Choo Choo Canned Heat Collectivism

George Will in Newsweek:

So why is America’s “win the future” administration so fixated on railroads, a technology that was the future two centuries ago? Because progressivism’s aim is the modification of (other people’s) behavior.

Forever seeking Archimedean levers for prying the world in directions they prefer, progressives say they embrace high-speed rail for many reasons—to improve the climate, increase competitiveness, enhance national security, reduce congestion, and rationalize land use. The length of the list of reasons, and the flimsiness of each, points to this conclusion: the real reason for progressives’ passion for trains is their goal of diminishing Americans’ individualism in order to make them more amenable to collectivism.

To progressives, the best thing about railroads is that people riding them are not in automobiles, which are subversive of the deference on which progressivism depends. Automobiles go hither and yon, wherever and whenever the driver desires, without timetables. Automobiles encourage people to think they—unsupervised, untutored, and unscripted—are masters of their fates. The automobile encourages people in delusions of adequacy, which make them resistant to government by experts who know what choices people should make.

Time was, the progressive cry was “Workers of the world unite!” or “Power to the people!” Now it is less resonant: “All aboard!”

Jason Linkins at Huffington Post:

One way of looking at high-speed rail systems is that they are a means by which distant communities get connected, economic development and jobs are fostered, and workers with a diverse array of marketable skills can improve their mobility and thus their employment prospects. But another way of looking at high-speed rail is that it’s some nonsense that came to a bunch of hippies as they tripped balls at a Canned Heat concert. That’s my takeaway with George Will’s latest grapple-with-the-real-world session, in which he attempts to figure out “Why liberals love trains.” It’s “Matrix” deep, yo

Sarah Goodyear at Grist:

In case you’re wondering about the provenance of that “collectivism” word — well, collectivism was a favorite demon of Ayn Rand, right-wing philosopher and the Ur-mother of libertarianism in the United States. Here’s a typical usage, from The Objectivist Newsletter of May 1962 (via the Ayn Rand Lexicon):

The political philosophy of collectivism is based on a view of man as a congenital incompetent, a helpless, mindless creature who must be fooled and ruled by a special elite with some unspecified claim to superior wisdom and a lust for power.

“Collectivism” also recalls some of the very worst communist ideas, including the “collectivization” of farms in the Stalinist Soviet Union — among the great atrocities of the 20^th century (a crowded category).

Which makes it a pretty strong term to be throwing around when it comes to funding different modes of transportation in 21^st-century America. But Will persists with his formulation:

To progressives, the best thing about railroads is that people riding them are not in automobiles, which are subversive of the deference on which progressivism depends. Automobiles go hither and yon, wherever and whenever the driver desires, without timetables. Automobiles encourage people to think they — unsupervised, untutored, and unscripted — are masters of their fates. The automobile encourages people in delusions of adequacy, which make them resistant to government by experts who know what choices people should make.

A couple of things here. First off, automobiles are not the only vehicles capable of encouraging “delusions of adequacy.” Bicycles, one might argue, are a lot more capable of encouraging such delusions — fueled as they are entirely by the body of the “unscripted” individual. Which is perhaps why they seem to enrage people in cars, who have to worry about gasoline and the like, so very much.

Second, let’s talk about modern air travel. What mode of transport is more capable of sapping the human sense of possibility, more confining of the untrammeled human spirit? Perhaps before Will goes after high-speed rail, he should call for the defunding of the Federal Aviation Administration.

Paul Krugman:

As Sarah Goodyear at Grist says, trains are a lot more empowering and individualistic than planes — and planes, not cars, are the main alternative to high-speed rail.

And there’s the bit about rail as an antiquated technology; try saying that after riding the Shanghai Maglev.

But anyway, it’s amazing to see Will — who is not a stupid man — embracing the sinister progressives-hate-your-freedom line, more or less right out of Atlas Shrugged; with the extra irony, of course, that John Galt’s significant other ran, well, a railroad.

Matthew Yglesias:

But I do think this is a good look into the psychology of conservatives. Maybe high-speed rail is a waste of money and maybe it isn’t. I think it’s plausible to say we should just spend the cash on better regular mass transit or whatever. But I’ve long struggled to explain the right-wing’s affection for status quo American policies that amount to massive subsidization of the automobile. A small slice of that is spending on roads. A much larger amount is minimum lot size rules, parking mandates, the whole shebang. It’s a bit odd, and my instinct had been to say that this just goes to show that conservatism has nothing to do with free markets and everything to do with the identity politics of middle aged white suburban conformists. But Will offers another explanation here. Automobile use is not a sign of the free market, but an actual cause of it. Driving inculcates habits of freedom, and thus coercive pro-car regulations are, in a way, freedom-promoting.

More Krugman:

A bit more on this subject — not serious, just a personal observation after a long hard day of reading student applications. (My suggestion that we reject all applicants claiming to be “passionate” about their plans was rejected, but with obvious reluctance.)

Anyway, my experience is that of the three modes of mechanized transport I use, trains are by far the most liberating. Planes are awful: waiting to clear security, then having to sit with your electronics turned off during takeoff and landing, no place to go if you want to get up in any case. Cars — well, even aside from traffic jams (tell me how much freedom you experience waiting for an hour in line at the entrance to the Lincoln Tunnel), the thing about cars is that you have to drive them, which kind of limits other stuff.

But on a train I can read, listen to music, use my aircard to surf the web, get up and walk to the cafe car for some Amfood; oh, and I’m not restricted by the War on Liquids. When I can, I prefer to take the train even if it takes a couple of hours more, say to get to Boston, because it’s much higher-quality time.

Yes, your choices are limited by the available trains; if I wanted to take a train from beautiful downtown Trenton to DC tomorrow, I’d be restricted to one of 21 trains, leaving roughly once an hour if not more often, whereas if I wanted to drive I could leave any time I wanted. Big deal.

And don’t get me started on how much more freedom of movement I feel in New York, with subways taking you almost everywhere, than in, say, LA, where you constantly have to worry about parking and traffic.

So if trains represent soulless collectivism, count me in.

Atrios:

As Krugman says, trains really are the best way to travel, at least for travel times that are roughly competitive with air travel. That fact doesn’t automatically mean that therefore we should spend huge amounts of public money on it, but, you know, it does mean that people like trains for more reasons than their insidious collectivist promotion.

Scott Lemieux at Lawyers, Guns and Money:

Manypeoplehave, for good reason, taken their knocks at syndicated columnist William F. George’s ludicrous column about trains, with particular emphasis on the substantial amount of government subsidies that facilitate “individualistic” car travel.    In addition, I’d note that the flying experience is a good example of Republican “freedom.”   For some distances flying is of course necessary and useful, although a good high-speed train network would reduce the number of routes that make flying more practical. For the ordinary person, however, flying is a miserable experience — more waiting in line than a Soviet supermarket during a recession, the potentially humiliating security theater, and incredibly cramped and uncomfortable travel.     But — and here’s the rub — people as affluent as Will can buy their way out of the worst aspects of flying, with separate security lines, private lounges, and first-class seating.   With trains, on the other hand, the experience for the ordinary person is infinitely superior but the affluent can obtain an only marginally better experience.   So you can see why Will hates it.   The fact that trains might represent more meaningful freedom for you isn’t his problem.

More Krugman:

Some of the comments on my various pro-train posts have been along the lines of “Oh yeah, try taking the train to Los Angeles.” But that, of course, misses the point.

I think about the trains/planes comparison something like this: planes go much faster, and will continue to go faster even if we get high-speed rail; but there are some costs associated with a plane trip that can be avoided or minimized on a rail trip, and those costs are the same whether it’s a transcontinental flight or a hop halfway up or down the Northeast Corridor. You have to get to the airport at one end, and get from it at the other, which is a bigger issue, usually, than getting to and from train stations that are already in the city center. You have to wait on security lines. You have to spend more time boarding. So if we look just at travel time, it looks like this:

Suppose that I put those fixed costs at 2 hours; suppose that planes fly at 500 miles an hour; and suppose that we got TGV-type trains that went 200 miles an hour. Then the crossover point would be at 667 miles. It would still be much faster to take planes across the continent — but not between Boston and DC, or between SF and LA. Add in my personal preference for train travel, and I might be willing to train it to Chicago, maybe, but not to Texas.

Now, if we got vacuum maglevs …

More Yglesias:

I endorse Krugman’s analysis, but in some ways I think the fact that you can’t get to LA on a train actually is the point. You can’t take the train from New York to Los Angeles. You can’t drive from New York to Los Angeles. You need an airplane. But LaGuardia Airport has limited runway capacity and many daily flights to Boston. Clearly, though, you can take a train from New York to Boston. So money spent on improving the speed and passenger capacity of NYC-Boston train links is, among other things, a way to improve New York’s air links to the West Coast.

Now a separate question is whether there’s any feasible way to actually do this in a country that doesn’t have a French (or Chinese) level of central political authority empowered to build straight tracks through people’s suburban backyards. The answer seems to be “no,” but the potential gains from greater rail capacity in the northeast are large and would (via airplanes) spill over into the rest of the country.

More Goodyear:

In the dark days immediately after 9/11, Will seems to have had a revelation about how a certain mode of transportation could help our nation be stronger and more secure. In an Oct. 1, 2001 column syndicated in the Jewish World Review, Will recommended three steps in response to the attack that the nation had just sustained. First, buy more B-2 bombers. Second, cut corporate taxes. And third? Let Will speak for himself (emphasis mine):

Third, build high-speed rail service.

Two months ago this columnist wrote: “A government study concludes that for trips of 500 miles or less — a majority of flights; 40 percent are of 300 miles or less — automotive travel is as fast or faster than air travel, door to door. Columnist Robert Kuttner sensibly says that fact strengthens the case for high-speed trains. If such trains replaced air shuttles in the Boston-New York-Washington corridor, Kuttner says that would free about 60 takeoff and landing slots per hour.”

Thinning air traffic in the Boston-New York-Washington air corridor has acquired new urgency. Read Malcolm Gladwell’s New Yorker essay on the deadly dialectic between the technological advances in making air travel safer and the adaptations to these advances by terrorists.

“Airport-security measures,” writes Gladwell, “have simply chased out the amateurs and left the clever and the audacious.” This is why, although the number of terrorist attacks has been falling for many years, fatalities from hijackings and bombings have increased. As an Israeli terrorism expert says, “the history of attacks on commercial aviation reveals that new terrorist methods of attack have virtually never been foreseen by security authorities.”

The lesson to be learned is not defeatism. Security improvements can steadily complicate terrorists’ tasks and increase the likelihood of defeating them on the ground. However, shifting more travelers away from the busiest airports to trains would reduce the number of flights that have to be protected and the number of sensitive judgments that have to be made, on the spot, quickly, about individual travelers. Congress should not adjourn without funding the nine-state Midwest Regional Rail Initiative.

Now that it’s a Democratic administration advocating for rail, Will sees it not as a sensible solution for moving people from one place to another, but instead as a tool to control an unsuspecting populace:

To progressives, the best thing about railroads is that people riding them are not in automobiles, which are subversive of the deference on which progressivism depends. Automobiles go hither and yon, wherever and whenever the driver desires, without timetables. Automobiles encourage people to think they — unsupervised, untutored, and unscripted — are masters of their fates. The automobile encourages people in delusions of adequacy, which make them resistant to government by experts who know what choices people should make.

