Saturday, May 15, 2010


Ron Brownstein published a paragraph this week that actually seemed hard to believe: "If the economy produces jobs over the next eight months at the same pace as it did over the past four months, the nation will have created more jobs in 2010 alone than it did over the entire eight years of George W. Bush's presidency."


At first blush, it's tempting to think that couldn't possibly be true. The Republican economic policies -- tax cuts for the wealthy, huge deficits, weak recovery, minimal public investment, even less oversight and regulation -- were a spectacular mess that failed miserably. But can 2010 really top the job creation of Bush's entire presidency?

Actually, yes. This chart, published by the Washington Post in January, tells a pretty remarkable story, showing job growth by decade. (You can click on the chart to see it larger.) Notice that red line down towards the bottom? That shows the anemic job creation over the first decade of the 21st century.

Indeed, it went largely ignored at the time, but the Republican Bush/Cheney ticket sought a second term in 2004 despite the fact that it was the first administration in the modern era to go four years with a net job growth of zero. The campaign was largely about national security, so voters overlooked this painful detail.

And so it creates the dynamic that Brownstein describes. If job growth holds steady the rest of this year -- by no means a certainty, of course -- the U.S. economy will create a net gain of about 1.7 million jobs. From start to finish, the net gain under Bush was about 1 million.

The Obama presidency, of course, will have a long way to go before it can start talking about a net gain. It inherited an economy in freefall, and over 4 million jobs were lost in 2009 alone. Making up that kind of lost ground will take quite a long time, though the stimulus has obviously helped get us back on track.

But in some ways, that only helps make the Bush comparison worse -- he inherited an economy with a 4% unemployment rate, a huge surplus, and sunny skies ahead. Worse, Bush/Cheney and congressional Republicans got exactly what they wanted in terms of huge tax cuts, but the economic benefits they promised never materialized.

Oddly enough, these same Republicans think the economy will soar if we just return to Bush-era policies and repeat the same mistakes they already made. Why anyone who hasn't suffered trauma would find this credible remains a mystery.

As of about a decade ago, there was an assumption among much of the public that the government was pretty good at disaster response. By 2000, the Clinton administration's FEMA was considered a model government agency, able to act quickly and effectively to almost any scenario.

A decade later, the public's confidence has been badly rattled, and for good reason -- among its many problems, the Bush administration's mismanagement on this front became a national embarrassment. It wasn't long before it became a template for those hoping to discredit the efficacy of government itself -- if the government can't even respond ably to a hurricane in New Orleans, how can we expect it to [fill in the blank]?

With that in mind, Marc Ambinder raised an important yesterday that often goes overlooked: the government's disaster response efforts have already vastly improved over the last 16 months.

An eternal fact of Washington is that government gets much more attention when it performs badly than when it performs well. As an illustration of the former, recall the aftermath of Hurricane Katrina. To illustrate the latter, consider how the media is covering government right now. By my count at least three major natural disasters have occurred in recent weeks: the Nashville flooding, the deadly Oklahoma tornadoes, and the BP oil spill (admittedly not "natural" but threatening to be a major environmental disaster). Let's throw in an attempted terrorist attack in Times Square, too. On every front, government has performed ably -- and often better than ably. And yet it's understating things considerably to say this success has not been widely recognized.

It should be recognized, though, because when it comes to government disaster response, the Bush years marked a low point and right now we're experiencing a high point.

That may seem like cold comfort to those along the Gulf Coast -- there's only so much the government can do about the BP oil spill disaster, and at this point, the crisis is getting considerably worse -- but Ambinder's observation is nevertheless an accurate one. Obama was intent on quickly improving the federal government's ability to respond to these kinds of disasters, and those efforts have been successful.

Ambinder noted several recent examples from the last month, but let's not overlook at the administration won (and deserved) plaudits for his handling of the H1N1 epidemic, and the administration's response to the devastating earthquake in Haiti has not only been exemplary, but it's even exceeded expectations.

Paul Waldman noted recently, "[I]t seems that the better job the Obama administration does with this [BP oil spill] and future disasters, the less it will matter in the public's perception of what government is capable of."

