Wednesday, June 9, 2010

A Nation of Children

Yglesias: This is the Sound of Hope Dying

Yesterday afternoon, Lindsay Graham confirmed that he’s bailing from efforts to pass a climate change bill. The odds weren’t looking good for this legislation, but now they’re hard to distinguish from zero. And the news gets worse after the midterms. Simply put, given the difficult nature of the problem and the regional considerations in play, you just can’t tackle climate change unless a substantial number of Republicans want to tackle climate change. In theory, this shouldn’t be impossible. There are three Republicans from liberal states in New England. And there are a bunch of Republicans from southwestern states with low carbon emissions and huge potential to generate low carbon energy. On top of that, you have Republicans from Gulf Coast states whose population should be intimately familiar by now with the ecological consequences of climate disruption and fossile fuel use.

But there’s no sign of any movement. And as Kate Sheppard observes, Graham himself can barely speak coherently on the subject:

I’m in the wing of the Republican Party that has no problem with trying to find ways to clean up our air. We can have a debate about global warming, and I’m not in the camp that believes man-made emissions are contributing overwhelmingly to global climate change, but I do believe the planet is heating up. But I am in the camp of believing that clean air is a noble purpose for every Republican to pursue. The key is to make it business friendly.


Paradoxically, the 111th Congress is going to go down in history as one of the most productive and consequential of all time, but also one that abjectly failed to confront the most important issue it faced. And by “Congress” I mean “Senate.”


For the better part of a year, Sen. Lindsey Graham (R-S.C.) worked with Sen. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) on a comprehensive climate/energy bill. It was poised to be a pretty strong package, that struck a grand bargain between parties and interests. The result would be a tri-partisan bill that would combat global warming, create new jobs in a growing industry, and reduce the deficit.

But like Lucy, who always pulls away the football and puts Charlie Brown on his ass, Graham has a nasty habit of betrayal.

Sen. Lindsey Graham, R-S.C., [yesterday] said he would vote against a climate change strategy he helped develop with Sens. John Kerry, D-Mass., and Joe Lieberman, D-Conn., citing new changes that further restrict offshore oil and gas drilling and the bill's impact on the transportation sector.

He said neither that plan nor any energy and climate strategy will get 60 Senate votes this year. Instead, he said, lawmakers next year should work on a strategy that only places a cap on electric utilities while lowering emissions from the transportation sector through increased fuel efficiency and other means that do not involve placing a cap on the sector's carbon emissions.

Graham said his advice to lawmakers is to "start over and scale down your ambitions." ... The statement today is the furthest Graham has gone in divorcing himself from the substance and timing of the efforts of Kerry, Lieberman and other Democrats to pass climate and energy policy this year.

Graham added that the BP oil spill disaster makes this a bad time for policymakers to tackle energy policy. Try to wrap your head around that one.

When Graham first started moving away from his own bill a couple of months ago, plenty of smart, credible observers seemed to think the South Carolinian was still working in good faith, and was arguing from a reasonable position. I disagreed. Yesterday, these observers started coming around -- Jon Chait, for example, said he "greatly overestimated" Lindsey Graham's "sincerity."

Let this be a lesson to all of us: if something important needs to get done, and it's entirely dependent on Graham working seriously towards a policy goal in good faith, prepare to be sorely disappointed.

At this point, Graham is objecting to energy policy provisions he helped write, and his comments on the kind of proposal he'd like to see are bordering on gibberish. Either Graham has no idea what he's talking about after spending months crafting a comprehensive bill, or he's just wildly spinning a ridiculous rationalization for abandoning his own effort.

The consequences of Graham's betrayal are severe. As the need for a comprehensive climate/energy bill becomes overwhelmingly obvious, a Republican filibuster will likely kill all legislative attempts. With Dems likely to lose seats in November, the next attempt to pass meaningful legislation is likely several years away.

It's very hard to be even a little optimistic under the circumstances.

Ezra Klein: Lindsey Graham and the failure of the 'lone Republican' theory

With Lindsey Graham bolting a bill he helped draft, efforts to address climate change in this Congress look likely to fail. And because the next Congress is likely to have more Republicans, and because the House's approval of Waxman-Markey will expire after the election and mean the House would have to write and pass a whole new bill, the situation looks grim going forward, too.

