Archive for March, 2009

Are Moderate Democrats Playing Kabuki?

Monday, March 30th, 2009

by Brien Jackson

Yglesias doesn’t think so:

On a related note, people sometimes have a model in their head whereby the typical moderate congressional Democrat is a solid-gold progressive who really wants to do great things for America but feels constrained by politics. That’s probably true of some of them. But one really shouldn’t assume that it’s uniformly true. After all, a Senator who wants to do the right thing on, say, climate change but worries that a strong cap-and-trade bill would be a tough political sell in his state ought to be eager to see cap-and-trade done through reconciliation. That way you can vote “no” like you think you have to, without the “no” vote killing the bill. And that’s hardly the only example. There’s tons of below-the-radar procedural stuff that a legislator whose “real” views are further-left than he thinks he can get away with could be doing. And I don’t actually see a ton of Senate Democrats trying to push those envelopes.

There’s a certain amount of logic to this, but at the same time it creates the same merry-go-round effect you always get when you try to analyze these things for obvious examples of kabuki. Even if Evan Bayh really wants these progressive measure to go through reconciliation so they can pass over his politically necessary “no” vote, he can’t exactly say that out loud, because that would pull the curtain back. So he has to, publicly, oppose the idea of using reconciliation, and hope that it’s used anyway. And down the rabbit hole we go. Similarly, progressives like Matt Yglesias have to criticize him for the kabuki to work. So even if this is all true, and you want to inform your readers of these things, it still works best to assume that positions are more or less genuine to a certain degree, whether that’s based on personal preference, politics, or whatever. Otherwise you wind up tangled inside a revolving door it’s hard to work your way out of. Whether Ben Nelson wants healthcare reform to pass or not, if he’s decided he has to appear to oppose it, then he has to appear to oppose it. You can’t go half way, as it were.

Reconciliation Politics

Monday, March 30th, 2009

by Brien Jackson

Ezra Klein has the goods on Senate Budget Committee Chairman Kent Conrad’s (D-ND) feelings on using the reconciliation process for healthcare reform:

Asked by a reporter whether Senate Democrats would just adopt reconciliation instructions from House Democrats — more on that strategy here — he replied first with the standard caveats. “I don’t want to do the negotiation of the Conference Committee through the media,” he said. “I’ve been as clear as I can be, publicly and privately, that I don’t think reconciliation is the right way to write health reform legislation. It wasn’t designed for that purpose. It was designed for deficit reduction. Using it creates a lot of technical issues.”[…]

“One thing I’ve said to colleagues is the Budget Act contemplates a second budget resolution with only 10 hours [of debate] on the floor,” Conrad continued. “If it proved absolutely essential, if there was no Republican cooperation on writing major health reform, you could write a second resolution. It would only take a day on the floor and you could include reconciliation instructions there.”

That’s rare moment of insight into the backroom strategy sessions Conrad is conducting with his Democratic colleagues. Not only are they discussing reconciliation, but Conrad is developing a variety of parliamentary plays that could reintroduce it into the process. There’s not only the option of importing reconciliation instructions from House Democrats, but also adopting a second budget that allows Senate Democrats to write the rules themselves. Moreover, Conrad’s comments echo the Democratic Caucus’s consensus fairly perfectly: He doesn’t want to use reconciliation, but if Republicans won’t cooperate on health reform, he’ll be left with no choice.

There’s a lot of very important aspects of this to unpack, but on a number of levels, Conrad’s answer is quite encouraging. First of all, Conrad is exactly right that you wouldn’t, ideally, want to use reconciliation to pass healthcare reform. Not because it’s impolite or violates the sanctity of the Senate or some other such nonsense, but because measures passed through reconciliation acquire a certain set of particular caveats from the process, notably a 10 year sunset. That is to say, if you passed healthcare reform through reconciliation, among several less than ideal factors the program would end after 10 years unless it was independently made permanent. That’s not the worst thing in the world, because programs like this are hard to unwind once they’re in place (Medicare has survived 4 Republican Presdients after all), but at the same time, the sunset provisions wouldn’t require overt action to kill te program, only inaction, and that could potentially put pressure on Democrats to accept a bad deal down the road to preserve it, especially if Republicans control one of the houses of Congress at the time. So reconciliation should certainly not be your starting point for any efforts regarding healthcare.