I hope that's right, because the debate in recent years has gone in a ridiculous direction. At issue has never been whether the government can effectively respond to disasters, but rather, the difference between an administration that guts response agencies and promotes incompetent lackeys, and one that takes these issues seriously.

Saturday Morning: Adults & Children

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It sounds a bit like the script of a Hollywood blockbuster, but I'm pretty sure Bruce Willis will not be joining this team.

U.S. Energy Secretary Steven Chu signaled his lack of confidence in the industry experts trying to control BP Plc's leaking oil well by hand-picking a team of scientists with reputations for creative problem solving.

Dispatched to Houston by President Barack Obama to deal with the crisis, Chu said Wednesday that five "extraordinarily intelligent" scientists from around the country will help BP and industry experts think of back-up plans to cut off oil from the well, leaking 5,000 feet (1,500 meters) below sea-level.

Members of the Chu team are credited with accomplishments including designing the first hydrogen bomb, inventing techniques for mining on Mars and finding a way to precisely position biomedical needles.

In the wake of the unsuccessful "dome" effort, Chu has tasked this team to develop "plan B, C, D, E and F," while looking for solutions to stop the oil from gushing into the Gulf.

Looking over these scientists' backgrounds, they look like a pretty creative bunch. Here's hoping for the best.

On a related note, Chu has also crafted a plan to use gamma rays to better understand the geologic nature of this specific leak. The Energy Secretary was asked yesterday how in the world he knew about gamma rays. He replied:

"Because I'm a physicist. And I dabble in many areas of physics. I did experiments when I was a graduate student on weak interactions, which are the forces of nuclear decay. And so I kept in my brain certain nuclear sources and what their energies were and I knew what the ranges were for how penetrating gamma rays could be. Very high-energy gamma rays can penetrate several inches of steel."

This is the latest installment in the "This Isn't The Bush Administration" chronicles.

The politics of corporate loopholes May 14: Senator Bernie Sanders talks with Rachel Maddow about how to rein in energy corporations that will go so far as to register in the Marshall Islands, the Cayman Islands and Zug Switzerland to exploit loopholes to avoid taxes and regulation and maximize profits.

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Can MMS restructuring save regulation? May 14: Rachel Maddow talks with Danielle Brian, executive director of the Project on Government Oversight, about efforts to clean up the disasterously corrupt Minerals Management Service by restructuring the whole agency.

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The Maine Republican Party raised a few eyebrows this week when it endorsed a right-wing party platform combining "fringe policies, libertarian buzzwords and outright conspiracy theories." Almost as interesting was the Maine GOP's behavior at the meeting where the platform was adopted.

Republican activists held their annual gathering at the Portland Exposition Building, near a local middle school. GOP members used an eighth-grade classroom for a caucus meeting, and took it upon themselves to start making some changes. (thanks to several alert readers for the tip)

"We allowed them to use the space and I'm appalled that they would go through a teacher's things, let alone remove something from a classroom," [School Committee member Sarah Thompson] said Wednesday. "We want the public to use school spaces, but they need to respect that it's a school and understand that they should leave it the way they find it." [...]

When [studies teacher Paul Clifford] returned to school on Monday, he found that a favorite poster about the U.S. labor movement had been taken and replaced with a bumper sticker that read, "Working People Vote Republican."

Later, Clifford learned that his classroom had been searched. Republicans who had attended the convention called Principal Mike McCarthy to complain about "anti-American" things they saw there, including a closed box containing copies of the U.S. Constitution that were published by the American Civil Liberties Union.

There's just something oddly spectacular about Republican activists describing a copy of the U.S. Constitution as "anti-American" because they didn't approve of the group that distributed the copy.

Party officials later apologized for the members' misconduct.

Thursday, May 13, 2010

Lunchtime Potpourri

Jay Ackroyd: Freedom
The GOP purity trolls who have taken out Bennett and Crist have some rhetorical elements that are, charitably, sometimes difficult to understand in policy terms. For me one of these is equating carrying handguns in public places as an expression of freedom.