This is, understandably, causing many enviros to wonder whether Graham was ever committed to the effort. Brad Plumer, who's as fair-minded and unexcitable on these questions as they come, calls Graham's stated objections "ridiculous" and says "this whole episode really makes you wonder if Graham was ever serious about energy and climate policy in the first place."

My take, from previous conversations with Graham, his staff, and other Senate offices that were working with them, is that Graham was serious about doing this if he thought it could be done. But when he made the judgment that a carbon-pricing bill wasn't going to pass the Senate, that was also enough for him to decide that it was foolhardy to remain publicly committed to a position that's unpopular with his base. There was no middle ground in Graham's position: Either he could do this and he'd be there or he couldn't and he wouldn't. He clearly came down on the latter side. So rather than stick with the effort and give a long-shot campaign the best chance it could have, Graham is abandoning it and probably sticking the final nail in its coffin.

It's further evidence that the "lone Republican" strategy doesn't work. Time and again, Democrats have ended up in a room with a single Republican who seemed willing to cut a deal. It was Olympia Snowe on health care, Bob Corker on financial regulation and Lindsey Graham on climate change. In every case, the final bill looked a lot like what that Republican helped negotiate. And in every single case, the Republican realized that he or she couldn't get more support from their party and so they eventually bolted the effort.

If you think this has all been a cynical strategy, it's been brilliantly successful. On the one hand, Republicans have had a major role in shaping these bills. On the other hand, they haven't had to vote for these bills, and so they could cleanly campaign against legislation that a member of their party helped write. And as an added bonus, Democrats are stuck trying to defend a bill that their base doesn't like very much and that's thick with compromises that annoy political elites.

Kevin Drum: R.I.P. Climate Legislation

Today probably marks the official death of climate legislation in the United States. Lindsey Graham, the only Republican even nominally favorable toward any kind of carbon pricing plan, has announced that he can't support the Kerry-Lieberman bill because it doesn't allow enough offshore drilling (!), and without Graham there's pretty much zero chance of getting any further Republican support. So the odds of passing climate legislation, already slim, have now dropped to zero. The only option left is a pure energy bill, something that accomplishes very little, and accomplishes that little solely by offering up subsidies to every special interest you can imagine.

By coincidence, Stanford researcher Jon Krosnick has an op-ed in the New York Times today that suggests this is exactly what the American public wants:

When respondents were asked if they thought that the earth’s temperature probably had been heating up over the last 100 years, 74 percent answered affirmatively. And 75 percent of respondents said that human behavior was substantially responsible for any warming that has occurred.

....Fully 86 percent of our respondents said they wanted the federal government to limit the amount of air pollution that businesses emit, and 76 percent favored government limiting business’s emissions of greenhouse gases in particular. Not a majority of 55 or 60 percent — but 76 percent.

Large majorities opposed taxes on electricity (78 percent) and gasoline (72 percent) to reduce consumption. But 84 percent favored the federal government offering tax breaks to encourage utilities to make more electricity from water, wind and solar power. And huge majorities favored government requiring, or offering tax breaks to encourage, each of the following: manufacturing cars that use less gasoline (81 percent); manufacturing appliances that use less electricity (80 percent); and building homes and office buildings that require less energy to heat and cool (80 percent).

So there you have it: the American public believes in global warming and wants the government to do something about it. However, the American public doesn't want to do anything — carbon taxes or cap-and-trade — that might actually work. But they do want to open the federal goody bag and dole out subsidies and tax breaks to everyone under the sun, presumably because these all sound like pleasant things to do and they're under the impression that they're all "free." Whether they work or not isn't really on their radar.

And it looks like that's what Congress is going to deliver. We are, in this case, getting exactly the government we deserve. A government of children.1

1Yes, I'm feeling bitter about this at the moment. Anyone have a problem with that?

Financial Follies

Think Progress: Trumka: Lawmakers Worried More About The Deficit Than Jobs ‘Have Been Reading Too Much Fiction’

Before it adjourned for its Memorial Day recess, the House of Representatives passed a scaled down tax extenders bill, that didn’t include extensions of COBRA health insurance subsidies for unemployed workers, or an extension of FMAP funding to help states meet their Medicaid responsibilities. The bill also only extended unemployment benefits through November, instead of December as had been originally planned.

Despite 9.7 percent unemployment, and long-term unemployment at record highs, the bill was cut down because of concerns regarding its effect on the deficit, as only part of it was offset by revenue raisers. A group of Blue Dogs and freshman Democrats, as well as lockstep Republican opposition, helped to produce legislation with significantly less impact.