In his recent screed against rail, Will explicitly dismissed arguments that it would be good for national security. He also didn’t mention air travel. Maybe that would have reminded him of what he himself wrote nearly 10 years ago.

David Weigel:

Good get, but if we’re going to be talking about stupid ideas people had right after 9/11, we’ll be here all day. Will’s rail fetish was a passing fancy, and since then he’s come around to the conservative consensus that rail can never, ever work as a replacement for air travel, so rail projects are essentially boondoggles.

This is an odd discussion to have as the Atlas Shrugged movie comes out. The book and the film absolutely fetishize rail; the film makes it clear that rail will become necessary once gas starts to really run out. And this is something liberal rail adherents point out, too. But I don’t see conservatives coming around to HSR, which needs a massive manpower and financial and land commitment to get going, outside of that sort of crisis thinking.

Jamelle Bouie at Tapped:

This isn’t to play “gotcha,” as much as it is to note a simple fact about our world: We’re all partisans, whether we admit it or not. Reason’s opposition to the individual mandate has almost nothing to do with the substance of what is truly a center-right policy and everything to do with current political circumstances. The mandate was implemented by a Democrat. Reason, as a right-libertarian institution, is part of the conservative opposition to the liberal president. Likewise, Will’s opposition to high-speed rail is purely a function of partisan politics.

This isn’t a bad thing. Yes, partisanship can be taken too far and veer into ideological blindness, but, in general, it is a useful way of organizing our thoughts on policies and politics. Indeed, it’s how most voters process political information. Political commentary would be much more bearable if pundits were willing to accept the partisan origins of their biases and skepticism, instead of playing a game where we pretend to be open-minded observers.  Most are anything but.

Gulliver at The Economist:

Mr Bouie might be overstating the influence of partisanship a bit, and it’s hard for people to know exactly what is driving others’ opinions—or even one’s own. Still, partisanship is certainly a useful frame through which to view both the most ardent opponents and the most passionate defenders of HSR. There is political science research that shows that a president weighing in on one side of a given debate (as Barack Obama has with high-speed rail) dramatically increases political polarization on that issue. Of course, if Mr Bouie’s theory is correct, we should be able to point to some lefty supporters of HSR whose support seems to be driven primarily by partisanship—or even a few who, like Mr Will, have switched positions on the issue. Anyone have a nomination? Let us know in the comments.

That Zany Zandi

Lori Montgomery at WaPo:

A Republican plan to sharply cut federal spending this year would destroy 700,000 jobs through 2012, according to an independent economic analysis set for release Monday.

The report, by Moody’s Analytics chief economist Mark Zandi, offers fresh ammunition to Democrats seeking block the Republican plan, which would terminate dozens of programs and slash federal appropriations by $61 billion over the next seven months.

Zandi, an architect of the 2009 stimulus package who has advised both political parties, predicts that the GOP package would reduce economic growth by 0.5 percentage points this year, and by 0.2 percentage points in 2012, resulting in 700,000 fewer jobs by the end of next year.

Brad DeLong:

One question: in what sense was Mark Zandi an “architect of the 2009 stimulus plan”? I don’t get that at all.

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UPDATE: Queried, Lori Montgomery emails:

he was on the team of economists who were advising pelosi during that period, and his research helped shape the package. don’t you remember all those photo ops?

Hmmm… By that standard, the Recovery Act had at least 200 “architects,” including me…

Atrios:

It doesn’t matter how many “reports” from “economists” get released making the obvious point that cutting spending=cutting jobs, the Real Americans in the Tea Party and those who understand them and speak for them, the Villagers, know that cutting spending is the right thing to do. Because arglebargle!

Jonathan Cohn at TNR:

I can’t vouch for these numbers and Zandi, who used to advise John McCain, is now the Democrats’ favorite economist to cite. But that’s largely because Democrats are making an argument that mainstream economists like Zandi happen to support: In the midst of such a weak economic recovery, less government spending is almost certainly going to mean fewer jobs.

Patricia Murphy at Politics Daily:

On Monday, House Majority Leader Eric Cantor dismissed the Moody’s report entirely: “I would note that Mr. Zandi was a chief proponent of the Obama/Reid/Pelosi stimulus bill that we know has failed to deliver on the promise of making sure unemployment did not rise above 8 percent.”

But speaking with senators on Capitol Hill Tuesday, Bernanke took issue with the reports and their predictions of dire consequences if the Republican proposal were to pass the Senate.

“A $60 billion cut obviously would be contractionary to some extent, but our analysis does not get a number quite that high,” Bernanke said of the job losses predicted by Moody’s and the economic damage predicted by Goldman Sachs. “I have to say we get smaller impact than that.” Instead, Bernanke said that the cuts would likely slow economic growth by “several tenths” of a percent and that the lost jobs would be “much less than 700,000.”

Although Republicans may feel vindicated by Bernanke’s remarks, he did add that the proposed GOP cuts would not grow the economy in the short term.

“It would of course have the effect of reducing growth on the margins certainly,” he said. “It would have a negative impact, but 2 percent? I’d like to see their analysis. It seems like a somewhat big number relative to the size of the cut.”

John B. Taylor at Economics One:

As I have written before, the old-style Keynesian approach used by Zandi has many of the same flaws that are found in the Goldman Sachs approach: excessively large multipliers, inaccurate predictions of the effect of the 2009 stimulus, failure to recognize that reducing uncertainty about the debt can have positive effects, especially if it is done in a credible way by reducing spending growth now, not postponing it to a date uncertain in the future. After stating that “too much cutting too soon would be counterproductive,” Zandi claims that this is what the “House Republicans want” and what their budget does. But it’s simply not credible to say that a budget that has government spending increasing at 6.7 percent per year cuts spending too much too soon.

In sum, there is no convincing evidence that H.R. 1 will reduce economic growth or total employment. To the contrary, there is more reason to expect that it will increase economic growth and employment as the federal government begins to put its fiscal house in order and encourage job-producing private sector investment.

David Weigel at Slate:

Zandi, Phillips, and other economists who think the government has been creating or saving jobs with supply-side spending are not taken seriously on the right. They have economic models that rate how much “bang for the buck” (they prefer this cliché) is delivered from various types of spending—unemployment checks, food stamps, tax cuts. They have the CBO’s numbers, which posit that 1.4 million to 3.5 million people have jobs that wouldn’t have existed without the stimulus package that became law two years ago this month. Republicans just don’t buy them.

“These analyses by the Keynesians are missing a key part of the story,” Rep. John Campbell, R-Calif., explained Monday. “One hundred percent of the money they’re talking about is borrowed. Republicans, right now, are talking about cutting spending on the margins, and 100 percent of what we don’t cut will be borrowed. The capital that they’re putting to work is capital that’s not improving something in the private sector, and all of these studies fail to take into account the interest we’re paying on the deficit.”

Campbell, an Ayn Rand disciple, has been saying this for a while. Republicans have started aping him only recently. Two years ago, as they opposed the stimulus bill, House Republicans reverse-engineered the White House’s economic models—models bearing a kissing-cousin resemblance to Zandi’s—and promised 6.2 million jobs for half the price of the Democrats’ proposal. The number was based on calculating how many jobs would be killed by tax hikes and inverting it.

This didn’t make much sense, and Republicans didn’t really believe it, but they were out of power. Their bill didn’t pass, so no one noticed. The Democrats’ stimulus did pass, and because unemployment went up, voters don’t think it worked. This gives Republicans a free hand to say anything they like about doomsaying predictions of cuts in government spending leading to cuts in employment. (Rep. Paul Ryan, R-Wis., who helped develop the GOP’s Potemkin stimulus, noted that the Democrats planned on spending $275,000 per job if their models worked; the current cost estimate per job is $228,055, as reported derisively by the conservative CNSNews.com.)

They may be dismissive, but Republicans aren’t Pollyannas about this stuff. Boehner’s comment to a Pacifica Radio reporter—if the spending cuts killed government jobs, he said, “so be it” —was not the party’s message. It’s not actually how they’ve been approaching their cuts.

A GOP aide with knowledge of the process that led to $61 billion in proposed cuts described it like this. The ideas for cuts came from plenty of places—a lot of them came from freshmen—but they were vetted by veteran staff on the Appropriations Committee. Those people tried to direct the cuts away from the salary side of the agencies they were attacking. They tried to target discretionary spending that was not part of salaries. For example, Republicans cut $1.3 billion of discretionary funding to community health centers; the Affordable Care Act, which is still there, stubbornly unrepealed, included mandatory funding for those health centers that the GOP didn’t touch.

The goal, even if GOP leaders won’t sing about it, was to shrink spending but leave employment as unmolested as possible. The agencies have discretion over how they use their shrunken budgets; they don’t have to cut back jobs.

The Republicans who’ll open up about possible job losses might have the more convincing case. Campbell talks about the losses as Joseph Schumpeter talked about creative destruction—temporary losses offset by sustainable gains.

“If we do not get the deficit down, if we don’t change trajectory, will lose more jobs than we lose from cuts,” Campbell said. “When a debt crisis hits, if we’ve still got 47 percent of our debt held by foreigners, we’ll have much greater job loss than that. Our first objective to is try and prevent a fiscal collapse, a la Greece. And it will take a longer time for the private sector to replace public-sector jobs that are cut, but when they do, they’ll last longer.”

Republicans have been talking like this for months, and they haven’t been hurt by it. The choice between stimulus spending and creative destruction is a choice between something voters don’t think worked and something voters don’t think we’ve tried. As long as voters don’t pay attention to how the U.K.’s austerity program is working, the GOP will be just fine.

Kids Today Just Don’t Blog Like We Used To

Verne Kopytoff at NYT:

Like any aspiring filmmaker, Michael McDonald, a high school senior, used a blog to show off his videos. But discouraged by how few people bothered to visit, he instead started posting his clips on Facebook, where his friends were sure to see and comment on his editing skills.

“I don’t use my blog anymore,” said Mr. McDonald, who lives in San Francisco. “All the people I’m trying to reach are on Facebook.”

Blogs were once the outlet of choice for people who wanted to express themselves online. But with the rise of sites like Facebook and Twitter, they are losing their allure for many people — particularly the younger generation.

The Internet and American Life Project at the Pew Research Center found that from 2006 to 2009, blogging among children ages 12 to 17 fell by half; now 14 percent of children those ages who use the Internet have blogs. Among 18-to-33-year-olds, the project said in a report last year, blogging dropped two percentage points in 2010 from two years earlier.

Former bloggers said they were too busy to write lengthy posts and were uninspired by a lack of readers. Others said they had no interest in creating a blog because social networking did a good enough job keeping them in touch with friends and family.

Blogging started its rapid ascension about 10 years ago as services like Blogger and LiveJournal became popular. So many people began blogging — to share dieting stories, rant about politics and celebrate their love of cats — that Merriam-Webster declared “blog” the word of the year in 2004.

Defining a blog is difficult, but most people think it is a Web site on which people publish periodic entries in reverse chronological order and allow readers to leave comments.