I noticed this recently on a trip to northern Florida and southern Georgia, just in time, as it has turned out, to see the indigenous wildlife. (There was a surprising number of bald eagles, and some spectacular swallow-tailed kites, not to mention the local bison population.)

In any case, there was a teenager wearing an anti-Obama t-shirt. I forget the precise cleverness of phrasing, but a central element was that Obama wanted to take away his guns, and therefore limit his freedom. Aside from the not being true part, and the implied treason, it was hard to under stand what he was trying to say.

And now I see this notion of freedom includes carrying guns into bars. Both Virginia and Tennessee have passed bills allowing people to carry a concealed handgun into establishments that serve alcohol. (It turns out that Plaxico Burress was a freedom fighter with a bad sense of timing and place. Who knew?)

The James Brady lobbying effort has found the open carry movement unpopular, but as always, the NRA carries the day over merely popular legislative positions.

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Ezra Klein: Galbraith: The danger posed by the deficit ‘is zero’

James Galbraith is an economist and the Lloyd M. Bentsen Jr. chair in government and business relations at the University of Texas at Austin. He's also a skeptic of the prevailing concern over America's long-term deficit. With many people now comparing America's fiscal condition to Greece, I spoke with Galbraith to get the other side of the argument. An edited transcript of our conversation follows.

EK: You think the danger posed by the long-term deficit is overstated by most economists and economic commentators.

JG: No, I think the danger is zero. It's not overstated. It's completely misstated.

EK: Why?

JG: What is the nature of the danger? The only possible answer is that this larger deficit would cause a rise in the interest rate. Well, if the markets thought that was a serious risk, the rate on 20-year treasury bonds wouldn't be 4 percent and change now. If the markets thought that the interest rate would be forced up by funding difficulties 10 year from now, it would show up in the 20-year rate. That rate has actually been coming down in the wake of the European crisis.

So there are two possibilities here. One is the theory is wrong. The other is that the market isn't rational. And if the market isn't rational, there's no point in designing policy to accommodate the markets because you can't accommodate an irrational entity.

EK: Then why are the bulk of your colleagues so worried about this?

JG: Let's push a bit deeper on the CBO forecasts. They publish a baseline set of projections. One of those projections holds the economy will return to a normal high-employment level with low inflation over the next 10 years. If true, that would be wonderful news. Go down a few lines and they also have the short-term interest rate going up to 5 percent. It's that short-term interest rate combined with that low inflation rate that allows them to generate, quite mechanically, these enormous future deficit forecasts. And those forecasts are driven partially by the assumption that health-care costs will rise forever at a faster rate than everything else and by interest payments on the debt will hit 20 or 25 percent of GDP.

At this point, the whole thing is completely incoherent. You cannot write checks to 20 percent to anybody without that money entering the economy and increasing employment and inflation. And if it does that, then debt-to-GDP has to be lower, because inflation figures into how much debt we have. These numbers need to come together in a coherent story, and the CBO's forecast does not give us a coherent story. So everything that is said that is based on the CBO's baseline is, strictly speaking, nonsense.

EK: But couldn't there be a space between the CBO being totally correct and the debt not being a problem? It seems certain, for instance, that health-care costs will continue to rise faster than other sectors of the economy.

JG: No, it's not reasonable. Share of health-care cost would rise as part of total GDP and the inflation would rise to be nearer to what the rate of health-care inflation is. And if health care does get that expensive, and we're paying 30 percent of GDP while everyone else is paying 12 percent, we could buy Paris and all the doctors and just move our elderly there.

EK: But putting inflation aside, the gap between spending and revenues won't have other ill effects?

JG: Is there any terrible consequence because we haven't prefunded the defense budget? No. There's only one budget and one borrowing authority and all that matters is what that authority pays. Say I'm the federal government and I wish to pay you, Ezra Klein, a billion dollars to build an aircraft carrier. I put money in your bank account for that. Did the Federal Reserve look into that? Did the IRS sign off on it? Government does not need money to spend just as a bowling alley does not run out of points.