That said, making it known that you are willing to use the process as a last resort is crucial to getting moderate Republicans, and moderate Democrats for that matter, to play along. Without it, all of the leverage goes to individual members at the margins whose vote is needed to invoke cloture. With it, the pressure is on the individual to get a deal done, and the advantage goes to the collective bloc (provided you have at least 50 Senators on board), who can demand favorable terms for any deal, since they’re holding the “trigger” in this scenario. Of course, it doesn’t help matters when you’ve made a big to-do about earmarks, and you have to find some way to cut a deal that doesn’t involve a nice sum of money for a worthwhile project in Nebraska, Pennsylvania, or Maine.

Biden’s Vice-Presidency

Monday, March 30th, 2009

by Brien Jackson

Mark Leibovich’s profile of Joe Biden manages to be both interesting and uninteresting at the same time, in no small part because the Vice-President didn’t actually sit to be interviewed himself. But what I continue to find to be the most interesting aspect of Biden, and one of the most interesting things about the entire administration, is the way he envisions his role in governing, as we see in this graf from Secretary of State Hillary Clinton:

Before he took the job, Mr. Biden sought assurances that his would not be just a ceremonial position and that he would have substantive assignments. Mr. Obama envisioned his vice president as having a role distinct from the last two — Dick Cheney, who was his own power center in the White House, and Al Gore, who took on signature issues and assignments like the environment and government reform that he hoped would help his anticipated run for president.

Mr. Obama wanted his No. 2 to be a kind of über-adviser and interdisciplinary trouble-shooter. “Joe and I agreed that I wasn’t going to be handing him one narrow portfolio,” Mr. Obama said.

Early indications are that the partnership has evolved as they had imagined. “I think he’s playing the role as ‘adviser in chief’ that he has foreseen,” Mrs. Clinton said of Mr. Biden, adding that he was “involved in the whole agenda of the president.”

For a while, especially during the early primaries, there seemed to be a large feeling that Obama would somehow change government itself in substantive ways. Whether or not that is true, or whether there are any major structural changes (I doubt it), one thing they may very well change, for the better, is the role of the Vice-President. Dick Cheney aside, since the Vice-President took on a larger role under Carter/Mondale, the nature of the office has been quite ambiguous. Carter valued Mondale as an adviser, George H.W. Bush and Dan Quayle were little more than symbolic sops who had no real relationship with the President they served under. Al Gore was given a particular portfolio, which was both helpful to those issues and harmful, in the sense that it created ambiguity about who controlled what turf internally. And, of course, there was Cheney. Biden has outlined a different version of the office, one in which he serves in a sort of “wise old sage” function, dispensing advice to the President across a wide range of issues, and where he has latitude to be involved in the decision making process without necessarily taking on any formal governing role. This is a very good model, I think, for the Vice-President going forward, one where, given the right person in office, they can have a lot of influence in the administration without creating new turf wars, and a way in which a smart, experienced person can be useful to the President without taking on an improper amount of authority. It also has the added benefit, again given the right person, of injecting an “independent” voice into discussions, as the Vice-President can speak their mind comfortably moreso than staffers or advisers, since the President can’t fire them. They can decline to ask them to be on the re-election ticket, but that would create political problems itself, and so the Vice-President can feel more open to voicing an unpopular opinion or to challenge strongly held opinions of the President. And when you have a President who doesn’t mind having their opinions and assumptions challenged, as Barack Obama appears not to, that creates a very good check on group think, and an extra layer to the cognitive process of decision making in the White House we haven’t seen in some time in this country. Hopefully future Vice-Presidents, and Presidents, take note of this.

Outing Anonymous Bloggers

Monday, March 30th, 2009

by Brien Jackson

This isn’t going to be popular, but frankly I don’t really have a problem with Alaska Muckraker’s identity being revealed. While I don’t disagree with Hilzoy that it doesn’t really affect her writing much to be anonymous, and that the lawmaker didn’t know whether she had a particular reason not to reveal her identity, wanting to insert yourself into the conversation/process and getting an audience mostly from antagonizing a candidate but declaring that you’re just a person with an opinion when there’s pushback smacks of trying to have it both ways. I doubt very much that any of us would symathize much if Rush Limbaugh responded to criticism by declaring that he was just a guy with an opinion who shouldn’t be criticized, pushed back against, campaigned against, or whatever, and rightly so. For better or worse, this is one of the consequences of a blogosphere that matters.

Simple Answers to Stupid Questions

Friday, March 27th, 2009

by Brien Jackson

Jonah Goldberg asks why no one defends Marty Peretz from accusations that he’s  racist.

