Matt Yglesias

100 Days

The Daily Beast put together a compilation of various folks’ thoughts on Obama’s First 100 Days. Mine is here.

I would also affiliate myself with Reihan Salam’s remarks. Separately, but also at the Beast, I have a column about Obama’s difficulty getting his nominees confirmed and why (a) the Republicans should stop acting like whiny toddlers and (b) the country should rely less on political appointees and more on civil servants.

Stiglitz Calls Geithner Plan “Robbery of the American People”

I think Joe Stiglitz is being a bit unfair here:

The U.S. government is basically using the taxpayer to guarantee against downside risk on the value of these assets, while giving the upside, or potential profits, to private investors, he said.

“Quite frankly, this amounts to robbery of the American people. I don’t think it’s going to work because I think there’ll be a lot of anger about putting the losses so much on the shoulder of the American taxpayer.”

It’s a bit more subtle than that. The government is guaranteeing private investors against downside risks but has secured for itself a fair share of the upside. In other words, you have a situation where the private investors are taking a chance of a small loss in exchange for the opportunity at a big win. The government is taking a chance of a large loss in exchange for the opportunity of a big win and giving up all the autonomy and decision-making power in the meantime. In one scenario, taxpayers and investors alike make a bunch of money. In another scenario, taxpayers lose a ton of money—many hundreds of billions—and investors lose a small amount. It’s a bet that looks fair if (a) you think the win-win scenario is much more likely than lose-lose, or (b) you think the social gains from creating recapitalized banks exceed the fiscal cost to the taxpayers of suffering through lose-lose. Option (a) seems like wishful thinking, but option (b) is perfectly reasonable. The unreasonable thing here is that the Geithner Plan seems to allocate an unreasonable large share of the social gains of recovery back to the financier class. So I think Stiglitz is only being slightly unfair.

Meanwhile, I actually think the most distressing thing about the criticism from folks like Krugman and Stiglitz is what you can infer reading between the lines from how ferocious it is. They, and other leading critics, are acting like people who’ve been totally shut out of the consultation/communication loop. And it’s distressing to see people of their stature and expertise getting shut out while the administration works harder on kissing Wall Street’s ass to try to persuade the finance class to avoid deliberately sabotaging the economy.

The Obama administration seems to respond to criticism from the right by turning the other cheek and becoming more solicitous, while responding to criticism from the left by putting its fingers in its ears.

Organizing for America Kicks into Action

Chris Cillizza reports that Organizing for America, the successor-organization to Barack Obama’s presidential campaign, is going to kick into gear for the first time to try to mobilize support for the president’s budget. That seems like a good idea to me. Ordinarily, you think of a brand-new president’s main initiatives as being able to attract a fair amount of support from opposition party legislators whose constituencies he carried in the election. After all, an Obama platform of letting the Bush tax cuts expiring and auctioning carbon permits in order to pay for health care and a tax cut for working people carried the day in North Carolina, Pennsylvania, Maine, Ohio, Indiana, Florida, and Iowa so you might think that Richard Burr, Arlen Specter, Olympia Snowe, Susan Collins, George Voinovich, Dick Lugar, Mel Martinez, and Chuck Grassley would be a bit leery of opposing a budget framework that just lays out those campaign promises. But instead Obama’s seemed to have trouble getting Democrats on his side—including Democrats in whose states he’s popular.

Organizing, roughly speaking, is the difference. The top two percent and the pollution lobby don’t really care who won the election, aren’t impressed by slogans about how elections have consequences, and don’t care if people have health care or if the working class gets a tax cut. They just go to work every day to press for their agenda, and they’ll get their way unless people are pressing back.

Obama Lobbyist Policy Doing More Harm Than Good

Ryan Grim has an excellent story in The Huffington Post spelling out in some detail what’s been a mounting problem with the Obama administration—the ban on lobbyists is having perverse consequences for staffing:

Lobbyists who for years have fought for workers’ rights, environmental protection, human rights, pay-equity for women, consumer protection and other items on the Obama agenda have found the doors to the White House HR department slammed shut. In the past, several progressive lobbyists explained, there was no reason not to register if there was a slim chance that the law might require it. Obama’s new policy changes the calculus, leading folks to deregister as federal lobbyists or consider other employment while they wait out the policy’s required two-year separation from lobbying.

