Matt Yglesias

How Much Would Escalation in Afghanistan Cost

For a while now I’ve been saying that the fastest way to end the war in Afghanistan would be to to ask General McChrystal’s staff to produce a plan to make it deficit neutral and find sixty votes in the senate for his financing plan. Today, Spencer Ackerman points out that an excellent LA Times piece by Christi Parsons and Julian E. Barnes that digs into the issue of how much going bigger in Afghanistan would cost seems to indicate that the Pentagon agrees with me. Thus, they’re fudging the numbers to make their preferred policies look cheaper than they really are:

The Pentagon cost includes higher combat wages, extra aircraft hours and other operations and maintenance costs, but omits such items as new weapons purchases — one-time costs that vary by year — and support equipment like spy satellites and anti-roadside-bomb technology.

The Pentagon also does not try to estimate costs of new bases for additional soldiers.

But in a memo early this month, obtained by The Times’ Washington bureau, the Pentagon’s own comptroller produced an estimate that broke with the customary Defense formula and did include construction and equipment.

Estimating weapons and equipment costs is clearly going to be difficult. But it’s equally clear that $0 is the wrong estimate. And as we see, the DOD has some way of doing this for internal consumption.

Meanwhile, I’d like to see Paul Krugman or other advocates of more stimulus weigh-in on whether debt-financed escalation of military effort would have a beneficial impact on the labor market situation. I think it’s deplorable that U.S. political culture tends to regard military-related appropriations as exempt from normal budgetary considerations, but it’s possible that that’s a loophole worth taking advantage of in this case. All those new weapons purchases the Pentagon doesn’t want to estimate are manufacturing jobs for someone, right? Obviously this shouldn’t the primary consideration in dictating military strategy, but I do think a comprehensive look at the macroeconomic impact of defense policy choices—both the costs and benefits of hugely expensively military undertakings—is a necessary element of the strategic consideration.

Home Sale Pace Up, Inventories Falling

(cc photo by I See Modern Britain)

For all the talk about how the current economic crisis started in the housing market, taken on its own terms the ups-and-downs of the real estate industry are pretty straightforward. New households are formed at a certain rate. And homes become obsolete at a certain rate. When you have a prolonged period of time when homes are being built faster than they’re needed you get a crash in prices and construction activity. But after a fallow period of construction, the excess supply should eventually get bought and people will want to buy homes again. Thus it shouldn’t come as much of a surprise to see the National Association of Realtors reporting that inventories are shrinking on rising sales. It’ll be a while until there’s a lot of new demand for residential construction, but the arrival of that day is fairly inevitable—the population is growing.

The problem, however, is that we’ve got much bigger economic problems now than the decline in employment in the construction industry. In particular, we’re facing the prospect of an extended period in which widespread joblessness leads to a general lack of demand for goods and services, which itself leads to joblessness and low levels of investment, leading to more joblessness.

Thousands of Uninsured Arkansans Seek Free Medical Care

NAFC photo

It’s not a coincidence that states with elected officials who are dubious about health reform tend to have the largest number of uninsured people. The same political culture that produces high uninsurance rates at the state level normally also produces federal officials who are hostile to measures to broaden access. But as long as the spotlight’s on Arkansas:

According to the Arkansas Department of Health, around 450 thousand Arkansans lack health insurance. More than a thousand of those uninsured made their way to Little Rock’s Statehouse Convention Center on Saturday for the National Association of Free Clinics “C.A.R.E.” event. [...] According to the NAFC, more than 90 percent of those who came on Saturday had three or more life-threatening conditions, such as hypertension, diabetes, cardio-vascular, and pulmonary disease. Dr. Kimberly Garner, who works for the Veteran’s Administration in North Little Rock and was one of the volunteer physicians at the clinic, says those kinds of numbers illustrate the need for change.

As of 2008, 19.2 percent of non-elderly Arkansans were uninsured (Arkansas seniors, of course, avail themselves of government-run health insurance), a bit higher than the national average. Many of those people would be made much better off by the health reform bill that passed the House or by the somewhat different one that passed the Senate. But Blanche Lincoln says that unless Democrats agree to kill the idea of introducing a public option into the mix, she’ll vote against a bill that would otherwise help many of her constituents.

