Matt Yglesias

Doug Holtz-Eakin Calls for Bank Nationalization

I wonder if Doug Holtz-Eakin has talked to John McCain about this idea. I bet he could do more good for the world talking it up than wasting his time with inane Twitters. At any rate, I think DHE is making sense:

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.

This, of course, is the nationalization option promoted by Paul Krugman, Simon Johnson, and unwashed bloggers like yours truly.

Generals Perturbed By Senators’ Obstruction of Chris Hill

I don’t think I’ve posted yet on John McCain and Lindsey Graham acting to hold up veteran diplomat Christopher Hill’s appointment to serve as Ambassador to Iraq. Hill’s a career foreign service officer whose views are sufficiently compatible with conservative politics that George W. Bush made him Ambassador to Poland, Ambassador to Korea, and Assistant Secretary of State for East Asia. But neocons are mad that in that last role he helped avert a war with North Korea, so they’re holding up his appointment. There’s no real prospect of blocking him, but McCain and Graham are managing to annoy some of their erstwhile friends. Laura Rozen reports:

There’s one as yet unremarked constituency increasingly disturbed by some Republican senators’ efforts to block the confirmation of former North Korea envoy Christopher Hill to be the next U.S. ambassador to Iraq: the U.S. military.

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.

That said, the nominal source of opposition to Hill is not his work in North Korea but his lack of experience in the Arab world. I think this is a concern that deserves to be taken seriously, but anyone who’s serious about it would recognize that it’s a systemic issue. One might think that the Foreign Service ought to be organized around regional or cultural areas of specialty. But that’s not generally how our system, which prefers to emphasize a form of generalized diplomatic expertise, works. It may be worth reconsidering this choice as a general matter. But there’s no reason to single out one senior FSO for problems here, and everyone knows that their real issue is Cheneyite opposition to the North Korea policy that Hill, Condoleezza Rice, and Bush followed at the end of the Bush administration.

Why Capping the Health Benefits Tax Exclusion is Worth Considering

Getting some of the tax revenue necessary to pay for health care reform by taxing some employer-provided health benefits is under serious consideration on the Hill, and according to some reports the administration is open to it. John McCain proposed taxing health benefits and Barack Obama criticized him sharply for it on the campaign trail, so this is prompting some awkward moments for Obama advisers like Austan Goolsbee:

A more articulate defense is offered by Igor Volsky at the Wonk Room:

The problem was never the tax exclusion itself. Rather, progressives were concerned about what would happen to individuals who lost their employer-sponsored health coverage once the tax code changed. McCain proposed replacing the employee deduction with a one-size-fits-all tax credit without reforming the health insurance market or expanding access to group coverage. Under his plan, Americans who lost their employer coverage would have had to fend for themselves in an unregulated individual health insurance market; Americans with pre-existing conditions would have joined the ranks of the uninsured.

Obama is using the measure as a means to finance comprehensive reform. Should someone lose their employer-based coverage, they will be able to purchase affordable insurance through a regulated exchange that cannot deny coverage to Americans with pre-existing conditions.

Perhaps the right way to think about this is that limiting the tax-preferred status of employer-provided health care has long been on progressives’ radar as a possible way of financing health care reform. Part of the appeal to the McCain campaign of using this method to pay for their own proposals was almost certainly that they knew perfectly well that many progressives were on record as supporting something superficially similar. This, they hoped, would compel progressives to “go soft” on McCain’s proposed tax hike. But they were wrong. Still with any tax, you have to ask what you’re getting for the tax to really evaluate it. Comprehensive health care reform requires additional revenue, and that’s bound to make someone unhappy. But there are a variety of possible revenue sources that would be well-worth the cost in order to achieve the substantial benefits of health care reform.

John McCain Obstructing Qualified Interior Department Nominee Because He Hurt Ronald Reagan’s Feelings

There have been a lot of vaguely-worded complaints in the past two days about the dysfunctional nature of the appointments process and the Obama administration’s slow pace of staffing. Well, now we can put a face to Senatorial grandstanding—the face of John McCain, who’s threatening to hold up David Hayes’ nomination to be Deputy Secretary in the Interior Department over the fact that Hayes once wrote something mean about Ronald Reagan’s environmental policy. That’s right, a member of one political party has, in the past, said something disparaging about a prominent member of the other party. This is McCain’s objection. Seriously. How on earth would you staff an administration of people who pass that test?

