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Barack Obama Domestic issues Economics Energy Independence Financial Crisis Foreign Policy Green Energy Health care Politics

An Ambitious Presidency

In his interview with Time magazine, Barack Obama listed those issues on which he believes his first two years as president should be judged:

Domestic Policy

  • Have we helped this economy recover from what is the worst financial crisis since the Great Depression?
  • Have we instituted financial regulations and rules of the road that assure this kind of crisis doesn’t occur again?
  • Have we created jobs that pay well and allow families to support themselves?
  • Have we made significant progress on reducing the cost of health care and expanding coverage?
  • Have we begun what will probably be a decade-long project to shift America to a new energy economy?
  • Have we begun what may be an even longer project of revitalizing our public-school systems so we can compete in the 21st century?

Foreign Policy

  • Have we closed down Guantánamo in a responsible way, put a clear end to torture and restored a balance between the demands of our security and our Constitution?
  • Have we rebuilt alliances around the world effectively?
  • Have I drawn down U.S. troops out of Iraq, and have we strengthened our approach in Afghanistan — not just militarily but also diplomatically and in terms of development?
  • Have we been able to reinvigorate international institutions to deal with transnational threats, like climate change, that we can’t solve on our own?

Intangibles

  • And, two years from now, can the American people say: “Government’s not perfect; there are some things Obama does that get on my nerves. But you know what? I feel like the government’s working for me. I feel like it’s accountable. I feel like it’s transparent. I feel that I am well informed about what government actions are being taken. I feel that this is a President and an Administration that admits when it makes mistakes and adapts itself to new information, that believes in making decisions based on facts and on science as opposed to what is politically expedient.” Those are some of the intangibles that I hope people two years from now can claim.

So, basically, a rather limited agenda here.

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Criticism Domestic issues The Opinionsphere

Don (George) Will Tilts At Imaginary Liberals

Just then they came in sight of thirty or forty windmills that rise from that plain. And no sooner did Don Quixote see them that he said to his squire, “Fortune is guiding our affairs better than we ourselves could have wished. Do you see over yonder, friend Sancho, thirty or forty hulking giants? I intend to do battle with them and slay them. With their spoils we shall begin to be rich for this is a righteous war and the removal of so foul a brood from off the face of the earth is a service God will bless.”

“What giants?” asked Sancho Panza.

“Those you see over there,” replied his master, “with their long arms. Some of them have arms well nigh two leagues in length.”

“Take care, sir,” cried Sancho. “Those over there are not giants but windmills. Those things that seem to be their arms are sails which, when they are whirled around by the wind, turn the millstone.”

George Will – my favorite columnist – had a stunningly wrong-headed column this weekend on the Fairness Doctrine. I certainly would expect him to dislike the long-vanquished doctrine.

What I wouldn’t expect was for Will to write an entire column to refute a straw man argument used merely to bash liberals. Will constantly invokes what liberals want to do regarding this – but cites not a single one in his piece. In fact, Marin Cogan of The New Republic was unable to find any congressperson pushing legislation to this effect or any liberal policy wonks promoting a return to the Fairness Doctrine.

Will though manages to be an expert on what these anonymous liberals think:

And these worrywarts say the proliferation of radio, cable, satellite broadcasting and Internet choices allows people to choose their own universe of commentary, which takes us far from the good old days when everyone had the communitarian delight of gathering around the cozy campfire of the NBC-ABC-CBS oligopoly. Being a liberal is exhausting when you must simultaneously argue for illiberal policies on the basis of dangerous scarcity and menacing abundance.

If reactionary liberals, unsatisfied with dominating the mainstream media, academia and Hollywood, were competitive on talk radio, they would be uninterested in reviving the fairness doctrine. Having so sullied liberalism’s name that they have taken to calling themselves progressives, liberals are now ruining the reputation of reactionaries, which really is unfair.

Next up would be George Will’s column on how Net Neutrality would be like a Fairness Doctrine for the internet.

Matt Yglesias summed up this Fairness Doctrine controversy best a few weeks ago:

Political movements mischaracterize the other side’s general goals all the time. But I’ve never heard of anything like the current conservative mania for blocking a particular legislative provision that nobody is trying to enact.

