At the Huffington Post, Tom Edsall has a useful article presenting the views of various prominent economists about the Geithner plan for financial institutions. He offers some snippets from the comments of those on all sides of the controversy, including Geithner critics Joseph Stiglitz, Jeffery Sachs and Henry Blodgett, and more favorably inclinded economists like Brad DeLong, Massimo Morelli and Nouriel Roubini.
Edsall’s kicker is nice:

With this range of disagreement, Nassim Nicholas Taleb, the Distinguished Professor of Risk Engineering at NYU-Polytechnic Institute, wrote to the Huffington Post that the way to deal with a lack of consensus is to recognize that: “Economists always disagree … on the wrong problems.”

I’ve been saying for a while that the thing to watch in public opinion was where and when Barack Obama’s approval ratings would begin to converge with “right track” assessments of the country’s direction. If today’s new Washington Post/ABC poll is any indication, this convergence could be happening pretty fast, and on terms largely favorable to the president.
The percentage of Americans expressing “right track” sentiments in this poll was 42%, which is a pretty decent number by the standards of recent years, and a very good number given all the prevailing bad economic news.
Obama’s job approval rating now stands at 66% (and at 61% with independents).
There are lots of interesting numbers in this poll, but the one that jumps out is this measurement of the effectiveness of Republican efforts to shift responsibility for the economic meltdown from George W. Bush to Barack Obama: 70% of Americans think Bush “deserves blame” for the economic situation, and 60% are still “angry” about it. The corresponding numbers for Obama are 26% and 21%. So far, the blame shift isn’t working, but as the president’s approval ratings remain relatively steady, optimism about the future is increasing. This is all good news for the Obama administration after a couple of weeks without a whole lot to smile about.

Jonathan Chait has penned a very interesting and important article in the New Republic today about the institutional barriers to Democratic unity, and to achievement of any coherent progressive agenda, posed by the Congress, and especially the U.S. Senate. He covers a lot of ground in this piece, from the floor rules that make 60 votes necessary to pass important legislation, to the “small-state” bias of the Senate’s constitutional structure, which exaggerates conservative power, to the chaotic culture of 100-sun-kings that makes senators resist discipline, to the committee system that gives certain sun kings an outsized ability to shape legislation.
If anything, I think Chait understates the importance of this last factor. Seniority-based committee and subcommittee chairmanships are, after all, the primary magnet for special-interest campaign contributions, and also a powerful reinforcer for legislative parochialism, which enables the committee baron to survive adverse political trends by bringing home and defending the bacon in a way that a replacement senator couldn’t hope to achieve.
Chait’s more controversial theme is that Democrats have a much harder time negotiating senatorial landmines than Republicans. This he attributes to a combination of historical patterns, the influence of business interests, and a tradition of ideological hedge-betting against Democratic presidents.
On history:

Since Democrats controlled the Congress almost continuously for more than 60 years beginning in 1933, the culture of Congress left a deeper imprint on their party. Republicans, shut out from the perks of majority status, finally decided under the opposition leadership of Newt Gingrich in the 1990s that their only path to power lay in partisan discipline.
Democrats, on the other hand, came of age under the old Democratic chieftains, and they have mostly aped that style. They do not fall in line, even under a Democratic president who mostly shares their goals.

On business interests:

[T]he affluent carry disproportionate political weight with elites in both parties. So, while people who earn more than $250,000 per year make up just a tiny slice of the electorate, they make up a huge chunk of any congressman’s friends, acquaintances, and fund-raisers.
What’s more, whatever their disposition toward business in general, Democrats feel it is not just a right but a duty to slavishly attend to the interests of their home-state businesses. That is why Kent Conrad upholds even the most absurd demands of agribusiness, or why even a good-government progressive like Michigan’s Carl Levin parrots the auto industry’s line on regulating carbon dioxide.
Taken as a whole, then, the influence of business and the rich unites Republicans and splits Democrats.

And on bet-hedging:

Democrats have locked themselves into a self-fulfilling prophecy. When their party controls all of Washington, things tend to go south quickly. The president’s popularity plunges, and soon his copartisans in Congress find themselves scrambling to keep from losing their own seats in the political undertow. It happened to Carter in 1978 and 1980, and again to Clinton in 1994.
And, so, they hedge their bets by carving out an independent identity. It doesn’t matter that Obama is popular now, or that a majority of Americans (according to a recent Pew poll) reject the criticism that he’s “trying to do too much.” If Obama defies history and retains his popularity, they’ll retain their seats anyway. They have to worry about the scenario where Obama turns into an albatross.