Yet for many Internet users, blogging is defined more by a personal and opinionated writing style. A number of news and commentary sites started as blogs before growing into mini-media empires, like The Huffington Post or Silicon Alley Insider, that are virtually indistinguishable from more traditional news sources.

Blogs went largely unchallenged until Facebook reshaped consumer behavior with its all-purpose hub for posting everything social. Twitter, which allows messages of no longer than 140 characters, also contributed to the upheaval.

No longer did Internet users need a blog to connect with the world. They could instead post quick updates to complain about the weather, link to articles that infuriated them, comment on news events, share photos or promote some cause — all the things a blog was intended to do.

Caitlin Dickson at The Atlantic with a round-up

Chris Crum at WebProNews:

Here we go again with another one of those silly social media vs. blogs debates. The New York Times stirred the pot this time with an article called, “Blogs Wane as the Young Drift to Sites Like Twitter.”

“Blogs were once the outlet of choice for people who wanted to express themselves online. But with the rise of sites like Facebook and Twitter,” writes Verne G. Kopytoff. “They are losing their allure for many people — particularly the younger generation.”

This idea that blogs are dying has been around practically as long as either Facebook or Twitter, and it almost always gets dismissed as a ridiculous notion.

WordPress founding developer Matt Mullenweg took some issue with the piece: “The title was probably written by an editor, not the author, because as soon as the article gets past the two token teenagers who tumble and Facebook instead of blogging, the stats show all the major blogging services growing — even Blogger whose global ‘unique visitors rose 9 percent, to 323 million,’ meaning it grew about 6 Foursquares last year alone. (In the same timeframe WordPress.com grew about 80 million uniques according to Quantcast.)”

In fact, in 2010, WordPress had over 6 million new blogs created in 2010, and pageviews were up by 53%.

John Del Signore at Gothamist:

A more accurate headline might be “Google’s Company ‘Blogger’ Sees Domestic Page Views Decline 2%.” Catchy, right? To be fair, the Times does acknowledge “the possibility that the decline in blogging by the younger generation is merely a semantic issue.” That’s because Tumblr is proving increasingly popular, and some kids think Tumblr isn’t blogging. “It’s different from blogging because it’s easier to use,” explains one San Francisco teen. “With blogging you have to write, and this is just images. Some people write some phrases or some quotes, but that’s it.”

The Times also concedes that “defining a blog is difficult, but most people think it is a Web site on which people publish periodic entries in reverse chronological order and allow readers to leave comments.” The study in question found that from 2006 to 2009, blogging among children ages 12 to 17 fell by half. But before you run out and set up a charitable trust to educate children on the vital importance of daily blogging, note the study’s conclusion:

While the act formally known as blogging seems to have peaked, Internet users are doing blog-like things in other online spaces as they post updates about their lives, musings about the world, jokes, and links on social networking sites and micro-blogging sites such as Twitter.

PHEW. So kids are still lustily committing “the act formally known as blogging”—they just don’t like using that old-fashioned word blog (Est. 2004), and prefer expressing their incisive opinions on the latest Family Guy episode in 140 characters or less. We can live with that.

Scott Rosenberg:

So the actual story — which, to be fair, the Times’ article mostly hews to (it’s the headline and lead that skew it more sensationally) — is that blogging keeps growing, but it’s losing popularity among teens.

Social networking is changing blogging. (My postscript to the paperback edition of Say Everything addresses those changes at length.) More of us are using Facebook and Twitter for casual sharing and personal updates. That has helped clarify the place of blogging as the medium for personal writing of a more substantial nature. Keeping a blog is more work than posting to Facebook and Twitter. So I wouldn’t be surprised if, long-term, the percentage of the population blogging plateaus or even declines.

Maybe we’ll end up with roughly ten percent of the online population (Pew’s consistent finding) keeping a blog. As the online population becomes closer to universal, that is an extraordinary thing: One in ten people writing in public. Our civilization has never seen anything like it.

So you can keep your “waning” headlines, and I’ll keep my amazement and enthusiasm.

BONUS LINKS: WordPress founder Matt Mullenweg addresses the story:

At some point you’ll have more to say than fits in 140 characters, is too important to put in Facebook’s generic chrome, or you’ve matured to the point you want more flexibility and control around your words and ideas.

And Anthony DeRosa points out that Twitter isn’t very popular among the teen set either.

Dan Riehl:

I spend time on Twitter I might otherwise have spent blogging. But the net result may actually be good for blogging. One does fewer throw away posts meant to only say something quick, better said via Twitter. What this is really about is alternative media taking on the old, or mainstream media. According to the Times, 14% of children ages 12 – 17 are blogging. That may have halved from when blogging was all the rage in media, but it’s still a healthy percentage.

Among 18-33 year-olds, the percentage dropped by 2 points in 2010. Good. It’s a little crowded out here, as it stands. I’ve no reason to doubt that New Media, in its various forms, continues to grow in size and influence.

Atrios:

I’m sure the emphasis of the internet will keep evolving, but what apparently won’t evolve is the mainstream press’s view of “the internet” as somehow being about young people. For years and years after the rise of political blogging, the press kept writing about it as if it was something that young people were into. As I wrote many times, I certainly wished I could take credit for getting a bunch of college kids interested in politics, but the fact is that people who read this site have always been pretty old. Basically the mainstream media types just wanted to infantalize bloggers as part of their mission of painting us as Very Unserious People.

Not Exactly A Moment Of Zen

Jon Stewart’s last show of 2010

Jay Newton-Small at Swampland at Time:

In his last show of the year, The Daily Show’s Jon Stewart took Congress and the media to task for not making the Zadroga bill a priority. Named for James Zadroga, a 911 first responder who died in 2006 of respiratory disease, the bill would create a trust fund to cover the health care costs of surviving police, firemen, emergency medical technicians and clean up crews who toiled for months in the wreckage of the World Trade Center. The bill passed the House but has been stalled in the Senate due to GOP concerns that it would, in essence, create a new — albeit relatively tiny — entitlement.

(Stewart may have taken outrage lessons on the issue from his buddy Rep. Anthony Weiner with whom he’s shared a South Hampton summer sublet.)

In the wake of Stewart’s show, ABC’s Jonathan Karl ran a story on World News and the cable nets seem to have woken up to the bill’s existence. On Sunday, New York Senators Chuck Schumer and Kristen Gillibrand announced that a revised version of the bill, which reduces the cost from $7.4 billion to $6.2 billion – the measure is offset by closing a corporate tax loop hole – had gained at least some GOP support. Indeed, several prominent Republicans have come out in support of the bill with Fox News Sunday’s Chris Wallace calling it a “national shame” that the legislation has yet to be enacted.

Greg Sargent:

With Senate Democrats upping the pressure for passage of the bill giving health benefits to sickened 9/11 responders, it’s going to get increasingly hard for GOP Senators to maintain their opposition. That’s because even right-leaning commentators and political operatives are growing mighty uncomfortable with the Senate GOP’s stance.

Case in point: This morning Joe Scarborough ripped into GOP opponents of passing the bill, which is called the Zadroga 9/11 Health and Compensation Act. He said Republicans were taking a big risk, and the crucial point Scarborough made is that this should be a national issue, not a New York one

Matt Negrin at Politico:

Paging Jon Stewart: The White House needs your help.

Robert Gibbs, President Obama’s press secretary, told reporters on Tuesday that he hopes the Comedy Central host can persuade enough Republican senators to vote for a 9/11 health bill so it can head to the president’s desk.

“If there’s the ability for that to sort of break through in our political environment, there’s a good chance that he can help do that,” Gibbs said in his briefing. “I think he has put the awareness around this legislation. He’s put that awareness into what you guys cover each day, and I think that’s good. I hope he can convince two Republicans to support taking care of those that took care of so many on that awful day in our history.”

Stewart has dedicated lengthy segments on “The Daily Show” to the legislation that would help the first responders on Sept. 11.

“It seems, at the end of a long year around the holiday season, a pretty awful thing to play politics about,” Gibbs said Tuesday. “That’s a decision that 42 Republican senators are going to have to make.”

Steve Benen:

I’m glad Stewart’s efforts are garnering attention, because it’s really not an exaggeration to say the bill would have no chance without his coverage. Indeed, major media outlets — at least in broadcast media — almost completely ignored the Zadroga bill every step of the way. When a GOP filibuster blocked the most recent attempt at passage, despite 58 votes in support of the proposal, it looked like Republicans had killed the bill.

But then “The Daily Show” ran a bunch of segments on this, noting not only the legislation’s merit and the inanity of Republican talking points against the bill, but also calling out news organizations for blowing off an important story regarding 9/11 heroes who need a hand.

And sure enough, Stewart’s public shaming paid off — news shows that couldn’t be bothered to even mention the bill in passing started talking about it. The visibility took a story that was entirely overlooked by the mainstream and made it a national issue, which in turn prompted Republican senators to begin talking to Democratic sponsors again.

The New York Daily Newsnoted this morning, “Thanks in large part to relentless television advocacy by Jon Stewart of ‘The Daily Show,’ the 9/11 bill has risen up the agenda.”

It’d be an exaggeration to say Stewart was solely responsible. Other voices in media (including, ahem, the one you’re reading now) were reporting on the importance of the bill several weeks ago, and as soon as the tax deal was settled, Republicans who were at least open to the Zadroga bill were willing to start talking again.

Christopher Beam at Slate:

In the never-ending debate about whether Jon Stewart is a comedian with opinions or an activist who happens to make jokes, he’s always argued for the former. When Tucker Carlson accused Stewart of liberal hackery on Crossfire in 2004, Stewart famously played the joker card. “You’re on CNN,” he said. “The show that leads into me is puppets making crank phone calls.”

It’s true—Stewart leans left, but the jokes always come first. At October’s Rally To Restore Sanity, which many observers considered his coming-out party as the anti-Glenn Beck, Stewart was careful not to cross the line into advocacy. He didn’t even tell people to vote. He’s just not “in the game,” he told Rachel Maddow in an interview in November. “I’m in the stands yelling things, criticizing.”

Last week, Stewart stepped onto the field. The change came after Senate Republicans blocked a bill that would provide $7.4 billion in medical benefits to firefighters, police officers, and health workers who got sick from working at Ground Zero on and after 9/11. Stewart didn’t just mock the 42 Republicans who refused to consider the bill until the Bush tax cuts were extended. He ripped them apart. “I can’t wait for them to take to the floor to talk about why their party hates first responders,” he said. He shredded Sen. Mike Enzi’s argument that the bill would lead to waste, fraud, and abuse by pointing to Enzi’s support for corruption-riddled spending in Iraq. Last week, he did a follow-up segment, “Worst Responders,” in which he called the refusal to pass the 9/11 bill “an outrageous abdication of our responsibility to those who were most heroic on 9/11.” The bill would even be paid for by closing corporate tax loopholes. “It’s a win-win-win-win-just [bleep] do it!” he yelled. He also blasted the media for failing to cover the story, noting that the only cable news network to devote a full segment to the issue was Al Jazeera. He then interviewed four first responders—a fireman, a police officer, a Department of Transportation worker, and an engineer—who suffered illnesses as a result of their work at Ground Zero. The segment had funny moments. But the jokes didn’t come first.

