Tag Archives: Jonathan Chait

It Is Ezra Klein Week Here At Around The Sphere

Ezra Klein:

There’s lots of interesting stuff in Ed Glaeser’s new book, “The Triumph of the City.” One of Glaeser’s themes, for instance, is the apparent paradox of cities becoming more expensive and more crowded even as the cost of communicating over great distances has fallen dramatically. New York is a good example of this, but Silicon Valley is a better one

[…]

The overarching theme of Glaeser’s book is that cities make us smarter, more productive and more innovative. To put it plainly, they make us richer. And the evidence in favor of this point is very, very strong. But it would of course be political suicide for President Obama to say that part of winning the future is ending the raft of subsidies we devote to sustaining rural living. And the U.S. Senate is literally set up to ensure that such a policy never becomes politically plausible.

Klein again:

Yesterday afternoon, I got an e-mail from a “usda.gov” address. “Secretary Vilsack read your blog post ‘Why we still need cities’ over the weekend, and he has some thoughts and reflections, particularly about the importance of rural America,” it said. A call was set for a little later in the day. I think it’s safe to say Vilsack didn’t like the post. A lightly edited transcript of our discussion about rural America, subsidies and values follows.

Ezra Klein: Let’s talk about the post.

Tom Vilsack: I took it as a slam on rural America. Rural America is a unique and interesting place that I don’t think a lot of folks fully appreciate and understand. They don’t understand that that while it represents 16 percent of America’s population, 44 percent of the military comes from rural America. It’s the source of our food, fiber and feed, and 88 percent of our renewable water resources. One of every 12 jobs in the American economy is connected in some way to what happens in rural America. It’s one of the few parts of our economy that still has a trade surplus. And sometimes people don’t realize that 90 percent of the persistent poverty counties are located in rural America.

EK: Let me stop you there for a moment. Are 90 percent of the people in persistent poverty in rural America? Or just 90 percent of the counties?

TV: Well, I’m sure that more people live in cities who are below the poverty level. In terms of abject poverty and significant poverty, there’s a lot of it in rural America.

The other thing is that people don’t understand is how difficult farming is. There are really three different kinds of farmers. Of the 2.1 million people who counted as farmers, about 1.3 million of them live in a farmstead in rural America. They don’t really make any money from their operation. Then there are 600,000 people who, if you ask them what they do for a living, they’re farmers. They produce more than $10,000 but less than $250,000 in sales. Those folks are good people, they populate rural communities and support good schools and serve important functions. And those are the folks for whom I’m trying to figure out how to diversify income opportunities, help them spread out into renewable fuel sources. And then the balance of farmers, roughly 200,000 to 300,000, are commercial operations, and they do pretty well, particularly when commodity prices are high. But they have a tremendous amount of capital at risk. And they’re aging at a rapid rate, with 37 percent over 65. Who’s going to replace those folks?

EK: You keep saying that rural Americans are good and decent people, that they work hard and participate in their communities. But no one is questioning that. The issue is that people who live in cities are also good people. People who live in exurbs work hard and mow their lawns. So what does the character of rural America have to do with subsidies for rural America?

TV: It is an argument. There is a value system that’s important to support. If there’s not economic opportunity, we can’t utilize the resources of rural America. I think it’s a complicated discussion and it does start with the fact that these are good, hardworking people who feel underappreciated. When you spend 6 or 7 percent of your paycheck for groceries and people in other countries spend 20 percent, that’s partly because of these farmers.

More Klein here and here

Will Wilkinson at DiA at The Economist:

IN THIS chat with Ezra Klein, Tom Vilsack, the secretary of agriculture, offers a pandering defence of agricultural subsidies so thoroughly bereft of substance I began to fear that Mr Vilsack would be sucked into the vacuum of his mouth and disappear.When Mr Klein first raises the subject of subsidies for sugar and corn, Mr Vilsack admirably says, “I admit and acknowledge that over a period of time, those subsidies need to be phased out.” But not yet! Vilsack immediately thereafter scrambles to defend the injurious practice. Ethanol subsidies help to wean us off foreign fuels and dampen price volatility when there is no peace is the Middle East, Mr Vilsack contends. Anyway, he continues, undoing the economic dislocation created by decades of corporate welfare for the likes of ADM and Cargill will create economic dislocation. Neither of these points is entirely lacking in merit, but they at best argue for phasing out subsidies slowly starting now.