Way back in August 2007 I criticized Obama’s lobbyist pledge as “meaningless grandstanding.” That turns out to have been too optimistic as Tom Malinowski and other well-qualified individuals who registered as lobbyists while working for progressive non-profits find themselves shut out of jobs, and the administration finds itself understaffed.

The problem here has always been that the lobbyist/non-lobbyist distinction doesn’t track any meaningful goals. Goldman Sachs’ lawyer, for example, is not a lobbyist, and therefore not banned from office. A “lobbyist” is just someone who talks to members of congress about legislation. You can be a corrupt special interest and not be a lobbyist, and you can be a lobbyist who only works for good causes.

But dumb as the pledge was, it’s dumber still to stick with it. Flip-flopping will look bad, but nobody will care in 2012 about an old flip-flop. By contrast, lots of people will care by 2012 if we’re in the midst of a prolonged depression. The premium has to be on getting smart, effective people in place in order to frame and implement smart, effective policy. At the moment, Obama is still floating on a positive image and the fact that people rightly blame his predecessor for the current situation being so bad. But that brand isn’t going to be worth anything in a couple of years unless he brings back growth. He should admit that the initial pledge was ill-considered and a bit cynical and that it would be even more cynical to stick with a mistaken promise merely in order to avoid the need to admit a mistake.

The “F” Word

I heard someone smart remark recently that thus far in the discussion of the financial crisis we haven’t heard that much of the “f” word—fraud. And when we have heard it, it’s tended to be with reference to micro-fraud—borrowers lying on their mortgage applications. But as Steve Coll says we’re almost certain to learn more about corrupt activity on the part of bank executives, which makes it all the more puzzling that the administration seems determined to keep these same executives in place:

Why, for example, would the Obama Administration wish to forge a bet-the-Presidency partnership with Kenneth Lewis, the C.E.O. of Bank of America, who bought the sub-prime lender Countrywide at the top of the housing market, and who then, as this enormous mistake became evident, extravagantly overpaid for Merrill Lynch? What absolves Lewis of responsibility for these colossal errors in business judgment? This week, Andrew Cuomo, the attorney general of New York, has been deposing Lewis about his tone-deaf decision, instigated by Merrill’s John Thain, to award more than $3 billion in bonuses to Merrill employees in December. In December—a month of cascading layoffs, rising public anger, falling stock prices, and the dawn of a new national politics. And what of the management of Citigroup, with which Summers, among others in the Administration, enjoys close connections? Vikram Pandit, the current C.E.O., took office recently and is not responsible for all of the bank’s problems, but he is part of a board and management group that has an almost comically awful record dating back years. How much more bad judgment must a board and an executive team display before it departs to exile?

Just as important, the Cuomo investigation reminds us that we don’t yet know the full scope of terrible judgment, ethical lapses, and outright fraud that occurred within the banking and financial industries last autumn. It was a time of great turmoil and very high stakes. More shoes will drop; Obama and company might want to slide out of the way before they do.

It’s all the more puzzling to me that this is being done while there are literally no subcabinet officials in place at the Treasury. I’m told this relates in part to the fact that the administration is having trouble coming up with people who wouldn’t appear “tainted” by association with the bad stuff here. But keeping the government understaffed because we don’t want to give jobs to financiers with the one hand, and then forking over vast sums of taxpayer money to the very same financiers seems bizarre.

Obama’s Iraq Announcement

For the record, I am aware that the administration made a big announcement about Iraq today. But I’m pretty busy attending a conference so I haven’t really had the time to digest what’s going on, and I’d rather offer too-slow commentary on it than low-quality commentary.

CAP Budget Reax

Everything you wanted to know about the Obama budget and more from the Center for American Progress policy teams:

1. Dan Weiss on the climate and energy elements.
2. Cindy Brown and Melissa Lazarín on education.
3. Larry Korb on defense.
4. Michael Ettlinger on the big picture.

It’s not Obama’s style to actually say this, but were this budget to be enacted it would be by far the most significant progressive step in over forty years.

