1. The Personal Toll TARP Exacted. Laura Blumenfeld profiled Neel Kashkari for the Washington Post – the Treasury employee and Hank Paulson confidante who presided over TARP and assisted with much of the government’s response to the bailout who is now “detoxing” from Washington by working with his hands in an isolated retreat. The piece focuses not on what happened and the enormous impact, but on the personal toll this crisis exacted on Kashkari and those around him: the heart attack by one of his top aides; the emotional breakdowns; the trouble in his marriage as he didn’t come home for days, sleeping on his office couch and showering in the Treasury’s locker room:
Thoughts tended toward the apocalyptic. During midnight negotiations with congressional leaders, Paulson doubled over with dry heaves. A government economist broke into Kashkari’s office sobbing, “Oh my God! The system’s collapsing!” Kashkari counseled her to focus on things they could control. (Minal: “So you offered her a bag of Doritos.”)
“We were terrified the banking system would fail, but the thing that scared us even more was, what would we do the day after? How would we take over 8,000 banks?”
The piece seems to ask us to feel pity for these men and women who toiled under difficult circumstances, but it seems inappropriate to feel pity for those who assume power because they also feel its heavy weight. But the piece acknowledges that Kashkari himself seeks to get back to Washington again, “Because there’s nowhere else you can have such a large impact — for better and for worse.” Lionize them for their heroic sacrifices if you will, but there is no place for pity. Those who choose to take on the burdens of power should not be pitied because it proves too weighty.
2.New Ideas. The New York Times briefly discusses the Year in Ideas. Some of the more interesting entries:
Guilty Robots which have been given “ethical architecture” for the American military that “choose weapons with less risk of collateral damage or may refuse to fight altogether” if the damage they have inflicted causes “noncombatant casualties or harm to civilian property.”
The Glow-in-the-Dark Dog (named Ruppy) that emits an eerie red glow under ultraviolet light because of deliberate genetic experiment.
Applying the Google Algorithm that generates the PageRank which first set Google apart from its competitors to nature, and specifically to predicting what species’ extinctions would cause the greatest chain reactions.
Zombie-Attack Science in which the principles of epidemiology are applied to zombies.
3. Obama’s Afghanistan Decision. Fareed Zakaria and Peter Beinart both tried to place Obama’s Afghanistan decision into perspective last week in important pieces. Both of them saw in Obama’s clear-eyed understanding of America’s power shades of the foreign policy brilliance that was Richard Nixon and Henry Kissinger. Zakaria:
More than any president since Richard Nixon, he has focused on defining American interests carefully, providing the resources to achieve them, and keeping his eyes on the prize.
Nixon stopped treating all communists the same way. Just as Obama sees Iran as a potential partner because it shares a loathing of al-Qaeda, Nixon saw Communist China as a potential partner because it loathed the U.S.S.R. Nixon didn’t stop there. Even as he reached out to China, he also pursued détente with the Soviet Union. This double outreach — to both Moscow and Beijing — gave Nixon more leverage over each, since each communist superpower feared that the U.S. would favor the other, leaving it geopolitically isolated. On a smaller scale, that’s what Obama is trying to do with Iran and Syria today. By reaching out to both regimes simultaneously, he’s making each anxious that the U.S. will cut a deal with the other, leaving it out in the cold. It’s too soon to know whether Obama’s game of divide and conquer will work, but by narrowing the post-9/11 struggle, he’s gained the diplomatic flexibility to play the U.S.’s adversaries against each other rather than unifying them against us.
“He reminds me of a chess grandmaster who has played his opening in six simultaneous games,” Kissinger said. “But he hasn’t completed a single game and I’d like to see him finish one.”
What would happen if the deficit countries did slash spending relative to incomes while their trading partners were determined to sustain their own excess of output over incomes and export the difference? Answer: a depression. What would happen if deficit countries sustained domestic demand with massive and open-ended fiscal deficits? Answer: a wave of fiscal crises.
While he says both sides have an interest in an orderly unwinding of this arrangement, both also have the ability to resist:
Unfortunately, as we have also long known, two classes of countries are immune to external pressure to change policies that affect global “imbalances”: one is the issuer of the world’s key currency; and the other consists of the surplus countries. Thus, the present stalemate might continue for some time.
6. War & Peace. Obama’s Nobel Prize acceptance speech was an audacious defense of American power and ideals. If you read nothing else on this list, read this.
Of course, such anti-polar bear sentiment doesn’t exist beyond The Colbert Report and satire of global warming denialists.