It’s all a pretty persuasive case, and one that does not, as many accounts do, rely on excessive attributions of treasonous motives to a particular faction of the party. Though party “centrists” are the current top suspects for a revolt against the Obama agenda in the Senate (as opposed to the op-ed pages, where progressives are issuing strong objectives to the Obama-Geithner financial plan), more traditional liberals, sometimes on institutional or parochial-interest grounds, were the main rebels against the last two Democratic presidents.
But Ezra Klein, who agrees strongly with Chait on the importance of institutional factors, challenges Chait’s claim that Republicans managed Congress in a superior fashion during the Bush years.

Read more…

Up until today, I figured that in the course of a pretty long career in politics and government, I had heard every conceivable conservative argument against progressive taxes, and for high-end tax cuts. But in the midst of a workmanlike article claiming (dubiously) that Americans are upset about government oppression of small businesses, we get this interesting twist from Carl Schramm and Doug Schoen at RealClearPolitics:

Hikes in marginal tax rates will discourage investment in new ventures. Those who dismiss concerns about “tax hikes on the rich” who can presumably afford to pay more should understand that among those “rich” people are well-to-do older relatives and friends of aspiring entrepreneurs, the first source of investment for most new businesses that would otherwise have trouble securing capital – especially in the midst of a credit crunch.

This suggestion comes immediately before a rejection of a cap and trade system for carbon emissions, on grounds that it would unduly burden businesses.
So to be clear about this, we can’t have progressives taxes because somebody’s rich uncle might not have the wherewithal to subsidize somebody’s business start-up. And we can’t deal with global climate change through measures that raise the price of fossil fuel consumption–with the added benefit of providing a way other than higher taxes to pay for government–because this is no time to raise business costs, even if it results not in high costs but in efficiency improvements and in greater use of alternative energy sources.
All this is to say that in the eyes of many conservatives, marginal tax rates always have to go lower, no matter what, and any government regulation or mandate is never affordable. They should just call it the “don’t tax rich uncles!” principle, and save a lot of time and trouble otherwise spent in articulating particular versions of this incredibly consistent gospel, that offers economic and political salvation in every imaginable circumstance.

President Obama’s new strategy regarding Afghanistan and Pakistan is getting cautiously favorable reviews from a broad range of foreign policy experts, most of whom give him credit for narrowing the U.S. mission to defeating Al Queda and their supporters in the Taliban.
The New York Times has an editorial, “The Remembered War,” which does a good job of putting Obama’s new policy in perspective, noting:

…It was greatly encouraging simply to see the president actually focusing on this war and placing it in the broader regional framework that has been missing from American policy. That is a good first step toward fixing the dangerous situation that former President George W. Bush created when he abandoned the necessary war in Afghanistan for the ill-conceived war of choice in Iraq.
Mr. Obama has come back to first principles. Instead of Mr. Bush’s vague talk of representative democracy in Afghanistan, he defined a more specific mission. “We are not in Afghanistan to control that country or dictate its future,” Mr. Obama said, but “to disrupt, dismantle and defeat Al Qaeda in Pakistan and Afghanistan.”

Foreign Policy magazine’s ‘Flashpoints‘ leads the discussion on the pros and cons of Obama’s Af-Pak strategy paper with a package of 7 separate articles from different authors, including “Will the Real Obama Middle East Strategy Please Stand Up?” by Brian Katulis, who credits Obama with,

a much-needed step in the right direction on the Pakistan piece of its policy. Increasing support for the democratically-elected civilian government and massively increasing development assistance to the country are steps that many think tanks have been calling for

Robert Templer, Asia program director at the International Crisis Group adds this in his Flashpoints contribution, “Call in the police (but please help them first)“.

