iranians for a shift away from decades of confrontation.

But he warned Iran's leaders that their access to what he called Iran's "rightful place in the community of nations" would not be advanced by threats or by "terror or arms, but rather through peaceful actions."

The president's message -- released with Farsi subtitles to some broadcasters in the Middle East and marking the Nowruz Spring holiday in Iran -- echoed sentiments in Mr. Obama's first televised interview from the White House in January in which he hinted at a new openness toward Iran. [...]

The president's overture drew an enthusiastic response from the European Union's foreign policy chief, Javier Solana, who said he hoped it would lead to a "new chapter in relations with Iran."

Obama's video message spoke to both the Iranian people and their leaders, but in different ways. For the prior, the message was positive and respectful: "Over many centuries your art, your music, literature and innovation have made the world a better and more beautiful place.... For nearly three decades relations between our nations have been strained. But at this holiday we are reminded of the common humanity that binds us together."

For the latter, it was diplomatic and forward-thinking: "We have serious differences that have grown over time. My administration is now committed to diplomacy that addresses the full range of issues before us, and to pursuing constructive ties among the United States, Iran and the international community. This process will not be advanced by threats. We seek instead engagement that is honest and grounded in mutual respect."

I don't doubt that the right will be unhappy about this. The president, the argument goes, is supposed to be threatening (if not bombing) Iran, not reaching out to them. That the White House message was offered with Farsi subtitles, published with a Persian transcript, and ended with the line " Eid-eh Shoma Mobarak," will probably drive Fox News and far-right blogs batty.

But Obama's message bypasses Iran's religious ruling class and will likely have its intended effect: generating good will. It certainly beats "axis of evil" bluster.

It also reflects a welcome maturity for U.S. leaders. Ezra raised a very good point: "There are times when it's hard to believe that this is how my country acts now. That somewhere in government, some young bureaucrat had the idea that the President should publicly honor the Iranian New Year, and that bureaucrat felt that her superiors would also think this a good idea, and, indeed, the thought went all the way to the President, who agreed that a display of engagement and goodwill was consonant with our national values and foreign policy goals. It is hard to believe that five years after we were ordering 'freedom fries' in the congressional cafeteria, we're posting Persian translations at Whitehouse.gov."

I love the smell of progress in the morning.

Steve Benen 8:35 AM Permalink | Trackbacks | Comments (20)

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ANYTHING THEY CAN DO, PALIN CAN DO DUMBER.... If there's one thing elected officials in Alaska know how to do, perhaps better than anyone else in the country, it's accepting federal dollars for state programs. It was curious, then, to see a certain Alaskan governor decide she'd like to reject economic recovery funds.

Gov. Sarah Palin is refusing to accept more than 30 percent of the federal economic stimulus money being offered to Alaska, including dollars for schools, energy assistance and social services.

The news Thursday drew anger from those who accused Palin of putting her national political aspirations ahead of the state's interests, and admiration from others who say she has courage to turn down money that would expand government. The state Legislature will have an opportunity to override her decision.

Palin is not taking about $288 million of the $930.7 million that Alaska is due in the federal stimulus. Palin said she is accepting the federal stimulus money that would go for construction projects, but not funding directed at government operations.

Early reports suggested Palin would turn down half the stimulus allotment for Alaska, but Palin "later conceded that does not count the Medicaid money she is accepting. That brings down what she's refusing to 31 percent of what the state government could get."

Of the $288 million that Palin doesn't want, $170 million would go to education, including money that "would go for programs to help economically disadvantaged and special needs students." Other programs affected include "weatherization, energy efficiency grants, immunizations, air quality grants, emergency food assistance, homeless grants, senior meals, child care development grants, nutrition programs, homeless grants, arts, unemployment services, air quality, and justice assistance grants."

It's just fascinating. Palin has never seen a federal dollar she didn't want, but now that some other far-right governors are trying to turn down economic recovery aid -- governors who might challenge her for the 2012 Republican presidential nomination -- Palin suddenly sees the benefit in turning down money that might help stimulate the Alaskan economy.

Palin had a choice -- people's interests or political posturing. Guess which one comes first?

Sen. Mark Begich (D) is calling on the state legislature to override the governor's decision: "We owe it to our children to give them the most opportunities possible, and this is money fairly allocated to Alaska in this stimulus package."

Steve Benen 8:00 AM Permalink | Trackbacks | Comments (40)

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March 19, 2009

THURSDAY'S MINI-REPORT.... Today's edition of quick hits:

* Not too big a surprise: "The Treasury Department, trying to stabilize the battered auto industry, will provide up to $5 billion in financing to troubled auto parts suppliers who are linked to Detroit's carmakers, officials said Thursday. The funding would be made available from the government's Troubled Assets Relief Program, or TARP, said two congressional aides briefed on the plan."

* Claiming full responsibility for the situation, Treasury Secretary Timothy Geithner told CNN today that his office "asked Sen. Chris Dodd to include a loophole in the stimulus bill that allowed bailed-out insurance giant American International Group to keep its bonuses." He said he requested the measure to prevent costly governmental litigation.

* Two far-right senators -- Jim Bunning (Ky.) and Johnny Isakson (Ga.) -- called for Geithner's ouster today. No one really cares what they think.

* Today is the sixth anniversary of the start of the war in Iraq. It didn't generate too much attention.

* On a related note, President Obama's Iraq policy is drawing considerable support from the public.

* Lawrence Wilkerson is still on a roll: "A former Bush administration official says many Guantanamo detainees are innocent and have been held only because U.S. officials hoped they would know something important."

* Why did yesterday's House hearing with AIG CEO Edward Liddy go poorly? Daniel Gross has a compelling piece arguing that lawmakers were asking questions of the wrong person.

* Noam Schieber warns of potential unintended consequences of today's vote on AIG bonuses.

* Good: "The House voted Wednesday to approve the largest expansion of government-sponsored service programs since President John F. Kennedy first called for the creation of a national community service corps in 1963."

* The Senate passed the public lands bill, again.

* I'd be pretty surprised if immigration reform happened this year.

* How far gone is Larry Kudlow? Today he literally set money on fire. There's something deeply wrong with CNBC.

* McCain and Lieberman talk U.S. policy on Afghanistan. Joe Klein has some worthwhile thoughts on the subject.

* Last week, on "The Daily Show," Jim Cramer was contrite and committed to doing better. Today, not so much.

* Who made the final four in your Bracket of Evil?

* And my Quote of the Day goes to Robert Farley, who made me laugh out loud: "Now that I'm more or less finished with my taxes, I can proclaim without reservation that I have, for the 34th consecutive year, successfully managed to keep my income below $250000. Take that, Barack Hussein Hitler Lenin Osama! I can only hope that society will realize the folly of constraining my creative energies through the medium of a modest increase in the marginal tax rate."

Anything to add? Consider this an open thread.