Oh, wait. I forgot about Sarah Palin, populist tribune of all that is good, who has taken a vehemently anti-polar bear stance, writing in yesterday’s Washington Post:
As governor of Alaska, I took a stand against politicized science when I sued the [Bush administration] over its decision to list the polar bear as an endangered species…
[digg-reddit-me]I love subscribing to TownHall.com’s emails. They are often good for a chuckle.
But what truly surprises me is the absolute contempt they show for their readers. Obviously, the website promotes political lies and makes no attempt to disguise this. But, as conservatism today has devolved into a reality-show equivalent of thrillers like The Da Vinci Code or any Vince Flynn novel – complete with ominous music that would play in the background if these novels are movie-fied – the fictional world created by these lies seems to provide enjoyable entertainment.
But TownHall.com apparently believes its readers will not only gullibly accept lies that confirm their political convictions, but are gullible enough to invest money in all sorts of shady enterprises and get-rich-quick schemes. Back in August, I posted one such email – in which TownHall.com allowed an advertiser to use its brand and email list to send out a promotion for a newsletter suggesting that you too could get “A potential 6-figure fortune within 12 to 24 months” by investing in Constitution Mining Corp. Nearly 5 months after this email – but to be fair, less than the 2 years they are talking about – Constitution Mining Corp. has increased in value from $1.25 per share on the day of the post to $1.53 today. A significant increase, but nowhere near the 430% return discussed in the email.
How a Ruthless Government
Conspiracy Could Make You
$97,500 Richer by March 2010
*(The following true story will make you mad as hell. It could also make you very rich…)
The email, when printed out, was 21 pages long. But in its 21 pages, it did not manage to mention the name of the company it was promoting. To get that, you need to buy the $49 subscription fee for BreakAway Investor. Of course, Michael Robinson, editor of BreakAway Investor, didn’t make that clear until about 15 pages in. But in the meantime, Robinson spun a fantastical story of a dark, nefarious conspiracy – which you too could become rich by participating in!
I can’t emphasize enough how extraordinarily unique this situation is. In fact, the last time an opportunity this explosive… and this lucrative… came along was in 1933…
… right in the middle of the Great Depression…
… when a similar U.S. government “conspiracy” sent tiny military contractor EBC soaring 55,000%… turning a handful of people into multimillionaires.
Folks who got in early had the chance to turn a $5,000 investment into $2.5 million.
The opportunity I’ve uncovered today offers similar riches. And while a 55,000% return might take a while…
… folks who get in now — on the GROUND FLOOR — could be $97,500 richer by March 2010. Maybe a whole lot more…
[digg-reddit-me]See Part 1: An Introduction here. Parts 3 and 4 discussing the Democratic approach and then lessons from this moment of “welfare scleroris/imperial overstretch” coming tomorrow and Friday.
Republicans have called themselves, and are once again trying to position themselves, as the party of fiscal responsibility. This is the pendulum swing of deficit politics in its second repetition – as Republicans run up massive deficits during their time in power and then attempt to pass off the blame for raising taxes or cutting programs onto the Democrats who succeed them in office.
The political challenge the Republicans face is intriguing. Their ideology holds the solution to the deficit is to shrink the size of the government. Yet the Republican base consists of corporate America, the military, and the elderly – the largest beneficiaries of current government spending. Given this, it’s not surprising that while in power Republicans have expanded rather than shrinking government. Bush expanded Medicare further than anyone since LBJ created it all while cutting taxes and engaging in two wars and allowing Congress to engorge itself with discretionary spending increases never before allowed. Bush was not an isolated example. Like his apparent role model, Ronald Reagan, he saw deficit spending as a way to win politically in the short term as you gave everyone what they wanted – and protected those interest groups who supported you – while in the long term the incredible irresponsibility would force government to shrink, and perhaps even discredit the idea of a competent or sustainable government program. In other words, deficits were the way to “starve the beast.”
Republicans did not jettison this approach along with Bush when they began to repudiate his legacy. John McCain – for all his talk of fiscal rectitude – offered more of the same in his campaign agenda. He proposed dramatic tax cuts without commensurate spending cuts (while masking this by proposing the elimination of pork barrel spending which represents a minuscule portion of the federal budget.) As an alternative to the stimulus, McCain and the Republicans attempted the same trick – attacking the plan for adding to the deficit with spending while proposing a plan that would add even more to the deficit through tax cuts (which the Congressional Budget Office determined was a less effective way to stimulate the economy.) For Republicans, increasing the deficit by cutting taxes is “fiscally responsible” – while increasing the deficit with spending is “generational theft.”