Chait on Schlaes

Jonathan Chait has a great piece on Amity Shlaes and The Forgotten Man. Best line: “The experience of reading The Forgotten Man is more like talking to an old person who lived through the Depression than it is like reading an actual history of the Depression.”

The most important point, however, is how closely contemporary conservative rhetoric is coming to resemble Hoover’s prescriptions:

Pence has insisted that The Forgotten Man proves “that it was the spending and taxing policies of 1932 and 1936 that exacerbated the situation.” Sanford, for his part, offered this fiscal diagnosis: “When times go south you cut spending. That’s what families do, that’s what businesses do, and I don’t think the government should be exempt from that process.” That is, of course, a perfect description of the paradox of thrift, only put forward as the solution rather than the problem. Governor Tim Pawlenty of Minnesota insisted that “we can’t solve a crisis caused by the reckless issuance of debt by then recklessly issuing even more debt,” and called for a balanced-budget amendment to the Constitution, which would of course massively exacerbate the present crisis. It is 1932 again in the Republican Party. [...]

But now we have come to a time when leading Republicans and conservatives–not just cranks, but the leadership of the party and the movement–once again sound exactly like Herbert Hoover. “Prosperity cannot be restored by raids upon the public Treasury,” said President Hoover in 1930. “Our plan is rooted in the philosophy that we cannot borrow and spend our way back to prosperity,” said House Minority Leader Boehner in 2009. They have come to this point by preferring theology to history, by wiping Hoover’s record from their memories and replacing it with something very close to its opposite. It is Hoover, truly, who is the Forgotten Man.

Brad DeLong takes the view that “Had John McCain won last November, very few of the New Deal denialists would be out in public–instead, the Republican legislators and their tame intellectuals would be enthusiastially rallying behind McCain’s tax cut-based Keynesian fiscal stimulus package right now.” I’m not nearly so sure that’s right. Recall that McCain was touting a spending freeze as the solution to the economic crisis while on the campaign trail, already to the general acclaim of the congressional right-wing.

Cutting Earmarks Doesn’t Save Money

I think it’s reasonable well-understood at this point among non-stupid, non-dishonest people that “earmarks” are a minor aspect of the budget and the bloviating about them is just hot air not serious budget policy. Less well-understood is Stan Collender’s point that earmark reform would literally save no money whatsoever:

Lost in all of the debate (and the reporting about the debate) on the earmarks in the omnibus 2009 appropriations bill the Senate is still working to adopt is the basic fact that cutting earmarks doesn’t save any money.

This is not open for discussion. An earmark simply is a congressional decision to allocate part of appropriation for a particular purpose. Eliminating the allocation doesn’t reduce the appropriation, it simply leaves the allocation decision to a federal department or agency rather than to Congress.

A lot of people don’t understand this because the mechanics of the federal budget process are fairly obscure. But guess who really ought to understand the federal budget process? Members of congress! And especially those members of congress who portray themselves as incredibly concerned with the need for federal budget reform. I’m looking at you John McCain!

McCain, Dowd Substitute Mockery for Understanding

You understand why politics might get up to dumb gimmicks. They’re trying to get press, they’re trying to get elected, whatever. But even though lots of people do it, I genuinely don’t understand why someone would go into political journalism despite a total lack of interest in trying to actually inform the public. If you want to operate with a reckless disregard for the consequences of your actions, there’s a lot more money to be had in banking. At any rate, Maureen Dowd loves John McCain’s Twitter feed:

$1 million for Mormon cricket control in Utah. “Is that the species of cricket or a game played by the brits?” McCain tweeted. …

$2 million “for the promotion of astronomy” in Hawaii, as McCain twittered, “because nothing says new jobs for average Americans like investing in astronomy.” …

$200,000 for a tattoo removal violence outreach program to help gang members or others shed visible signs of their past. “REALLY?” McCain twittered.

The tattoo removal anti-crime program has already been dealt with in some detail. But it’s worth dwelling on this for a bit. The cost per-prisoner of incarcerating someone for a year is enormous. If this program generates as little as ten person-years less of imprisonment that’s a net fiscal benefit to the government even if you ignore the benefits of reducing crime which, obviously, would be absurd. In other words, the marginal benefit of preventing a serious violent crime is extremely high—much higher than might be apparent if you didn’t bother to consider the issue at all. Which is exactly how McCain proceeds.