Policing is one of the most effective — and also the most ill-used — tools available to tackle extremism. Yet compared with military and other assistance, international support for policing is miniscule, and much of it is delivered in an uncoordinated and ineffectual manner. Since 2002, the United States has given the Pakistani military more than $10 billion, only the thinnest slice of which has gone to policing…Giving police forces a greater role in counterinsurgency shouldn’t mean sending them heedlessly into harm’s way. What is needed are police to keep everyday peace on the streets. Reducing general criminality and providing security to the public provides the most widely shared and distributed public good. It is much more effective in winning hearts and minds than digging wells or building schools — and indeed encourages and protects such development activities.

In addition to the Flashpoints collection, FP is featuring “The Idiot’s Guide to Pakistan” by Nicholas Schmidle, a fellow at the New America Foundation who lived in Pakistan in 2006 and 7. Schmidle witholds judgment about the prospects of our Pakistan policy, but he provides a sobering read for gung-ho interventionists.
The New York Times also has a ‘Topic A’ roundtable addressing the President’s Af-Pak strategy with 10 short articles, one of which by Andrew Bacevich, author of “The Limits of Power: The End of American Exceptionalism,” asks an interesting big-picture question:

Ask yourself: When it comes to American prosperity and security, which matters more — Afghanistan or Mexico? The question answers itself. So if the United States has billions of dollars lying idle that it wishes to invest in development and security assistance, why prioritize Afghanistan?

Bacevich adds

More important than Afghanistan is neighboring Pakistan — bigger, at least as dysfunctional and armed with nuclear weapons. Yet the Obama plan treats Pakistan as an afterthought, promising trivial levels of assistance given the challenges facing that country. Even assuming that America can “fix” Afghanistan, does it possess the wherewithal, wisdom and will to do likewise in Pakistan?

In the NYT roundtable, former deputy national security adviser for Iraq and Afghanistan Meghan O’Sullivan takes a more positive view:

President Obama’s new strategy for Afghanistan and Pakistan deserves high marks on several fronts: The president made a compelling case connecting these countries with U.S. interests; he committed substantially more military and civilian resources to the effort; and he placed equal weight on Afghanistan and Pakistan — the latter being the true epicenter of this conflict. It is reasonable to wonder whether the new strategy is informed by the most important lesson from Iraq: Nothing is more important than winning the support of the population by providing security. Obama announced a “shift [in] the emphasis of our mission to training and increasing the size of the Afghan security forces.”

Then there is the thorny question about how welcome we are in Muslim countries. Juan Cole, President of the Global Americana Institute, notes at his Informed Comment blog:

In a recent poll, Muslim publics, including that in Pakistan, overwhelmingly rejected US military presence in Muslim countries. A year ago, an opinion poll of Pakistanis found that “most Pakistanis do not believe that Pakistan-U.S. security cooperation has benefited Pakistan, and a majority (84 percent) sees the U.S. military presence in Asia as a greater threat to Pakistan than Al Qaeda and the Taliban (60 percent). Two-thirds of the Pakistanis polled do not trust the United States to “act responsibly in the world,” and a vast majority thinks the United States aims to “weaken and divide the Islamic world.” A recent poll of residents of the tribal belt themselves found majority support for the US Predator strikes, but polls show that Pakistanis in general view the US as a destabilizing factor for their country.

Cole told Rachel Maddow “I didn’t think we were at war with Pakistan so much as with some Pushtun tribes on either side of the Hindu Kush. And I didn’t think it was likely that they would be brought under “control.”
Meanwhile I’m hoping President Obama and Secretary Clinton read an interesting article in the current issue of Foreign Affairs, “How Development Leads to Democracy” by Ronald Inglehart and Christian Welzel, co-authors of Modernization, Cultural Change, and Democracy. A couple of nut graphs:

…The bad news is that it is unrealistic to assume that democratic institutions can be set up easily, almost anywhere, at any time. Although the outlook is never hopeless, democracy is most likely to emerge and survive when certain social and cultural conditions are in place. The Bush administration ignored this reality when it attempted to implant democracy in Iraq without first establishing internal security and overlooked cultural conditions that endangered the effort.
The good news, however, is that the conditions conducive to democracy can and do emerge — and the process of “modernization,” according to abundant empirical evidence, advances them. Modernization is a syndrome of social changes linked to industrialization. Once set in motion, it tends to penetrate all aspects of life, bringing occupational specialization, urbanization, rising educational levels, rising life expectancy, and rapid economic growth. These create a self-reinforcing process that transforms social life and political institutions, bringing rising mass participation in politics and — in the long run — making the establishment of democratic political institutions increasingly likely…

It’s a good point to keep in mind as the Obama Administration refines its long range strategy in the mid and near east and we invest billions of dollars to fight terrorism and promote democracy.