Steve Benen 5:30 PM Permalink | Trackbacks | Comments (44)

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REMAINDER TABLE, HERE IT COMES.... Former President Bush has never exactly been a book lover, per se, but that won't stop him from hiring a ghost writer playing the role of author for the first time.

As widely expected, former President George W. Bush, like many past occupants of the Oval Office, is writing a book. But rather than delivering a more traditional presidential memoir, Mr. Bush plans to explain 12 difficult personal and political decisions he has made.

Mr. Bush mentioned the book Tuesday in his first speech since leaving office, delivered in Calgary, Alberta. The book, tentatively titled "Decision Points," is to be published in 2010 by Crown Publishing Group, a division of Random House.

According to Robert B. Barnett, the Washington lawyer who negotiated the deal with Crown on Mr. Bush's behalf, the book will cover Mr. Bush's decisions relating to Sept. 11, the invasions of Afghanistan and Iraq and the government's response to Hurricane Katrina. Mr. Barnett said Mr. Bush would also write about why he ran for president, his decision to quit drinking, his discovery of religious faith, and his relationships with his parents, wife and siblings.

Bush reportedly signed a $7 million deal for the book. Alex Koppelman noted that this is obviously a lot of money, but not in the broader context: "It's $5 million less than Bill Clinton got for his memoir, $1 million less than Hillary Clinton got for hers and even $2 million less than former British Prime Minister Tony Blair."

I'm a little surprised Bush was able to get as much as he did for a book that almost certainly won't fly off the shelves.

For one thing, the former president isn't exactly known for candor and honesty. Who's going to pony up $29.95 for a book written by someone who can't be trusted?

For another, what are the odds that Bush's book will include juicy, heretofore unknown revelations? Or even fascinating behind-the-scenes insights?

Perhaps most importantly, it's hard to imagine there being any meaningful demand for the former president's thoughts on key decisions. It's hardly a secret that practically all of his big decisions turned out to be a mistake, if not completely disastrous. Is there really a market for reliving the details of one man's misguided judgment? Won't most book buyers prefer to forget these decisions? It doesn't exactly scream, "Best seller."

The book will apparently be titled, "Decision Points." I'm sure we can come up with better titles than that. Any suggestions?

Steve Benen 4:35 PM Permalink | Trackbacks | Comments (103)

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BOEHNER: 'THERE WAS NO DEREGULATION'.... On CNN's "Situation Room" yesterday, Wolf Blitzer, paraphrasing President Obama, told House Minority Leader John Boehner (R-Ohio), "[H]e seemed to be saying, all those Republicans who want a free market, who want to deregulate, who want the government off the back of these huge corporations, look what we got as a result of all of that." Boehner replied:

"Wolf, you have to understand, there was no deregulation of anything in the financial services industries. As a matter of fact, there was an increase in regulation."

Seriously, has Boehner even been awake since getting elected to Congress 18 years ago? Does he not remember voting for the Gramm-Leach-Bliley Act? And supporting the deregulation of derivatives?

Now, perhaps Boehner can defend these regulatory changes, perhaps not. But to deny that the changes even took place is ridiculous.

"There was no deregulation of anything in the financial services industries." John Boehner has said a lot of bizarre things in recent years, but this is just breathtaking. He's either a) lying; b) hopelessly ignorant; or c) confused about the meaning of the word "deregulation."

I suppose we shouldn't rule out some combination of these possibilities.

Steve Benen 3:45 PM Permalink | Trackbacks | Comments (41)

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AIG MEASURE CLEARS HOUSE.... The House passed its measure today to recoup the controversial AIG bonuses. While there was some question going into the vote as to whether the two-thirds needed for passage would be there, the bill was approved rather easily.

The measure, which also applies to bonuses at other large bailed-out companies, passed 328-93. There were 85 Republicans who voted yes, and six Democrats who voted no. [...]

The bill would place a 90 percent tax on bonuses paid out by firms receiving at least $5 billion in bailout money. The tax would apply to individuals and families with overall income exceeding $250,000.

The Republican alternative -- a non-binding measure asking the Treasury Department to think of something -- was rejected. Imagine that.

House Speaker Nancy Pelosi, who helped orchestrate this vote very quickly, exclaimed, "We want our money back and we want our money back now for the taxpayers."

Passage in the Senate appears likely.

Update: Here's the final roll. Republicans were clearly divided on the issue, with 85 voting for it and 87 voting against it. Even the minority party's leadership was split -- Boehner opposed the measure, while Cantor, have hedging earlier, supported it.

Steve Benen 3:10 PM Permalink | Trackbacks | Comments (25)

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THE REPUBLICAN 'ALTERNATIVE' ON AIG BONUSES.... House Minority Leader John Boehner (R-Ohio) is drawing fire this afternoon for opposing a measure to recoup AIG bonus money, after complaining all week about how outrageous the bonuses are. House Democrats are on the offensive.

A spokesperson for GOP House leader John Boehner confirms that he will be voting No on a measure being introduced by House Dems today to slap a 90% tax on bonuses paid to AIG execs with family incomes topping $250,000 -- and a senior Democrat on the Senate side blasted him for expressing "manufactured outrage" about the AIG controversy.

Senate Dems are demanding to know whether Boehner's opposition -- which doesn't matter much on the House side because of the Dems' lopsided majority -- signals that GOP leaders will oppose the measure in the Senate, where the Dem margin is much slimmer.

"He will vote 'no' on the Democrats' bill, which will recoup some of the AIG bonus money eventually," Boehner spokesperson Michael Steel emails me. "He supports the House Republicans' better alternative, which would recoup all of the money immediately."

Right, and what's the "Republican alternative" on this? It's a non-binding resolution asking the Treasury Department to figure out a way -- the GOP's bill doesn't specify -- to recoup the money AIG paid in bonuses. Seriously, that's it. The "alternative" bill basically just passes the buck, telling Treasury Secretary Tim Geithner, in effect, "We don't have a policy per se, but be a mensch and go get all the money back." That's the "better" Republican "alternative" to the Democrats' plan to recoup the money through taxes.

And if Geithner didn't figure out a way to get the money back? Nothing happens. This, Boehner believes, "would recoup all of the money immediately."

And Republicans wonder why it's so difficult to take them seriously on policy issues.

Keep in mind, Democrats are likely to vote in droves to get the AIG money back, but if Republicans balk, the bill may very well fail. Alex Koppelman reminds us that the majority is "bringing the bill to the floor under a suspension of the rules which ... means that a supermajority -- two-thirds -- will be required for passage."

To get to two-thirds, the majority will need every Democrat in the chamber plus 36 Republicans. No one seems to know, at this point, whether the votes are there or not.

Steve Benen 2:35 PM Permalink | Trackbacks | Comments (27)

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HOLDER, MEDICAL MARIJUANA, AND GOP IRE.... About a month ago, Attorney General Eric Holder told reporters that the Justice Department will no longer raid medical marijuana clubs legally established in states. The announcement fulfills a campaign promise President Obama made last year.