What’s tricky is how Republicans position themselves with regards to the looming fiscal crisis. The business conservatives who make up an influential portion of the Republican base tend to propose pragmatic but politically impossible solutions like cutting spending to the other core Republican constituencies – the elderly and the military, and sometimes, even the tax and other subsidies to big corporations. The other groups seem primarily concerned with ensuring that their own government dollars continuing to grow. The past two times a liberal has taken office following several terms of extreme fiscal irresponsibility by a Republican though, a semi-independent movement has sprung up, thus changing the political dynamics in the Republican party. This movement of citizens concerned about the size of government, of government debt, and especially of liberals being in charge of this government (which suddenly seems more intrusive now that it is in the control of those they don’t sympathize with) was incarnated in Ross Perot’s two presidential campaigns, the 1994 Republican Revolution, and today, the Tea Parties. In each instance, this movement has coalesced around an inchoate frustration with the way things are coupled with the remarkably fixed position of opposing everything the Democrats do, opposing tax increases, and supporting the reduction of the deficit. Though this logically must lead to cutting government programs, which programs will be cut always remains vague which works well enough until a Republican gets in power.
To balance and rally these constituencies while out of power – the anti-tax fiscal hawks, the elderly relying on government programs, the military reliant on government spending, and the corporations who profit from government favors – Republicans have adopted a framework whereby they condemn any new spending as “generational theft” while protecting the status quo. Within this framework, Republicans claim their protection of the status quo which is screwing over my generation is actually about protecting my generation. This language also comforts the elderly who don’t wish to see any reduction in their benefits. Under the Republican approach, the only elderly who will see a reduction in benefits under the Republican plan are the eventual elderly of the younger generations – as the government programs they are now paying for cease.
The challenge Obama has given to the Republicans though is to propose a solution to the looming fiscal crisis through health care reform. Republicans have responded by claiming that the plans will add to the deficit (contrary to the Congressional Budget Office) while at the same time they have been attacking any measures in the plan which might actually cut costs. For example, Senator Coburn has said, “If you’re a senior and you’re on Medicare, you better be afraid of this bill” – which is a difficult position to maintain while at the same time holding that any deficit spending today is “generational theft.” But it is of course, the only political answer they have.
The Republicans – for short term political expediency – are creating an interesting political dynamic (and an impossible situation for the country.) They are telling the elderly that any spending that adds to the deficit is stealing from their grandchildren and children – while telling them to be afraid of any cuts to the programs they like. Meanwhile, as they filibuster any attempts to alleviate the situation, they inculcate the belief among the younger generation that the government cannot do anything right – pointing to the approaching fiscal disaster as proof. The hope must be that if they are correct that this disaster cannot be averted, their obstruction of any attempt to avoid it will be forgiven, especially if the disaster itself discredits the government, thus bringing the younger generation ideologically closer to the Republican position.
Thus is the logic of deficit politics and starve-the-beast governance.
Not to overdramatize, but: in a way the papers are betting their reputations with these articles. The Times, that climate change is simply a matter of science versus ignorance; the Post, that this is best treated as another “-Gate” style flap where it’s hard to get to the bottom of the story.
[digg-reddit-me]Last week I wrote a semi-irresponsible post about how Republicans are waging a generational war* by opposing fiscally responsible health care legislation. It was a variation on the common refrain from the right that all sorts of government programs are in fact “generational theft.” This memorable phrase was coined by John McCain to describe the stimulus bill, but there is nothing in principle to distinguish it from all deficit spending. Bill Frezza writing in Real Clear Markets in a more recent example of this right wing meme called Social Security “a Ponzi scheme” which in which the younger generations are being screwed. The general message of the “generational theft” meme is that the young shouldn’t expect to benefit from government spending – but should only see it as a burden.
Few would dispute that it is my generation that is being screwed if our current policies remain in effect. The deficit we face now is big but manageable. But the real reason we are being screwed is that the projected deficits are not manageable, specifically because of the rising costs of Medicare. (Graph source: CBO.)
We know that projected spending is unsustainable: so the question moves to why has this issue not been addressed? To answer that, you need to look at who benefits from the status quo and wants to protect it. The federal budget and tax system consists primarily these components:
Entitlement spending on the elderly, mainly Medicare and Social Security, which together represent the largest projected expenditures of the federal government. (For 2010, Medicare about $453 billion and Social Security about $695 billion.)