The intra-progressive debate over the Geithner plan for financial institutions often seems like an arcane argument over obscure subjects that most of us–myself included–struggle to grasp. And so we often use shorthand involving “left” and “center” ideological postures, or alternatively, different levels of trust, from high to low, in the president and his economic team.
But now and then some of the contestants in the debate offer a ray of light into the larger and more generally accessible aspects of the crucial choices facing the administration and the country in addressing the financial crisis. That’s true of Paul Krugman’s New York Times column today.
It’s no secret that Krugman is an increasingly acerbic progressive critic of the administration’s approach to the financial system; the release of the Geithner plan filled him with “despair.” But his basic fear about Team Obama’s approach has never been so clearly articulated than today:

Much discussion of the toxic-asset plan has focused on the details and the arithmetic, and rightly so. Beyond that, however, what’s striking is the vision expressed both in the content of the financial plan and in statements by administration officials. In essence, the administration seems to believe that once investors calm down, securitization — and the business of finance — can resume where it left off a year or two ago.
To be fair, officials are calling for more regulation. Indeed, on Thursday Tim Geithner, the Treasury secretary, laid out plans for enhanced regulation that would have been considered radical not long ago.
But the underlying vision remains that of a financial system more or less the same as it was two years ago, albeit somewhat tamed by new rules.
As you can guess, I don’t share that vision. I don’t think this is just a financial panic; I believe that it represents the failure of a whole model of banking, of an overgrown financial sector that did more harm than good.

A different voice from a different ideological corner of the Democratic coalition, Will Marshall of the Progressive Policy Institute, offered a similar observation of the contending factions in a RealClearPolitics column yesterday:

Obama and Geithner are working to restore the financial sector as it existed roughly a decade ago, before the frenzied run-up in real estate prices and the bubble in securitized loans. But as the president has said, the regulatory minimalism of the Bush years must be replaced with a new regime that extends oversight to hedge funds and derivatives and ensures that we never again face the necessity of bailing out companies that are too big or too interlaced to fail.
The administration’s critics envision a more fundamental restructuring: a dramatic shrinking of the financial-services sector; an end to easy credit; a tight corset around any lending practices that might smack of seduction or predation; the permanent intrusion of government into matters of firm strategy and compensation; and, somewhat ironically, a return to the old, black-and-white days when conservative bankers took modest risks for modest profits.

Putting aside for a moment Krugman’s belief that Obama and Geithner only want to roll back a couple of years of financial malpractice, and Marshall’s contention that they are trying to restore the pre-Bush status quo ante, the fundamental fault line remains: how far should the madness be rolled back?
And this fault line both parallels and overlaps with an older intra-progressive argument that lurked just unde the surface of the last two Democratic presidential nominating contests: are Democrats trying to restore while modernizing the public policies of the Clinton administration, or was that administration itself a reflection of a rightward drift in domestic and international policy that needed to be overthrown?
This revived question is made all the more compelling by the fact that most of the Obama administration’s economic advisors were major figures in the Clinton administration, and have often been accused of favoring policies excessively favorable to Wall Street and excessively skeptical of government regulation.
Indeed, one central issue in the current debate casts light on the earlier arguments over the state of affairs in the 1990s: the question of exactly how large a role the financial sector ought to play in the national economy, and in a society where much of the middle class has financed its survival and the acquisition of its assets via novel credit instruments. Was the ideology of mass homeownership, avidly promoted by the Clinton adminstration, a mistake? And was the creation of a mass upper-middle-class, generally considered one of the epochal accomplishments of the 1990s, a mirage that disguised the brutal realities of a wealth-dominated economic system for those who didn’t share in the bounty?
In the end, the current financial policies of the Obama administration will either work to some degree or another, or won’t, and just as I’m sure Paul Krugman hopes for the best while predicting likely failure, I would hope that more optimistic progressives would adjust to bad results by rethinking the assumption that the late Bush Era represented an aberration in the generally positive upward trajectory of a modernized global economy. If progressives are, to use the familiar term, a “reality-based community,” we should learn a great deal soon not only about our future, but about our past.