Sewage Spill

Talk of environmental problems in recent years has tended to focus on climate change, but an excellent Charles Duhig piece in The New York Times reminds us that thanks to inadequate capacity at the nation’s sewage treatment plants many cities still find themselves dumping raw sewage into rivers when heavy rain falls.

Part of the problem is the spread of the ever-villainous vast surface parking lot, whose non-permeable surface (in contrast to, say, grass or trees) creates extra water flow. But the largest issue is simply that upgraded the capacity of sewage treatment plants is the kind of infrastructure project we’ve been neglecting for decades. That, in turn, should be a reminder that it shouldn’t reall be all that hard to come up with useful things to do if there’s an interest in additional job creation measures.

Hugo Chavez’s Strange Speech

I think an underrated success of the Obama administration has been the way he pulled us back from the brink of a pointless Cold War dynamic the Bush administration had landed us in in South America. And he did it pretty easily—basically just resolving to stay out of any wars of words with Hugo Chavez, shake hands, and focus on concrete issues. It turns out that for all the huffing and puffing, there’s really no actual conflict between the United States and Latin America’s leftists.

But this seems to have left Chavez a bit adrift and looking to push the envelope. How else to explain the idea of praising Idi Amin in a speech:

About former Ugandan President Idi Amin, Mr Chavez said: “We thought he was a cannibal… I don’t know, maybe he was a great nationalist, a patriot.”

Idi Amin seized power in 1971. About 300,000 people were killed during his eight-year rule.

That’s really not the kind of statement that bolsters one’s confidence in the man’s commitment to liberalism and democracy. I would link to a Human Rights Watch report on Chavez’s impact on Venezuela’s political institutions but everyone knows that HRW is a non-credible group obsessed with unfair slams on Israel so their criticism of Chavez must somehow be part of their vast conspiracy.

Reforming the House of Lords

Last night I caught a bit of the Queen’s Speech from the UK on CSPAN. This is an interesting tradition. It’s a bit like the State of the Union, except with more pomp and circumstance. But you’ve got the Queen, who’s a non-partisan figure, sitting up there reading what’s basically a partisan political speech written by the Prime Minister and his staff all about how “my government” is committed to doing this and that.

But one thing that the Queen told me Gordon Brown wanted to do was reform the House of Lords to create a second branch of parliament with “real democratic legitimacy.” Sounds like a bad idea to me. Pretty much the best thing about the House of Lords is that its complete and utter lack of democratic legitimacy has made it possible over the years to strip it of all its legislative powers. Now the U.K. has a de facto unicameral regime and I think it’s working just fine. Bicameralism arises for some understandable historical reasons—the legacy of aristocracy in the U.K., an 18th century political compromise in the U.S.—but in this case it looks a lot like a solution in search of a problem. Maybe Brown should ask Barack Obama about some of the hassles involved in an upper house with actual power. Watch what you wish for!

Collender on Broder

David Broder’s dour take on the Senate health reform bill has become best known for Harry Reid’s rebuke that “to focus on an editorial written by a man who has been retired for many years and writes a column once in a while is not where we should be.” But Stan Collender offers a more substantive response:

David Broder has a column in today’s The Washington Post that I find close to incomprehensible.

First he says that the Congressional Budget Office’s substantive, detailed analysis shows that the bill proposed by Senate Majority Leader Harry Reid (D-NV) will reduce the deficit.

(Note to David: CBO does not give its “blessing” to legislation; all it does is score the bill.)

Second, he says that the CBO scoring that shows the bill reducing the deficit compared to existing law is not as valuable as polls that show that Americans don’t believe it. And he says that the polls are somehow more correct that CBO even though one group actually analyzed the bill while the other got its almost certainly less-than-complete-and accurate information from someone else.

Third, Broder says “every expert I have talked to says that the public has it right. These bills, as they stand, are budget-busters.”

As Collender points out, the CBO director and his staff would seem to count as experts. These economists think the CBO knows what it’s talking about.