Answer; because Marty’s racism is so self-evident that to do so would cost you any credibility you might have.

Abe Foxman Tells the Truth…Again

Thursday, March 26th, 2009

by Brien Jackson

Like Ezra, I don’t really find this cartoon all that anti-Semitic. I think it’s a little offensive, and pretty poorly done from a symbolic point, but to the extent the Star of David is involved, it seems to relate more directly to Israel (it is the focal point of the Israeli flag, after all) than to Judaism or ethnic Jews at large. Unlike Ezra, I’m not Jewish, so I suppose I’m not in the best position to make that call. On the other hand, I find the Abe “Too Fair” Foxman quote to be deliciously illuminating:

“Pat Oliphant’s outlandish and offensive use of the Star of David in combination with Nazi-like imagery is hideously anti-Semitic,” he railed. “It employs Nazi imagery by portraying Israel as a jack-booted, goose-stepping headless apparition. The implication is of an Israeli policy without a head or a heart.”

Well yes, that is the implication. What Foxman is saying, in effect, is suggesting that Israeli policy is needlessly brutal and/or makes little practical or strategic sense is, by definition, anti-semitic. Usually you see this point, much like complaints that someone who will be an even handed diplomat in the situation is insufficiently friendly to Israel, more deftly, but thankfully Abe Foxman is more or less incapable of finessing a point in carefully parsed words. And so you have a major player on record with the opinion that suggesting Israeli policy makes little sense is equal to bigoted hatred of Jewish people everywhere.

Quitting and Whining in Public

Wednesday, March 25th, 2009

by Brien Jackson

Without dwelling on it for too long, I have a couple of simpe observations to make about this AIG employee’s resignation letter that was published in the Times today:

1. The underlying assumption seems to be that, even though the company more or less imploded altogether, he still deserved bonus money because he himself didn’t actually have anything to do with it. This is a rather unusual view of the way company finances and bonus money works in most places.

2. The right-wing media’s embrace of this guy is starkly at odds with their fervent belief that unionized auto workers had to take sharp cuts in their compensation in order for their firms to receive government loans, which should put to rest any doubt about where their natural sympathies lie.

Specter’s Switch Not Death of EFCA

Wednesday, March 25th, 2009

by Brien Jackson

The biggest non-Geithner related story of the day yesterday was the announcement from Sen Arlen Specter (R-PA) that he will oppose cloture on the Employee Free Choice Act (EFCA). With a maximum 59 Democrats in the Senate, Democrats needed at least one Republican vote for cloture to end debate on the bill and Specter, as the only Republican to suport cloture on the bill in the last Congress, and as someone who has enjoyed a good relationship with Labor for much of his Senate career, was the most obvious choice. With Specter announcing he will oppose cloture, the prospect of getting any other Republicans on board is highly unlikely, meaning that EFCA probably is on hold, for now.

However, Specter’s volatile political situation likely means that the bill itself is far from dead. Specter’s new position should be understood as a matter of naked political positioning, designed entirely to stave off a primary challenge from former Congressman and Club for Growth President Pat Toomey, who nearly defeated Specter in a 2004 race in which former President George W. Bush had to be brought in to campaign for Specter just days before the election. Specter has never been liked by the conservative activist base of the GOP and, faced with the prospect of a business community angry over his potential support of a bill to make union organizing easier, was looking at a campaign in which he would have no base of support whatsoever. Now, although he will likely remain unpopular with the Republican base, he can count on support from a business community grateful for his putting EFCA on hold, at least, and who will view him as having a better chance to win a general election than the right-wing Toomey. That said, Specter’s switch likely makes it difficult for him to win in November anyway. Labor groups were major backers of Specter in 2004, and Specter has been more popular with Democrats than Republicans in Pennsylvania for some time. In a state that is increasingly trending in a Democratic direction, as well as being mor elabor friendly than most, this move makes it very likely that a well positioned, high profile Democratic candidate will unseat Specter in 2010. With that in mind, this move might even make the passage of EFCA more likely in the long run, given the prospect of a marginal Republican being replaced by a mainstream Democrat in a pro-labor state. And I wouldn’t discount the possibility that Specter will flip-flop again between the primary and the general election, in a craven bid to win another term in office, either. So while we’ve probably heard the last of EFCA for at least the next 12-18 months, it’s certainly not dead, either in Democratic politics or in the U.S. Senate.