Mr Vilsack should have stopped here, since this is as strong as his case is ever going to be, but instead he goes on to argue that these subsidies sustain rural culture, which is a patriotic culture that honours and encourages vital military service:

[S]mall-town folks in rural America don’t feel appreciated. They feel they do a great service for America. They send their children to the military not just because it’s an opportunity, but because they have a value system from the farm: They have to give something back to the land that sustains them.

Mr Klein follows up sanely:

It sounds to me like the policy you’re suggesting here is to subsidize the military by subsidizing rural America. Why not just increase military pay? Do you believe that if there was a substantial shift in geography over the next 15 years, that we wouldn’t be able to furnish a military?

To which Mr Vilsack says:

I think we would have fewer people. There’s a value system there. Service is important for rural folks. Country is important, patriotism is important. And people grow up with that. I wish I could give you all the examples over the last two years as secretary of agriculture, where I hear people in rural America constantly being criticized, without any expression of appreciation for what they do do.

In the end, Mr Vilsack’s argument comes down to the notion that the people of rural America feel that they have lost social status, and that subsidies amount to a form of just compensation for this injury. I don’t think Mr Vilsack really believes that in the absence of welfare for farmers, the armed services would be hard-pressed to find young men and women willing to make war for the American state. He’s using willingness-to-volunteer as proof of superior patriotism, and superior patriotism is the one claim to status left to those who have no other.

Ryan Avent at Free Exchange at The Economist:

I’ll add a few comments. First, it may be that the economists who understand the economic virtues of city life aren’t doing a sufficiently good job explaining that it’s not the people in cities that contribute the extra economic punch; it’s the cities or, more exactly, the interactions between the people cities facilitate. It’s fine to love the peace of rural life. Just understand that the price of peace is isolation, which reduces productivity.

Second, the idea that economically virtuous actors deserve to be rewarded not simply with economic success but with subsidies is remarkably common in America (and elsewhere) and is not by any means a characteristic limited to rural people. I also find it strange how upset Mr Vilsack is by the fact that he “ha[s] a hard time finding journalists who will speak for them”. Agricultural interests are represented by some of the most effective lobbyists in the country, but their feelings are hurt by the fact that journalists aren’t saying how great they are? This reminds me of the argument that business leaders aren’t investing because they’re put off by the president’s populist rhetoric. When did people become so sensitive? When did hurt feelings become a sufficient justification for untold government subsidies?

Finally, what Mr Klein doesn’t mention is that rural voters are purchasing respect or dignity at the price of livelihoods in much poorer places. If Americans truly cared for the values of an urban life and truly wished to address rural poverty, they’d get rid of agricultural policies that primarily punish farmers in developing economies.

Andrew Sullivan

Arnold Kling:

Ezra Klein sounds like my clone when arguing with the Secretary of Agriculture.

James Joyner:

Essentially, Vilsack justifies subsiding farmers on the basis that rural America is the storehouse of our values, for which he has no evidence. And he’s befuddled when confronted with someone who doesn’t take his homilies as obvious facts.

Nobody argues that America’s farmers aren’t a vital part of our economy or denies that rural areas provide a disproportionate number of our soldiers. But the notion that country folks are somehow better people or even better Americans has no basis in reality.

Jonathan Chait at TNR:

Why is it so common to praise the character of rural America? Part of it is doubtless that rural life represents the past, and we think of the past as a simpler and more honest time. But surely another element is simply that rural America is overwhelmingly white and Protestant. And completely aside from the policy ramifications, the deep-seated veneration of rural America reflects, at bottom, a prejudice few would be willing to openly spell out.