As Jon Chait says:

And McCain’s method of indentifying waste, gleefully repeated by Dowd, is a disgrace. His technique is to focus on programs that mention animals or food, or anything that sounds silly. He’s clearly not interested in learning whether any of the programs he targets have merit. [...] I don’t know whether or not cricket control is a necessary program. Maybe crickets are doing many times that amount in crop damage every year. Maybe it’s a boondoggle. I don’t know about the astronomy program, either, though I do think there’s a role for federal support of the sciences, even in silly-sounding places like Hawaii.

I’m just a blogger, not a U.S. Senator or a powerful newspaper columnist with access to a research assistant, but it’s not so difficult to make some inquiries into this sort of thing. What’s the deal with Mormon crickets? Well “Mormon crickets become pests very sporadically (about once or twice in a decade) when populations build to high levels and they migrate over large areas. If an alfalfa field is in the path of a migration, Mormon crickets can cause severe damage by devouring the plants.” Are Mormon crickets a problem this year? It seems they are. Now that bit of Googling is hardly the last word on this, but we’re at least getting somewhere. Dowd and McCain both have a lot of resources at their disposal and big megaphones—maybe they should try to figure this stuff out and help people distinguish the worthy programs from the wasteful ones instead of just making jokes.

John McCain Pretends Not to Understand What Beaver Management Is

For any given federal expenditure of funds, there’s an argument to be had over whether the deadweight loss to the economy caused by the taxation required to generate the funds exceeds the benefit obtained by the expenditure. But this is a technical argument that’s difficult to win decisively. And at the same time, the government rarely spends money on anything that’s genuinely pointless—though presidents do sometime propose the idea of a manned mission to Mars. Consequently, even though everyone’s against “out of control spending” and “pork” and everyone knows that “fiscal responsibility” is good, it’s difficult to criticize specific actual expenditures in a persuasive way. One popular thing the GOP has been doing to get around this problem in recent months is to criticize made-up programs. So the right is against a $30 million mouse earmark that they’re pretending Nancy Pelosi put in the stimulus, they’re against an $8 billion scheme to build a Disneyland-Vegas mag-lev train that they’re pretending Harry Reid put in the stimulus, and now they’ve invented a tattoo removal program that they’re pretending is in the omnibus appropriations bill.

Their other big idea is feigned stupidity. Michael Steele pretended not to know what a fish passage barrier removal program is. Turns out that these are programs designed to remove barriers to the passage of fish. So that fish species don’t vanish from certain habits and wreck entire ecosystems. Bobby Jindal was inspired to denounce “something called volcano monitoring”. Volcano monitoring is when you monitor volcanos to try to understand when they might erupt. And now we get this Tweet from John McCain:

Not having ever worked in beaver management before, I couldn’t say in detail how a beaver-management program would work. But again the basic concept here is really pretty clear. But if McCain is really confused, he could look it up. Brendan Nyhan suggests that we may need to let the GOP know about Let Me Google That For You. If anyone out there wants to know why beavers could be a problem for a given area, or about different ways that you can manage the beaver population and minimize beaver-related problems I would direct them to the Beaver Control and Management Information page on the Internet Center for Wildlife Damage Management. I found that right away using Google.

Explaining Congressional Conservatives’ Back-to-the-Future Tactics

Eve Fairbanks mulls the eerie similarities between the McCain campaign and the tactics being employed by congressional conservatives. This is something I had some fun with yesterday, and it’s really striking. While moderates like Arnold Schwarzenegger, Charlie Crist, Olympia Snowe, Susan Collins, and Arlen Specter are trying to cut deals with the new, popular president the Republican Party’s conservatives are just recycling McCain-era gambits.

Dave Weigel wonders particularly about the obsession with alleged pork, observing that “Republicans sound strange when they attack the president for tiny spending outlays and unemployment benefits when most Americans are only aware of the local news stories they see about where the stimulus money is going, locally.”

I think this is arguably the downside of the much-bemoaned-by-progressives continued conservative dominance of what Josh Marshall’s termed the “para-government” here in DC. On the one hand, these guys are probably pretty in touch with their districts—they represent the conservative, Obama-hating minority of the country. And they’re in touch with the views of their donors, as are the conservative think tanks. What supplements that is DC conventional wisdom. But the DCCW is, for now, still so wired-up to conservative presuppositions that it doesn’t offer a meaningful check on the right-wing hothouse atmosphere. It just tells Republicans back what they want to hear.