Proud of Themselves

Wednesday, March 25th, 2009

by Brien Jackson

George Stephanopolous must have a very low opinion of his colleagues in the Beltway press:

Just about all of the questions were pointed and challenging, and just about every journalist worked in a follow-up.  That’s new, and welcome.

Surprisingly, not a single question tonight about Iraq or Afghanistan. When’s the last time that happened at a full-blown presidential press conference?

On my report card, both the president and the press get an A- tonight.

For real? There wasn’t a single question about Iraq or Afghanistan, to say nothing of the administration’s bank plan, regulatory plans, healthcare reform, cap and trade, etc. But there was a lot about deficits, Fox implying Obama is really Communist, some Washington Times reporter throwing down the social conservative gauntlet on stem cells, and Chuck Todd asking a really stupid question about “sacrifice,” as though a pronounced economic downturn is everyone’s idea of one helluva party.

A-? And they wonder why they’re dying?

Is Krugman an Oracle?

Tuesday, March 24th, 2009

by Brien Jackson

I think Justin Fox is making an awfully big leap here:

Whether it’s worth an “expensive subsidy of a few entities” to do this is of course debatable, and it’s entirely possible that Hempton and I are guilty of wishful thinking about Treasury’s intentions. But it’s also possible that Krugman is guilty of whatever the opposite of wishful thinking is. And I guess that what set me off about tc125231’s comment, and caused me to ramble on and on here, is the omniscience it seems to attribute to Krugman. It’s not just tc125231: Krugman’s critique of the Geithner plan got huge amounts of uncritical play in the media today. He’s getting to be one of those people whose every statement is treated as oracular. Which I tend to take as a dangerous sign.

Krugman is a great economist and a great writer (the latter is in evidence more in his blog and his pre-NYT writings than in his column). He’s also a guy with tons of opinions, some of which are backed up by economic theory and many of which aren’t. He has some “emotional biases,” as do we all.  And every so often, he’s going to be dead wrong.

I certainly think there’s far too much deference in some quarters to Krugman’s writing vis-a-vis the financial crisis. Indeed, I think a lot of it amounts to a basic appeal to authority fallacy to continue to cite “Nobel prize winning economist Paul Krugman” when talking about his financial opinions, simply because his (much deserved) Nobel had nothing to do with finance. Which isn’t to say that Krugman isn’t smarter than most people, myself included, but he’s certainly not infalliable, and if you’re really looking for the opinion of accomplished experts in the field of finance, you’re not going to find a much higher authority in this country than…Tim Geithner or Ben Bernanke.

Of course, I think a lot of the deference you see to Krugman in some circles (see Sirota, David), is simply a function of the fact that Krugman is agreeing with them. I doubt very much that you’ll see the same sort of citation should Krugman disagree with them, and I certainly doubt you’d see much of a shift in opinion based on what Krugman says (that Krugman supported the bailout certainly didn’t change the OpenLefters opinion any). So I think Fox is being a bit hyperbolic here.

Hoyer Pushes Back Against Treasury

Tuesday, March 24th, 2009

by Brien Jackson

In keeping with the observation that getting a nationalization plan through Congress might not be easy enough, at the moment, to enact the Krugman Plan, I see that, via TPM, Politico is reporting that House Majority Leader Steny Hoyer is already pushing back somewhat at the Treasury’s request for “emergency powers” allowing them to seize large financial/insurance companies like AIG.

In other words, it really is helpful to keep in mind that Congress really is, genarally, a complicated, stupid animal.

Really Smart People Doing Things I Don’t Understand

Tuesday, March 24th, 2009

by Brien Jackson

I’m glad someone other than me went there first:

I’m biased in this regard, obviously, because I think the costs of nationalization likely outweigh the benefits, and that in any case it would be very difficult for Obama to get Congress to authorize the trillion dollars or more the government would need to take over America’s biggest banks. And I agree with Thoma that the Geithner plan could work. But what I like best about his conclusion is something else: his implicit recognition that the people who came up with this plan — Geithner, Larry Summers, and Ben Bernanke — are well-versed in the problems of the banking system and serious about trying to solve them, rather than being either oblivious or corrupt. Much of the discourse around the Geithner plan, and around the nationalization debate more generally, seems to assume that Obama’s economic policymakers don’t understand the gravity of the situation or the virtues of nationalization, or else it assumes that they don’t really care about improving the real economy. I’d be very surprised if either of those things was true.