Today, ThinkProgress posed a couple of questions regarding such deficit hysteria to AFL-CIO President Richard Trumka, who appeared at the America’s Future Now conference to advocate more robust job creation measures from Congress. Trumka said that those more concerned with the deficit than the fact that 15 million Americans are currently out of work have “been reading too much fiction or they have their head in the sand”:

We do not have a short-term deficit crisis, we have a short-term jobs crisis in this country. And anyone that doesn’t believe that has either, I think, been reading too much fiction or they have their head in the sand. Every economist I know says we have a jobs crisis, and yet the people on [Capitol] Hill say we can’t really fix the crisis, we have to worry about deficit reduction.

Watch it:

Later on, when ThinkProgress asked why Washington is so focused on deficits when the country is much more concerned with unemployment, Trumka blamed “timid leadership. Timid leadership gets any kind of pushback, they say we’ll stop. What they need to do is stand up and explain that if you really want to cure deficits, put people back to work.”

It’s true that short-term concern over the deficit and favoring deficit reduction over job creation is counterproductive. As CAP’s Michael Ettlinger and Michael Linden wrote, in the face of the Great Recession, short-term deficits “are both inevitable and highly appropriate at a time when the economy is weak.”

It should also be noted that, according to a recent NBC News/Wall Street Journal Poll, Americans do not prioritize deficit reduction over job creation. Only 5 percent of respondents to the poll cited it as their top concern, while 35 percent said job creation is the most important policy priority of theirs.

Brad DeLong:

We need bigger deficits.

As the disappointing May job numbers confirm, this is still an exceptional time—a time in which many of the normal rules of the Dismal Science are changed and transformed. It is a time for not normal economics but rather "depression economics." The terms on which the U.S. government can borrow now are exceptionally advantageous. And because of high unemployment the benefits of boosting government purchases and cutting taxes right now are exceptionally large.

Krugman: The Seductiveness Of Demands For Pain

Mark Thoma is astonished at Raghuram Rajan’s obviously intense desire to find some argument, any argument, for raising interest rates even though unemployment is near 10 percent. As he points out, Rajan is reduced to arguing that the Fed should raise rates because unemployment is low in Brazil.

But I realized, as I read this, that I’d seen something like this before. Back in the summer of 2008, as the world was sliding into recession, Ken Rogoff demanded that the Fed and the ECB raise rates because of rising commodity prices and inflationary pressure in developing countries. Again, it was very hard to understand what model lay behind the demand.

And let me throw Jeff Sachs into the mix. Brad DeLong is astonished by the recent Sachs op-ed calling for fiscal austerity now now now, in which he claims that fiscal expansion has had all sorts of negative effects that are, in fact, completely absent from the data.

What’s going on here? I don’t think you can resort to class-warfare arguments. What I think is happening is that we’re seeing the deep seductiveness, for many economists (and others), of taking what sounds like a tough-minded position in favor of inflicting pain on the economy — and the people who make up that economy.

Keynes knew all about this. Writing about the peculiar appeal of classical economics even in a world in which it had manifestly failed, he argued

That it reached conclusions quite different from what the ordinary uninstructed person would expect, added, I suppose, to its intellectual prestige. That its teaching, translated into practice, was austere and often unpalatable, lent it virtue.

Something like that, I believe, is going on here. Calling for austerity and tight money feels courageous, tough-minded, and virtuous; it allows the economist making such calls to take the pose of a Serious Person standing firm against the easy-money guys.

Yes, I know that’s insulting. But what’s so striking is that in all three cases I’ve cited you had highly trained economists — that is, people who have spent their whole lives arguing in terms of carefully laid out models — making arguments that aren’t backed by any model I can see.

And may I say, I think that by giving in to the seductiveness of calls for pain, some of my colleagues are doing a lot of damage; at a time when we really need clarity of thought, they’re adding to the intellectual murk instead.

Booman: Stupid Punditry
You gotta love Fred Barnes:

In Washington these days, President Obama is rumored to be hoping Republicans capture the House of Representatives in the midterm election in November. There's no evidence for this speculation, so far as I know, but it's hardly far-fetched. If Mr. Obama wants to avert a fiscal crisis and win re-election in 2012, he needs House Speaker Nancy Pelosi to be removed from her powerful post. A GOP takeover may be the only way.