[…]

Stewart would probably argue that pushing for 9/11 workers comp—9/11 workers comp, for Chrissake!—isn’t taking a political stance. It’s taking a stance for decency, heroism, and the American people. Indeed, he called it “the Least-We-Can-Do-No-Brainer Act of 2010.” But stripped of the funny, that sounds a lot like what a politician would say. So did Stewart’s cheap shot about Mitch McConnell crying over the departure of his friend Sen. Judd Gregg—but not, Stewart seemed to suggest, about 9/11. Republicans may have had a flimsy case for blocking the bill, and Stewart rightly mocked the GOP for failing to help 9/11 workers after milking the tragedy all these years, but by shaming them in the name of 9/11 workers, he was engaging in demagoguery himself. It may have been for a good cause, but it was political demagoguery all the same.

Atrios:

If Jon Stewart Can Do It

Then maybe a charismatic fairly popular tall skinny guy with a fancy podium and the ability to get people to point TV cameras at him almost any moment can figure out how to do it.

Glenn Thrush at Politico:

New York Democrats hoping for quick action on a bill to give health care compensation to ground zero workers are about to run into Tom Coburn.

The Oklahoma Republican senator and physician — known in the Senate as “Dr. No” for his penchant for blocking bills — told POLITICO on Monday night that he wouldn’t allow the bill to move quickly, saying he has problems with parts of the bill and the process Democrats are employing.

Another Republican, Wyoming Sen. Mike Enzi, said he had concerns with the measure and that it should instead move through the committee process.

“I’m not trying to fight it; I’m trying to get it right,” Enzi said. “There are 30 things that ought to be changed real quick in committee but very difficult on the floor. To finish a bill at this point of time, we’re not going to be able to amend it.”

Mark Joyella at Mediaite:

It’s a huge victory at the very last minute–the lame duck Congress delivering the 9/11 First Responders bill–and a moment in history.On Fox News, Shepard Smith, who railed against the Republicans who blocked the bill in the face of 9/11 heroes, asking “how do they sleep” at night, was on set to report the passage this afternoon.

At times visibly teary-eyed, Smith called it a “compromise of utmost importance for those who put their lives on the line.”

Fox News correspondent Steve Centanni described how the deal got done:

“Everybody saw the writing on the wall, the time was running out, Republicans might get a black eye for not supporting the 9/11 responders if they blocked the bill, and Democrats wouldn’t have a chance to get quite as good a deal if they waited for the next Congress.”

Smith’s coverage of the 9/11 First Responders bill even earned him praise from the most unlikely of quarters–at MSNBC, where Rachel Maddow gave due props for Smith creating a “hullabaloo” about the bill: “All hail Shep Smith at Fox News,” she declared. “And I’m not kidding.”

We Have A Letter From Ireland Here

Niamh Hardiman:

Ireland’s fiscal crisis is largely caused by the collapse of the house price bubble and over-reliance on revenues from construction-related activities. This is bad enough, but by itself it would be difficult but manageable. The millstone around the neck of the Irish people is the vast scale of the crisis in the banking sector. Ireland’s banking crisis is not primarily about complicated and risky financial products: it is a common-or-garden result of reckless lending for property development and an inadequate regulatory regime. Between 2004 and 2007, the banks had escalated the scale of their lending to construction and property development enormously. When financial meltdown was imminent in September 2008, the government undertook to guarantee all of the banks’ losses, bondholders as well as depositors. In what is now widely regarded as a terrible mistake, the government in effect socialized the enormous private debt of the banks.

The true picture of what is entailed has been slow to emerge. The government’s attempts to shore up the banks have not involved outright nationalization, but the creation of a National Asset Management Agency (NAMA) to transfer the bulk of the banks’ non-performing property-backed loans into a special purchase vehicle, at a discounted rate. This amounts to indirect recapitalization of the banks. The total cost of Nama-type loan loss is now estimated at €66 billion. This is, in effect, half of GNP (the best measure of the taxable resource base of the Irish economy), which in 2009 amounted to €131.2bn. Mortgage and personal loan losses have not yet come fully into focus, but may amount to an additional €25 billion.

The present government, a coalition between the dominant centre-right Fianna Fáil and the Green Party, must go to the polls soon, and they will certainly be trounced. But unpopular though it is, the government was adamant until almost the last moment that it did not need or ask for the rescue package. Borrowing needs were fully met until mid-2011, and government had no need to go back to the bond markets. ECB as well as European Commission representatives had been on an extended visit to the Department of Finance, inspecting plans for the budget due on 7 December, in line with the strengthened fiscal oversight practices in the Eurozone. EU Commissioner for Economic and Monetary Affairs Olli Rehn had declared himself happy with the plans he had seen.  Austerity measures were projected to take some €4bn out of the economy as part of the planned fiscal consolidation strategy. This was intended to ensure conformity with the Stability and Growth Pact requirements of 3% deficit by 2014.

Yet Ireland is now committed to an IMF-EU rescue package worth €85bn over the coming years, to fund both government spending and to support the costs of sorting out the crisis in the banks. It all happened very quickly, and indeed one government minister said they were bounced into it. The terms are set out in the government’s new four-year fiscal plan. The interest rate involved is not low, at an average of 5.87%. The total fiscal contraction will come to €15bn, though the deadline is now extended until 2015. The December budget alone will take out €6bn in a mix of spending cuts and tax increases. This is tougher than anything that had been envisaged so far. In addition, the National Pension Reserve Fund, a rainy-day measure set against future public pension liabilities, is to be used as part of the bail-out package. Most controversially from the point of view of Irish taxpayers, while these public assets are to be committed to the front line of bank recapitalization, the banks’ bondholders are not to be required to bear any losses. The most equitable adjustment measure, from the point of view of the Irish taxpayers, would have required some element of writing down outstanding debt through an orderly restructuring, that is, burning the bondholders. But this could damage government’s capacity to raise future funds through borrowing; government ministers stress that they really had no option in this. Yet there is palpable anger in Ireland at the outcome which ensures that the banks will be bailed out while the cost is to be borne in full by the taxpayers.

Paul Krugman:

Kevin O’Rourke has put out a beautifully written, heartfelt piece on Ireland’s woes. Read it and weep.

Update: Gah — we seem to have overwhelmed the hamsters at Eurointelligence. I’m going to put O’Rourke’s text under the fold for the time being.

Letter from Dublin

It is one thing to know that someone you love is terminally ill; their death still comes as a shock.

I certainly don’t want to compare the arrival of the EU-IMF team in Dublin last week to a bereavement. But I was surprised at how upsetting I found it, given that it came as no surprise. It had been clear for a long time that the blanket guarantee given to the liabilities of Ireland’s rotten banks, in September 2008, had saddled the State with a debt that was too big for it to handle. Ten successive quarters of declining real GNP, and one attempt too many to draw a line under the losses of our banks, made our exclusion from international capital markets inevitable. But to know something is one thing; to see it actually happen is something entirely different.

I am not alone in feeling this way, it seems. The economics editor of the Irish Times, Dan O’Brien, wrote that

nothing quite symbolised this State’s loss of sovereignty than the press conference at which the ECB man spoke along with two IMF men and a European Commission official. It was held in the Government press centre beneath the Taoiseach’s office. I am a xenophile and cosmopolitan by nature, but to see foreign technocrats take over the very heart of the apparatus of this State to tell the media how the State will be run into the foreseeable future caused a sickening feeling in the pit of my stomach.

This is not to say that we would be happy to have our country’s affairs managed by the current, disgraced, government. I yield to no-one in my loathing of the men and women who have done this to my country. What has been the intellectual low-point of the last couple of years? Was it the cash-for-clunkers stimulus package (Ireland does not produce any cars)? Or the statement by our Finance Minister that Ireland need not fear a bank run, since Ireland is an island? Or the biggest Irish joke of them all, which underpinned the bank guarantee in the first place: that if we wanted investors to retain confidence in the creditworthiness of the Irish State, we needed to make sure that nobody who invested in our (private sector) banks ever lost a penny?

The latter decision is the one that sank the country. It was the last great act of hubris of the Celtic Bubble, and was immediately denounced by one of the heroes of the crisis, my old UCD colleague Morgan Kelly. On the night the guarantee was announced, Kelly pointed out that while it was the right policy if the Irish banks were facing a liquidity crisis, it was a terrible policy if they were insolvent, which was in fact the case. As they always do when confronted with someone smarter than them, the Dublin establishment circled the wagons, and Kelly was dismissed as an irresponsible young troublemaker of no consequence. He has been proved right, of course, but the establishment is still at it, making the
same fundamental mistake of thinking that a solvency crisis is just a liquidity crisis. Now, however, the establishment is European as well as Irish, and it is the State rather than the banking sector which is insolvent.

Clive Crook:

David Gardner draws my attention to this Letter from Dublin by Kevin O’Rourke, one of Ireland’s most distinguished economists. It might be the best single thing I’ve read on the Irish crisis. Analytically astute, and moving too. Just how profound a blow this has been comes through. It is not just an economic and political crisis, but a full-blown constitutional crisis. And the European Union has made it all so much worse than it needed to be.

Brad DeLong

Barry Eichengreen:

The Irish “rescue package” finalized over the weekend is a disaster. You can say one thing for the European Commission, the ECB and the German government: they never miss an opportunity to make things worse.

It pains me to say this. I’m probably the most pro-euro economist on my side of the Atlantic. Not because I think the euro area is the perfect monetary union, but because I have always thought that a Europe of scores of national currencies would be even less stable. I’m also a believer in the larger European project. But given this abject failure of European and German leadership, I am going to have to rethink my position.

The Irish “program” solves exactly nothing – it simply kicks the can down the road. A public debt that will now top out at around 130 per cent of GDP has not been reduced by a single cent. The interest payments that the Irish sovereign will have to make have not been reduced by a single cent, given the rate of 5.8% on the international loan. After a couple of years, not just interest but also principal is supposed to begin to be repaid. Ireland will be transferring nearly 10 per cent of its national income as reparations to the bondholders, year after painful year.

This is not politically sustainable, as anyone who remembers Germany’s own experience with World War I reparations should know. A populist backlash is inevitable. The Commission, the ECB and the German Government have set the stage for a situation where Ireland’s new government, once formed early next year, rejects the budget negotiated by its predecessor. Do Mr. Trichet and Mrs. Merkel have a contingency plan for this?

Kevin Drum:

As a resident of California, I have some advice for the EU: something good is really unlikely to turn up. Kicking the can down the road just makes the can mad. Like it or not, you’re better off dealing with this stuff sooner rather than later.

Megan McArdle:

There’s no question that it is morally outrageous for taxpayers who had nothing to do with the overlending to be saddled with the costs, while bondholders who should have watched where they put their money, walk away scot free.  Moreover, I cannot but believe that this is creating considerable moral hazard; investing in bank debt starts to look something like investing in the sovereign debt of the country where the bank is.