The Case for a Feisty Left

John Judis’ article here about how the lack of pressure from the left helped lead to a disappointing stimulus package reminds me of a more general complaint of mine—progressive politicians’ pathological aversion to criticism from the left.

Of course nobody likes to be criticized. But the way your ideas get to carry the day is when there’s about as much political clout to the left of your ideas as there is to the right of them. If you succeed in muting all your critics to the left, all you do is create a situation where your program is defined in the press and the congress and the public imagination as the most-leftwing-possible proposal. And the furthest-left proposal can’t possibly win. It’s never helpful to have fratricidal warfare and battles to the death, but it’s necessary for there to be meaningful pressure to do more than is popular or possible or even necessary in order to lay the groundwork for accomplishing anything.

Something for What?

The Decemberists “The Bagman’s Gambit” is a noteworthy recent DC-located song. But it reveals a certain unfamiliarity with the details of District life:

And I recall that fall
I was working for the government
And in a bathroom stall off the National Mall
How we kissed so sweetly
How could I refuse a favor or two
For a tryst in the greenery?

Realistically, there’s not that much greenery around the National Mall and no bathrooms. It’s a piece of federal infrastructure, in other words, that could use an upgrade. And it’s a “shovel-ready project.” And money spent on doing the project would provide people jobs and offer some stimulus to the economy. So the House of Representatives including Mall refurbishment funds in their stimulus bill. But know-nothing conservatives decided that fixing up important national landmarks sounds funny, so they’ve spent a week mocking the idea. And instead of punching bask and asking if the right-wing intends to just let the whole country fall apart for the sake of a sound byte, the Obama administration is backing down and getting the provision removed.

As with the family planning issue, the question is what have they gotten in return? Thus far, I don’t see any concrete indication that they’ve gotten anything. But they do seem to be setting up an expectation whereby right-wing talk radio gets veto power over the details of national legislation. Is whatever they arbitrarily choose to criticize going to be stripped out of every bill for four years?

Change We Can Issue Waivers For

Way back on August 4, 2007 I was watching a Presidential Debate at Netroots Nation and wrote in defense of Hillary Clinton, my least-favorite candidate, on one specific point:

Hillary Clinton got some boos for her defense of lobbyists and, indeed, her initial response — which amounted to pointing out that some Democratic-leaning interest groups have lobbyists, too — wasn’t very compelling. The second time around, though, she got the right answer, namely that lobbyists do their jobs because they get hired by people and Obama and Edwards take money from the executives and so forth who do the hiring, so the whole distinction is basically meaningless.

As best I can tell, that’s totally correct; refusing to take money from lobbyists is just a kind of meaningless grandstanding.

But Obama’s lobbyist grandstanding has continued and in one of the first acts of his administration he issued an executive order banning lobbyists from all kinds of administration work. But then he wanted William Lynn to be Deputy Secretary of Defense. So it turned out that the order had a waiver process and Lynn was granted a waiver on basically the grounds that, well, he was the best man for the job. And now comes this news:

Despite President Barack Obama’s pledge to limit the influence of lobbyists in his administration, a recent lobbyist for investment banking giant Goldman Sachs is in line to serve as chief of staff to Treasury Secretary Timothy Geithner.

Mark Patterson was a registered lobbyist for Goldman until April 11, 2008, according to public filings.

I don’t have particular views on the merits of Lynn or Patterson, but I think the whole thing illustrates the lack of merits of this anti-lobbyist posturing. Among other things, the distinction between “lobbyists” and other forms of influence-peddlers is pretty irrelevant. I do worry about putting too much of our regulatory authority in the hands of people whose primary allegiance is to friends on Wall Street rather than to the public interest. But if instead of being a lobbyist for Goldman, Patterson had been some other kind of Goldman employee, that wouldn’t actually ease my concerns. Meanwhile, you do need some people in government who know the private sector world so it’s not possible to totally avoid these kinds of ties. Either way, the way you take on the entrenched interests of the wealthy and powerful is by taking on their interests not by promulgating ethics rules so tight that you immediately start searching for loopholes in them.