To say there is no evidence for this speculation is an understatement. The president has had no success in working with House Republicans on any measure over the last year and a half and his agenda would be completely blocked if he had to deal with a Speaker Boehner and a bunch of Republican committee chairs.

As it is, he is finding Congress unwilling to add sufficient stimulus or even pass a budget. What the president needs above all is for the voters to defy expectations and return huge Democratic majorities to Congress. That is the only way he can break the logjam in Washington and take on big issues.

Krugman: Madmen in Authority

Rereading my post on the folly of the G20, it seems to me that I didn’t fully convey just how crazy the demand for fiscal austerity now now now really is.

The key thing you need to realize is that eliminating stimulus spending, while it would inflict severe economic harm, would do almost nothing to reduce future debt problems. Here’s the IMF’s estimate of sources of the growth in debt over the next few years:


And even this figure conveys a misleading impression of the importance of stimulus spending. First, since cutting stimulus would weaken the economy, it would reduce revenues — that is, a substantial part of the debt growth the IMF attributes to stimulus would have happened even without stimulus, through lower revenue. Second, for the US at least the core reason for long-run budget concern is rising health care costs — in fact, health cost control is the sine qua non of long-run solvency — which has nothing whatever to do with how much we spend on job creation now.

So how much we spend on supporting the economy in 2010 and 2011 is almost irrelevant to the fundamental budget picture. Why, then, are Very Serious People demanding immediate fiscal austerity?

The answer is, to reassure the markets — because the markets supposedly won’t believe in the willingness of governments to engage in long-run fiscal reform unless they inflict pointless pain right now. To repeat: the whole argument rests on the presumption that markets will turn on us unless we demonstrate a willingness to suffer, even though that suffering serves no purpose.

And the basis for this belief that this is what markets demand is … well, actually there’s no sign that markets are demanding any such thing. There’s Greece — but the Greek situation is very different from that of the US or the UK. And at the moment everyone except the overvalued euro-periphery nations is able to borrow at very low interest rates.

So wise policy, as defined by the G20 and like-minded others, consists of destroying economic recovery in order to satisfy hypothetical irrational demands from the markets — demands that economies suffer pointless pain to show their determination, demands that markets aren’t actually making, but which serious people, in their wisdom, believe that the markets will make one of these days.


Yglesias The No-Stimulus Economy

If fiscal stimulus is so great, then why hasn’t the Obama administration’s massive stimulus program helped improve the economy? Well, via Mark Thoma, the answer is that there hasn’t been any net fiscal stimulus, all the Obama administration’s efforts plus the automatic stabilizers have done is mitigate the contractionary impact of state and local policy:

But it’s important to remember that the proper measure for fiscal stimulus is not spending by the federal government; it is spending by all levels of government. And when you look at the contributions to US GDP growth (Table 1.1.2 at the BEA site), total government spending has been a drag on growth over the past two quarters. The increases at the federal level have not been enough to compensate for the spending cuts at the local and state levels.

And with another hat tip to Thoma, here’s a look at cuts in state and local payrolls:

State-local 1

Looked at comprehensively, what the country has been implementing is a mild version of the conservative policy prescription for boosting growth—fire bureaucrats and trim spending. And it’s not working very well. And with continuing economic weakness, state and local governments are set for further trimming even as federal stimulus winds down. This is going to be a disaster. Nothing about having economically pressed jurisdictions lay off huge quantities of teachers is going to improve the situation.

Punching Your Friends.

Jed Lewinson (DKos): AR-Sen: In Pyrrhic victory, White House attacks labor

For some reason, a foolish White House aide decided to celebrate Blanche Lincoln's narrow primary victory by slamming organized labor -- and by extension the netroots and the entire progressive movement. Speaking to Politico's Ben Smith, the White House aide said: "Organized labor just flushed $10 million of their members' money down the toiled."

That aide is obviously a coward for hiding behind the shield of anonymity. Moreover, whoever it is doesn't have a good political sense. Anyone who thinks Blanche Lincoln has a shot at re-election is a fool. Bill Halter was the only chance at winning that seat in Arkansas, and they spent millions to defeat him.