I’ve been almost too amazed to react to the recent bout of conservative hilarity over the president’s use of teleprompters to deliver prepared text. ‘Prompters are no different than a typed speech text in a folder on a podium, and anyone who thinks most politicians haven’t used those for well over a century probably doesn’t know that politicians don’t generally write their own speeches, either. Forget about the stunning difference between George W. Bush with and without a teleprompter; consider the Great Communicator, Ronald Reagan, who wasn’t so great without a teleprompter or a printed text.
But in any event, conservative and sometimes presidential speechwriter Mike Gerson has performed the rare feat of coming to the defense of both Barack Obama and the teleprompter in a Washington Post column today. Gerson not only documents the heavy prior use of teleprompters by other political leaders; he also argues that it’s a device that helps produce better presidential leadership and clearer executive thinking:

The speechwriting process that puts glowing words on the teleprompter screen serves a number of purposes. Struggling over the precise formulations of a text clarifies a president’s own thinking. It allows others on his staff to have input — to make their case as a speech is edited. The final wording of a teleprompter speech often brings internal policy debates to a conclusion. And good teamwork between a president and his speechwriters can produce memorable rhetoric — the kind of words that both summarize a historical moment and transform it.

My own take is a bit more prosaic. Having watched countless politicians practice speeches on teleprompters at Democratic conventions for a long time, it’s clear to me that the primary utility of the ‘prompters isn’t so much to present text, but to control pacing and intonation. I’ve watched speakers who have memorized their texts absolutely cold still rely heavily on the ‘prompter scroll to remind themselves where to take breaths, what to emphasize, and how to clearly enunciate potentially confusing words and passages. It’s certainly not a “crutch” to deceive anyone or to disguise a lack of intelligence; as Gerson suggests, it’s a tool that a fine intelligence puts to good use.
I doubt Gerson’s column alone will quell conservative mockery of Barack Obama’s teleprompter use. But this really is an exceptionally ignorant criticism, especially coming from those who say they want to “reveal” the president’s ignorance.

In response to the president’s taunt the other night that GOP critics of his budget haven’t bothered to offer their own, the House GOP today made a big show of, well, confirming his point, for the time being at least.
Yes, they claim they released an “alternative budget” today, but the “Republican Road to Recovery” document is in actual fact a 16-page compilation of talking points, attacks on Obama, “goals,” and very sketchy proposals, with virtually no numbers and certainly no rigorous presentation of spending and revenue levels over time. And by “sketchy” proposals, I don’t just mean sparse, but also discredited, such as the endlessly repeated GOP “idea” of going back to the 1950s by forcing Americans into individually purchased health insurance policies and medical services, and the suggestion that “reforming” programs that help low-income Americans own homes is all that has to be done to fix the financial system.
The House GOP leadership, unsurprisingly, says it will have more details out “in a few days,” which makes you wonder why they killed so many trees with today’s document.
It appears Republicans just couldn’t bear letting Obama’s challenge stand until they had their act together, and had to do some quick posturing lest someone imagine they were just the “party of no.”
But at one prominent conservative website, there seems to be some deep resentment that Republicans didn’t respond a little more forcefully. Check out this interesting observation from Jeff Emanuel at Redstate:

There was a time in our country’s history where opponents who had a genuine beef with each other were not only unafraid to debate the issue (see Lincoln-Douglass), but were willing to actually do battle over it (see Sumner-Brooks). Heck, we’ve even had a sitting Vice President kill a former Treasury Secretary in a duel!
How fortunate it is for President Obama that he lives in an age in which the virtue of manhood as once understood and revered has been utterly depleted; an age in which we not only have nonviolent disagreements (which are largely — and sometimes unfortunately — governed by the rules of comity), but where out-and-out challenges like those he repeatedly made to McCain during the campaign, and like that he made to the House GOP last night (during what is, for all intents and purposes, simply an “extended campaign”), are treated as being a sign of all the toughness a Democratic president needs, even when they are nought but rhetorical devices he has no intention whatsoever of backing up with actual action.

Since–alas and alackaday–in this era of depleted manhood and runaway nonviolence and comity, there are no manly men left in the Republican Party willing to emulate Bully Brooks and Aaron Burr by literally bludgeoning or shooting their opponents, it seems they must bludgeon Democrats with talking points and return fire with “ideas” left over from the Bush administration and the McCain-Palin campaign.