And yet it seems to me that the practical question remains: is Ireland actually better off if it does this?  Are the taxpayers?  Couldn’t the contagion get worse?  We’re talking about a country that has been the net recipient of a lot of foreign capital over the years (which is why, in part, the Irish are so outraged.)  The government is running a sizeable primary deficit, and as far as I can tell, expects to for at least a couple of years.  If telling the bondholders to take a haircut triggered capital flight, wouldn’t that mean dramatic austerity right now, as the government was suddenly forced to balance its books?  What about the contraction of household credit?

I’m asking the question, not answering it: I genuinely don’t know.  The EU could have backstopped Ireland’s government spending without a guarantee for the bondholders, of course.  Probably, they should have.  But was that very likely to happen?  These are countries where the banks are “too big to save”–where the bank liabilities are twice GDP, or even higher.  They’re very wary of anything that makes their financial sector even slightly less sound.

Have there been any really successful situations where the bank bondholders were not made whole? Again, I’m asking, not answering; I would feel a lot better about saying Ireland should take this course if I knew of instances where it had been successfully pulled off in the past.  As far as I can tell, even famously “tough” solutions like the Swedish nationalization ultimately made the bondholders whole, as the FDIC does in our own country.  The logic is simple: a run on bank bonds looks like a slow-motion run on the banks.

To be clear, I am not arguing that bailing out the bondholders at taxpayer expense is right or fair; it is not right, and it is monstrously unfair.  I am only arguing that doing the fair and right thing, and making the bondholders eat the losses instead of the taxpayer, might end up costing taxpayers even more.  For example, I’d argue that whatever it might have cost taxpayers to prop up all the banks in 1929, that burden would have been infinitely preferable to the Great Depression.

Atrios:

I guess we can find some small comfort in the fact that another country is doing it even more wrong.

Baby, It’s Freezing Outside

Katherine Mangu-Ward at Reason used the same pic as us.

Peter Baker at The NYT:

President Obama announced a two-year pay freeze for civilian federal workers on Monday as he sought to address concerns over sky-high deficit spending and appeal to Republican leaders to find a common approach to restoring the nation’s economic and fiscal health.

“The hard truth is that getting this deficit under control is going to require some broad sacrifice and that sacrifice must be shared by employees of the federal government,” Mr. Obama said at a White House news conference.

“I did not reach this decision easily,” he said. “This is not just a line item on a federal ledger. These are people’s lives.”

Ed Morrissey:

Give the President some credit.  This mainly empty gesture will net a lot more than Barack Obama’s earlier exhaustive budget trimming that saved all of $100 million after running up a $1.3 trillion deficit.

Philip Klein at The American Spectator:

In his press conference, Obama claimed that the move would save the government $28 billion over five years. Taking that number at face value, that would represent a sixth-tenths of one percent reduction in the projected $4.52 trillion deficit over that same period (2011 through 2015). It would be the equivalent of a person who expects to rack up $10,000 of of credit card debt over the next five years touting the fact that he’s found a way to reduce his expenses by $60 over that time period. In football terms, it would be like a kickoff return that gains about a half of a yard.

James Joyner:

This will of course be very popular politically, since non-military federal employees are widely believed to be overpaid and underworked.  And, frankly, given that we have near-zero inflation, there shouldn’t be any cost of living hikes, anyway.

Indeed, it’s not clear how this proposal actually saves any money.  It’s not like this would roll back already-enacted pay increases.  Presumably, this is “saving” in the federal government sense of not getting a spending hike that you had previously mentioned wanting to have.

Scarecrow at Firedoglake:

For the umpteenth time, the Obama White House has made the foolish mistake of confusing efforts to “boost economic growth and spur job creation” with the need for near-term deficit reduction. Even his economic team tried to keep the two different time frames — short run vs long-run — separate. And for the umpteenth time, this President has repeated discredited Republican gibberish that when households are having to cut back spending during a recession, government should do the same thing.

That’s just wrong. Foolishly wrong. Depressingly (literally), tragically wrong.

The economy is suffering from, among other things, the collapse of the housing market and it’s relationship to a massively fraudulent, rapacious financial system. When housing prices collapsed — and they’re not done yet — households lost over $6 trillion in wealth and families lost trillions in retirement savings. With 15 million unemployed and millions more living in job and health insecurity, typical non-wealthy households have no choice but to cut back. So private spending cannot pull the economy out of the ditch as it has in the past. But that is not true of the federal government.

Government spending can pull the economy up from the bottom. And only government has the resources and the power to fill in the gap in aggregate demand to bring the economy and jobs back.

Atrios

Jonathan Chait at TNR:

There’s a certain class of moderate Democratic strategist that thinks symbolic moves like this brilliantly capture the center, but I’m not sure it really works like that. Instead, it will be reported on the evening news, with a complaining comment from a liberal, a sneering comment from a conservative, and a dismissive comment from a Centrist Budget Wonk who says you have to cut entitlement spending. If you’re going to do something like this, at least do it during the State of the Union address so you can get the message out unfiltered.

Jonathan Zasloff:

Mr. President, it is not park rangers’ fault that Wall Street decided to gamble with the global financial system and lost.

It is not FBI agents’ fault that the Republican Party wants to give tax breaks to billionaires and get them to pay for it.

It is not USDA food inspectors’ fault that you and your advisors have not bothered to tell the American people why your program is good and have gone out of your way to alienate your base.

It is not VA nurses’ assistants and caregivers’ fault that Larry Summers was so infatuated with his own economic models that he didn’t give you the right options for the stimulus or that Tim Geithner can’t figure out that this unemployment is cyclical.

Mr. President, you said at your news conference today that “this is not just a line item on a federal ledger. These are people’s lives.”  You are right.  They just happen to be lives that you don’t really care about.

Holiday, Celebrate!

Lori Montgomery and Anne Kornblut at WaPo:

With just two months until the November elections, the White House is seriously weighing a package of business tax breaks – potentially worth hundreds of billions of dollars – to spur hiring and combat Republican charges that Democratic tax policies hurt small businesses, according to people with knowledge of the deliberations.

Among the options under consideration are a temporary payroll-tax holiday and a permanent extension of the now-expired research-and-development tax credit, which rewards companies that conduct research into new technologies within the United States.

Administration officials have struggled to develop new economic policies and an effective message to blunt expected Republican gains in Congress and defuse complaints from Democrats that President Obama is fumbling the issue most important to voters. Following Obama’s vacation and focus on foreign policy in recent weeks, White House advisers have arranged a series of economic events for the president next week, including two trips to swing states and a news conference.

David Leonhardt at NYT:

It’s time to start talking about a tax cut.

The economy is struggling mightily. Some 15 million people remain unemployed. The Federal Reserve has been slow to act and still is not doing much. The Senate has been unable to find the 60 votes needed to pass anything but minor bills.

The best hope for a short-term economic plan that can win bipartisan support is a tax cut — and not the permanent extension of George W. Bush’s tax cuts, which have been dominating the debate lately. Such an extension is unlikely to win many Democratic votes. Republicans, meanwhile, are unlikely to support more spending, like the national infrastructure project President Obama has been mentioning.

A well-devised tax cut could be different. Cutting taxes has been the heart of the Republican economic program for 30 years, and last year’s stimulus bill showed that Mr. Obama was open to tax cuts.

The question, then, is what kind of cut can put people back to work quickly.

The last 30 years offer some pretty good answers. For one thing, a permanent reduction in tax rates focused on the affluent — along the lines of those 2001 Bush tax cuts — does little to lift growth in the short term. An across-the-board, one-time cut — like the one that Mr. Bush signed in 2008 or that Mr. Obama signed last year — does more.

But the most effective tax cut for putting people back to work quickly is one that businesses and households get only if they spend money. Last year’s cash-for-clunkers program was an example. So was a recent bipartisan tax credit for businesses that hired workers who had been unemployed for months. Perhaps the broadest example is a temporary cut in the payroll tax for businesses, which reduces the cost of employing people.

Tyler Cowen

Joseph Lawler at The American Spectator:

The Post suggests that the bill would be introduced before the midterm elections. The article quotes William Galston of the Brookings Institution explaining that the timing proves that the decision wouldn’t be motivated by fears about the midterms: “Substantively, there is nothing they could do between now and Election Day that would have any measurable effect on the economy. Nothing.”

If the idea is to make it easier for companies to hire new workers in an attempt to revive the weak labor market, a payroll tax cut would be a good first step. The administration, however, is also toying with a few other policies that would undermine the effect of the payroll tax cut. For example, if the Democrats do allow the Bush tax cuts for top individual earners to expire, the burden will fall onto small business owners — counteracting the effect of the payroll tax cuts mere months after they’re implemented.

Mary Katherine Ham at The Weekly Standard

Jennifer Rubin at Commentary:

When all else fails, Democrats throw in the towel on their loopy economic policies and resort to tax cuts — just like the Republicans wanted in February 2009. We learn:

With just two months until the November elections, the White House is seriously weighing a package of business tax breaks — potentially worth hundreds of billions of dollars — to spur hiring and combat Republican charges that Democratic tax policies hurt small businesses, according to people with knowledge of the deliberations.

Among the options under consideration are a temporary payroll-tax holiday and a permanent extension of the now-expired research-and-development tax credit, which rewards companies that conduct research into new technologies within the United States.

A couple of problems with that. First, it won’t improve the economy before the election. The voice of sanity for the Democrats, William Galston, says: “Substantively, there is nothing they could do between now and Election Day that would have any measurable effect on the economy. Nothing.” Second, this renders the Obama economy policy entirely incoherent. If the economy is worsening and they admit tax cuts are good, why eliminate the Bush tax cuts? What sense does it make to give with one hand and take away with the other?

We’ll see what the Democrats come up with. As Milton Freidman advised, “I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible.” But conservatives should insist that in addition to any tax cuts Obama proposes, the Bush tax cuts must be retained. Otherwise, we are merely treading water.

Steve Benen:

Given the mixed signals of late, it’s worth noting that Politico has a report similar to the Post‘s, explaining that administration officials are “mulling a raft of emergency fixes to stimulate the economy before the midterms, including an extension of the research and development tax credit and new infrastructure spending.”

It’s hard to evaluate any of these ideas without more details, and for that matter, no matter what the White House recommends, Congress’ inability to function makes progress unlikely for the foreseeable future.

That said, it’s at least somewhat encouraging to see a shift away from “everything’s on track, so just be patient.” Moreover, there’s obviously real political salience to even just having the debate — with two months before the midterms, it’s worth having the two parties fight over how to help the economy grow. If Republicans intend to kill every proposal the White House offers, that should matter to voters, too.

The Post‘s report concluded that President Obama “could roll out additional measures as soon as next week.” Stay tuned.

Megan McArdle:

Thoughts:

1)  Practically, this isn’t going to do anything before the mid-terms.  These sorts of changes take time to roll out, and there’s no way they could get anything into effect soon enough to make an actual difference in peoples’ lives.

2)  Whether you think this works as a campaign tactic depends on whether you think people will think that it is going to work.  On that question, I have no idea.  People do love cash in their pockets, however.

3)  Politically, this has one major drawback:  it’s going to put huge holes in the Social Security and Medicare trust funds.  Since I think those trust funds are meaningless accounting devices, I don’t think this has any practical relevance.  But as you will be able to see in my comment section about twenty minutes after I hit “post,” people have a very deep emotional attachment to the idea of the trust funds, which politicians cannot easily trifle with.