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Barack Obama Domestic issues Economics Election 2008 Energy Independence Financial Crisis Green Energy Politics The Opinionsphere

The Generation That Sucked

[digg-reddit-me]With apologies to all those Baby Boomers I know – I, of course, don’t mean you.

There is something so very right about trashing the Baby Boom generation. Tom Friedman – a member of said generation – suggests a few names in his column on Sunday:

“The Greediest Generation?” “The Complacent Generation?” Or maybe: “The Subprime Generation: How My Parents Bailed Themselves Out for Their Excesses by Charging It All on My Visa Card.”

Barack Obama himself wrote in The Audacity of Hope:

In the back and forth between Clinton and Gingrich, and in the elections of 2000 and 2004, I sometimes felt as if I were watching the psychodrama of the baby boom generation — a tale rooted in old grudges and revenge plots hatched on a handful of college campuses long ago.

Perhaps this passage is what led Andrew Sullivan to describe Barack Obama’s candidacy (back when he was a long shot) as America’s only chance for a much needed truce in the long civil war fought by the Baby Boom generation:

…the most persuasive case for Obama has less to do with him than with the moment he is meeting. The moment has been a long time coming, and it is the result of a confluence of events, from one traumatizing war in Southeast Asia to another in the most fractious country in the Middle East. The legacy is a cultural climate that stultifies our politics and corrupts our discourse.

Obama’s candidacy in this sense is a potentially transformational one. Unlike any of the other candidates, he could take America—finally—past the debilitating, self-perpetuating family quarrel of the Baby Boom generation that has long engulfed all of us. So much has happened in America in the past seven years, let alone the past 40, that we can be forgiven for focusing on the present and the immediate future. But it is only when you take several large steps back into the long past that the full logic of an Obama presidency stares directly—and uncomfortably—at you.

At its best, the Obama candidacy is about ending a war—not so much the war in Iraq, which now has a mo­mentum that will propel the occupation into the next decade—but the war within America that has prevailed since Vietnam and that shows dangerous signs of intensifying, a nonviolent civil war that has crippled America at the very time the world needs it most. It is a war about war—and about culture and about religion and about race. And in that war, Obama—and Obama alone—offers the possibility of a truce.

The point of all of this is that the Baby Boom generation was quite terrible. While the “Greatest Generation” tackled a Great Depression and won a World War, and then came home and created an age of prosperity and the United Nations – and then, by the late 1950s and early 1960s, fought for and won civil rights, finally erasing the official discrimination against African Americans that had blighted America since it’s inception – the Baby Boomers – the children of the Greatest Generation – started an American civil war, focused initially on Vietnam, and then later on the role of government, on abortion, and on religion’s place in public life. While these are worthy issues to argue about, the culture war of the Baby Boomers kept them from tackling many of the urgent challenges of their day – from global warming to infrastructure deterioration to America’s place in the world. As the Baby Boomers entered adulthood, their national cohesion that was evident in the Greatest Generation dissolved into squabbles and then by 1968, into a virtual civil war.

Since the 1960s, America has failed to invest in our roads, our utilities, our energy infrastructure; America’s dependency on foreign oil was demonstrated in the 1970s, yet we did nothing and blamed it on Jimmy Carter’s bad leadership; at the same time, a radical brand of extremist Islam began to grow – and our government encouraged it, seeing it as a tool to use against the Soviet Union; some two decades ago, global warming was accepted as a fact by the greatest majority of scientists, yet we have failed to take any significant steps.

Instead, since the late 1960s, we have fought and re-fought the war over the war in Vietnam. What happened in the rice paddies and jungles of that nation are almost irrelevant to the culture war. What is remembered is where people stood while they were here. John Kerry served with distinction, but spoke against the war when he came back – forever putting him on the liberal side of the war. Dick Cheney got one deferment after another, avoiding serving at all – yet he was enthusiastic about the war as long as he himself wasn’t fighting, making him a conservative. John McCain was captured and came home a hero and George W. Bush served stateside in a cushy National Guard unit for the sons and daughters of those politicians influential enough to prevent their children from serving – yet both are equally conservative because they both were annoyed at the hippies protesting. Barack Obama was only a boy, but as Sarah Palin never failed to mention, he served on a charitable board with someone who decided to fight an insurgency against the American government to oppose the war – which by association made Obama a far-left radical. Much less important than what these Baby Boomers actually did is how they felt about the war.