There’s no political narrative more beloved in large swaths of media-land than that of “Democrats in Disarray!” Conservatives have obvious motives for promoting tales of indiscipline and factionalism in the Donkey Party. Certain Democrats from Left to Center, with varying degrees of sincerity, also have their own reasons for drawing bright and dreadful fault lines or launching “battles for the soul of the party.” And many MSM gabbers probably talk about the subject out of sheer laziness as a hardy perennial, much as they can always fill a slow news day by pointing to the latest batch of rhetorical craziness from right-wing talk show hosts or very junior GOP House members.
As Congress moves towards action on a new federal budget, however, reports of Democratic factionalism should be examined carefully and taken with more than a grain of salt.
Consider a story today from US News’ Political Bulletin, headlined: “Democrats Split Over Obama Budget.” If you actually read it, evaluations of the extent to which House and Senate Democratic budget committee chairs differ with Obama are all over the place. And if you actually think about it, the main difference so far other than obscure variations in out-year deficit reduction numbers is that the other shoe is dropping on the subject of carbon cap-and-trade legislation, which, for reasons that have little or nothing to do with Democratic ideology or Barack Obama, probably would not survive a Byrd Rule challenge that could knock it out of a budget reconciliation bill. Since cap-and-trade auction fees are the financing mechanism in the Obama budget for his Make-Work-Pay tax cut (created for the next two years by the stimulus legislation), that, too, is being left out of the Democratic budget drafts for the time being.
These are important omissions, but are not irretrievable this year or (more likely) next, and don’t represent some sort of Democratic “circular firing squad” or a fullscale congressional Democratic revolt against the administration.
Indeed, after reading the lurid US News headline, check out the headline in this AP assessment of the exact same facts: “Unified Democrats Mirror Obama Budget Priorities.”
The other “Democrats in Disarray” story getting circulation this week involves the announcement by a group of “centrist” Democratic senators led by Evan Bayh that they are creating a 14-member caucus, followed by announcement of an effort by several progressive groups, including MoveOn.org and Americans United for Change, to run ads encouraging said “centrists” to support Obama’s budget and policy priorities (a development that Politico reported under the headline: “Democrats versus Democrats.”).
So far, despite widespread accusations of incipient betrayal, the Bayh group hasn’t issued any demands or offered to broker any deals with Republicans, but the reaction led three of its members to pen a Washington Post op-ed disclaiming treasonous intentions. And the supposed counterweight, the pro-Obama ads, fall pretty fall short of violent chain-yanking or purge-threatening, and could in fact help make it easier for Dems in conservative states to support Obama’s agenda. “There’s zero anger coming from our side,” said Americans United spokesman Jeremy Funk to Politico.
Democratic factionalism may ultimately become a big problem for the Obama administration, but it ain’t happened yet. We all need to understand that such “stories” invariably fall on very fertile soil in Washington, and require little nourishment in the way of objective reality.

Ironically, the economic crisis that has ruined so many small fortunes may boost the political prospects of those with large fortunes. According to CQ’s Rachel Kapochunas, the 2010 campaign cycle could be a big year for self-funded candidates given the tough fundraising climate:

In the previous election cycle, at least 18 House and eight Senate candidates loaned their campaigns more than $1 million in personal funds, according to CQ Moneyline.
Another 60 candidates loaned their campaigns $350,000 or more. In addition, numerous self-funding candidates identified their personal funds as contributions instead of loans to be repaid.
But the previous election cycle includes a time during which the forecast for the country’s economic health was less dire than today’s widespread predictions.
Jennifer A. Steen, author of author of “Self-Financed Candidates in Congressional Elections,” said future economic conditions may strongly impact the coming election season.
“People’s willingness to spend money on political activity … is probably going to taper off this year,” Steen said. “I think it should be harder for most candidates to raise money and that makes the relative value of self-financing go up.”

As Kapochunas notes, self-funded candidates don’t actually have that great a track record for winning, but the two parties love them for what they don’t ask from the national fundraising networks. Indeed, self-funders are the ideal candidates to recruit in tough districts: they force the opposition to spend money better spent elsewhere, and they allow the party to target its own resources to the closest races.
Nothing like a fool and his (or her) money to change the odds in a competitive political environment!