Brandon Jennings

A few years back, the NBA cartel established a rule saying that 18 year-olds can’t play in the league. This, combined with the NCAA cartel’s rules, means that in practice if you want to become a professional basketball player you need to spend at least one preparatory year playing professional basketball without being paid for it. And make no mistake—big-time college hoops is a professional endeavor. Everyone except the players gets paid a lot for it. One obvious alternative strategy would be to simply go play professionally in some other league in Europe or China where they don’t have this rule.

Last year, Brandon Jennings became the first guy to blaze that trail, signing with Rome’s team in the Italian league. Now this year he’s in the NBA playing for the Bucks. And playing well! He’s scoring 25.3 points per game on efficient shooting and adding 5.5 assists and 4.3 rebounds.

I’d like to think this shows that not only are their advantages to getting paid to play basketball, but also that playing in Europe against other grown men is probably superior preparation for the NBA than is playing against teenagers in college.

Blanche Lincoln’s Website Still Says She Supports The Public Option

My colleague Igor Volsky points out that not only did Blanche Lincoln used to support a public option, as of last night at least that language was still up on her website:

Her specific belief that a public option, if enacted, would eventually receive public funds even if it’s created by a law that prohibits taxpayer subsidies is a little bit hard to understand. Right now there aren’t sixty votes in the Senate for taxpayer subsidies to a public option. Nor is there a majority in the House for taxpayer subsidies to a public option. Nor does the White House support such subsidies. And we’re at something of a high water mark for Democratic victories—how likely is a simultaneous leftward shift by all three branches?

Blanche Lincoln, Racing Horse

Blanche Lincoln has emerged as one of the pivotal votes in the US Senate debate about health care reform. So an article about her and her role in the debate seems like a smart thing for a newspaper to run. Which makes Spencer Ackerman’s tweet quite apropos: “Hey let’s say that I didn’t pay any attn to HC yesterday. Shouldn’t this piece tell me why Lincoln opposes the bill?”

Exactly. It’s striking to me how little scrutiny the stated views of public option opponents tend to get. Moderates are very rarely asked to explain what it is about an opt-outable level playing field public option that’s so horrible that it becomes suddenly worthwhile to filibuster an otherwise good bill that will put the country on a more sustainable fiscal course will improving millions of Americans’ access to health care.

How Awesome is Central Bank Independence?

Ryan Avent constructs a central bank paradox:

Marriner S. Eccles Federal Reserve Board Building (cc photo by Cliff1066)

There is simply no avoiding the conclusion that unemployment is a much, much bigger problem than inflation right now, and yet the Fed is unwilling to do anything more about unemployment, seemingly because it is concerned about inflation. What we want is some inflation! Rising prices would mean that the Fed is doing all it can do, counter-cyclically speaking.

An independent central bank is crucial. Political control of monetary policy must inevitably lead to accelerating inflation and long-run economic instability. But at the moment, the American economy could use an increase in expected inflation. And a real threat to Fed independence would almost certainly deliver it, either because markets would anticipate increased political influence on monetary policy ever after, or because the Fed would seek to fend off pressure from Congress by easing further, which amounts to the same thing. But we don’t actually want there to be a real threat to Fed independence, because that way uncontrolled inflation lies.

I’m not ready to abandon central bank independence, which I think has worked well for the United States, but I don’t think we should be dogmatic about it either. The case for central bank independence is that it’s worked well. But if it turns out that an unanticipated negative consequence of central bank independence is systematic deflationary bias in major economy, unduly slow economic growth, and unduly high unemployment then that means it turns out to not work very well. And certainly if you look at the behavior of the Fed, the European Central Bank, and the Bank of Japan that seems to be the situation we’re in. The best thing would be for existing monetary authorities to start doing more to fight unemployment. Then our institutions work and everything’s good. But if our institutions don’t work, then we can’t just cling to them forever—we’d have to start thinking about whether there isn’t some other kind of arrangement that could improve on the current situation.

After all, as John Quiggin has pointed out a big part of the case for central bank independence was that it was supposed to help us avoid exactly the sort of crisis we’re in. Of course, to be worth sticking with our current institutions don’t need to be perfect, they just need to be better than the available alternatives and I don’t have another alternative in mind at the moment. But still, this seems worth thinking about.