4)  Practically, I think the actual impact will be minimal, at least on employment.  It might help people and companies to rebuild their balance sheets (or let struggling companies ride things out a while longer).  But the main constraint on business hiring is uncertainty, and a payroll tax isn’t going to change that.  Obviously, some workers will get hired at the margin–but if your labor is so marginal that you need a payroll tax holiday to make it economical, then I’d expect that as soon as the payroll tax holiday is over, you’ll probably be fired.  Hence, even if you get the job, you’re going to want to save as much of your wages as possible, blunting the multiplier effect we hope to get out of stimulus.

Arnold Kling:

Really? I have a proposal. Suppose the holiday costs the trust fund $400 billion. Just transfer that $400 billion from the general budget to the trust fund.

In fact, we could immediately put $100 trillion gazillion dollars in the trust funds from the general budget, and then they would have enough money to pay Social Security forever. Supposedly.

The trust fund is a measure of what we are promising to pay future Social Security recipients. To me, it is nothing more than that. But what is going to fund Social Security down the road is not the promises that we pour into it today. It is the taxes that people will pay in the future.

I have tried to explain Social Security for a long time. See here, for example. But Megan is probably right. I honestly thought that among trained economists it was understood that the trust fund has no real significance. I thought that anyone who went to a respectable graduate school learned the overlapping generations model, which sometimes gets taught as a model of money but is most evidently a model of Social Security. However, Paul Krugman at least pretends to act as if he never learned that.

Atrios:

There’s something about working in politics which starts making people think everything is about perception rather than reality. I think a full payroll tax holiday would be fine as long as it wasn’t yet another excuse to try to destroy Social Security, but an employer only one would be truly awful on substance, impact, and message. More help for the overlords, no help for you!

But apparently the geniuses in charge think the problem is that “stimulus” and “bailout” have become scary bad words. The problem is that the economy sucks and people don’t have any money.

Timmy, The Bloggers And The Background, Which Is Apparently A Portrait Of Robert Rubin

Alex Tabarrok:

Yesterday, Tyler, myself and a handful of other economics bloggers had a chance to discuss the economy with Treasury Secretary Geithner and other treasury officials. Here are a few random notes.

There was deep skepticism about the financial industry and about reform from some of the bloggers. More let’s say “radical” approaches such as Treasury taking an equity stake in underwater homes or giving everyone a guaranteed income were brought up. I was surprised to find myself on the side of the more conservative Treasury officials who cogently argued that such reforms were neither politically viable nor likely to work.  Treasury gave a good argument that reform had been deep and meaningful.

A few good lines from a senior treasury official as I recall the gist:

• “Markets believe we can borrow. The public doesn’t. We need both to move forward on the fiscal front.”

• “Businesses are investing in a way that shows more confidence than they are talking.” (graph here, see the last year or so AT)

There was a recognition that the Fed could do “dramatic” things but a sense that the theory here was uncertain and untested.

The best question of the day came from Tyler. The discussion was on the financial reform bill and how it changed the incentives of players in the financial industry by creating more risk for them. Tyler interrupted with “What I really want to know is how your incentives have been changed! What is to say that next time the decision will not be made to again bailout the bondholders?”

Felix Salmon:

Treasury’s blogger meeting on Monday has been covered by quite a lot of the participants — see Lounsbury, Tabarrok, and Smith.

On Wednesday, there was another meeting, this time with professional, salaried bloggers, with a decidedly center-left bias. (Tim Fernholz, Mike Allen, Derek Thompson, Shahien Nasiripour, Nick Baumann, Ezra Klein, me. Matt Yglesias was literally left out in the rain, unable to get past Treasury security.)

I half understand why Treasury makes the distinction between the two types of bloggers, but Ezra and I both felt a little jealous that we had to compete with Mike Allen asking about politics when we could have listened to a detailed and wonky discussion between Steve Waldman and Tim Geithner on the subject of bailout incentives.

The discussion was all held on deep background, so I can’t quote anybody. I can tell you that Geithner looked healthier than the past couple of times I’ve seen him: I daresay he’s actually getting some sleep these days, which has got to be a good thing. I also learned a fair amount about how Treasury views the world.

The big picture, at least as I grokked it, is that although the recovery started off stronger than Treasury had hoped, the broad economy is still in a pretty weak position. The Fed is doing its part to try to keep a certain amount of momentum going, but fiscal policy is harder, because it needs the cooperation of Congress. And it’s far from clear what kind of fiscal legislation can be passed at this point.

On housing, the main message from the big conference on Fannie and Freddie is that there’s a broad-based consensus, Rick Santelli rants notwithstanding, that large-scale government participation in the housing market is necessary to prevent further house-price declines. And yes, Treasury would very much like to make sure that house prices don’t fall any more than they have already. There’s no Bush-style policy of trying to maximize homeownership, or anything like that, and indeed Treasury now seems pretty resigned to the fact that its much-vaunted loan-modification program is going to have only a pretty marginal effect, doing more to delay foreclosures than to prevent them. But the very powerful government guarantee on Frannie’s bonds is here to stay, you won’t be surprised to hear. And even delaying foreclosures can be a good thing if it helps to give the broader economy a bit of time to recover.

Naked Capitalism:

Readers may wonder why I haven’t written about my visit on Monday to the Treasury, but truth be told, I headed out afterward with Mike Konczal and Steve Waldman to get a drink, and we all looked at each other quizzically. I said something along the lines of “I’m not certain there is anything to write about,” and they nodded in agreement. I had less than a half page of notes.

That isn’t to say we didn’t spend nearly 2 1/2 hours in a high-ceilinged conference room, and that we didn’t engage with Treasury officials, including Timothy Geithner, in what looked like conversation. But the assumptions of both sides re process as well as substance were so far apart that it often felt like we were talking past each other.

One part of the dynamic was the home court advantage the Treasury enjoys. This is their drill, their offices, they no doubt used their spiel on others and have it pretty well debugged, and more important, they play well off each other (they give the impression of having good rapport with each other; there was some banter on their side). So they have message discipline and stay unified and still manage to look relaxed and informal. By contrast, we seven bloggers (the others were Tyler Cowen, Alex Tabarrok, Phil Davis, and John Lounsbury) were on hold in the very large corridor till the conference room cleared up, which meant we didn’t even have the chance to ask each other, “And what do you want to ask about?” Our interests were likely to be (and were) somewhat divergent, but it would have been nice to know to what degree.

Despite our heterogeniety, we all took a skeptical posture towards the Treasury team. One has to think they anticipate that, which then begs the question of what they expect to accomplish with these meetings. We aren’t journalists, so the access card does not work; the infrequency and format of these sessions means they don’t build personal rapport (and there are good reasons why not; from our end, it costs time and money to go to DC; from their end, we aren’t important enough to warrant more frequent contact).

So they may have other motivations, but a safe assumption is that they regard this as marketing, and a famous cliche is “50% of what I spend on advertising is wasted, I just don’t know which 50%.” We probably look like part of the wasted 50%, but they can’t be certain, and the costs to them of having this sort of meeting are low, so they might as well keep the experiment going.

Mike Allen at Politico:

—ADMINISTRATION MINDMELD: The virtue of action on Social Security is that it demonstrates the ability to begin to affect the long-run deficits. Social Security isn’t the biggest contributor to the problem – that’s still health-care costs. But ti could help a little bit, buy time, and strengthens the odds of a political consensus behind other spending cuts or tax increases. Most importantly, it would establish more CREDIBILITY with the MARKETS. The mood of the world at the moment (slightly excessive, from the administration’s point of view) is that if you don’t do anything with spending cuts, it doesn’t get you credibility.

Tim Fernholz at Tapped on Allen:

Sure makes it seem like the administration wants to cut Social Security, doesn’t it? By chance, I was at the same deep-background briefing where Allen had his “mindmeld,” and I have to say, I don’t think he’s got it right. After reviewing my notes and a recording of the conversation, here’s my take. (The rules for this conversation were no direct quotes and no identifying the senior administration official in question.)

Allen references a part of the conversation that concerned the Deficit Commission and what the official might know about its agenda. The official believed that the largest consensus was forming around an undefined plan to support the long-term solvency of Social Security and was discussing why that hypothetical plan might help bolster political will for other deficit-reduction ideas. The official would note that Social Security is already solvent for decades.

The most important omission from Allen’s item is that the official concluded the conversation by noting that Social Security is not a generous benefit compared to other public pensions around the world and that cutting benefits, even years in advance, would be difficult to justify. More symbolically, Allen doesn’t mention that the official cited Paul Krugman when talking about Social Security’s contributions to the deficit. Finally, the reason the administration official was interested in credibility before the markets is so the government could borrow more money for temporary fiscal stimulus.

Brad DeLong

Matthew Yglesias on Allen:

Brad DeLong glosses this as part of why “Friends Don’t Let Friends Read Politico.” And certainly it is a case study in why you can’t go run and panic after reading a thinly sourced item in a traffic-hungry publication. But part of the issue here, it seems to me, is that DC officialdom ought to realize that its obsession with off the recordy-ness has some serious downsides. Treasury did two meetings this week, one that was with professional blogger types and one that was more with professional economists who also blog, and most of the attendees seem to have come away quite impressed. If that’s the case, wouldn’t people able to listen to a recording of the full session likely also be impressed? And wouldn’t it be easier to clear up misconceptions that Allen’s writeup may have created?

Structural shifts in the media industry away from the “three TV networks and a bunch of local newspaper monopolies” model have shifted the balance of power away from journalists and toward flacks. Consequently, if people want to hold off the record briefings with “senior officials” plenty of writers are going to show up. But merely because people can get away with that kind of thing doesn’t necessarily make it a good idea.

Ezra Klein:

There’s been some meta-discussion over a recent meeting between reporters, bloggers, pundits and Treasury officials. The meeting existed under the worst of all media rules: Background.

On-the-record is, well, on the record. Somebody tells me something and I tell you. Off-the-record is just the opposite: Somebody tells me something and I can’t tell you that I was told this. I can be informed by it, but no one knows how I got the information. The disadvantages of this are obvious. But the advantage is a much more honest and free-flowing conversation.

Background has neither the transparency of being on-the-record or the freedom of being off-the-record. It means I can tell you that someone told me this (“a senior Treasury official”). I really don’t understand why people use it.

But use it they do, and all the time. My favorite background offer from this administration came in an e-mail the night before HealthCare.gov launched. It was a lot of standard information on the new site that I could attribute to an “administration official” if I so chose. Why they wanted anonymity to say things like “HealthCare.gov is a new, easy to use website that helps consumers take control of their health care and make the choices that are right for them by putting the power of information at their fingertips,” I’ll never know. Was Gibbs seriously going to chew someone out for going on-the-record with that?

Mike Konczal at Rortybomb:

On Monday I took part in a blogger meeting with several members of the Treasury Department. Alex Tabarrok has a writeup, as does Yves Smith and John Lounsbury has an extensive one as well.

First off, here’s a picture of me with Robert Rubin’s portrait:

Second, have you ever seen Miracle on 34th Street? Remember at the end when that guy legally is Santa Claus because he has all that mail delivered to him? I felt a little like that seeing “Mike Konczal, Rortybomb” on paper that had Treasury’s seal:

Heh.

