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Monday, May 3rd, 2010

Last week, I labeled this article a “Must-Read” — saying it provided “a coherent and reality-based conservative look at America’s structural deficit.”

As commentor John Rose points out, the piece has some glaring flaws. For one, there is only one mention either agricultural subsidies or the defense budget:

Every program should be on the table, including those as politically sensitive as agricultural subsidies, Social Security, and defense.

Throughout the rest of the piece, Marron focuses on total spending and specifically Social Security, Medicare, and Medicaid. No look at this topic can be complete without discussing the defense budget. But Marron makes the best contribution from the right to this national conversation dominated by Peter Orszag on the one side, the marginalized far left claiming any talk of the deficit is a cover to screw the working class for Obama’s corporate agenda on another, and the populist right not really participating as they seem to believe that this all can be fixed by cutting waste while leaving Social Security, Medicare, and the defense budget alone.

Of course, the most important thing to me personally, so that I can use it as a sledge against  is that Donald B. Marron — from a conservative (rather than populist right wing) perspective — confirms the essentials of the story I told in my series on “real fiscal responsibility” and each part. (Parts 1, 2, 3, and follow-up.)

Marron for example directly contradicts one of the avowed sources of hysteria on the right — Obama’s short term deficit — saying:

Running deficits can certainly be appropriate — and even beneficial — at times of particular stress, such as wars and recessions. But in the long run, persistent large deficits and growing debts undermine our nation’s prosperity.

Marron points out that the problems with Social Security can be fixed with some common-sense reasonable measures — but that Medicare and Medicaid — because of growing health care costs — are spiraling out of control:

While Social Security provides benefits in cash, Medicare and Medicaid pay for a service — the cost of which is not wholly within the government’s control and is also growing at an explosive rate. Despite some rhetoric about solving the problem once and for all, the reality is that no one really knows what to do to rein in federal health spending. There are lots of ideas — strengthening consumer incentives, changing provider incentives, investing in prevention, squeezing doctors and hospitals, or moving to a single-payer system — but no one can be sure how much any of these measures would actually “bend the cost curve” over the long run. Policymakers should therefore approach health spending as a research-and-development challenge, not as a one-time matter of setting specific policy dials. Experimentation, learning, and reform will be essential as we pursue policies to reduce the growth of health-care costs. Budget-setters can take some immediate steps to reduce the growth of health spending (e.g., by limiting Medicare payment rates), but this is a dilemma that will require ongoing attention.

The populist right lives in a world in which “Other Spending” is what is out of control.

Marron makes the best conservative case against the Obama administration’s relative fiscal responsibility that can be made:

Finally, our leaders should obey the first law of holes: When you are in one, stop digging. Unfortunately, the current climate in Washington encourages the exact opposite: Dig as fast as you can while there’s still time.

That impulse is evident in many recent policy initiatives. Lobbyists are already arguing that various temporary provisions in the 2009 stimulus bill should be made permanent. While the congressional committees with oversight of education spending have found a way to eliminate $80 billion from the federal student-loan program, they plan to use most of it to expand other spending, rather than to reduce the deficit. The committees in charge of energy and environmental policy are considering proposals that would create almost $1 trillion worth of carbon allowances over the next ten years — only to give away or spend 99% of that money. And then there is the Democrats’ health-care initiative, which would make a series of cuts to the budget only to use the savings to expand the federal government’s role in financing health care.

Marron gives no credit to the actual worth of the policies being pursued — cap-and-trade addressing the issue of global warming for example. Marron instead looks at each policy solely based on how it affects the budget.

And on health care, he is curiously silent. He makes it clear that this is the crux of the problem — but doesn’t evaluate or discuss the deficit reduction matters within the health care law recently passed — the many pilot projects meant to test different ways to bring down costs. You get the impression that he would oppose all non-stimulus spending the Obama administration has proposed — even if it reduced the deficit.

Ezra Klein though had a good rejoinder:

[T]he Center for Budget and Policy Priority’s Bob Greenstein made a nice point on this: The choice, he said, isn’t between solving the problem before the crisis hits and waiting for a crisis. Solving the problem requires doing more than the political system is able to do outside a crisis atmosphere. But making a start on the problem isn’t. And if you can make enough of a start, you can delay the crisis and/or mitigate its eventual severity. The problem is that people tend to dismiss doing a bit because it means we won’t do enough. But if we attempt to do too much, Greenstein said, we run a large risk of doing nothing at all, and that will be much worse.

But by providing a reality-based description of the structural deficit from a conservative perspective, Marron has made an important contribution to our political conversation and where it needs to go.

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Must-Reads of the Week: American Power, Inequality, 1 Billion Heartbeats, Hacking Life, Anthora Cups, Structural Deficit, Financial Doomsedays and Crises, China, the Tea Party’s Views on Immigration, and Lady Gaga

Friday, April 30th, 2010

There were a lot of good articles and posts I came across this week — so brace yourself…

1. The American Power Act. David Brooks makes the case for progressive reform — specifically the American Power Act regarding climate change:

When you read that history, you’re reminded that large efforts are generally plagued by stupidity, error and corruption. But by the sheer act of stumbling forward, it’s possible, sometimes, to achieve important things…The energy revolution is a material project that arouses moral fervor — exactly the sort of enterprise at which Americans excel.