Show Me the Votes

Unlike some, I’m not per se outraged by the idea of dropping a family planning provision from the stimulus bill in response to conservative objections. I’m all for the provision, but it’s genuinely tangential to the point of the bill, so if this is really what’s standing between us and a universe in which a substantial number of conservative get on the stimulus train so be it.

But as with a lot of Democratic concessions on the bill thus far, what seems to be missing is the “pro quo.” Where are the members of the House saying “yesterday I was inclined to vote ‘no’ on this, but thanks to this change I’m voting ‘yes.’” Bargaining is smart. I even think magnanimity on the part of a new majority is smart. But when you bargain, you get something. And I don’t see what Obama’s gotten for his business tax cuts nor do I see what he’s getting for selling out low-income women’s access to contraceptives.

Noone Could Have Predicted

I, for one, am shocked that Barack Obama’s strategy of making preemptive concessions to the GOP in the stimulus bill, slashing rail funding to make room for more tax cuts, hasn’t stopped Republicans from still wanting more:

Republicans accused Democrats of abandoning the new president’s pledge, ignoring his call for bipartisan comity and shutting them out of the process by writing the $850 billion legislation. The first drafts of the plan would result in more spending on favored Democratic agenda items, such as federal funding of the arts, they said, but would do little to stimulate the ailing economy.

Nor can I really blame the Republicans here. Everyone knows that you don’t accept the first bid. Now of course the Democrats have substantial majorities in both houses and don’t need to get Republican votes. But the very fact of having made preemptive concessions created expectations that Obama would get GOP support for his bill and generate pissy grafs like this:

The GOP’s shrunken numbers, particularly in the Senate, will make it difficult for Republicans to stop the stimulus bill, but the growing GOP doubts mean that Obama’s first major initiative could be passed on a largely party-line vote — little different from the past 16 years of partisan sniping in the Clinton and Bush eras.

Meanwhile, I’m not even sure it’s true that bills being “passed on a largely party-line vote” really has been the defining quality of the past 16 years’ worth of governance. If we think back to Bill Clinton’s administration, then his first budget certainly was party-line. But NAFTA, the other major initiative of his first two years in office, very much wasn’t. And then after the GOP takeover in the 1994 midterms it was impossible to do anything on a party-line vote. The major legislation of that era—the 1997 budget deal, welfare reform, etc.—was necessarily bipartisan. In his first term, I would say that Bush’s major endeavors were the 2001 & 2003 rounds of tax cuts, the No Child Left Behind re-write of ESEA, and the military actions in Afghanistan and Iraq. Of those, only the 2003 tax cuts passed without significant Democratic support.

And yet, there really was sniping all this time! Which I think mostly goes to show that the vote counts for bills in congress ultimately has very little to do with whether or not there’s a general spirit of comity in town.

The Administration’s Ideology

Via Henry Farrell, Nolan McCarty takes a rigorous look at the ideology of the Obama administration:

To gauge the differences between the administration and Congressional democrats, I use Keith Poole’s “common space” measurement of conservatism. This measure is an adjustment of DW-NOMINATE scores designed to facilitate comparison of the House and Senate. Each legislator is given a single conservatism score for her entire career ranging from around -1 (very liberal) to 1 (very conservative). One drawback is that these scores are only available up through the 109th Congress (2005-2006). So I can only compare the cabinet to the Democratic caucuses of that term. Another is that Bill Richardson’s score more than a decade old (but the rest continued to serve through the 110th Congress).

The following table list the conservatism scores for the administration as well as the House and Senate leaders and the medians of the caucuses.

The evidence is pretty strong that the administration lies considerably to the right of the Democrats in the House, but is reasonably representative of Senate Democrats. But only Solis comes from the most liberal wing of the party. The center of the party is well represented in powerful positions by the president, vice-president, secretary of state, and WH chief of staff while the lower cabinet is filled with more moderate Democrats and a Republican.

Needless to say, the median senator is more conservative than the median senate Democrat. And many bills can only be passed with the support of ten senators who are more conservative than the median senator. So as I was saying yesterday even if the Obama administration were to shift its position more in the direction of Nancy Pelosi, I doubt that would change many legislative outcomes. The bulk of the Obama administration is more conservative than I am, but less conservative than the pivotal members of congress.