It was a pretty casual meet and greet. There weren’t any presentations, nothing to be sold on. We went to questions immediately. Geithner is very smart and personable, and it was very useful to chat with Treasury officials on background over the strengths and weaknesses of the financial reform bill.

[…]

HAMP

– They are sticking by HAMP. The narrative seemed to change from helping homeowners to spacing out the foreclosures. I asked them to repeat it, because the idea that billions of taxpayer dollars are being spent to smooth out foreclosures for banks struck me as new narrative – it’s explicitly extend-and-pretend, and also fairly cynical.

– There was talk about how fiscal policy can’t move through Congress. I asked them about only 0.5% of HAMP being spent and how that could be used without Congress’ permission. Before I suggested that the remainder of the $50bn be divided into two funds, the Digging Holes Across States (DHAS) fund and the Filling Holes Across States (FHAS) fund, two far more socially productive means of spending the HAMP money than what is currently being done with it, I was told that the entire $50bn is expected to be spent by the time the program is over. I didn’t believe it; we will see.

– Overall, there seemed to be a sense of “we are done here” from the meeting. Maybe it was the fact that it is August, the informal manner of the meeting and a news cycle is driven by insane things, but there was a sense with the financial reform bill passed, deadlock in Congress and a Federal Reserve tip-toeing around its mandate things were going to slow down and options are more or less removed from the table. Which is a very scary thought with the economy the way it is.

Atrios:

Really fucking unbelievable. As I think I said to Mike at Netroots Nation, if HAMP is actually a program designed to boost the housing market and funnel money several billion more dollars to banks, it’s also a really fucking horrible and stupid and inefficient way to do that even without the “screwing people over” part.

Shahien Nasiripour at Huffington Post

EARLIER: Meet The Financial Bloggers, Timmy

Timmy Meets With Even More Bloggers

That’s Some Professional Hippie Punching, Mr. Gibbs

Sam Youngman at The Hill:

The White House is simmering with anger at criticism from liberals who say President Obama is more concerned with deal-making than ideological purity.

During an interview with The Hill in his West Wing office, White House press secretary Robert Gibbs blasted liberal naysayers, whom he said would never regard anything the president did as good enough.

“I hear these people saying he’s like George Bush. Those people ought to be drug tested,” Gibbs said. “I mean, it’s crazy.”

The press secretary dismissed the “professional left” in terms very similar to those used by their opponents on the ideological right, saying, “They will be satisfied when we have Canadian healthcare and we’ve eliminated the Pentagon. That’s not reality.”

Of those who complain that Obama caved to centrists on issues such as healthcare reform, Gibbs said: “They wouldn’t be satisfied if Dennis Kucinich was president.”

Chris Bowers at Open Left:

Oy, on many levels.

If the White House really doesn’t think it has any problems among self-identified liberals or progressives, and that all the complaints are coming from a grasstop elite, it needs to look at the data again.  From 2008 to 2010, President Obama has suffered far more erosion of support among self-identified liberals than among self-identified moderates or conservatives:

• In 2008, according to exit polls, 89% self-identified liberals voted for President Obama.  Over the past four weeks, according to Gallup, President Obama’s approval rating among self-identified liberals has averaged 74%. That is a decline of 15 points.
• In 2008, according to exit polls, 60% of self-identified moderates voted for President Obama.  Over the past four weeks, according to Gallup, President Obama’s approval rating among self-identified moderates has averaged 54%.  That is a decline of 6 points.
• In 2008, according to exit polls, 20% of self-identified conservatives voted for President Obama. Over the past four weeks, according to Gallup, President Obama’s approval rating has averaged 24% among self-identified conservatives.  That is an increase of 4 points.

So, according to Gallup, disapproval among self-identified liberals accounts for the majority of President Obama’s approval rating underperformance compared to his 2008 vote share (from the perspective that the smaller decline among moderates is partially canceled out by the small gain among conservatives).  If it were not for President Obama’s decline among liberals, there would be virtually no difference between his 2010 approval rating and 2008 voter performance.
Maybe the White House knows that its problem among self-identified liberals is not confined to the grasstops.  Maybe it is “reaching out” to liberals in this insulting manner because it figures that while it has lost more support among liberals than among any other group, those liberals are still going to vote Democratic anyway.

Jane Hamsher at Firedoglake:

Spiro Agnew — sorry, Robert Gibbs — says “the professional left is not representative of the progressives who organized, campaigned, raised money and ultimately voted for Obama.” Well, the Obama in the White House is not representative of the Obama who organized, campaigned, raised money and ran for office, so I guess it’s a wash.

Gibbs does the only thing you can do when trying to defend a record of corporatist capitulation: triangulate against your critics as extremists. But the fact is, the positions Obama has abandoned aren’t the exclusive territory of Dennis Kucinich. Standing up to the banks and the insurance companies, reducing the political influence of corporate money, defending Social Security and ending the wars are issues that are broadly popular with the American public. That’s why Obama campaigned on them in order to pave his way to the White House.

I don’t recall Obama making campaign promises to increase the defense budget and cut Social Security benefits, order the assassination of American citizens without due process, or cut sweetheart deals with the pharmaceutical industry in exchange for political patronage. Where was the bold, inspirational speech where he vowed to give AT&T immunity for operating their own private corporate spy network, tax people’s health insurance benefits, abandon gay rights and throw a party in the rose garden for Bart Stupak’s presidential signing statement? When did he promise to re-appoint Ben Bernanke, protect the bonuses of bailed out bankers and keep shoveling money at Wall Street?

Marshall Ganz was the field organizer responsible for Obama campaign programs that motivated those progressive volunteers. During the health care debate, when it was clear Obama was abandoning his campaign rhetoric on health care, he said “If Barack had campaigned on the politics of narrow self-interest, he never would have won the nomination, let alone the election.”

Maybe Gibbs should stop and revisit some of those campaign speeches and ask himself if the guy in the oval office looks like the guy on the campaign trail. He might figure out why people are upset, and it’s not just the “professional left.” According to Gallup, Obama’s approval ratings among Hispanics was 73% in January of 2010 and is now at 54%. That’s largely over his failure to fulfill the promises he made about immigration.

Are they the “professional left” too?

Glenn Greenwald:

So, to recap:  (1) The Professional Left are totally irrelevant losers who speak for absolutely nobody, and certainly nobody in Real America who matters; but (2) they’re ruining everything for the White House!!!  And:  if you criticize the President, it’s only because you’re such a rabid extremist that you harbor a secret desire to eliminate the Pentagon — that’s how anti-American you are!  You’re such a Far Left extremist that Dennis Kucinich isn’t far enough Left for you, you subversive, drug-using hippies!  You’re so far to the Left that you want to turn the U.S. into Canada.  As David Frum put it today:  “More proof of my longtime thesis, Repub pols fear the GOP base; Dem pols hate the Dem base.”

The Democrats have been concerned about a lack of enthusiasm on the part of their base headed into the midterm elections.  These sorts of rabid, caricatured, Fox-News-copying attacks on the Left will undoubtedly help generate more enthusiasm — more loud clapping — for the Democrats.  I know I’m eager to go canvass and clap for Democrats after reading Gibbs’ noble, inspiring vision.  If it were Gibbs’ goal to be as petulant and self-pitying as possible, what could he have done differently?

Perhaps one day the White House can work itself up to express this sort of sputtering rage against the Right, or the Wall Street thieves who destroyed the American economy, or the permanent factions that control Washington.  Until then, we’ll have to satisfy ourselves with White House explanations that the Real Culprits are not (of course) them, but the Professional Left, that is simultaneously totally irrelevant and ruining everything.  I’ll give credit to Gibbs for putting his name on this outburst:  these are usually the things they say anonymously and then deny afterward on the record that it’s what they think.

Nate Silver:

Lord knows I’ve had my share of disagreements with the “professional left”, as Press Secretary Robert Gibbs derisively referred to them in a rant to The Hill this morning. And I tend to endorse Jonathan Cohn’s view that Obama has had a reasonably accomplished first year-and-a-half in office that perhaps has been taken for granted by some liberals.

But if there is a gulf between what Obama has accomplished and the amount of credit that some liberals are willing to give him for it, it just became much wider today with Gibbs statements like “those people ought to be drug tested” and “they wouldn’t be satisfied if Dennis Kucinich was president”.

One problem that Obama is having — and not just on the left, although it might be most acute there — is the dissonance between the grand, poetic narratives of the campaign trail and the prosaic and transactional day-to-day grind of governance. To some extent, this is intrinsic to the nature of the respective activities. Still, for the 70 million who voted for Obama, there was a sense that — after a difficult eight years for a country challenged by two wars, two recessions, Hurricane Katrina, and the worst act of terrorism in history — things might finally start to be different. That change had come. That progress was happening. That politics were becoming more elevated. A black man had just received 365 electoral votes, for crying out loud!

The euphoric feeling among liberals in the days between the election and the inauguration seems so quaint now — like something that happened decades ago — but it was very tangible at the time. Conservatives, for their part, were willing to give Obama the benefit of the doubt, with his approval and favoability ratings sometimes soaring into the 70s: such a post-election “bounce” had once been commonplace in the days of Eisenhower and Kennedy, but had rarely been seen in the post-Watergate era.

But Obama was never really able to capitalize on that momentum. Perhaps, in the face of the headwinds of an ever-deepening jobs crisis (far worse than his advisors had anticipated) and unrepentant Republican obstructionism (a canny, even ballsy strategy in retrospect), there was no way he really could have.

Nevertheless, I suspect that for most liberals, any real sense of progress has now been lost. Yes, the left got a good-but-not-great health care bill, a good-but-not-great stimulus package, a good-but-not-great financial reform plan: these are a formidable bounty, and Obama and the Democratic Congress worked hard for them. But they now read as a basically par-for-the-course result from a time when all the stars were aligned for the Democrats — rather than anything predictive of a new direction, or of a more progressive future. In contrast, as should become emphatically clear on November 2nd, the reversion to the mean has been incredibly swift.

What liberals haven’t had, in other words, is very many opportunities to feel good about themselves, or to feel good about the future. While the White House has achieved several wins, they have never been elegant or emphatic, instead coming amidst the small-ball banality of cloture vote after cloture vote, of compromise after compromise.

Greg Sargent:

Robert Gibbs, under fire for his attack on the “professional left,” sends over a statement walking it back, conceding it was “inartful,” and clarifying that the views he expressed frustration about are not widely held:

I watch too much cable, I admit. Day after day it gets frustrating. Yesterday I watched as someone called legislation to prevent teacher layoffs a bailout — but I know that’s not a view held by many, nor were the views I was frustrated about.

So what I may have said inartfully, let me say this way — since coming to office in January 2009, this White House and Congress have worked tirelessly to put our country back on the right path. Most importantly, to dig our way out of a huge recession and build an economy that makes America more competitive and our middle class more secure. Some are frustrated that the change we want hasn’t come fast enough for many Americans. That we all understand.