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Filed under Economics, Food, Go Meta, New Media

Erlernen Sie Von Uns, Amerika, Part III

David Leonhardt at NYT:

Remember the German economic boom of 2010?

Germany’s economic growth surged in the middle of last year, causing commentators both there and here to proclaim that American stimulus had failed and German austerity had worked. Germany’s announced budget cuts, the commentators said, had given private companies enough confidence in the government to begin spending their own money again.

Well, it turns out the German boom didn’t last long. With its modest stimulus winding down, Germany’s growth slowed sharply late last year, and its economic output still has not recovered to its prerecession peak. Output in the United States — where the stimulus program has been bigger and longer lasting — has recovered. This country would now need to suffer through a double-dip recession for its gross domestic product to be in the same condition as Germany’s.

Yet many members of Congress continue to insist that budget cuts are the path to prosperity. The only question in Washington seems to be how deeply to cut federal spending this year.

If the economy were at a different point in the cycle — not emerging from a financial crisis — the coming fight over spending could actually be quite productive. Republicans could force Democrats to make government more efficient, which Democrats rarely do on their own. Democrats could force Republicans to abandon the worst of their proposed cuts, like those to medical research, law enforcement, college financial aid and preschools. And maybe such a benevolent compromise can still occur over the next several years.

The immediate problem, however, is the fragility of the economy. Gross domestic product may have surpassed its previous peak, but it’s still growing too slowly for companies to be doing much hiring. States, of course, are making major cuts. A big round of federal cuts will only make things worse.

So if the opponents of deep federal cuts, starting with President Obama, are trying to decide how hard to fight, they may want to err on the side of toughness. Both logic and history make this case.

Let’s start with the logic. The austerity crowd argues that government cuts will lead to more activity by the private sector. How could that be? The main way would be if the government were using so many resources that it was driving up their price and making it harder for companies to use them.

In the early 1990s, for instance, government borrowing was pushing up interest rates. When the deficit began to fall, interest rates did too. Projects that had not previously been profitable for companies suddenly began to make sense. The resulting economic boom brought in more tax revenue and further reduced the deficit.

But this virtuous cycle can’t happen today. Interest rates are already very low. They’re low because the financial crisis and recession caused a huge drop in the private sector’s demand for loans. Even with all the government spending to fight the recession, overall demand for loans has remained historically low, the data shows.

Similarly, there is no evidence that the government is gobbling up too many workers and keeping them from the private sector. When John Boehner, the speaker of the House, said last week that federal payrolls had grown by 200,000 people since Mr. Obama took office, he was simply wrong. The federal government has added only 58,000 workers, largely in national security, since January 2009. State and local governments have cut 405,000 jobs over the same span.

The fundamental problem after a financial crisis is that businesses and households stop spending money, and they remain skittish for years afterward. Consider that new-vehicle sales, which peaked at 17 million in 2005, recovered to only 12 million last year. Single-family home sales, which peaked at 7.5 million in 2005, continued falling last year, to 4.6 million. No wonder so many businesses are uncertain about the future.

Without the government spending of the last two years — including tax cuts — the economy would be in vastly worse shape. Likewise, if the federal government begins laying off tens of thousands of workers now, the economy will clearly suffer.

Doug J.:

Bobo six months ago on German austerity:

The early returns suggest the Germans were. The American stimulus package was supposed to create a “summer of recovery,” according to Obama administration officials. Job growth was supposed to be surging at up to 500,000 a month. Instead, the U.S. economy is scuffling along.

[….]

The economy can’t be played like a piano — press a fiscal key here and the right job creation notes come out over there. Instead, economic management is more like parenting. If you instill good values and create a secure climate then, through some mysterious process you will never understand, things will probably end well.