Military spending. (For 2010, $664 billion. Or as commentor John Rose points out, including non-DOD military spending, the total would come to somewhere in the $900 billion range.)
Medicaid and other aid to the poor. (For 2010, $290 billion on Medicaid; some portion of the $571 billion in “other mandatory spending.”)
Subsidies to corporations in the form of tax loopholes which makes our effective corporate tax rate among the lowest in the world (even while the nominal rate is among the highest.) Also, more traditional subsidies to large corporations in favored industries, specifically agriculture. (More than $75 billion on tax subsidies; some portion of the $571 billion in “other mandatory spending.”)
Education and infrastructure. (Combined, for 2010, about $120 billion, plus some portion of the $571 billion in “other mandatory spending.”)
People of all political stripes acknowledge the approaching fiscal apocalypse, but each party’s responses and proposed solutions have been shaped by their core constituencies and their ideology.
The next two posts will explore each party’s approach in more depth, but in short: Republicans, believe government is the problem; yet as the currently elderly, along with big corporations and the military are core interest groups and the primary beneficiaries of the status quo, they implicitly propose a deal whereby they maintain the status quo today – and then eliminate or drastically reduce entitlement spending on future elderly, the young Democrat-voting generation now, as well as, presumably, shrinking the government by eliminating other spending programs that do not benefit their interest groups.
The Democrats meanwhile, believing government programs can work, propose a three-step approach culminating in a “grand bargain,” to finesse the issue:
Get the GDP growing again. A growing economy expands the tax base and reduces welfare spending, and – most important – reduces the size of the deficit in relation to the economy making it easier to pay off.
Curb the growth in health care costs – thus alleviating the biggest factor leading to the explosion of the deficit.
With these two factors relieving pressure, strike a Grand Bargain. Either through a technocratic commission or through bipartisan legislation, push through some combination of taxes and adjustments to current programs to make them sustainable.
Both of these plans are risky. But any path we choose now will be risky – due to the incredible and seemingly deliberate starve-the-beast-style (see next post) fiscal irresponsibility of George W. Bush’s administration, coupled with a downturn and the looming fiscal crisis.
Part 2 on the Republican approach found here. Parts 3 and 4 discussing the Democratic approach and then lessons from this moment of “welfare scleroris/imperial overstretch” coming tomorrow and Friday.
*I know that’s a bit unfair, a bit too pithy to be true. But the simple messaging – the oversimplification – can be a useful tool to get people to think if it is not used to reinforce the conventional wisdom. All too quickly, using such an oversimplified scheme, one can come to the wrong conclusions – which is part of the reason George Orwell in his “Politics and the English Language” stressed using original phrases. The first time one encounters such a phrase – it can prompt thought. But all too quickly, it solidifies into dogma and ideology.
[Image by Vermin Inc licensed under Creative Commons.]
A more proper post coming later, but for the moment, I wanted to provide you with two graphs and one poll result.
First, from the always insightful Nate Silver of FiveThirtyEight.com, who points out that all these polls touting the fact that Americans are almost evenly split on the health care legislation before Congress, 12% of those counted against the bill are those that want it to move farther to the left:
By “left,” Silver means those who think the bill doesn’t go far enough to reform health care – though I suppose those could be people on the right as well. Either way, breaking down the data like this gives a lot more insight than the headline numbers.
Via Andrew Sullivan, an enterprising individual mapped out the “geography of the recession,” with the mounting job losses per county places on a map of the United States and animated over time.
Finally, in a rather misleading piece of analysis, Andrew Malcolm of the LA Timesuses recent poll data to suggest that Sarah Palin has a shot in an electoral race against Obama. Rather than looking at head-to-head polling results, he looks at the favorability ratings of Sarah Palin, Barack Obama, and Dick Cheney. He points out that Obama’s are dropping and Palin’s and Cheney’s are rising. Perhaps this has something to do with the fact that these last two individuals have no power and thus those favoring them are only supporting the vague promise of an individual. But – on the other hand – this does demonstrate that Palin and Cheney have become the voice of the Republican Party, and does bode well for my prediction that at least one of the two will be on the Republican ticket come 2012. Those suggesting we write them off and ignore them because they represent fringe views are engaging in wishful thinking.