Sarah Palin’s Qualifications

The most ridiculous thing about Sarah Palin’s ongoing quest for national office is that she has a really pathetic ability to answer basic questions. Bill O’Reilly wants to know if she thinks she’s qualified to be president:

I believe that I am because I have common sense, and I have, I believe, the values that are reflective of so many other American values. And I believe that what Americans are seeking is not the elitism, the kind of a spinelessness that perhaps is made up for that with some kind of elite Ivy League education and a fact resume that’s based on anything but hard work and private sector, free enterprise principles. Americans could be seeking something like that in positive change in their leadership. I’m not saying that has to be me.

That’s awful!

How about: I know I don’t have as much experience in office as a lot of other politicians, but this country has never had a tradition of electing long-time Washington hands and I think that in America the strength of ideas matters more than your longevity. Of course that would require her to develop some ideas, but that’s a different problem.

For the record, though, I think we should take the probability of her becoming president at least somewhat seriously. She probably won’t win the GOP nomination (the odds of any particular individual winning are < 0.5) and my guess is that by 2012 the economy will be growing nicely and Obama will be re-elected no matter what. But if she does get the nomination and the economic fundamentals aren’t good then I don’t think anyone should count on her absurd persona bailing the Democrats out. Incumbents win when the economy is improving. When it’s not, they lose.

Coal Groups Want to Block Health Reform to Kill Clean Energy

One crucially important, but not-so-well-understood aspect of American politics is that business groups in the U.S. tend to behave in a highly ideological, highly solidaristic manner rather than as narrow interest groups. For example, check out this interesting item from my colleague Lee Fang:

Corporate front groups and large business trade associations are funneling their resources into defeating health reform. Even though health reform will lower costs for small businesses and boost worker productivity economy-wide, it appears that corporate entities influenced by major polluters are hoping that the defeat of health care legislation will slow President Obama’s agenda and derail their true enemy: clean energy reform.

The West Virginia Chamber of Commerce, which is largely backed by the coal industry, candidly revealed this strategy in a letter released today to Sens. Jay Rockefeller (D-WV) and Robert Byrd (D-WV). The Chamber of Commerce demanded that the senators use “their clout and seniority” to obstruct the health reform debate until cap and trade legislation is taken off the table and the EPA is barred from regulating carbon dioxide as a pollutant. As Ken Ward of the Charleston Gazette noted, Rockefeller has already rejected a similar proposal of blocking health reform unless the EPA stops reviewing mountaintop removal permits. The coal lobby has also pressured West Virginia state legislators to pass resolutions opposing clean energy reform.

Part of what’s interesting about this is that, as a matter of logic, you could easily imagine trying to run this play in the other direction. The WV Chamber of Commerce could be working with Senators Rockefeller & Byrd to cement a broad, bipartisan alliance between WV legislators in which the Republicans join with the Democrats to support health reform and the Democrats join with the Republicans to protect the state’s coal interests. There’s nothing, in other words, particularly obvious, natural, or inevitable about this kind of linkage. But American business has a very strong tendency toward forming a broad ideological alliance against all forms of regulation and public services. You might, for example, think that “real economy” firms would want a well-regulated financial system but business groups show no signs of anything other than hostility to efforts to better-regulate the main banks.

Baron Davis as Ancient Emperor

I was tweeting last night about how I wasn’t sure what ancient civilization Baron Davis’ beard reminded me of—Egypt, maybe? Or Sumer or Assyria? Dorsey Shaw stepped up to the plate with a composite image:

I love the internet. Also: health care reform!

Away We Go

Senators Lincoln and Landrieu have no both indicated that they’ll vote yes on the motion to proceed to the debate of the Senate health care bill. They’ve also both made it clear that they won’t vote for cloture on the bill unless the debate process leads to further concessions, especially on the public option.

That’s the day’s news. There’s hours more of debate to go, but we know what we need to know.

Making a Budget Commission Work

Evan Bayh has an idea for a budget commission: “our bipartisan panel would put all options on the table, including spending cuts and revenue raisers. Congress would then be compelled by law to debate the recommendations and take an up-or-down vote on the entire plan.”

