Tom Laskaway links to an enlightening CBO report on ethanol’s impact on food prices and carbon emissions which concludes that it makes food more expensive (boo!) while arguably increasing carbon emissions (also boo!) to say nothing of the direct budgetary costs of ethanol subsidies. His post asks “Is ethanol’s Congressional free ride coming to an end?”
I’m going to say no. The appeal of ethanol to the congress has nothing to do with issues about the merits of ethanol.
Think Progress: McCain’s former economic adviser flips on Bush tax cuts.
Throughout the presidential campaign, Sen. John McCain’s (R-AZ) top economic adviser and former CBO director, Douglas Holtz Eakin, argued passionately for McCain’s proposal to extend the Bush tax cuts (and cut some more taxes for the wealthy on top of it). Holtz-Eakin, however, has now come out against making the tax cuts permanent, acknowledging that it would explode the deficit:
Though economist Douglas Holtz-Eakin spent the 2008 presidential campaign advising Sen. John McCain to defend the Bush-era tax cuts, he now thinks they should be allowed to expire on Dec. 31, 2010 due to “the prospect of an Argentina-style fiscal meltdown.” Said Holtz-Eakin: “If you ask: ‘Who pays the taxes?’, it’s the first step toward not having the answer be: ‘Our kids.’”
Recall, McCain also flip-flopped on the Bush tax cuts, but he opposed the cuts in 2001 and argued for them in 2008.
Ezra Klein correcting history on THE "MALAISE" SPEECH.
Kevin Mattson has a nice piece in the latest issue of The Prospect that tries to correct the historical record on Jimmy Carter's famous malaise speech. Mattson thinks you might have some misconceptions about the address. First, you might think it included the word "malaise." It didn't. And you might think it was unpopular. It wasn't:
You might have heard that the speech was a disaster. That it was all about Jimmy Carter, the "loser" president, shirking his responsibilities. Sean Wilentz writes in The Age of Reagan, "Carter appeared to be abdicating his role as leader and blaming the people themselves for their own afflictions." This interpretation is repeated countless times in history textbooks.
But in fact, the speech worked. It prompted an overwhelmingly favorable response. Carter received a whopping 11 percent rise in his poll numbers. The mail that poured into the White House testified that many citizens felt moved by the speech. One man wrote to Carter, "You are the first politician that [sic] has said the words that I have been thinking for years. Last month I purchased a moped to drive to work with. I plan to use it as much as possible, and by doing so I have cut my gas consumption by 75%."
In the end, Jimmy Carter did blow the situation, but it wasn't because of the speech itself. Rather, he blew the opportunity that the speech opened up for him. Just two days after July 15, Carter fired his Cabinet, signifying a governmental meltdown. The president's poll numbers sank again as confusion and disarray took over. Carter could give a great speech, but there were two things he couldn't manage: to govern well enough to make his language buoy him or to find a way to yoke the energy crisis with concrete civic re-engagement initiatives. Though Americans were inspired by the speech, many were still stumped as to what was expected of them. As Time magazine described it: "The President basked in the applause for a day and then set in motion his astounding purge, undoing much of the good he had done himself."
This isn't just a matter of correcting the historical record. The "lesson" of the malaise speech was that presidents can't ever question America's greatness or ask for personal sacrifice on the part of its people. Politics, we were told, must be a realm of happy talk and big smiles. As Mattson writes, "From that moment, sacrifice and civic obligation faded from presidential rhetoric. You never heard Carter's language from either of the Bushes -- not even in the wake of September 11, when W. instead told Americans to go shopping." That lesson was based off the supposedly historic unpopularity of a speech that was in fact wildly popular. The real lesson of that period is that presidents shouldn't abruptly fire their cabinet and signal that their government has fallen into chaos. Voters, it turns out, have a quirky tendency to find that sort of behavior unsettling.
Kurtz (TPM): More Troubling Signs
A lawyer representing detainees at Gitmo tells TPMmuckraker that the foot-dragging and stonewalling that marked the Bush Administration's handling of detainee cases continues unabated under President Obama:
It did not surprise me in the slightest that the Bush administration would do everything in its power to subvert the Supreme Court's ruling. I expected that. What I did not expect is that there would be absolutely zero change in the stonewall strategy when the [new] administration came in.Zack Roth has more.