Yesterday, Holder followed up by clarifying the shift in law enforcement of federal drug laws.

Speaking with reporters, Mr. Holder provided few specifics but said the Justice Department's enforcement policy would now be restricted to traffickers who falsely masqueraded as medical dispensaries and "use medical marijuana laws as a shield."

In the Bush administration, federal agents raided medical marijuana distributors that violated federal statutes even if the dispensaries appeared to be complying with state laws. The raids produced a flood of complaints, particularly in California, which in 1996 became the first state to legalize marijuana sales to people with doctors' prescriptions.

Graham Boyd, the director of the American Civil Liberties Union drug law project, said Mr. Holder's remarks created a reasonable balance between conflicting state and federal laws and "seem to finally end the policy war over medical marijuana." He said officials in California and the 12 other states that have authorized the use of medical marijuana had hesitated to adopt regulations to carry out their laws because of uncertainty created by the Bush administration. [...]

He said dispensaries operating in accord with California law would not be a priority for the administration.

This strikes me as something of a no-brainer, but Sen. Chuck Grassley (R-Iowa) is nevertheless outraged by Holder's remarks. "This Attorney General is not doing health care reform any good," said Grassley. "The first rule of medicine -- 'do no harm' -- is being violated by the Attorney General with this decision."

Grassley, using talking points I haven't heard in a while, insisted that pot is a "gateway drug" that could lead to methamphetamine abuse. (He didn't say what led him to this conclusion.)

As for the notion that Holder is "not doing health care reform any good" because he'll allow states to follow their own drug laws, it's scary to think a major initiative like health care reform would be undermined, even a little, by a simple Justice Department shift.

Steve Benen 1:55 PM Permalink | Trackbacks | Comments (29)

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BAYH AND THE BLUE DOGS.... When Sen. Evan Bayh (D-Ind.) announced the formation of his new "centrist" Senate caucus on MSNBC yesterday, he was a little evasive about his group's membership.

For what it's worth, Roll Call had an item about Bayh's endeavor -- it's apparently being called the "Moderate Dems Working Group" -- citing a press release of its membership. Bayh will apparently lead the group, along with Sens. Tom Carper (Del.) and Blanche Lincoln (Ark.). The rest of the membership includes, Sens. Mark Udall (Colo.), Michael Bennet (Colo.), Mark Begich (Alaska), Kay Hagan (N.C.), Herb Kohl (Wis.), Mary Landrieu (La.), Joe Lieberman (Conn.), Claire McCaskill (Mo.), Ben Nelson (Neb.) , Bill Nelson (Fla.), Jeanne Shaheen (N.H.), and Mark Warner (Va.). The

That's 15 people are willing to be identified with the group. Bayh said there are "three or four" other Democrats -- he said they're in the "witness protection program" -- who are affiliated with this, but didn't want their names on the announcement. Ryan Powers noted three Democratic "centrists" who "have been reported as attending Bayh's meetings in recent weeks," but whose names weren't disclosed: Sens. Bob Casey (Pa.), Klobuchar (Minn.), and Pryor (Ark.).

That brings the total up to 18 -- about a third of the Senate Democratic caucus -- which is anxious, for reasons I'll never fully understand, to water down the popular agenda of a popular president.

That said, when we talked about this yesterday, there was an important detail I wasn't aware of: Bayh has done this before. David Waldman noted the frequency with which we've heard this talk from Bayh.

Hey, have you heard that Sen. Evan Bayh (D-IN) is forming a new, supposedly "moderate" Democratic voting bloc in the Senate?

You have? Did you hear it today in The Fix? [...]

Or last year in Roll Call ($)?[...]

Or was it seven years ago from the DLC? [...]

Yawn. Sun rises in East, Evan Bayh forms "moderate coalition."

Too bad he's not as moderate in the amount of time he dedicates to making sure people hear how "moderate" he is.

David raises a very good point, but I'm a little more concerned about Bayh's efforts this time around. In the midst of a crisis -- multiple crises, actually -- Bayh and his merry band of "moderates" can do real damage to legislation that we really need.

Steve Benen 1:25 PM Permalink | Trackbacks | Comments (34)

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ALL GRANDSTANDING, NO FOLLOW THROUGH?.... When Republicans on the Hill decided to pursue the AIG bonus story, with hopes of exploiting it for partisan gain, they had half of a good idea. They would have been far better off, though, if they'd come up with an end game to the grandstanding.

GOP lawmakers knew they were "outraged." They knew how "angry" the AIG bonuses made them. They explained to the nation, as loudly as possible, that they found the whole mess "unacceptable." But given a chance to get the bonus money back, these same GOP lawmakers aren't so sure that's a good idea.

Take a look at this interesting exchange on MSNBC this morning, by way of Ben Smith. House Minority Whip Eric Cantor (R-Va.) said he wanted to see the bonus money come back, but had no idea what to say about how to do this. Would he vote to tax the relevant AIG employees? Cantor wouldn't say. Does he have any ideas about how, exactly, to get back the funds? Cantor wouldn't say.

It's not just Cantor. House Minority Leader John Boehner (R-Ohio) said he will vote "no" on efforts to recoup the AIG money. Several leading conservative lawmakers in both chambers have said the same thing. And just for real fun, Grover Norquist told the 172 representatives and 35 senators who signed an anti-tax pledge that if they support getting back the AIG bonuses, they'll be violating their written promise to the conservative movement.

This is what happens when foolish people grandstand without thinking. In effect, the message from congressional Republicans is, "We're outraged! Just don't expect us to do anything about it!"

Note to the GOP: you can't exploit an issue for partisan gain if you're not willing to stand by your own rhetoric.

Steve Benen 12:35 PM Permalink | Trackbacks | Comments (23)

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THURSDAY'S CAMPAIGN ROUND-UP....Today's installment of campaign-related news items that wouldn't generate a post of their own, but may be of interest to political observers.

* RNC fundraising in February -- Michael Steele's first full month -- was bad, but it wasn't that bad: "The RNC collected $5.1 million in February and ended the month with $24 million in the bank." In February 2007, the last post-election February, the RNC raised $7.2 million. Given that many of Steele's troubles began in earnest this month, March fundraising will be even more interesting.

* It's a real stretch, but Republicans hope to use public frustration over the AIG bonuses as a campaign issue in New York's 20th.

* Terry McAuliffe, a leading Democratic gubernatorial candidate in Virginia, is "running a new advertisement on black radio stations in the commonwealth tying himself to President Obama." For those who remember McAuliffe's efforts during the Democratic presidential primaries, this is an interesting turn of events.

* Pennsylvania Gov. Ed Rendell (D) has vowed to fully support the Democratic Senate candidate in 2010, regardless of what happens with Sen. Arlen Specter (R). If true, this will represent a shift from Rendell's efforts in 2004.

