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.

I love the internet. Also: health care reform!

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

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.

The Administration strongly supports Senate passage of the Patient Protection and Affordable Care Act (the proposed substitute to H.R. 3590), which represents a critical milestone in the effort to reform our health care system. This legislation meets the President’s criteria for health insurance reform: it provides stability and security to those with insurance; offers access to quality, affordable health care for those who do not have insurance; cuts costs for families, small businesses and the Government; and does so without adding a dime to the deficit.
This legislation is the product of unprecedented cooperation and countless hours of hard work by Members of the Senate who share the President’s conviction that the Nation cannot wait another year for health insurance reform. They have forged a strong consensus that represents an historic step forward.

The Senate legislation includes critical reforms to the insurance industry, so that Americans will no longer have to worry that they will be denied coverage, or that their coverage will be dropped or watered down when they need it most. It covers virtually all Americans and ensures that all Americans with health insurance are protected against high, out-of-pocket spending. The Administration is pleased that the bill includes a public health insurance option offered in an Exchange. As the President has said throughout this process, a public option that competes with private insurers is one of the best ways to provide the choice and competition that are so badly needed in today’s market.

The Senate bill also includes important health care delivery system and insurance reforms and cost-containment initiatives, and it would extend the solvency of Medicare’s hospital insurance trust fund. The Administration is also pleased that the bill creates an Independent Medicare Advisory Board. The bill’s Medicare and Medicaid policies promote integrated care, quality care, and primary care. It invests in research on the most effective treatments, prevention, and the health care workforce. It also makes critical improvements for Medicare beneficiaries including beginning to address the coverage gap in the Medicare drug benefit known as the donut hole. In addition, it provides new options for long-term care. The bill includes important program integrity protections that will safeguard Medicare and Medicaid from fraud, waste, and abuse. Moreover, the Senate bill is not only fully paid for, but also reduces the deficit by $130 billion in the first decade and by more than half a trillion dollars in the next decade.

This bill provides the necessary health reforms that the Administration seeks – affordable, quality care within reach for the tens of millions of Americans who do not have it today, and stability and security for the hundreds of millions who do. The Administration appreciates the hard work of the Senate on this bill, which contributes to transforming the health care system. The Administration looks forward to continuing to work with the Congress to enact health insurance reform and urges quick action on this landmark bill.

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.

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.

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.

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.

— 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”.

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.

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.

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.

Suppose I invent a magical device that can be pointed at a Muslim and say with 90% accuracy whether or not he’s an al-Qaeda operative. Well, if I start waving it around and it starts beeping on one guy, what should we conclude about him? A terrifyingly large number of people are going to say “there’s a ninety percent chance he’s with al-Qaeda! Let’s panic!” In fact, that’s not the case. There are a billion Muslims in the world. A test with 90 percent accuracy is going to mistakenly classify about 100 million of them as al-Qaeda operatives. And al-Qaeda actually has fewer than 10,000 people working for it. I’m going to get something like 10,000 false positives for every actual terrorist I find.

Meanwhile, applying the test to people is going to have severe consequences. The public doesn’t understand this correctly and is going to be put into a wholly unwarranted state of panic about the prevalence of terrorists. People will, of course, demand that those flagged by my machine be subjected to extra-heightened scrutiny. It’s easy to imagine lots of innocent people being mistakenly killed or subjected to discrimination or shunning. And that sense of beseigement and unfair treatment would ultimately heighten tensions between the world’s Muslims and the West, while wasting massive quantities of law enforcement resources chasing basically worthless leads.

No president is going to be able to lay down the law on human rights, exchange rates, or sanctions on Iran when China owns over a trillion dollars in U.S. assets, when the U.S. economy is on life support, and when the American military Is mired in two losing wars. Until we get our house in order over here, nobody should expect China to be especially responsive to our wishes or expect its leaders to view the “American model” as especially appealing.

My question is, in the specific case of the US-China currency dispute what leverage does Chinese ownership of US assets give them? If we annoy them too much about our desire to see their currency appreciate, they might sell their dollar-denominated assets thus . . . causing their currency to appreciate? It doesn’t add up. China isn’t buying that stuff as a favor to us that they can then revoke. They’re buying it as an integral element of their exchange rate policy.

The real question about this is whether American officials really want them to stop. They say they do. But while dollar depreciation would be good for the American labor market, and good for the long-term balance of the world economy, it could make the deficit situation more urgent.

Find out more here.

It’s January 2011. The GOP is about to assume control of both houses of Congress—having been voted in by a public deeply suspicious of Democrats after President Barack Obama conducted clandestine talks with President Felipe Calderon of Mexico and Prime Minister Stephen Harper of Canada. But two days before the new conservative majority is to be sworn in, Obama announces that this Congress will not be seated, that the United States (a creation of “racists and warmongers”) will be replaced by a North American Union, that the US Constitution will be dissolved, and that private ownership of firearms will be outlawed (as part of a United Nations treaty banning firearms globally). In response, millions rise up, and the Revolution begins.

Interestingly, the United States Constitution itself (indubitably the creation of racists, though not necessarily warmongers) was formed through just this sort of backroom deal-making among elites determined to ignore the existing legal procedures laid out in the Articles of Confederation. Which is just to say that crazier things have happened.

Talk of a North American Union or a NAFTA Superhighway has mostly been used as a launching point for sociological speculations but I think it’s an idea worth taking seriously. Insofar as the concept has any real origins, it seems to be in a 1999 report by the Frasier Institute, which is a free market Canadian think tank, called “The Case for the Amero: The Economics and Politics of a North American Monetary Union “. To be a bit flip about it, the author seemed upset that Canada didn’t undergo a Reagan/Thatcher-style assault on trade unions in the 1980s and believed it had escaped this fate by devaluing its currency to maintain labor market competitiveness. Under a monetary union, this would be impossible and Canadian unions could be crushed. Taking the longer view, it now simply appears to not be the case that the Canadian dollar is in some consistent downward trend relative to the dollar.