As Sam Seder tweeted:

and when Blanche loses? MT @benpolitico Sr. WH Official: Labor just flushed 10 mil of its members $ down the toilet in a pointless exercise

And Ezra Klein too:

For a WH that prizes discipline and dislikes drama, some "Senior WH official" is sure shooting off to @marcambinder and @benpolitico

More Ezra:

@benpolitico A few more statements like that one, and bet Labor will launch some more "pointless exercises."

Not to be outdone, the response of the AFL-CIO is a keeper:

AFL to White House: 'Labor isn't an arm of the Democratic Party'

The major labor federation AFL-CIO took sharp objection tonight to a White House official's assessment that they'd "flushed $10 million of their members' money down the toilet" in the "pointless exercise" of supporting the failed bid of Bill Halter to unseat Senator Blanche Lincoln.

"If that's their take on this, then they severely misread how the electorate feels and how we're running our political program. When we say we're only going to support elected officials who support our issues," said AFL-CIO spokesman Eddie Vale. "When they say we should have targeted our money among some key house races among Blue Dog Democrats --that ain't happening."

"Labor isn't an arm of the Democratic Party," Vale said. "It exists to suport working families. And that's what we said tonight, and that's what we're gong to keep saying."

I'll bet some people in the White House understand what's going on here, but whoever this senior official is has no clue about what's happening outside of the beltway. Time after time, the same White House aides make boneheaded, stupid political decisions that cost the President both popularity and political strength, in the process weakening and undermining the Democratic coalition. Instead of taking potshots at their supposed allies, maybe they should spend some time listening to the voices they hate, for example Greg Sargent's take on Lincoln's narrow win.

Blanche Lincoln's victory will be widely painted as a crushing loss for the left. Labor poured a huge amount of cash into the race, and there's no quibbling with the fact that this is a disappointing defeat.

But make no mistake: Progressive activists and labor mounted a challenge that was barely months in the making, and rallying behind Bill Halter, came within a hair of unseating a longtime incumbent who had the backing of the entire Dem establishment and the two most recent Dem presidents.

No matter what you read about this, the Halter challenge was a show of force by the left. Period. If you don't belive that, ask yourself why Lincoln suddenly found herself backing a tough-on-derivatives proposal in the Senate, why Obama had to cut radio ads and robocalls to save Lincoln, and why Bill Clinton had to come into the state to instruct voters not to listen to unions in order to save Lincoln's hide.

It remains to be seen who on the left will lift a finger to help Lincoln from here on out. More on this tomorrow, but for now, it's clear that the Dem establishment threw its weight behind a candidate who polls show is less likely to win the general election -- and Dems may have just lost themselves a Senate seat.

Whoever this aide is feels like he or she is king or queen of the world. Well, you know what? You're not God. You don't own this nation. We do. This is a government of the people. Not of senior White House officials. Not of lifelong DC hacks. And we're never going to let you forget that.

kos: AR-Sen: postscript

Jed already has a good take on the race, but I'll add a few thoughts:

  • The GOP establishment tries to nominate electable candidates, and gets sabotaged by the teabaggers. We're trying to nominate electable candidates, and we get sabotaged by the Democratic Party establishment. We won in Pennsylvania, lost in Arkansas. You can't win them all. But make no mistake -- we made the politically smart move.
  • Unfortunately, the smart political move lost. So say hello to Sen. John Boozman, the next senator from the great state of Arkansas. It's the political reality. No need to sugarcoat it.
  • How much do you think the Chamber of Commerce and its corporatist allies will spend on behalf of Blanche Lincoln through the fall? Zero. Suddenly, you're going to see Lincoln quite friendless.

    Those evil "out of state" unions and progressive groups sure won't lift a finger to help her. The only question is how much the DSCC wastes on the losing effort.

  • I've long since quit being impressed by moral victories. In this case, we forced Blanche to dramatically improve the financial reform bill, and it may be too late to strip out her derivatives reform language. And we delivered the kind of pain that no other incumbent wants to suffer. So congressional Democrats have two options -- they can either shape up and be spared primary pain (I'd be happy focusing solely on Joe Lieberman in 2012), or they can be Blanched.

    It's much easier to keep your job if you don't have to fight for it twice in a single year.

Greg Sargent:
8:46 p.m.: Random question of the night: Why are Blanche Lincoln's travails constantly seen as flowing from generic anti-incumbent sentiment, rather than as the result of a challenge from the left? When Tea Party candidates threaten Republicans it's accurately described as a challenge from the right....