It is possible to determine with a great degree of accuracy whether a Baby Boomer is a Democrat or Republican simply by asking their position on a war that ended almost forty years ago. Those who protested the war and stood against it took one side in the culture war; those who supported the war took the other side. As a rule, the Democrats – Kerry, Clinton, Gore – were against the war. The Republicans – Bush, McCain, Cheney – were for it. (This was despite the fact that it was “the best and the brightest” under Democrats John Kennedy and Lyndon Johnson who started the war.)

The obvious problem is that these divisions are barely relevant anymore.

The Baby Boomers pissed away the prosperity their parents bequeathed to them and squandered the opportunities presented to them – and now are busy using their children’s future earnings (our future earnings) to buy their way out of the mess they have created. They avoided the challenges of their times and found people to blame. They focused on OJ Simpson, Britney Spears, Madonna, and Monica Lewinsky – on abortion, Vietnam, gays, and religion – and not on global warming, on campaign finance, on the corruption of our political process, on an overleveraged economy.

After decades of avoiding systematic problems – as the solutions became embroiled in the ongoing culture war – we now must face them. With two wars in the Mid-East, a failing world economy, a growing threat of catastrophic terrorism, and whatever else may come our way, procrastination is impossible. Now it’s time for us to try to salvage this wreck.

That’s what the 2008 election was really about. And that’s our challenge. It remains to be seen if we’re up to it.

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Barack Obama Domestic issues Economics The Opinionsphere

The Biggest Decision Obama Will Make

Friedman:

The Obama presidency will be shaped in many ways by how it spends this stimulus. I am sure he will articulate the right goals. But if the means — the price signals, conditions and standards — that he imposes on his stimulus are not as creative, bold and tough as his goals, it will all be for naught. In sum, our kids will remember the Obama stimulus as either the burden of their lifetime or the investment of their lifetime. Let’s hope it’s the latter.

I think Tom Friedman understates matters here (which is unusual for him). Aside from some unexpected crisis (which of course is likely), Barack Obama’s presidency will not merely be “shaped” by how it spends this stimulus – but it’s historical significance will be determined by how it spends it. As David Brooks reccomended last week, channeling David Porter of Harvard Business School: “do nothing in the short term that doesn’t serve a long-term goal.”

Health care. Green energy. Energy infrastructure. Transportation infrastructure. Education. Barack Obama has laid out clear goals in all of these areas except the latter.

A crisis is always a time of opportunity – for mischief or ill gains if used exploitively; for needed reform if used wisely. Coming into office, Barack Obama will have more opportunity than any president – I would argue – in history. What Obama is able to accomplish with this opportunity will be his legacy.

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Barack Obama Domestic issues Economics Energy Independence Environmental Issues Financial Crisis Green Energy Humor Videos

The Detroit Investment Group

[digg-reddit-me]Jon Stewart pointed out against last night how non-constructive the political debate regarding the bailout of the Big Three Automakers has been:

Clearly, politicians are applying a double standard. But I think the hypocrisy is worse than Stewart suggests – because the product financial companies are supposed to be creating is profit with the risks associated thoroughly managed and quantified. Their product has proved to be far more defective than the cars produced by the Big Three, as the financial products have not just malfunctioned, but acted as a virus spreading the failures around to everyone.

Stewart previously pointed out how the first story regarding the bailout of the Big Three focused almost exclusively on the method of transportation used by the CEOs of the auto companies to get to hearing instead of any substantive issues. The real controversy has barely been discussed:

Corporations, whose primary purpose is to amass wealth by any means available for their owners (and who always manage to simultaneously amass wealth for the managers) cannot be trusted with public money. There is no public purpose to such profit-making. The public value of a corporation comes from it’s incidental activities – the means by which it is able to amass it’s profits. By bailing out General Motors, the government would be giving it’s money away for no public purpose. But the government does serve a public purpose by keeping General Motors’ factories churning out cars – by keeping people employed, by providing stability, by keeping the economy going and producing usable items.

Within that distinction lies the difference between outrageous abuse of taxpayer funds and a valid public purpose. The more difficult question is how to avoid the abuse while serving the purpose. [edited slightly from my original]

Which is why I think a bailout should be postponed – to attempt to find the least worst of all the options – rather than to cause great problems with hasty solutions. If the automakers won’t survive without an instant cash infusion though, the government needs to step in one way or another.