I agree with Stan Collender that this isn’t going to work. As he observes, the reason BRAC works for base closures is that congress actually decides that it wants to close bases. What it’s outsourcing to the commission is the decision about which bases, so as to prevent parochial interests from totally dominating. For a budget commission to work, it, too, will need to make some decisions on its own. Reduce the deficit to what? With how much coming out of taxes and how much coming out of defense and how much coming out of domestic?

A commission could be a good way to formulate a sensible plan in terms of details. Put something more reasonable than across-the-board cuts or rate hikes within the context of a dysfunctional tax code. But a commission can’t actually just create consensus out of thin air.

Statement of Administration Policy

You’ll no doubt be surprised to learn that the official Statement of Administration Policy on the Senate health care bill says it’s a good bill. Read it for yourself below the fold:

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House Dems vs. Their Districs

A few days ago Nicholas Beaudrot pulled together some great data. He took each House Democrat’s DW-NOMINATE score and it compared it to the Cook PVI of his or her district. As a result, you can see who is left-wing relative to his district and who’s right-wing relative to his district. A quick visual summary:

One clear result of this inquiry is that the statewide races that Artur Davis and Kendrick Meeks are running are pulling both of them well to the right of their districts. You also see that Bobby Bright, though he has a very conservative voting record, is clearly pulling his district to the left. By contrast, Gregory Meeks, Laura Richardson, Jane Harman, and Dan Lipinski are all putting together voting records that are considerably more conservative than their districts.

Big Type = Long Bills

The whole thing where members of congress criticize bills for being too long is ridiculous. It just makes no sense whatsoever on its face. But to understand how dishonest it is, you need to actually look at a page in a bill. This, for example, is an actual-size reproduction of a portion of page 58 of the Senate health care bill:

The bill is long in part because it’s a complicated bill with lots of words in it. But part of the issue is that bills are printed up with large type and a lot of spacing. I’m not exactly sure why they’re formatted this way, but anyone who’s ever worked on the Hill—including Republican members of congress of course—knows this perfectly well.

Yesterday I heard Orrin Hatch say the health care bill is longer than War and Peace or some such. But it’s not. There are just fewer words on each page:

And recall that despite GOP protestations to the contrary, the House bill actually has fewer pages than War and Peace. More to the point, conservatives don’t like the House bill any more than they like the Senate bill even though it’s much shorter. In fact, they like it less—it’s more left-wing. The length of a bill just isn’t a reliable guide to its content. In fact, some of what makes the Senate bill longer is it’s more “moderate” nature—doing Exchanges on a state-by-state basis, for example, requires more words. Providing an opt-out for the public option requires more words.

The Real Banker Backlash

An interesting point from Gillian Tett who observes that the real populist backlash against the financial industry is likely to come when the bill genuinely comes due in the form of the need to massively reduce deficits in the 2011-13 period:

Perhaps that will occur when income taxes are hiked above 50 per cent. Or maybe when hospital budgets are cut, or military spending slashed. Either way, the potential list is long. While that might cause political instability (which, of course, would be bad for bond markets) it might trigger a renewed, vitriolic round of bank-bashing – particularly if voters in 2011 or 2012 know that 2010 was a year when banks paid out more, massive bonuses.

No wonder that some financial officials and politicians are frantically pleading with bankers behind closed doors to show more restraint in their current bonus round. “Don’t the bankers realise what could be coming?” I heard one senior western finance official tell a room full of bankers this week, as he argued – with passion and a sense of desperation – that it would be a mistake for banks to pay big bonuses.

But even if one firm’s management accepted the logic of this claim, there would be a collective action problem. People would want to go work at the firms that were still paying out the big bonuses. Under the circumstances “frantically pleading” couldn’t possibly work, you would need to actually force them to stop, perhaps through the kind of bonus windfall tax proposed by Martin Wolf.

The Treaties of Yore

US Capitol Building

This is far from his main point, but David Shorr’s observation that “it’s not clear that our political system is still able to ratify significant treaties” seems important to me. I mean, if you think it’s hard to get 60 Senators to agree to something, just try finding 67 willing to vote in favor of a major treaty.