An actual economics reporter (Dave Leonhardt) today:

With its modest stimulus winding down, Germany’s growth slowed sharply late last year, and its economic output still has not recovered to its prerecession peak. Output in the United States — where the stimulus program has been bigger and longer lasting — has recovered. This country would now need to suffer through a double-dip recession for its gross domestic product to be in the same condition as Germany’s.

[…..]

“It’s really quite striking how well the U.S. is performing relative to the U.K., which is tightening aggressively,” says Ian Shepherdson, a Britain-based economist for the research firm High Frequency Economics, “and relative to Germany, which is tightening more modestly.” Mr. Shepherdson adds that he generally opposes stimulus programs for a normal recession but that they are crucial after a crisis.

It’s pretty much a guarantee that any argument involving the idea of government as parent will be a faulty argument.

No one could have predicted that Paul Krugman would be right about austerity.

David Dayen at Firedoglake:

David Leonhardt is speaking simple economic truths in what must sound like a foreign language, given the tenor of debates over the past few months. Standard economic theories haven’t applied in Washington for a while, so Leonhardt’s essay has the force of the running man throwing the hammer into the Big Brother TV screen in the famous Apple 1984 commercial.

Leonhardt manages to mention that GDP is still growing too slowly in the US for mass hiring, even with a higher growth rate than Germany. He manages to note the state and local cuts that will blunt recovery. He manages to look at interest rates, which are historically low, and reason that government spending is not crowding out the private sector in any way. He calls John Boehner a liar for saying the federal workforce has grown by 200,000 employees since Barack Obama’s tenure in office (it’s about 1/4 that). He says that the problem right now is a lack of demand. He cites the much better example of Britain, which has gone whole-hog for austerity and seen negative job growth and negative GDP growth since.

I’d like to think that this kind of truth would, like resuscitating a dying patient, shock the political class back to life. More likely it will just fall down the memory hole, drowned out by the bipartisan cries of “we all want to cut spending.” The unemployed are still invisible, economic theory is still upside down, and one article won’t change that.

It would be nice if it did.

Andrew Leonard at Salon:

What do we learn from the correlation between states with the worst housing bust and budget shortfalls? If U.S. economic growth slows, the federal deficit situation will get worse. Republicans believe that cutting government spending will spur economic growth. But the evidence we have from countries that have attempted such a strategy since the Great Recession began to ebb — Germany and the United Kingdom — suggests exactly the opposite. Austerity policies are not the right medicine for a fragile economy.

Felix Salmon:

One of the best aspects of being a journalist is that you get to talk at length to the most knowledgeable and interesting experts on just about any subject you can think of. For me, yesterday was a prime case in point: a long and fascinating lunch with James Macdonald, the author of my favorite book on the history of sovereign debt. Turns out he also has a microscopic vineyard in Tuscany, so the conversation ebbed wonderfully from economics to wine and back.

Macdonald has an economic historian’s view of the current austerity debate, and he was very clear: if you look at the history of countries trying to cut and deflate their way to prosperity while keeping their currencies pegged, it’s pretty grim — all the way back to Napoleonic times. Sometimes, the peg is gold. For a good example of the destructive abilities of that particular peg, look at the UK in the 1920s, which Macdonald says was arguably worse than the US in the 1930s: shallower, to be sure, but substantially longer. The devaluation of the pound, when it finally came, was very long overdue.

At other times, the peg is simply political: Macdonald gives the example of southern Italy being locked into what was essentially the Piedmontese monetary system at the time of the Risorgimento. That might have been well over a century ago, but there’s a case to be made that it has hobbled just about everywhere south of Rome to this day — and that’s in a country with about as much internal labor mobility as between EU countries.

So from a historical perspective, the prospects for countries like Portugal, Ireland and Greece are pretty grim. They can cut their budgets drastically and stay pegged to the euro, but most of them would be better off in the position of Iceland, which can and did devalue in a crisis (and allowed its banks to default, too). So far, the Baltic states have stuck to their deflationary guns with the most determination and discipline, but such things work until they don’t: at some point it’s entirely possible that Latvia or Estonia could pull an Argentina and kickstart growth by devaluing.