John McCain Repeats Vegas HSR Lie, Adds New Non-True Details

Given that legislators who want to provide accurate information to their constituents have no had ample time to learn that the stimulus package does not contain an $8 billion earmark for high-speed rail between LA and Las Vegas, I’m going to go ahead and call John McCain a liar:

So, we will be seeking fair and transparent use of the money. I believe that Arizona can compete with any other state or locality to get the much-needed money. Already we’re seeing a good example. There was $2 billion in the Senate bill of the stimulus package for light rail; there was zero in the House. It came out of conference – only Democrats, no Republicans in the room – with $8 billion for light rail. And guess where it’s going to go? A light rail between Las Vegas and L.A. Everybody knows that.

Could we have competed for that money? Maybe so. So it’s business as usual in Washington, and I think that Americans are generally very disappointed. Sorry for the long answer.

It can’t be the case that “everybody” knows that because it’s not true. The thing that John McCain wants where different states can compete for the high-speed rail money is what the bill already says. Except McCain has piled ignorance onto dishonesty by confusing high-speed rail (advanced passenger trains that run between cities) with light-rail (relatively low-capacity trains used for intra-city mass transit). They have a light rail system right in Phoenix so it’s not as if there’s no way he could have informed himself about these issues.

John McCain, Dittohead

That Rush Limbaugh is loathesome can, I think, be taken for granted. But as we’ve been having occasion to note recently, to a really striking extent conservative politicians everywhere are taking their marching orders on policy and legislative strategy from a boorish and occasionally drug-addled talk radio host. Even John McCain, who a lot of people thought would go back to his maverick schtick of 2001-2003 vintage after losing the election, is standing firmly behind Rush:

I don’t know why he would do that. Mr. Limbaugh is a voice of a significant portion of our conservative movement in America. He has a very wide viewing audience. He is entitled to his views, and he has a lot of people who listen very carefully to him. I don’t know why that the President would take him on. He’s part of the political landscape, and he plays a role.

Needless to say, it’s precisely because Limbaugh is a part of the political landscape that people feel compelled to take him on. Meanwhile, Obama’s point wasn’t that Limbaugh isn’t entitled to his views. His point was that if Republicans want to be constructive partners in dealing with the economic crisis, they need to go beyond their current posture of slavish adherence to Rushism. After all, this is a guy who’s said he’s actively hoping for the administration to fail.

F-22 Stimulus

The big trouble with any kind of stimulus bill is that it has to pass congress and there’s virtually no chance of the congressional wringer doing anything other than making things worse. For example, defense contractors’ plans to get a bailout for the financially and strategically absurd F-22 Raptor is gaining steam on the Hill. One good thing about a McCain presidency would have been that a former naval aviator in the White House would have been the deadliest foe ever faced by the U.S. Air Force and its various boondoggles and there’s been some indication that some of the Obama administration’s outreach to McCain has focused on this project.

Bygones

Barack Obama, acting with class and good sense, has been reaching out to John McCain going so far as to host a bipartisan dinner in his honor over the weekend at which he said:

And there are few Americans who understand this need for common purpose and common effort better than John McCain. It is what he has strived for and achieved throughout his life. It is built into the very content of his character.

I could stand here and recite the long list of John’s bipartisan accomplishments. Campaign finance reform. Immigration. The Patients’ Bill of Rights. All those times he has crossed the aisle and risked the ire of his party for the good of his country. And yet, what makes John such a rare and courageous public servant is not the accomplishments themselves, but the true motivation behind them.

I’m all for Obama making this gesture, but personally I don’t believe a word of it. I also don’t believe in saying things about people during the campaign season that you don’t really mean and then taking it all back after the fact. And I think the truest test of John McCain’s character as a public official was his conduct during the 2008 campaign, not his behavior during lower-stakes tests. This blog follows the legal restrictions put in place by McCain’s ill-advised Bipartisan Campaign Finance Reform Act and thus does not comment on the character, qualifications, or fitness for office of electoral candidates but McCain’s substantive legislative achievements are actually hugely unimpressive.