In part it’s a shame that more people can’t have a more reasonable view on things like the Comprehensive Test Ban Treaty. But in part, this is a really weird quirk of our constitution grounded in an era, over 2000 years in the past, when both the U.S. political system and the role of treaties in the international arena was totally different. Consequently you get absurd scenarios in which the US is the only country that won’t join the UN Convention on the rights of the child.

Endgame

Decide what you came here for:

— Feminists should defend Twilight fans . . . or maybe not.

— Even the woeful Knicks won’t touch Allen Iverson but we’re still all assured he’s a great player.

— Senate bill’s employer responsibility provisions are an improvement over Finance Committee draft.

— Higher gas prices alone won’t make cars substantially cleaner.

— Performance parking can fund appealing local amenities as well as improving the availability of parking spots.

— Coal kills.

LoveLikeFire’s refusal to rename themselves “Love Like Fire” annoys me, but I like their songs. Here’s “Stand in My Shoes”.

If You Build It, Will They Maintain It?

In its largest reconstruction effort since the Marshall Plan, the United States government has spent $53 billion for relief and reconstruction in Iraq since the 2003 invasion, building tens of thousands of hospitals, water treatment plants, electricity substations, schools and bridges.

But there are growing concerns among American officials that Iraq will not be able to adequately maintain the facilities once the Americans have left, potentially wasting hundreds of millions of dollars and jeopardizing Iraq’s ability to provide basic services to its people.

Oooops!

Spencer Ackerman did an item this morning urging the appointment of General David Petraeus as DC Police Chief, observing that many of the ideas of counterinsurgency strategy are basically in line with a modern progressive “tough on crime, tough on the root causes of crime” approach. I don’t actually think it would make much sense to put a high-ranking general in charge of a police department, but the point the suggestion is meant to illustrate has, I think, a lot of merit. The basic ideas employed in something like a “clear, hold, build” approach to Baghdad are basically a super-charged version of what you would want to do to get serious about bringing improved public safety, economic opportunity, and public health to a bad neighborhood in Washington or Baltimore or Detroit.

Which sort of raises the question of whether it mightn’t make more sense to deploy these kind of resources in troubled parts of our own country. A lot of the things that seem really problematic for COIN—language problems, this issue with the locals actually being too poor to maintain the projects we kick off, etc.—wouldn’t apply in a domestic context.

Michael Jordan Displays Uncharacteristic Classiness, Humility

Michael Jordan seems to have been stung by the negative reaction to his horrifying Hall of Fame speech and decided to start showing some class and humility:

If the NBA were to retire Michael Jordan’s No. 23 leaguewide, the newly inducted Hall of Famer says there are several more players just as worthy of the distinction. LeBron James, who wears No. 23 for the Cleveland Cavaliers, said last week he would change jersey numbers next season in honor of Jordan, and said no other players should wear it, either. [...]

“Magic Johnson, Larry Bird, Bill Russell all those guys should have their jerseys retired, too,” Jordan said. “I understand his gesture, but I am in the same group as those guys so I wouldn’t want to see my jersey retired unless you retire those guys. It is a compliment. I totally understand that. I appreciate LeBron for doing that and it is very thoughtful.”

Good for him.

The Three Percent Solution

Building on yesterday’s idea, borrowed from Brad DeLong, that the Fed could stimulate the economy by raising its long-term inflation target from two percent to three percent it’s worth noting that there are other arguments for thinking that this would be a good idea. First off, it’s worth noting that three percent inflation is still pretty low. There’s nothing magical about the two percent number, and a somewhat higher figure is still very much consistent with the basic idea that low inflation is good.

Second, a higher inflation rate would speed the process by which households climb out from over-indebtedness. Third, a higher inflation rate would ensure that in the future the Fed has more “running room” for conventional monetary policy before hitting the zero bound and getting into this madness. Fourth, a higher inflation rate would speed the process by which real wages and prices adjust to whatever real shocks the economy may or may not be suffering from.

This course of action seems to be anathema to the powers that be, but it seems strongly preferable to a prolonged period of ten percent unemployment and a possible series of trade wars and the like.