Michael Moore described his common sensical solution to this whole mess earlier this week:

1. Transporting Americans is and should be one of the most important functions our government must address. And because we are facing a massive economic, energy and environmental crisis, the new president and Congress must do what Franklin Roosevelt did when he was faced with a crisis (and ordered the auto industry to stop building cars and instead build tanks and planes): The Big 3 are, from this point forward, to build only cars that are not primarily dependent on oil and, more importantly to build trains, buses, subways and light rail (a corresponding public works project across the country will build the rail lines and tracks). This will not only save jobs, but create millions of new ones.

2. You could buy ALL the common shares of stock in General Motors for less than $3 billion. Why should we give GM $18 billion or $25 billion or anything? Take the money and buy the company! (You’re going to demand collateral anyway if you give them the “loan,” and because we know they will default on that loan, you’re going to own the company in the end as it is. So why wait? Just buy them out now.)

3. None of us want government officials running a car company, but there are some very smart transportation geniuses who could be hired to do this. We need a Marshall Plan to switch us off oil-dependent vehicles and get us into the 21st century.

Moore’s solution seems like what was done with the railroad industry in the 1970s – when it was taken over by the government, revamped, and then privatized again. I think Moore’s almost got it right. But not quite. Moore’s solution seems very 20th century – like India’s Five Year Plans or other centralized, government-sponsored attempts to solve large problems. Instead, I think Moore could take a lesson from Nassim Nicholas Taleb, the philosopher, economist, and former hedge fund manager who has been explaining the underlying weakness of our financial markets since he made a killing in the 1987 crash. Taleb understands that if you put a bunch of geniuses in charge, you might get something great. But as he points out, the truly game-changing developments happen by accident. The computer, lasers, the internet – all of these innovations have accidentally changed the world in a way that could not be anticipated. He refers to this type of game-changing development as a Black Swan.

And a Black Swan is exactly what Michael Moore, Barack Obama, and the rest of us know we need to jump start the green energy industry. The best way to catch a Black Swan in Taleb’s parlance is to tinker.

In that spirit I propose to create a government-affiliated entity, the Detroit Investment Group (DIG). ((Dig.gov is not being used by any government agency at the moment.))  DIG would be a modern-day government intervention in the market that would take inspiration from the Tennessee Valley Authority (especially it’s regional focus), the Manhattan Project (it’s think tank aspect), NASA’s moon shot (in the specificity of it’s goal and it’s timeline), and the Department of Defense (in how it creates incentives for inventors to create new technologies with the promise of contracts.)

Government intervention is necessary as the marketplace has failed to invest in the long-term development of green energy. This tendency of the market to focus on short-term profits over long-term projects has certainly been revealed to be a significant flaw in our current economic structure, as, for one common example, corporate managers seek instant profits which lead to huge bonuses and leave before the long-term effects of their actions hit. Not knowing how to fix this tendency to focus exclusively on the short-term, a government agency can create incentives within the market to focus on long-term issues that are essential to our nation’s security and stability. This would be the purpose of DIG – to supplement the market rather than to impose it’s own hierarchical structure.

DIG would be given goals and rules rather than a typical bureaucratic organization. It’s goals would:

  1. To spur the creation of new green technologies and a green energy industry in America; and
  2. To rejuvenate Detroit and the surrounding areas.

To accomplish both of these goals, DIG would make Detroit the place to go for green industry – the way Silicon Valley is for computer technology. DIG would not have a specific method of encouraging green industry – but would use an infusion of cash and people to tinker and innovate and generate solutions. It would need quite a number of tools to spur this growth and innovation:

It would need the authority:

  • To offer government contracts to license green technologies or buy green products;
  • To sponsor a think tank of top experts in various fields to come up with technologies;
  • To offer prizes for creating products that meet certain benchmarks or accomplish certain ancillary goals;
  • To have input into a cap-and-trade program not managed by DIG;
  • To buy companies with worthwhile technologies or resources (including General Motors for example) and continue to operate them.