But in 17 months, we have seen Wall Street reform, historic health care reform, fair pay for women, a recovery act that pulled us back from a depression and got our economy moving again, record investments in clean energy that are creating jobs, student loan reforms so families can afford college, a weapons system canceled that the Pentagon didn’t want, reset our relationship with the world and negotiated a nuclear weapons treaty that gets us closer to a world without fear of these weapons, just to name a few. And at the end of this month, 90,000 troops will have left Iraq and our combat mission will come to an end.

Even so, we will continue to work each day on the promises and commitments that the President made traveling all over this country for two years and produce the change we know is possible.

In November, America will get to choose between going back to the failed policies that got us into this mess, or moving forward with the policies that are leading us out.

So we should all, me included, stop fighting each other and arguing about our differences on certain policies, and instead work together to make sure everyone knows what is at stake because we’ve come too far to turn back now.

Atrios:

Joking aside, I know Gibbs’ hissy fit didn’t happen because he stays up late at night petrified wondering who might be the next wanker of the day. But, generally, DC Dems hate The Left even when, as below, it’s The Left that’s spending time and money to exert the pressure to pass their stated agenda.

Digby:

What with all the hoopla over Robert Gibbs’ comments today it pays to simply remember that everyone in Washington hates liberals. It’s a fact of life and until something happens to change the dynamic in which Democratic politicians are afraid to even mutter the words liberal, much less boldly and persuasively make a case for liberalism, I expect this will be the case. (The irony, of course, is that the liberals who do so have been proven right on the politics and the substance far more often than those who bet with the conservatives.)

Kevin Drum says that Democrats do this because only 20% of the country identifies as liberal so they are making a play for the center. I think he’s right that they think this way, but one could easily make the case that they’d do better by demonizing the 30% that calls themselves conservatives instead of their own voters. The center, by definition, doesn’t identify with them any more than the liberals, right?

There is also a case to be made that the Democratic establishment should be concerned about enthusiasm — that the activist base needs to be handled with a little bit more respect because they are the ones who knock on doors and make the calls. There’s something to that, of course, particularly in the mid-terms which depend so heavily on getting the base out.

But what’s dangerously myopic about going ballistic as Gibbs did in his statements is that just 10 years ago we had a little event in which only a tiny portion of the base went with a third party bid from the left — and the consequences were catastrophic. Democrats, of all people, should remember that every vote matters.

It’s embarrassing to have David Frum point out the obvious — that the Republicans fear their base and the Democrats hate theirs, but it has been so since I was a kid — a long time ago. At some point they are going to realize that their demanding activist base is the way it is and that they need to figure out a way to deal with it rather than rail against it. You cannot browbeat people into loving you and you can’t argue them into being enthusiastic. Certainly characterizing them in cartoon terms by saying “they want to eliminate the Pentagon”, they are on drugs and — worst of all — suggesting they are not part of America — isn’t going to get you there.

On the other hand, if they just want to use them as doormat as a way to appeal to “the center” then they take their chances that their activists won’t turn out to volunteer — or worse. Sometimes all it takes to lose is a quixotic third party bid, 535 disputed votes in Florida and Antonin Scalia. Why would they ask for that kind of trouble?

Ezra Klein:

I understand why the White House is frustrated by the criticism from the “professional left” and feels progressives should focus on all the progressive things the administration has done rather than all the things it hasn’t been able to do or interested in doing. What I don’t understand is why Robert Gibbs would voice that frustration to the press. His comments just turn this into a “story,” giving the very professional lefties whose criticism is rankling the White House another high-profile opportunity to criticize the White House.

Baffling. Meanwhile, it’s worth noting that this is largely a Beltway phenomenon: According to Gallup, Obama is at 81 percent among self-described Democrats and 76 percent among self-described liberals. His problem is that he’s at 38 percent among self-described independents and 55 percent among self-described moderates. Now, this might tell you less than meets the eye: Maybe independents would like Obama better if he’d followed the professional left’s advice and really hammered the banks or sped up the withdrawal from Afghanistan.

UPDATE: Sam Stein at The Huffington Post

Paul Krugman

Brad DeLong

Jordan Fabian at The Hill

Naked Capitalism

UPDATE #2: Jane Hamsher and Matt Welch at Bloggingheads

Krugman Has A Deflation Tattoo On His Chest?

Sewell Chan at NYT:

A subtle but significant shift appears to be occurring within the Federal Reserve over the course of monetary policy as the economic recovery is weakening.

On Thursday, James Bullard, president of the Federal Reserve Bank of St. Louis, warned that the Fed’s policies were putting the economy at risk of becoming “enmeshed in a Japanese-style deflationary outcome within the next several years.”

The warning by Mr. Bullard, who is a voting member of the Fed committee that determines interest rates, came days after Ben S. Bernanke, the Fed chairman, said the central bank was prepared to do more to stimulate the economy if needed, though it had no immediate plans to do so. On Friday, the government will release its estimate of gross domestic product for the second quarter of this year.

At the Fed, Mr. Bullard had been associated with the camp that sees inflation, the central bank’s traditional enemy, as a greater threat than deflation brought on by anemic growth. Until now he had not been an advocate for large-scale asset purchases to reinvigorate the economy.

But with inflation very low, about half of the Fed’s implicit target of 2 percent, and with the European debt crisis having roiled the markets, even self-described inflation hawks like Mr. Bullard have gotten worried about the economy’s trajectory.

With his remarks on Thursday, Mr. Bullard appeared to join other Fed officials already seen as sympathetic to the view that damage from long-term unemployment and the threat of deflation are the greatest challenges facing the economy. They include the Fed bank presidents Eric S. Rosengren of Boston and William C. Dudley of New York.

Those so-called inflation doves are likely to be joined soon by three new members of the Fed’s board of governors.

[…]

That view is not universally held, however.

Thomas M. Hoenig, president of the Kansas City Fed and an inflation hawk, said in an interview Thursday that the comparisons to Japan were overstated. He likened the debate to the situation in mid-2003, when a sluggish recovery from the 2001 recession prompted predictions of deflation that did not come to pass. “I don’t think we should find ourselves picking up every piece of short-term data and jumping to conclusions,” he said.

Two others associated with the hawkish camp, which is focused on continued vigilance on inflation, offered similar perspectives in separate interviews.

“I think the fear of deflation in and of itself is probably overblown,” Charles I. Plosser, president of the Philadelphia Fed, said last week. He said that inflation expectations were “well anchored” and noted that $1 trillion in bank reserves was sitting at the Fed. “It’s hard to imagine with that much money sitting around, you would have a prolonged period of deflation,” he said.

Neil Irwin at WaPo:

Here is the executive summary of Bullard’s paper, and the full document, with the ominous title “Seven Faces of ‘The Peril.’ ” His two main conclusions: that the Fed’s commitment to leave rates low for an extended period “may be increasing the probability of a Japanese-style outcome for the U.S.,” and that “on balance, the U.S. quantitative easing program offers the best tool to avoid such an outcome.”

Bullard’s paper comes at a crucial time, as the Fed starts to weigh whether the risk of deflation and extended weak growth is high enough to warrant new action. Chairman Ben S. Bernanke indicated openness to new policy steps to boost growth in congressional testimony last week, but made clear that they would only be undertaken if conditions worsen further.

Bullard’s analysis adds to that debate in some interesting ways. Bernanke suggested that the Fed could promise to leave its short-term interest rates low for even longer than the “extended period” it has already. Bullard is calling that strategy potentially counterproductive.

His argument: Essentially that the pledge of low rates signals that Fed leaders expect inflation to keep falling, making it more likely that the economy settles into the deflation trap in which the Japanese economy is stuck.

It’s particularly interesting to see Bullard raise the specter of deflation, because he is generally viewed as residing on the other side of Fed policy debates, on the inflation hawk side of things.

Colin Barr at Fortune:

The support for another round of asset purchases is noteworthy because Bullard has been both a supporter of Fed asset purchases and a worrier about the potential inflationary impacts. His support for more asset purchases suggests he believes the balance has swung against inflation.

Japan has endured two decades of economic stagnation after its asset price bubbles burst around 1990. It has been widely assumed this country could avoid such an outcome, but that assumption has come under fierce attack lately, with a weakening growth outlook and a sharp decline in Treasury bond yields.

The 10-year Treasury yield has dropped to around 3% from 4% this spring, and some growth skeptics now say it could tumble another percentage point or more. This decline happened even as the Fed this spring signaled it would hold rates near zero further into the future, as a response to the unrest in European debt markets.

This response appears to be “inflationary,” Bullard writes, by delaying the Fed’s exit from its two-year-old detour into the world of free money. Yet the market’s inflation expectations tumbled.

“Promising to remain at zero for a long time is a double-edged sword,” he concludes.

Bullard is the second top Fed official to part with Fed chief Ben Bernanke on the “extended period” language. Kansas City Fed chief Thomas Hoenig has called on the Fed to drop that promise and modestly raise interest rates.

Atrios:

My econ is a bit rusty and I was never much of a macro guy, but is there any way in which this reasoning makes any sense at all?

“I think the fear of deflation in and of itself is probably overblown, from my perspective,” Charles I. Plosser, president of the Philadelphia Fed, said last week in an interview. He said that inflation expectations were “well anchored” and noted that $1 trillion in bank reserves was sitting at the Fed. “It’s hard to imagine with that much money sitting around, you would have a prolonged period of deflation,” he said.

The…money…is…sitting…around.

Paul Krugman:

Atrios asks whether this makes sense. No, it doesn’t. I mean, if we’re talking about the risk of turning Japanese, shouldn’t we, um, look at Japanese experience? Here’s Japan’s monetary base — the sum of bank reserves and currency in circulation — from 1995 to 2005:

Bank of Japan

All that money sitting there — and deflation continued apace. I remember Taka Ito telling me that the only consumer durable selling well was … safes. When you’re in a liquidity trap, the size of the base doesn’t matter.

But at least some Fed types are getting it.

Ryan Avent at Free Exchange at The Economist:

On the other hand, the only one of the sceptics listed above that’s currently a voting member of the FOMC is Mr Hoenig. The number of vocal deflation worriers is quite close to a majority. So perhaps more action will be forthcoming soon.

My colleague also noted, however:

I think Mr Bernanke himself, however, is ambivalent on the benefit of more QE. He’s not sure of the unintended consequences of printing all that money. And the next round of QE will have less impact than the first because the spread between mortgage rates and Treasury yields has collapsed since the first round of QE. So the benefits of more QE are smaller and the costs greater than they were a year ago.

So how about it? This may be true. At the same time, the risk of deflation is greater than it seemed a year ago. Below is the Cleveland Fed’s trimmed mean measure of consumer price inflation. Year-over-year, prices are up under 1%, and the trend line is clearly downward.

My colleague argues that the two powerful tools left to the Fed—explicit devaluation and a money-financed fiscal stimulus (a helicopter drop)—would take Treasury approval and are unlikely to be pursued.

John Cole:

Wouldn’t it be awesome if the Fed and other government agencies took advantage of domestic Nobel Prize winning economists? For christ sake- someone google “Krugman+lost+decade” and tell me how many hits you come up with. He’s done just about everything except tattoo it on his chest and back and then do a pay-per-view boxing match with Tonya Harding.

UPDATE: James Ledbetter at Slate