What people worry about is that the federal government won't be able to sell bonds. But there can never be a problem for the federal government selling bonds. It goes the other way. The government's spending creates the bank's demand for bonds, because they want a higher return on the money that the government is putting into the economy. My father said this process is so simple that the mind recoils from it.

EK: What are the policy implications of this view?

JG: It says that we should be focusing on real problems and not fake ones. We have serious problems. Unemployment is at 10 percent. if we got busy and worked out things for the unemployed to do, we'd be much better off. And we can certainly afford it. We have an impending energy crisis and a climate crisis. We could spend a generation fixing those problems in a way that would rebuild our country, too. On the tax side, what you want to do is reverse the burden on working people. Since the beginning of the crisis, I've supported a payroll tax holiday so everyone gets an increase in their after-tax earnings so they can pay down their mortgages, which would be a good thing. You also want to encourage rich people to recycle their money, which is why I support the estate tax, which has accounted for an enormous number of our great universities and nonprofits and philanthropic organizations. That's one difference between us and Europe.

EK: That does it for my questions, I think.

JG: I have one more answer, though! Since the 1790s, how often has the federal government not run a deficit? Six short periods, all leading to recession. Why? Because the government needs to run a deficit, it's the only way to inject financial resources into the economy. If you're not running a deficit, it's draining the pockets of the private sector. I was at a meeting in Cambridge last month where the managing director of the IMF said he was against deficits but in favor of saving, but they're exactly the same thing! A government deficit means more money in private pockets.

The way people suggest they can cut spending without cutting activity is completely fallacious. This is appalling in Europe right now. The Greeks are being asked to cut 10 percent from spending in a few years. And the assumption is that this won't affect GDP. But of course it will! It will cut at least 10 percent! And so they won't have the tax collections to fund the new lower level of spending. Spain was forced to make the same announcement yesterday. So the Eurozone is going down the tubes.

On the other hand, look at Japan. They've had enormous deficits ever since the crash in 1988. What's been the interest rate on government bonds ever since? It's zero! They've had no problem funding themselves. The best asset to own in Japan is cash, because the price level is falling. It gets you 4 percent return. The idea that funding difficulties are driven by deficits is an argument backed by a very powerful metaphor, but not much in the way of fact, theory or current experience.

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Wednesday, May 12, 2010

What digby & Ed said ...

digby: Lock And Load
Such funny guys, especially with the death threats and all:

Congressional District 11 GOP candidate Brad Goehring is drawing fire for his confrontational Facebook statement today:

“If I could issue hunting permits, I would officially declare today opening day for liberals. The season would extend through November 2 and have no limits on how many taken as we desperately need to “thin” the herd.”

He later said he meant to "thin the herd" with votes, not bullets and that he just hit the send button to early and then just left it there because he didn't think anyone would take it seriously. That's nice.

But the truth is that this is a very old joke, which I'm sure this numbskull has seen:

Here is the story of some of these adorable jokes, but the first "Liberal Hunting Permit" shown above has been around for years. These are the kind of things they sell CPAC every year. It's perfectly common right wing rhetoric.
C&L: Bay Buchanan Says Obama has 'Dummied-Down' Supreme Court After Calling Palin Qualified to be President

Ed Schultz takes a well-deserved whack at Bay Buchanan for saying that President Obama has "dummied-down" the Supreme Court with his pick of the former dean of Harvard Law School Elena Kagan -- especially after she said this about her brother Pat's girlfriend Sarah McQuitter, right after McCain selected her to be his choice for Vice President.

Buchanan: John McCain has made a remarkable decision. It was quite... look... in fact it's brilliant. She has one accomplishment after another, all of which are very much on a president...

King: So you have no concerns about her being president.

Buchanan: Not only am I not concerned. She is extraordinarily qualified.

There are plenty of reasonable objections one might have to Elena Kagan's nomination to the Supreme Court. Implying she's dumb isn't one of them. Ed, when you guys get her hack brother to take his cot out of the MSNBC studios (where I suspect he lives other, than his weekly hike over to the PBS studio to scream at Eleanor Clift), you'll have some room to talk about CNN.