The point is – DIG would try everything. It’s task would not be to follow certain procedures, but to achieve it’s goals. It would be structured in such a way as to create market incentives and to centralize planning – on two alternate tracks – and let each influence the other. If this problem is fixable, then DIG would unleash the money and human resources to find the fix – and it would be agnostic about the ideology of it’s solution.

It is, in short,  a very Obama-esque approach to the problem.

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Domestic issues Economics Financial Crisis The Opinionsphere Videos

How the Media and the Politicians Failed to Understand the Detroit Bailout

Al Gore, in his book, Assault on Reason, described a media and political focus on “gotcha” journalism, on gaffes, on irrelevancies and personal scandals, on the Freak Show – rather than a focus on long-term issues, on character, and on principles as one of the major factors that has led to our current crises. “News” coverage is dominated by questions of whether this or that politician has a mistress (he probably does) or whether this or that entertainer is secretly going out with this or that sports star. Our news has become tabloid.

If, as the drafters of our Constitution believed, a well-informed citizenry is essential to the proper functioning of any nation, then our nation clearly cannot be functioning properly.

This lack of good information, this focus on the trivial over the significant, was evident when the CEOs of Ford, Chrysler, and General Motors went to Washington to beg for handouts. As Jon Stewart sagely observed in a pox-on-all-your-houses bit:

Unable to understand the actual problem, Congress seizes on tangential details for grandstanding purposes.

[Cue tape of various Congressmen expressing various types of outrage in semi-novel ways regarding the fact that each CEO flew to Washington in a separate private jet.]

The media coverage did manage to convey a few things:

  1. All these big shot CEOs travel by private jet.
  2. The Big Three automakers support, directly and indirectly, some 2.5 million American jobs.
  3. These American car companies made a big mistake by focusing on gas-guzzlers on the assumption that oil prices would remain low indefinitely.

Everything else was clouded in some confusion – not all of which is the media’s fault. Many economists asserted that they would normally want the government to avoid bailing out these automakers, but in this economy, believed the government must act. Some opinion-makers blamed the automakers troubles primarily on union-negotiated legacy costs – on the various deferred wages and other forms of deferred compensation the automakers entered into contracts to provide. But what seemed lacking from either the Congressional hearings or the media coverage was any serious and sustained attention to the problems themselves.

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Barack Obama Domestic issues Economics Energy Independence Environmental Issues Green Energy

Nuclear versus Wind

Alex Tabarrokat Marginal Revolution points out the downside to wind power at those times when “the market value of the power is zero or negative.” He points out a story of how wind farmers in Texas were actually paying the council in Texas that regulates the electric grid to take their electricity so that they would be eligible for tax credits. 

Certainly this is ridiculous – but I don’t think the only conclusion to take from this is that we need nuclear power plants. Tabarrok acknowledges that the reason the market value of power is so long in certain locations is the poor state of our energy infrastructure – which loses a large amount of energy that is transported over long distances. He writes that nuclear plants would be as clean as and less expensive than “costly and inefficient transport networks.”

But he doesn’t deal with the issue of nuclear waste – which makes nuclear power far from clean. He doesn’t discuss – and you can see why as this is just a short blog post – the positives of having a more flexible energy infrastructure.

Whether nuclear is the only feasible option comes down to two questions Tabarrok doesn’t address:

  • What is the cost of upgrading our energy infrastructure?
    This New York Times piece by Matthew L. Wald doesn’t make it seem as if the problem requires new technology as much as an upgrade of a very old system: “The basic problem is that many transmission lines, and the connections between them, are simply too small for the amount of power companies would like to squeeze through them. The difficulty is most acute for long-distance transmission, but shows up at times even over distances of a few hundred miles.”
  • Do you have a long-term strategy for dealing with the radioactive pollution generated by nuclear reactors?
    To date, I don’t think there are any good solutions to this.

A third question might concern the safety of nuclear power plants. But I think this threat – whether of a meltdown due to terrorism or error – is largely overstated.

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Barack Obama Conservativism Domestic issues Health care Political Philosophy

Health Care’s Place in Obamanomics

This tidbit from James Pethokoukis’s blog over as USN&WR makes me want to read Douthat’s and Salam’s new book:

Another interesting healthcare reform option is highlighted by Ross Douthat and Reihan Salam in the book Grand New Party. Uncle Sam would require individuals and families to put 15 percent of their income into health savings accounts. If you run out of money before year-end, the government steps in. If you don’t, you get the money back or it rolls over into a retirement account.