* Is Sen. Richard Burr (R-N.C.) vulnerable as he seeks re-election next year? A poll from Public Policy Polling suggests he is: "Burr's approval rating here is only 35%, disapproval is 32%, and a third of likely voters are undecided -- not very good numbers for an incumbent, to say the least. Against a generic Democrat, Burr has an initial lead of 42%-38%, with the incumbent well below 50%."

* With Rep. Ellen Tauscher (D-Calif.) leaving Congress to join the Obama administration's State Department, the race is on to replace her.

Steve Benen 12:00 PM Permalink | Trackbacks | Comments (11)

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PLAYING GAMES WITH CHRIS HILL.... President Obama recently nominated Christopher Hill to be next U.S. Ambassador to Iraq, and as nominations go, this should be one of the easier ones. He's an experienced diplomat who enjoys bipartisan support. There are more than enough votes to confirm him, even if he's subjected to a filibuster. And yet, several Senate Republicans are playing an annoying game.

For a while, Hill's GOP critics complained that Hill doesn't speak Arabic and lacks experience in the Middle East. That argument fell apart when we realized that those same Republicans voted to confirm John Negroponte as ambassador to Iraq in 2004 -- and Negroponte doesn't speak Arabic and lacked experience in the Middle East.

The same Republicans suggested Hill lacked institutional support needed to do the job. This, too, fell apart when Negroponte, Zalmay Khalilizad, and Ryan Crocker endorsed Hill's nomination, which was followed by support from Indiana Sen. Dick Lugar, the ranking Republican on the Senate Foreign Relations Committee.

But several conservative Republicans -- most notably John McCain and Lindsey Graham -- continue to fight a losing battle against a qualified nominee anyway. Laura Rozen reports today that the GOP obstructionism is starting to annoy U.S. military leaders.

Sources tell The Cable that Centcom commander Gen. David Petraeus, top Iraq commander Gen. Raymond Odierno, and Defense Secretary Robert Gates are frustrated by the delay in getting a U.S. ambassador confirmed and into place in Iraq, and support Hill's confirmation proceeding swiftly. [...]

Since the previous ambassador, Ryan Crocker, left the job Feb. 13, Odierno has complained of doing double duty: serving as the commanding general and the de facto ambassador.

The power vacuum in Baghdad comes at a critical juncture in Iraq's transition, sources noted. The U.S. mission is becoming increasingly focused on political stabilization and economic development over military missions; Arab-Kurd tensions are rising in the north; struggles for dominance within and across sectarian groups are heating up in the aftermath of January's provincial elections; the Baghdad government is facing tough budget choices due to declining oil prices; and national elections that will determine whether Iraq can consolidate its democracy are due by year's end.

Keeping a lid on such political tensions is "crucial to consolidating the security gains from the surge," a Washington Iraq hand said, "yet the advocates of the surge want to slow down the process of getting an ambassador to Iraq."

Let me get this straight. Hill is qualified and has the bipartisan support needed to win confirmation. He supports the same U.S. policy that's won plaudits from policymakers in both parties. He's ready to get to work, and U.S. military leaders believes his service is needed right away.

And John McCain, Lindsey Graham, and Sam Brownback are still playing partisan games?

A Senate Democratic foreign-policy staffer told Rozen, "Why are they dicking around and not putting an ambassador in there if Iraq is so important?"

Steve Benen 11:10 AM Permalink | Trackbacks | Comments (15)

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DISCLOSURE IS A VIRTUE.... On her show Tuesday night, Fox News' Greta Van Susteren devoted an entire segment to criticizing David Letterman. His offense? He'd made jokes about Sarah Palin and her family.

There seems to be a pattern here. In fact, it's hard not to notice that Van Susteren seems to enjoy closer ties to Palin than most media professionals. Matt Corley explained, for example, "In September, she hosted a one-hour 'documentary' on the GOP vice presidential candidate, titled 'Governor Sarah Palin -- An American Woman.' She also scored an exclusive interview with Todd Palin, in which she grilled him 'on everything from the story behind the name 'First Dude' to how he feels about the name 'First Dude.'' After the election ended, Palin chose Van Susteren for her first national television interview. Since then, Greta has consistently covered Palin, keeping an eye out for any potential sleights of the governor and gushing over her popularity."

As it turns out, there's a reason that helps explain why Fox News' Van Susteren has taken on the role of media publicist for the Alaska governor -- Van Susteren's husband helps guide Palin's political image.

[John] Coale, a well-known Washington lawyer and the husband of Fox News Channel's Greta Van Susteren, drew national media attention when he endorsed Sen. John McCain's presidential bid in protest of the way in which Sen. Hillary Rodham Clinton, who he backed in the primary, was treated. Coale, in an interview with the Fix, described himself simply as a "friend" of the Alaska governor but acknowledged that he suggested she start a leadership PAC and helped her navigate through some of the questions surrounding her family that lingered after the campaign. Others familiar with Palin's political team insist that Coale has far more power than he is letting on -- essentially helping to run Sarah PAC.

Doesn't this seem like the kind of thing Van Susteren might want to disclose to her viewers?

Steve Benen 10:45 AM Permalink | Trackbacks | Comments (34)

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WILKERSON'S STILL UNIMPRESSED.... Larry Wilkerson, Colin Powell's right-hand man at the State Department in Bush's first term, hasn't been too shy about criticizing his Bush administration colleagues over the years. He's complained publicly, for example, about a "Cheney-Rumsfeld cabal" that hijacked U.S. foreign policy.

And now that Dick Cheney is once again playing the role of attack dog, accusing President Obama of undermining U.S. national security, Wilkerson is once again weighing in on the judgment of the former vice president. (via Ali Frick)

Cheney went on to say in his McLean interview that "Protecting the country's security is a tough, mean, dirty, nasty business. These are evil people and we are not going to win this fight by turning the other cheek." I have to agree but the other way around. Cheney and his like are the evil people and we certainly are not going to prevail in the struggle with radical religion if we listen to people as he. [...]

But al-Qa'ida will be back. Iraq, GITMO, Abu Ghraib, heavily-biased U.S. support for Israel, and a host of other strategic errors have insured al-Qa'ida's resilience, staying power and motivation. How we deal with the future attacks of this organization and its cohorts could well seal our fate, for good or bad. Osama bin Laden and his brain trust, Aman al-Zawahiri, are counting on us to produce the bad. With people such as Cheney assisting them, they are far more likely to succeed.

First, Wilkerson is right. Second, shouldn't Wilkerson be encouraged to start a blog? Seems like he has some worthwhile things to say.

Steve Benen 10:15 AM Permalink | Trackbacks | Comments (10)

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WHEN THE ACORN OBSESSION GETS SILLY.... District Court Judge David Hamilton of Indiana, President Obama's first nominee for the appeals court bench, is likely to be confirmed. But in the drive to score some cheap points off the nomination, the right has come up a new talking point: Judge Hamilton is "tied" to ACORN. As conservative talking points go, this one's hilarious.