Matt Yglesias had earlier this week critiqued Brooks (among others) for taking the exact opposite stance of the one he was adopting here:

Oftentimes in the Obama Era the difference between “reasonable” conservatives (David Brooks and Greg Mankiw often leading the charge) and reasonable liberals has been that reasonable liberals look at flawed legislation that would improve on the status quo and support it while “reasonable” conservatives look at flawed legislation that would improve on the status quo and oppose it, while claiming to support alternative flawed proposals that they don’t actually lift a finger to organize support for within their own ideological faction.

2. Inequality, social mobility, and the American Dream. The Economist had a good piece that can serve as a starting point for a post I’ll be writing soon on inequality, social mobility, and the American dream:

The evidence is that America does offer opportunity; but not nearly as much as its citizens believe.

Parental income is a better predictor of a child’s future in America than in much of Europe, implying that social mobility is less powerful.

3. The Science of Life. Jonah Lehrer for Seed magazine has a brilliant piece on how cities are like living organisms. As a side matter, he notes this beautifully poignant data point:

[A]n animal’s lifespan can be roughly calculated by raising its mass to the 1/4 power. Heartbeats scale in the opposite direction, so that bigger animals have a slower pulse. The end result is that every living creature gets about a billion heartbeats worth of life. Small animals just consume their lives faster.

4. Fine-tuning life. Gary Wolf for the New York Times Magazine explains how the accessibility of computers is creating data about every aspect of our lives — and of the efforts of some people to begin to catalog and find insights in their own data. Surprisingly, Lifehacker was never mentioned.

5. The Anthora Cup. Margalit Fox of the New York Times writes the obituary for Leslie Buck, the designer of the Anthora cup:

It was for decades the most enduring piece of ephemera in New York City and is still among the most recognizable. Trim, blue and white, it fits neatly in the hand, sized so its contents can be downed in a New York minute. It is as vivid an emblem of the city as the Statue of Liberty, beloved of property masters who need to evoke Gotham at a glance in films and on television.

6. Unified Theory of the Financial Crisis. Ezra Klein synthesizes various narratives into a unified theory of the financial crisis.

7. The Structural Deficit. Donald B. Marron provides a coherent and reality-based conservative look at America’s structural deficit. Absolutely a Must-Read.

8. The Financial Doomsday Machine. Martin Wolf dedicated his column in the Financial Times last week to describe the “financial doomsday machine“:

[T]he financial sector has become bigger and riskier. The UK case is dramatic, with banking assets jumping from 50 per cent of GDP to more than 550 per cent over the past four decades…The combination of state insurance (which protects creditors) with limited liability (which protects shareholders) creates a financial doomsday machine. What happens is best thought of as “rational carelessness”. Its most dangerous effect comes via the extremes of the credit cycle.

9. Realism on China. Stephen Walt explains his take on China’s strategic ambitions — and its inevitable rivalry with the United States and other regional powers.

10. The Tea Party & Immigration. Radley Balko explains his take on the widespread support among the Tea Party for the massive government power grab that is Arizona’s new immigration law:

It also makes a mockery of the media narrative that these are gathering of anti-government extremists. Seems like in may parts of the country they’re as pro-government as the current administration, just pro-their kind of government.

Coincidentally, I made that exact point about the Tea Party back in September 2009 entitled: These Protests Aren’t Against Big Government, But About Liberals Running the Government.

Andrew Sullivan piles on:

Worse, on the fiscal front, they’re total frauds. They have yet to propose any serious cuts in entitlements and want far more money poured into the military-imperial complex. In rallies, the largely white members in their fifties and older seem determined to get every penny of social security and Medicare. They are a kind of boomer revolt – but on the other side of that civil conflict, and no longer a silent majority. In fact, they’re now the minority that won’t shut up.

More and more, this feels to me like an essentially cultural revolt against what America is becoming: a multi-racial, multi-faith, gay-inclusive, women-friendly, majority-minority country.

11. Sovereign Debt Crisis. Felix Salmon and Paul Krugman are both very pessimistic about how Greece will get out of this crisis — and what it means for the global economy.

12. Lady Gaga’s Ambition. Brendan Sullivan for Esquire chronicles the life and ambitions of Lady Gaga:

“There is a musical government, who decides what we all get to hear and listen to. And I want to be one of those people.” The girl who said that didn’t yet have the number-one hits (although she had already written most of them).

She was not yet the creative director of the Haus of Gaga, which is what she calls the machine of more than a hundred creative people who work for her. She didn’t make that statement in an interview or from the stage. She made it in 2007, when she was a go-go dancer sewing her own outfits and I was her DJ. She wrote it in one of my notebooks…

Lady Gaga is a student of fame, and the fame she studies most is her own — being famous seems to both amuse and fascinate her.

[1st image by me; 2nd image by LarindaME licensed under Creative Commons.]

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Posted in Barack Obama, China, Criticism, Domestic issues, Economics, Financial Crisis, Foreign Policy, Green Energy, Immigration, Life, New York City, Politics, The Bush Legacy, The Opinionsphere, The Web and Technology | 52 Comments »

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