So the issue this was meant to address actually looks like a bit of a non-issue. But the case for US-Canadian political union is pretty clear. As things stand, Canadian citizens are intensely impacted by decisions taken in Washington but have no real ability to influence them. Political union would give residents of Vancouver and Toronto an opportunity to have a say in decisions that are important to their lives. What’s more, the politics of AmeriCan would be more sensible than current US politics. There’d be a lot of microeconomic efficiency gains, and bringing America’s higher per capita income together with Canada’s vast natural resources could be beneficial for everyone.

Monetary union with Mexico, by contrast, seems like a bad idea—the economies are too different and too out of sync. But of course the European Union didn’t begin its political integration with monetary integration. And the case for deeper political ties between Mexico and the US/Canada seems fairly compelling.

The general idea would be to go beyond “immigration reform” to look more comprehensively at the trends driving migration. Immigration reform is part of that, but so is revisiting the intersection between NAFTA and US agricultural policy, so is confronting global trade negotiations as a unified North American bloc to address the issue of Mexico-China competition as a manufacturing ground, continent-wide air travel and energy grid issues, etc. Hopefully part of the conversation would involve some more robust discussion in the U.S. about the relative merits of spending money on immigration enforcement (a negative sum enterprise) versus spending money on improving living standards in Mexico (a positive sum enterprise).

In the most general sense, it’s hard not to notice that Mexican people, in general, seem to wind up doing much better for themselves when they’re able to relocate and live under American or Canadian institutions. So one of the goals of North American political integration would be for Mexico to begin to be governed by more US/Canadian-style institutions, extending the opportunities that are currently provided only through migration. You might also see more reverse migration, as retirement to Mexico could be a compelling opportunity for American or Canadian senior citizens living on fixed incomes.

At any rate, this clearly isn’t on the agenda in the short-term. But never say never. Political structures are always changing. The United States dates back to the late-18th century and is an unusually old country. Canada was created in 1867. Belgium’s been around since 1820, but may not last long.

Quentin Peel’s analysis of the new EU jobs contains a lot of interesting background, but I’m not sure that the lede is right:

The appointment of Herman Van Rompuy, Belgium’s prime minister, as president of the European Council and Lady Ashton of the UK as European Union “high representative” for foreign affairs is certain to be seen by many as a demonstration of Europe’s inability to punch its weight on the global stage.

Neither is a big political figure with an international reputation. Both are classic consensus-building figures, unthreatening to national European leaders, and unlikely to steal the limelight from their rivals.

I think the idea that the EU could have become a major player on the world stage simply by picking a famous person to be President of the European Council was always a mirage based on fuzzy thinking. If the EU were a country, it would be a very important country. It would have the largest economy in the world, a medium-sized nuclear arsenal, and a military that though considerably smaller than America’s does have some ability to project power on a global basis. Under the circumstances, even the most obscure person in the world would become an important player once he ascended to the top leadership post. But the EU isn’t a country, so it a fortiori isn’t an important country.

The weight-punching issue, viewed in this light, isn’t an issue of personalities it’s an issue of institutions. To punch its weight, Europe needs institutions that facilitate collective decision-making that can put its weight into place. This is why, per Annie Lowrey, the foreign policy job “will end up being the vastly more influential one — Ashton will control thousands of civil servants and a large budget.” Jean-Claude Trichet is one of the most important people on the planet, not because he’s famous, but because the European Central Bank has real responsibilities and the power to do things. Ashton will have some real authority, and that will make her important. Van Rompuy, meanwhile, will be able to wield some influence on the world stage if-and-only-if he’s able to forge a consensus of EU national leaders to back some course of action or another. Under the circumstances, a consensus-builder figure isn’t an alternative to a strong leader—the only way the office he’s picked for can possibly be strong is through consensus-building.

Senator John McCain’s future in the U.S. Senate may be a little less assured than previously thought.

A new Rasmussen Reports telephone survey of likely 2010 Republican Primary voters in Arizona finds the longtime incumbent in a virtual tie with potential challenger J.D. Hayworth. McCain earns 45% of the vote, while Hayworth picks up 43%.

This seems like pretty much terrible news for the world. The most likely path between Point A and Senate passage of a reasonable climate bill is for McCain to rediscover his interest in the issue. But that’s not the sort of thing a Senator worried about a right-wing primary challenge is likely to do. It would be different if, say, Janet Napolitano were mounting a strong challenge for the seat, but instead Democrats have no major contender in the field.

A CNN/Opinion Research Corp. survey released Friday morning indicates that 38 percent of the public blames Republicans for the country’s current economic problems. In May, 53 percent blamed the GOP. According to the poll, 27 percent now blame the Democrats for the recession, up 6 points from May, and 27 percent now say both parties are responsible.

I’ll just note that this highlights one important respect in which the filibuster undermines democratic accountability. It’s a good thing for the public to hold Democrats responsible for results even if the problems the Democrats are dealing with began under GOP rule. That instinct creates appropriate incentives for incumbent politicians to focus on solving problems rather than on allocating blame. But giving defeated electoral minorities veto power over large elements of national policy tends to undermine this dynamic. What’s wanted is an opportunity for the Obama administration to take its best shot at fixing the economy, followed by an “accountability moment” in which failure is decisively punished. Instead, especially if the GOP picks up two or three Senate seats in 2010, we’re likely to get a muddle that refocuses politics on blame-shifting efforts.