It apparently started with a National Review item from Wendy Long, who wrote on Tuesday, "Hamilton was a fundraiser for ACORN (nice ACORN payback, Mr. President)."

And from there, the race was on to see who could be the most ridiculous.

Hamilton's purported ties to ACORN immediately worked its way into right-wing commentary on the nomination, being highlighted by NewsBusters, Powerline, Curt Levey of the Committee for Justice, and the Family Research Council ... twice, which complained that ACORN was getting it very own judge.

The idea that President Obama's nomination of Hamilton was "payback" to ACORN quickly became the right-wing talking point of the day, with people claiming that he was "a big shot at ACORN" and leading to posts like this one written by Matthew Vadum at "The American Spectator" entitled "ACORN's Federal Judge":

"Giving the term judicial activism new meaning, President Obama has nominated an ACORN loyalist to the U.S. Court of Appeals for the Seventh Circuit, the Chicago Tribune reports ... The Judicial Confirmation Network notes that Hamilton previously worked as a fundraiser for ACORN, the radical direct-action group that not only resurrects the dead and gets them to the polls every election but also shakes down banks and pressures them to make home loans to people who can't afford to pay them back."

Ready for the punch-line? Judge Hamilton was a canvasser for ACORN -- in 1979. He spent a grand total of one month helping the group raise money the same year he graduated from college. He was 22 at the time.

National Review's item was wildly misleading and ignored the key detail that makes this a non-story. But NewsBusters, Powerline, the Committee for Justice, the Family Research Council and the American Spectator took National Review's word for it, and ended up looking rather foolish.

Again.

Steve Benen 9:35 AM Permalink | Trackbacks | Comments (33)

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NOTHING LEFT TO LOSE.... New Mexico Gov. Bill Richardson's (D) long and impressive career in public service is probably going to end next year, at the end of his second term. A grand jury investigation prevented him from joining the Obama cabinet, and Richardson probably won't seek elected office again.

It's exactly the kind of dynamic that allows an official to put political concerns aside and do the right thing.

Gov. Bill Richardson, who has supported capital punishment, signed legislation to repeal New Mexico's death penalty, calling it the "most difficult decision in my political life."

The new law replaces lethal injection with a sentence of life in prison without the possibility of parole. The repeal takes effect on July 1, and applies only to crimes committed after that date.

"Regardless of my personal opinion about the death penalty, I do not have confidence in the criminal justice system as it currently operates to be the final arbiter when it comes to who lives and who dies for their crime," Richardson said.

The death penalty repeal was approved by the New Mexico House last month, and the state Senate last week. Richardson had until midnight last night to make up his mind, and after a visit to the state penitentiary yesterday afternoon, the governor made the right call.

"More than 130 death row inmates have been exonerated in the past 10 years in this country, including four New Mexicans -- a fact I cannot ignore," Richardson said. "Even with advances in DNA and other forensic evidence technologies, we can't be 100 percent sure that only the truly guilty are convicted of capital crimes."

New Mexico now joins New Jersey as the only state to ban executions. The AP noted that 14 other states do not impose capital punishment.

Steve Benen 9:10 AM Permalink | Trackbacks | Comments (16)

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REDISCOVERING THEIR LOVE OF COMPENSATION LIMITS.... Part of the problem with the Republican strategy of exploiting the controversy over the AIG bonuses is the party's inability to convince the party's usually-loyal allies. The other part of the problem is the contradiction between the populist rhetoric this week and the opposite rhetoric, rejecting any and all limits on executive compensation, from last month.

"I really don't want the government to take over these businesses and start telling them everything about what they can do." Minority Leader Mitch McConnell told ABC News in February, when asked about Obama's proposed limits on executive compensation. Senator Jim DeMint, who attacked the original bailout bill as "pure socialism," characterized executive pay caps as a dangerous government intervention. "I think it's a sad day in America when the government starts setting pay, no matter how outlandish they [sic] are," DeMint told the Huffington Post. "This is just a symptom of what happens when the government intervenes and we start controlling all aspects of the economy." DeMint's right-wing compatriot, James Inhofe, also equated limits on compensation with the demise of the American way. "As I was listening to [Obama] make those statements I thought, is this still America? Do we really tell people how to run [a business], and who to pay, and how much to pay?"

A mere six weeks later, DeMint and Inhofe are now attacking the administration for failing to curb these executive payouts. In a long diatribe delivered on the Senate floor on Tuesday, Inhofe abandoned his earlier defense of businesses to make their own decisions about compensation to express his "deep anger" over the pay. "I don't know how someone at AIG giving out or receiving a bonus right now can look at themselves in the mirror," Inhofe thundered on the floor. "You can be sure that we will do all we can to right this wrong and get these bonuses back." DeMint has also found ways to channel his newfound anger against corporate pay. In a letter sent to the Senate Banking Committee yesterday, DeMint, along with David Vitter and Jim Bunning, demanded that AIG contracts be formally subpoenaed to determine why the company was "specifically exempt[ed]" from the executive compensation limits. In other words, DeMint is now asking why AIG hasn't been forced to comply with the conditions that he had so vehemently opposed.

Indeed, DeMint and Inhofe are among the most shameless hypocrites, but they're not alone. Senate Minority Leader Mitch McConnell (R-Ky.) and Senate Banking Committee ranking member Richard Shelby (R-Ala.) have also, all of a sudden, seen the light when it comes to compensation limits, and Rep. Peter King (R-N.Y.) and Sen. Kit Bond (R-Mo.) have also made efforts to switch their positions.

If Republican lawmakers wanted to limit executive pay, they had their chance. For them to complain bitterly now is a little silly.

Steve Benen 8:35 AM Permalink | Trackbacks | Comments (22)

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GOP, BASE NOT ON THE SAME PAGE.... Republican leaders on the Hill have been in high dudgeon this week over the controversial AIG bonuses. It's not altogether clear what their message is, but they're "outraged" and they'd really appreciate it if we'd all blame Democrats for the whole mess.

But as it turns out, there's a small flaw in the strategy: leading far-right activists, usually content to follow the party's instructions, aren't sticking to the script. It's not that Limbaugh, Hannity, & Co. are defending Democrats, but as Greg Sargent noted, they just don't care about the controversy of the week. Indeed, these far-right voices are some of the very few who are tacitly defending AIG.

Rush Limbaugh recently said: "I am all for the AIG bonuses" and attacked the Obama administration for trying to undo them. He also blasted Dem efforts to get the names of the AIG bonus recipients as "McCarthyism."

Fox News followed suit, also comparing Dems to "Joe McCarthy." And Sean Hannity has now derided efforts to tax the execs by saying: "In other words, we're going to just steal their money."

There's not really a direct contradiction between the GOP leaders' professed outrage over the bonuses and the conservative media's condemnation of efforts to recoup them. But the conservative attack on Dems is rooted in free market orthodoxy, which GOP leaders have implicitly ditched in order to get outraged.