I don’t agree with the first sentence, but the rest of it seems on. It’s easy enough for us (yes, I’m including myself) that writing on the internet doesn’t actually make you an expert about everything, and agreeing with me doesn’t make you the smartest person in the world. Similarly, disagreeing with me doesn’t, necessarily, mean you must either be completely corrupt or the dumbest person in the world, although that’s certainly a possibility. It’s certainly fair to point out that Paul Krugman is a Nobel prize winning economist, but you know who else is a very accomplished economist? Tim Geithner! And Ben Bernanke! And even Larry Summers! And each of them has more experience with financial issues than Krugman, whose Nobel was won for his work on trade issues (and I don’t think David Sirota would approve of those ideas, for the record). Which isn’t to say that Krugman is wrong, or that I think he’s unqualified to give an opinion on the plans, rather it’s simply to point out that he’s not the only really smart person in the room, and there are plenty of really smart people who don’t share his opinions. These guys aren’t quarterhorse afficianados.

Also, making sure the executives get hit hard is not a recovery plan in its own right, and recognizing that does not make you a Wall Street stooge.

Is Geithner Being Set Up

Tuesday, March 24th, 2009

by Brien Jackson

It seems like more and more people are starting to notice that a lot of people in the administration are perferctly fine with letting Geithner own the administration’s plans in regards to the banks. Here’s Tim Fernholz:

But Heilemann’s sketches of the relevant personalities is certainly of interest, especially Paul Volcker’s desire to get in on the action. It also has some delightfully catty blind quotes, including this observation: ““All I can tell you is that Larry [Summers] seems quite happy with [the banking proposal] being known as the Geithner Plan.” No doubt, but from here on out I’ll try to avoid that term just to make sure credit goes where credit is due — this plan has the stamp of the whole administration, however politically convenient it may be to have the Treasury secretary own it.

That’s probably a pretty fair assessment on Tim’s part, but I think it should be clearly understood what is happening by tying everything to Geithner; the administration is hedging against a future backlash against any perceived incompetence on it’s part. And that’s probably a pretty smart thing to do. If the Geithner plan really is designed as a stepping stone to make nationalization more politically feasible, then the biggest risk is that, if the plan fails, there won’t be any confidence in the administration’s abilities, even if nationalizing is popular in its own right. If that happens, the easiest way to deal with it is to…fire somebody. Especially if that someebody is seen as particularly to blame. So it clearly seems that Geithtner is being put way out on a limb, and if someone’s head has to roll to inject some political capital down the road, he’s probably going to get the axe. It’s not necessarily fair, but that’s life.

More Geithner

Tuesday, March 24th, 2009

by Brien Jackson

Kevin Drum writes:

If, several weeks ago, you had charged a task force with figuring out how to successfully nationalize a big bank, what do you think they’d say you had to do? Three things, at least: (1) you have to figure out a widely acceptable way to value the toxic assets on bank balance sheets, (2) you have to set up a fair and consistent test for evaluating bank solvency based on those values, and (3) you need to make sure you have the legal authority to take over a huge, multinational financial conglomerate in an orderly way.  Is it just a coincidence that these are precisely the things Tim Geithner has set in motion over the past month?

I think that’s probably a keen observation, and I think it’s at least somewhat likely that the Obama administration is slow rolling a nationalization plan here. As Kevin and others have pointed out, there is a not un-substantial opinion that the administration doesn’t actually have the authority it would need to seize the “less traditional” aspects of the financial industry, meaning Congress would have to give it to them. And it’s not all that clear that the will for nationalization exists, at this time, on the hill. But I think the more alternatives you exhaust, the more consensus you’re going to build amongst experts, and the harder it’s going to be for Congress not to authorize nationalization. So I think that’s where we’re headed but, unfortunately, it’s a process.

As I see it, what you’ll probably have happen is the Geithner plan being put into action, possibly shoring up some firms, seperating any sound assets from the toxic assets…but still leaving a large amount of market share that needs to be nationalized, which would be much easier to do at this point. The only question, to me, is whether or not Geithner will have to be sacrificed for an increase in political capital before the larger push for nationalization. If he’s replaced with a real heavy hitter like, say, Paul Volcker, I think that could make fora much easier time of it vis-a-vis the politics.

Deep Thought

Tuesday, March 24th, 2009

by Brien Jackson

I just can’t figure out where anyone ever got the idea that conservatives are bigots.