Yglesias says: Know Your Branches
I think this from Chris Bowers brings a much-needed perspective to the oft-cranky discussions of the Obama administration at Open Left:
It is becoming increasingly obvious that the Senate, rather than the Obama administration, is the biggest obstacle to progressive governance right now. If we were dealing with only the House and the Obama administration, there would be a noticeably more progressive government in America. From health care reconciliation, to 100% auction cap and trade, to a larger stimulus package, to bailout reform, to bankruptcy “cramdown” reform, and even to executive compensation, the Senate has moved to the right of both the House and the Obama administration. As such, it is the Senate, and not the Obama administration, against whom we should be directing more of our distrust and pressure.
Just imagine what we would have accomplished in terms of legislation without the Senate over the past few months. The stimulus would have had a hundred billion more in spending, 100% auctions would be on their way, hundreds of billions for new health care would be on its way, bankruptcy “cramdown” would be law, EFCA would be law, executive compensation limits would be far more severe, and on and on and on. However, if we had the Senate but there was no President, the legislative accomplishments would have been pretty much the same.
I think it’s crucially important to be aware of where the responsibility for disappointments lies. There are some important areas where the Obama administration really is the key actor. They are the ones taking positions on executive power that are at odds with what many people were hoping for from a new administration. And if you want to talk about strategy toward Afghanistan, the Obama administration takes full responsibility for whatever good or bad is coming out of that. But on basic domestic policy legislation, the essence of the matter is that the median member of the House of Representatives is more progressive than the median Senator and a lot more progressive than the sixtieth Senator you need to break a filibuster. Mark Pryor and Susan Collins are trying to unleash some torrent of liberal legislation that Obama is holding back.
Ezra Klein finds TOO MUCH GODDAMN MONEY.
On April 7th, Lloyd Blankfein, CEO of Goldman Sachs, delivered the mea culpa many have been waiting for. Wall Street, he said, "look self-serving and greedy in hindsight." He admitted that "we rationalized because our self-interest in preserving and growing our market share, as competitors, sometimes blinds us," and wondered "we collectively neglected to raise enough questions about whether some of the trends and practices that became commonplace really served the public's long-term interests." This wasn't a mistake, he said. It was a systemic failure. And a new regulatory structure will be required to prevent its recurrence.Blankfein's whole speech is here, and worth a read. Steve Pearlstein gave it a nice write-up in The Washington Post, and made a corrective point that's worth echoing:
Blankfein also makes the common mistake to think that the problem with compensation has only to do with how the pay is structured and not with the overall level of pay, which on Wall Street got to be ridiculously out of line with that of similarly skilled and equally successful people in other industries. No matter how it is structured, pay at such astronomical levels has a tendency to swell heads, inflate egos and tempt people to take undue risks of all sorts, ethical as well as financial.[...]
Of course, an industry that earns so much profit that it can afford to pay multimillion-dollar bonuses to 26-year-old traders also has too much money to lavish on the political process in ways that undermine those who would regulate it. I wouldn't go as far as MIT economist Simon Johnson, who argues in the May Atlantic magazine that the United States has effectively become a banana republic with the Wall Street oligarchy running the show. What is undeniable, however, is that there are regulators here in Washington who have been reluctant to rein in the industry out of fear that they would be thwarted by the White House, the Treasury and key members of Congress acting under pressure from the industry.
Right. Everyone agrees on that the structure of the money misaligned the incentives. But the arguably bigger problem was that there was simply too much goddamn money. The possible rewards for discovering a new instrument or exploiting an innovative arbitrage scheme were so awesome, so staggering, that it would have been contrary to human nature for the industry not to fall into wild excess.
Put it this way: If every time journalists broke even a small news story, they were given $6 million, you'd probably have a lot more unethical behavior, a lot more burned sources, and a lot more useless, and even counterproductive, competition to sensationalize scoops or invent new controversies that could then be dominated. Some profit motive is good. But too much profit motive turns sane men mad.
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