What strikes me about the attacks is how scattershot they are. The right wants to argue both that Obama is a mean-ass Chicago pol and a push-over… The inconsistencies are legion, because, I suspect, Obama’s enemies have yet to get a single, compelling narrative that rings true. They didn’t manage it in the campaign and they have not managed it since. He’s too big and interesting a figure to be caricatured that way. [my emphasis]
I think both Harris and Sullivan have missed something though – a single, compelling narrative that has been developing about Obama, and one that rings true to a significant subset of Americans. I call it the Unified Theory of Obama. It involves several, though not all, of these narratives listed by Harris. Charles Krauthammer wrote the best single synthesis of this theory in a cover piece for The Weekly Standard last month entitled “Decline is a Choice.” The piece was a brilliant example of “the Big Lie” which is plausible only after a leap of faith, but which because of its sheer audacity affects the entire political conversation. The core “insight” Krauthammer offered was that Obama’s liberalism is a deliberate attempt to undermine America’s power in the world both domestically and abroad. Postulating that the decline of American power is a choice, he suggests that Obama is deliberately choosing to make America decline in power.
You can see this narrative coming together if you listen to enough talk radio. See this interview with Rush Limbaugh; this article by Charles Krauthammer; this speech, upon which the article was based; this interview with Krathammer; and this profile of Krauthammer in the National Review which oddly is behind a firewall unlike most of National Review‘s content.) You can see the narrative animating the statements of Dick Cheney, Rush Limbaugh, of Charles Krauthammer, of Sean Hannity, and of Sarah Palin and Glenn Beck (though these last two also have potential to go off script.)
The narrative goes like this:
Obama is the most left-wing politician to gain power in American history and is attempting “a radical remaking of the whole system.” Never have we seen “such radical leadership at such a high level of power.” What Obama is proposing is so truly radical, no Republican ever would or has and involves “government takeovers” of the internet (net neutrality), health care, the automotive industry, the financial industry, and everything else by extension.
Obama has been successful because he is superficially charming and has concealed his true self from the nation, and because of the ruthless political tactics of his aides (with especial attention paid to Rahm Emanuel) who engage in “Chicago-style” hardball tactics.
He is incredibly naive, a ditherer, and weak – but does not realize any of this because of his own excessive vanity. While he thinks he is being strategic in addressing certain issues, he is “so naïve that I am not even sure he’s able to develop a doctrine.”
This narrative is audacious. And it’s compelling. And it ties so many anti-Obama memes together. It goes well with the ominous music constantly playing on Sean Hannity’s television show. It goes well with the transformation of right wing politics and media into a form of entertainment in which news is presented as if it is the plot of a thriller.* This narrative explains why Obama is popular around the world. (“Europeans like to see the hegemon diminished, and Obama is the perfect man to do that.”) It provides an explanation (about the only plausible one) for why Republicans should be so adamant in their opposition to everything Obama proposes. It provides a storyline that can rally the base behind any alternative candidate. It taps into the inchoate sense that “something’s wrong.” It provides a scapegoat for the end of America’s unipolar moment. Those who feel they are “losing the America they knew” are also given a scapegoat. (“America was once their country. They sense they are losing it. And they are right.”) It plays off of the foundation of anti-Obama attacks from the 2008 campaign – that he was somehow foreign, un-American, radical. The various factual inaccuracies in this narrative are unimportant – because it is fundamentally so at odds with reality that it requires a leap of faith to believe in the first place.
All of these pieces are directed only to the faithful. They aren’t meant for the general public. They are meant to keep the faithful in line. And despite the fact that Krauthammer has articulated this Unified Theory of Obama to the faithful, his columns have not pushed this rather extreme take on the President. Instead, Krauthammer chips away at Obama with smaller pieces attacking this and that, while for the sake of each column conceding that Obama might not be an anti-American radical intent on destroying the nation, as he tries to get the public to see this bigger picture one piece at a time.
This, I believe, is the narrative that the next Republican nominee will carry into the 2012 election in some form. I believe it will founder specifically because most Americans will balk at someone characterizing the president as anti-American. But Krauthammer and his allies have several years to try to figure out how to sell this message – how to convince a majority of Americans to accept it, or barring that how to rally the base using it while keeping it away from the rest of us. And The Weekly Standard has already determined the logical proponent of this Unified Theory of Obama, the logical response to Obama’s “new liberalism – someone to carry Republicans to victory in 2012 by leading a “new populist” movement:
Someone who will give voice to the millions who don’t want government aggrandizing the powerful; who don’t want government risking dangerous fiscal imbalances; who do want public policies that create the conditions for a general prosperity. Someone, in other words, who can play the same role in contemporary politics that Jackson, Bryan, and Reagan did in the past.
*Not my own idea. It’s from a piece in The New Republic from this November which I can’t find online. Update: The piece by Jason Zengerle is now online.