This split could muddy the GOP message and even compromise the party's efforts to use AIG to damage Obama.

Indeed, since Greg wrote this, these same conservative characters have been even more vocal on this point. Yesterday afternoon, Hannity continued to support AIG, as did Glenn Beck and Michelle Malkin.

It's an interesting disconnect. By all appearances, the right-wing media figures are, oddly enough, sticking to conservative economic principles, while right-wing lawmakers are simply hoping to exploit public frustration for partisan gain, whether it makes sense or not.

Indeed, rank-and-file Republicans may be leaning in the direction of the media figures. The Gallup poll released yesterday gauging public anger over the AIG bonuses showed that Republican voters are far less "outraged" by the matter than Democrats, and are far less interested in seeing the government try to block or recover the bonus money than Democrats or Independents.

All of this, at a minimum, complicates Republican officials' strategy here.

Steve Benen 8:00 AM Permalink | Trackbacks | Comments (26)

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'NO RETURN TO NORMAL'.... In the cover story for the next issue of the Washington Monthly, James Galbraith, a University of Texas economist and senior scholar with the Levy Economics Institute, has a must-read analysis of the economic landscape, just how serious the economic crisis is, and why the Geithner plan may come up far short of what's needed.

In short, if we are in a true collapse of finance, our models will not serve. It is then appropriate to reach back, past the postwar years, to the experience of the Great Depression. And this can only be done by qualitative and historical analysis. Our modern numerical models just don't capture the key feature of that crisis -- which is, precisely, the collapse of the financial system.

If the banking system is crippled, then to be effective the public sector must do much, much more. How much more? By how much can spending be raised in a real depression? And does this remedy work?

It is a chilling piece, challenging long-held assumptions -- embraced even by members of the Obama administration -- about self-stabilizing economic models. If this downturn is unlike most modern recessions, and Galbraith believes that it is, then the "return to normal" is off in the distance, and these initial steps taken by the White House are woefully inadequate.

As Paul Glatris, the Monthly's editor in chief, put it, "If Galbraith is right -- and I fear he is -- it means that tens of millions more Americans will be out of work in a year or two or five, even if the stimulus creates all the jobs the president expects. It means that the big banks really are 'zombies' that will neither resume normal lending nor grow their way out of insolvency regardless of how much money the Treasury pours into them. It means that the auto companies will burn through every dime the government lends them and still not turn a profit."

Galbraith goes on to offer a recipe for a more comprehensive approach to what ails our entire financial system. Take a look.

Steve Benen 2:10 AM Permalink | Trackbacks | Comments (18)

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By: Hilzoy

And Another Thing ...

In the piece by Steven Davidoff about the AIG contract that I cited in my last post, he also writes:

"This was not a boilerplate contract. Rather, it was highly negotiated. And it was highly negotiated to pay retention fees at high levels without regard to performance. This is obviously shocking. But it makes me wonder: perhaps one area of direction here should be actually looking at who negotiated this and why?

It strikes me that the A.I.G. financial products division received an unbelievably sweet deal. Did its managers slip it under the radar? Did the managers act in good faith? And who at A.I.G. signed off on this and did they focus on the risks and rewards? Yet more avenues for possible litigation."

I hope the Obama administration is looking very hard at this question. The introduction to the contract says that one of its aims is to "recognize the uncertainty that the unrealized market-valuation losses in AIG-FP's super-senior credit derivative and originally-rated AAA cash CDO portfolios have created for AIG-FP's employees and consultants."

That certainly suggests that AIG-FP was aware that there might be significant losses, as does the fact that they got their compensation locked down in a way that made it independent of their profits or losses. (Unless their bonus pool exceeded the amount guaranteed in the contract -- then they got to keep more!) And hard as it is to imagine that AIG's general management had somehow overlooked the signs of trouble in the subprime market in early 2008, it's even harder to imagine that whatever whoever signed off on this would not have asked: why does AIG-FP want this? How bad do they think it's going to get?

I imagine it would be worth scrutinizing the public comments of AIG executives between the first quarter of 2008, when this contract was written, and September, when it collapsed. But that's only one point. I hope that every law enforcement agency with anything resembling jurisdiction goes over everything about AIG-FP with a fine-tooth comb. There are more than enough peculiar aspects to this story to warrant it.

There's nothing like legal liability and high-profile prosecutions and lawsuits to put the fear of God in people. And the Masters of the Universe badly need a little fear of God right now.

Hilzoy 2:06 AM Permalink | Trackbacks | Comments (14)

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By: Hilzoy

The AIG Contract

The contract guaranteeing employees of AIG's Financial Products their retention bonuses has been published. Since I am not a lawyer, and my impression is that contract law is not for the faint of heart, I haven't read it all the way through. Steven Davidoff at Dealbook has, however, and he teaches corporate law. His basic summary:

"These bonuses are payable regardless of performance and are calculated at 100 percent of 2007 compensation for all employees except senior management, who receive 75 percent of 2007 compensation. The amount is payable unless they are fired with good cause, resign without good reason or fail to meet performance standards. For those hoping that these employees could now be fired, "good cause" is defined in the agreement as a very high standard. This is normal for these agreements. (...)

Similarly, failure to meet performance standards is another hard test to meet. If you could meet this latter standard, the contract provides that the employee still keeps his or her 2008 payments, just not next years. So even if the employee fails to meet performance standards this past year, they still keep the money paid this past weekend.

The contract also appears as inviolable as it states. Of course, this is not to say that it cannot be broken some other way, such as through bankruptcy, taxation or perhaps legislation."

I've read a lot of commentary suggesting that there has to be a way to show that these employees failed to meet the conditions of the contract. If Prof. Davidoff is right, there probably isn't.

As Matt Yglesias wrote before he learned that the bonuses had already been paid, the government could also have instructed AIG not to pay the bonuses and let the people who destroyed the company take their chances before a jury of their peers. Personally, I'm glad the government did not do this. It would be one thing for Congress to override the contracts in some way. I gather they could do so, though I'm not sure I think it would be a good idea. But it would be different if the administration ordered AIG not to pay.

The Congress gets to make the laws. If it changes the laws in some way that invalidates this contract, fine. But if it doesn't, then existing laws remain in force, and AIG is contractually obligated to pay. AIG could, and absolutely should, try to renegotiate those contracts. AIG and the government should consider what they might do to make refusing to renegotiate look less appealing to the people at AIGFP. But in the final analysis, it takes two to renegotiate a contract, and the people at AIGFP might not agree. If they don't, then legally, AIG is on the hook.

The executive is supposed to faithfully execute the laws. Obama swore an oath to do so. I didn't like it when George W. Bush tried to find ways around the law. I don't like the fact that by not prosecuting those responsible for torture, Obama is not fulfilling his obligations under the Convention Against Torture. And while I'm furious at the people at AIGFP, I don't think that means that I should start liking it when my President decides to ignore the law this time.