This idea seems to have promise – though without seeing the ancillary details, there are some glaring issues with it on process grounds, even as you can see the proposal working out ratehr well under most circumstances in the world. It seems to penalize those with families, by reducing their retirement funds; those without an income would not have to face the trade-off that seems essential to their system working – choosing between retirement savings and health care; and preventive medicine would seem to be discouraged, although it is seen by most wonks as the surest way to reduce overall health care costs. Why get a regular check-up if you’re depleting your retirement savings to do so?

The plan seems designed mainly to tackle two political problems – the lack of health insurance for many Americans; and the moral hazard of having unrestricted access to health care. It’s rather ingenious, even if I’m not sure that the second factor should be taken too seriously. People want to avoid going to the doctor – or at least I do. This policy almost seems designed to create a massive sociological experiment. Aside from short-term medical emergencies, people would be forced to create health care and retirement strategies that balanced their long-term financial needs with their short-term health care decisions. Should I get the botox, or save more for retirement? Should I schedule this regular check-up? Should I spend money on these various preventive steps and live longer – or save more so I can spend my fewer years in a splendid retirement?

I’m sure it’s worth checking out the book just to see what other ideas Salam and Douthat have to reinvigorate conservatism.

But for now, Obama’s plan – or some variation between the rather similar Clinton, Obama, and Edwards plans – is the right way to go. It’s the shortest route to improving our current mess.

The core problem we need to solve though isn’t that our health insurance system as currently instituted is flawed, but that health insurance as the primary means of dealing out health care is flawed. Politically, the Obama/Clinton/Edwards path of patching up the current system is the only feasible one at the moment – to improve the status quo marginally. But there are far too many perverse incentives – for health insurance companies, for patients, for doctors in a health insurance system.

Of course, James Pethokoukis has greater things on his mind than our rotten health care system. He seems to be concerned that if Obama is able to pass a program that actually gives substantial benefits to Americans, it will move America to the left. Which is why he has now declared that it is the responsibility of the Republicans to stop this idea or face destruction. After all – the average American hasn’t seen much improvement in their lives as a result of the government in a long time. His theory is, once a competent liberal is able to pass a plan that substantially improves a problem in the lives of many Americans, then people will abandon the anti-government rhetoric of the conservative movement and abandon the program of incessant and regressive tax cuts.

The fear of socialism lingers like a spectre.

So, Pethokoukis proposes Republicans do anything they can to stop “Obamacare,” in order to save themselves. His little speech reminds me of a football coach trying to psych his team up for the game. But he’s playing with fire.

In light of this market disaster, this financial earthquake, some necessary changes are required to be made to our grand social bargain. Free trade is a good thing – but it creates chaos in it’s wake. The financial crisis is just the latest symptom. Obamanomics is a pragmatic, liberal approach to treating the core disease – which is not free trade or globalization, but destabilization. Obamanomics does not ideologically prescribe government intervention as Reaganomics proscribed it. Rather, it is a series of pragmatic first steps. It does not have as it’s goal the creation of some Great Society as previous versions of liberalism did; and it also does not merely try to find a Third Way between the Left and Right as Clinton did.

The key factor in understanding Obamanomics is that it does not force it’s values in the hoped for end result, but instead in the processes of getting there. Rather than imagining a perfect world and attempting to bring America to this goal, Obamanomics tries to improve what is already here, especially by instituting processes that inherently reflect core values like transparency, accountability, fairness, a long-term strategic orientation, and an aversion to government coercion.

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Barack Obama Domestic issues Politics The Opinionsphere

The Manufactured Fairness Doctrine Controversy

Yglesias on the manufactured Fairness Doctrine controversy:

It’s very strange. Political movements mischaracterize the other side’s general goals all the time. But I’ve never heard of anything like the current conservative mania for blocking a particular legislative provision that nobody is trying to enact.

Part of this blog’s continuing coverage of the manufactured Fairness Doctrine controversy, especially as related to net neutrality:

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Domestic issues Election 2012 Health care Jindal

Jindal’s Health Care Reform

The wonks at ThinkProgress are impressed with the Republican up-and-comer’s plan.