I hope the people at AIGFP listen to their CEO and return their bonuses. Failing that, I hope we find some way to renegotiate those contracts. But what really matters is making sure that nothing like this ever happens again. That means setting up procedures for dealing with systemically important firms that are not banks when they become insolvent, so that we don't have to improvise everything at the last minute; and making sure that those procedures include provisions for scrapping employment contracts like this one.

What I'm really hoping, though, is that this episode manages to shake politicians into actually taking on Wall Street, and does so without producing any genuinely ghastly policies. With any luck, for instance, the people at AIGFP have blown any chance that hedge fund managers might have had to keep their absurdly preferential tax treatment. With a little more luck, this could help those members of the administration and Congress who want much tougher regulation of banks and other financial services firms.

Hey: a girl can dream, can't she?

Hilzoy 1:30 AM Permalink | Trackbacks | Comments (19)

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March 18, 2009

WEDNESDAY'S MINI-REPORT.... Today's edition of quick hits:

* More from the Fed: "Saying that the recession continues to deepen, the Federal Reserve announced Wednesday that it would pump an extra $1 trillion into the mortgage market and longer-term Treasury securities in order to revive the economy."

* Some right-wing lawmakers (Florida's Connie Mack IV and California's Darrell Issa) are calling for Treasury Secretary Tim Geithner's resignation. House Minority Leader John Boehner stopped just shy of that line, but said the Treasury Secretary is on "thin ice."

* Asked if Boehner's comments were justifiable, Rep. Barney Frank (D-Mass.) responded, "No. Does Boehner need any justification? It says it right there on his partisan hack license that he can say anything that he wants."

* It's about time: "The Associated Press has learned that the Obama administration will sign a U.N. declaration calling for the worldwide decriminalization of homosexuality that President George W. Bush had refused to endorse." Up until now, the U.S. was the only Western democracy to refuse to back the measure.

* Uh oh: "Three of the most dangerous Taliban leaders in Pakistan, once arch-enemies, have formed an alliance that could threaten thousands of American troops set to arrive across the border in Afghanistan this year, according to an exclusive interview with one of the commanders."

* Christopher Hill, President Obama's choice to be the next U.S. ambassador to Iraq got a boost yesterday with an endorsement from Sen. Richard Lugar (R) of Indiana.

* It's not AIG, but some Fannie Mae executives are slated to get some generous bonuses, too.

* The Senate confirmed Ron Kirk today as the new U.S. Trade Representative. The final vote was 92 to 5.

* Vivek Kundra was quietly reinstated yesterday as the federal government's chief information officer.

* Sarabeth makes the case that the AIG bonuses need a new name.

* The Congressional Research Service believes it's likely unconstitutional for state legislatures to override state governors in accepting federal stimulus aid.

* Sen. Judd Gregg's (R-N.H.) deeply held principles vary based on the president's party.

* Don't blame Chris Dodd for the AIG bonuses.

* Greg Sargent picks up on a point I touched on earlier: there's an interesting split between far-right lawmakers and far-right activists on the AIG bonuses.

* Former Sen. Chuck Hagel (R-Neb.) believes his party needs "serious people to deal with serious issues and to govern seriously."

* Dana Perino has a very strange sense of what constitutes "middle class."

* Julian Zelizer makes the case that the GOP's "small government" talk is hollow.

* CNN's Lou Dobbs is so far gone, he attacked St. Patrick's Day yesterday as a needless "ethnic holiday." After asking for "an American Day," the strange CNN personality added, "Is there a Jewish ethnic holiday? Is there one? No. Okay.... How about an Asian ethnic holiday? Is there one? You know, St. Jing-Tao-Wow?"

Anything to add? Consider this an open thread.

Steve Benen 5:30 PM Permalink | Trackbacks | Comments (61)

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WHITE HOUSE BACKS AWAY FROM VA PROPOSAL.... Following up on an item from last week, the Obama administration was reportedly weighing a change in how military veterans' healthcare would be paid for. Under existing policy, private insurance companies help pay for veterans' care that is not service related. Administration officials considered the possibility of charging insurance companies for service-related injuries, too, at a savings to the VA of a half-billion dollars annually.

To put it mildly, the idea, which the White House never fully embraced, was not well received. Democratic lawmakers balked at the very suggestion. Veterans' groups issued strong denunciations. Even Jon Stewart expressed outrage at the mere possibility.

Today, the administration reportedly abandoned the idea altogether.

The White House on Wednesday backed off a controversial plan that would have dramatically altered the way the Department of Veterans Affairs (VA) handles insurance claims, after veterans groups staged an all-out fight against such a proposal.

President Obama will not pursue a proposal that would have allowed the VA to charge private insurance companies for the treatment of veterans with service- and war-related injuries. The proposal raised the ire of prominent Democrats on the House and Senate Veterans Affairs panels. House Speaker Nancy Pelosi (D-Calif.) was the first to publicly announce Wednesday afternoon that the president won't pursue such proposal.

The announcement came shortly after the second White House meeting between presidential aides and prominent veterans' organization leaders.

At yesterday's White House press briefing, Robert Gibbs kept emphasizing Obama's 11% increase in discretionary spending in the VA budget, which invariably led to "yes, but" questions regarding the possible shift in insurance.

It appears Obama's team has resolved the problem. Good move.

Steve Benen 4:20 PM Permalink | Trackbacks | Comments (12)

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PHASING OUT 'STOP-LOSS'.... Of all the controversial decisions the Bush administration made on military readiness, one of the most contentious was the "stop-loss" program -- sometimes referred to as a "backdoor draft" -- that prevented U.S. troops from leaving the military after their service commitment was complete.

The Pentagon announced today that the stop-loss order issued in November 2002 is coming to an end.

The military will phase out its "stop-loss" program, the contentious practice of holding troops beyond the end of their enlistments, for all but extraordinary situations, Defense Secretary Robert Gates announced Wednesday. Instead, the military will use incentive programs to encourage extending service.

The stop-loss program was put into place to ensure that units remained intact during deployment. Tours of duty could be extended for those whose enlistment was due to end in the middle of their unit's deployment.

Currently, the Army is the only service that uses the stop-loss program. As of January 2009, 13,217 soldiers had tours extended under the stop-loss policy.

I'd like to know a little more about what constitutes "extraordinary" situations, but at first blush, this seems like a very encouraging development. Gates, to his credit, has been working on ending stop-loss for a while now, and is finally able to follow through.

The shift isn't immediate.

Under Gates's new plan the Army Reserve would deploy or mobilize to war without using stop-loss beginning this August, while the National Guard would deploy its members without stop-loss in September. The active-duty Army will deploy its first unit without any stop-lossed soldiers in January 2010.

Gates said at a Pentagon press conference on Wednesday that he intends to cut stop-loss in half by June 2010 and completely eliminate it by March 2011.

The AP has more. Seems like good news.

Steve Benen 3:50 PM Permalink | Trackbacks | Comments (13)

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HALF?.... This seems unlikely to work.

As the lucrative bonuses paid to employees of the American International Group fueled fresh outrage at the White House and on Capitol Hill on Wednesday, the embattled chief executive of A.I.G. said that he had asked some recipients to give at least half the money back.

The chief executive, Edward M. Liddy, made the announcement during his testimony on Wednesday afternoon before a Congressional committee investigating the problems at the insurance giant.

"I have asked the employees of AIG Financial Products to step up and do the right thing," Mr. Liddy told lawmakers. "Specifically, I have asked those who received retention payments of $100,000 or more to return at least half of those payments."

The A.I.G. chief said that some recipients had already offered to give up all of their bonuses.

Of the 418 employees who received bonuses, 298 received more than $100,000, according to the New York attorney general, Andrew M. Cuomo. The highest bonus was $6.4 million, and 6 other employees received more than $4 million. Fifteen other people received bonuses of more than $2 million and 51 received $1 million to $2 million.

For one thing, Liddy's asking 418 298 people to voluntarily, just out of the goodness of their hearts, hand over hundreds of thousands of dollars -- in some cases, millions -- to which they believe they're entitled? It seems like an unlikely scenario.

For another, if comments from lawmakers at today's hearing are any indication, "half" isn't going to cut it.

Steve Benen 3:00 PM Permalink | Trackbacks | Comments (24)

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FALLING SHORT OF ITS OWN LOW STANDARDS.... Highlighting examples of ridiculous journalism on Fox News is usually unnecessary. Anyone who takes standards seriously probably realizes that the partisan network is already a joke.

But this week offered an especially interesting example. Fox News ran a segment on Monday, hoping to prove that Obama administration officials are contradicting themselves. On the one hand, they're emphasizing the dire economic conditions. On the other, they're trying to strike optimistic notes about the future.

As part of the segment, Fox News showed Vice President Biden saying, "The fundamentals of the economy are strong," and suggested Biden had said this over the weekend. In our reality, the Biden line was uttered six months ago, and had the opposite meaning. Biden said at the time, "I believe that's why John McCain could say with a straight face as recently as this morning and this is a quote, 'the fundamentals of the economy are strong.'" The network, obviously, carefully removed the context.

Fox News apologized yesterday for deceiving its audience, describing this as an "inadvertent" error.

Christopher Orr had the same reaction I did.

[I]t's hard not to wonder how the network could "inadvertently" take a six-month-old campaign clip, carefully trim out the context (i.e., that Biden was ridiculing McCain) to make it seem the speaker was saying exactly the opposite of the point he was making, and slip it into a montage about the Obama administration's "mantra for the weekend."

I assume [Fox News'] McCallum had no idea about this (it certainly did her career no good), but it's hard to imagine that someone involved in putting the segment together -- a producer, an archivist, an intern, someone -- didn't knowingly alter the Biden clip. I don't think this necessarily suggests that Fox News is more nefarious than generally believed -- it was a pretty harmless segment -- but, along with last month's GOP press release, it suggests a network culture that is abandoning the concept of journalism, even biased journalism, altogether.

That's a good point. Biased journalism can be worthwhile. Fox News likes to maintain the fiction that it's completely impartial -- insulting even its own viewers' intelligence -- but the network's obvious partisanship is only part of the problem.

The more painful shortcoming, as Orr explained, is that Fox News can't even do biased journalism well. It sets embarrassingly low standards -- literally running using Republican Party talking points as an on-air script, and then apologizing for the typo, was a unique humiliation -- and then fails to even try to meet them.

Steve Benen 2:15 PM Permalink | Trackbacks | Comments (33)

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THE PIVOT.... Marc Ambinder had an interesting item today noting, among other things, that the White House has to choose between rolling back on its heels or using the controversy surrounding AIG as "an example to catalyze public support for significant regulatory reform."

It looks like the president has made his choice.

President Barack Obama says he wants Congress to pass legislation giving the government greater regulatory authority over financial institutions like American International Group.

Standing on the White House lawn as he prepared to go to California, Obama again assailed the company for its business practices and the executive bonuses that it has authorized.

Obama said, "The buck stops with me." And he disclosed that he and members of his economic council have commenced discussions with leading congressional players on legislation that would create another regulatory entity -- along the lines of the Federal Deposit Insurance Corporation -- to give the government more authority over financial institutions like AIG.

After noting the nation's disgust, the president added, "I don't want to quell that anger -- people are right to be angry, I'm angry. I want to channel our anger in a constructive way. The most important thing is to stabilize the financial system, get credit flowing again, and make sure we change how these businesses operate so they don't put us in situation where when things go bad, tax payers fit the bill."

In describing his vision of "a broader package of regulatory steps," Obama also said today that outrageous bonuses are part of a "culture" in which "excess greed, excess compensation, excess risk-taking have all made us vulnerable and left us holding the bag." He concluded, "I hope that Wall Street and the marketplace don't think that we can return to business as usual. The business models that created a lot of paper wealth but not real wealth in the country and have now resulted in crisis can't be the model for economic growth going forward."

Steve Benen 1:50 PM Permalink | Trackbacks | Comments (20)

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'POLITICALLY OBSESSED'.... Two weeks ago, Karl Rove argued on Fox News that the Obama White House is so overtly political, it considers every issue "from a political perspective." He added that Obama's team, like Bill Clinton's team, does everything "with a very keen eye towards the politics of the matter, not what was in the best interests of the country."

It was one of the most ironic things I've ever heard in my life. Greg Sargent reports today, however, that the argument is now officially part of the talking points for Republicans on the Hill.

A Republican sends over a new set of GOP talking points for House conservatives -- privately circulated this week to scores of GOP press secretaries on the Hill -- that blasts the Obama administration as "radical" and "reckless" and the "most politically obsessed White House in history."

Now, there's obviously a special kind of stupid at play here. But instead of delving into all of the many, many ways in which the Obama White House is anything but "radical" and "reckless," let's instead just focus on the notion that the president and his team are the "most politically obsessed White House in history."

There's obviously no objective measurement for something like this, but I'm hard pressed to imagine how Republicans can back up this charge as it relates to Obama. Has he shifted positions on issues based on polls? Has he failed to reach out to those with whom he disagrees? Has he politicized any government agencies or systems? If the president and his team are "politically obsessed," they're hiding it well.

Which leads us to the president's immediate predecessor, who didn't hide it well. The most politically obsessed White House in history," is probably the one described by a top Bush advisor this way, "There is no precedent in any modern White House for what is going on in this one: a complete lack of a policy apparatus. What you've got is everything -- and I mean everything -- being run by the political arm. It's the reign of the Mayberry Machiavellis." If Republican lawmakers are really looking for a White House obsessed with politics, they should have looked at the presidential team they carried water for over the last eight years -- it's the one that managed to politicize every aspect of the federal government.

Steve Benen 1:10 PM Permalink | Trackbacks | Comments (33)