Jonathan Chait at TNR:

I’m sure that, in the light of this new evidence, American conservatives will undertake a thorough rethinking of their anti-stimulus beliefs. After all, as they told us at the time, this was a natural experiment.

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Filed under Economics, Foreign Affairs, The Crisis

The Continued News Out Of Madison…

Amanda Terkel at The Huffington Post:

Wisconsin’s public employee unions have agreed to cuts to their health care and pension funds, and a moderate Republican state senator has offered a compromise that would temporarily, not permanently, strip their collective-bargaining rights, but Gov. Scott Walker (R) refuses to budge on the latter issue. Now, state Senate Democrats say they’re done with Walker and seek ways to work around him.

“We had a Senate Democratic caucus last night, and we’ve pretty much given up on the governor,” said state Sen. Jim Holperin (D). “I think this is a governor who is a very stubborn individual and maybe does not understand fully the collateral consequences of his stubbornness. So we’ve decided to refocus on the people we believe may be flexible to some degree, and that’s Senate Republicans. A lot of those Senate Republicans have been around a long time, and I think understand the gravity of eliminating rights from people.”

Holperin and Wisconsin’s other Senate Democrats remain in Illinois, a move that prevents their Republican colleagues from reaching the quorum needed to move forward on budget bills like Walker’s. So far, Democrats said, Walker has ignored all their calls and requests to meet together.

Byron York at The Washington Examiner:

“They’ve painted themselves in a corner,” Wisconsin Republican state senator Randy Hopper says of his Democratic colleagues. “There’s no way for them to get out of it.”

Democratic senators last week fled Wisconsin rather than allow a vote on Republican Gov. Scott Walker’s new budget bill, with its curtailments of some public-sector unions’ right to bargain collectively. The bill surely would have passed given the Republicans’ 19 to 14 advantage in the Senate. So Democrats, deeply dependent on union money and support, ran away to avoid a vote.

Walker has stood firm in the fight, but the truth is a lot of Republicans were nervous last week when crowds of protesters showed up and Democrats headed for the hills. What if the public supported the unions? After going home to their districts over the weekend, Republicans are feeling better. Many heard from constituents telling them to hang tough, and voters were especially unhappy with Democrats for hightailing it out of state. “We think public opinion is with us on the budget issue, and we’re sure public opinion is with us on the Democrats’ not showing up for work and doing their job,” says Mark Jefferson, executive director of the state Republican Party.

In fact, for many Republican supporters, the big question is not whether the fight is worth the trouble but whether there’s some way the GOP can steamroll over the Democrats. But that’s not going to happen, at least for now. Republicans believe they are going to win without using extraordinary measures.

In Madison, the protesters are allowed to do almost anything. The police are watchful and bemused; during the foot-stomping, for example, Sgt. Brian Aubrey, who has been here for four days with capitol police, holds up his iPhone and takes a short video, then goes back to watching the crowd.

This occupation of the capitol is totally legal. During the legislative session, anyone can enter the building, from morning to midnight, without going through a security gate. In addition, police unions in Madison and Dane County oppose the governor’s bill and back the protest, even though they are exempted from the legislation’s ban on collective bargaining.

“Why do we deserve collective bargaining rights if no one else gets them?” asks Steve Heimsness, treasurer of the Madison Professional Police Officers Association, right after marching into the capitol with a “Cops for Labor” sign. “Also, if the collective bargaining rights are taken away from the other workers, it’ll happen to us. Guaranteed. I’m sure of it.”

 

So there’s no hurry to clean up the hundreds of small signs taped to the walls—several of them remind the crowd that “This is a PEACEFUL protest”—or the larger ones that have been taped there for days. They cover letters spelling out “We Are Wisconsin,” visible from most parts of the building, and the massive banner on the second floor asking Jon Stewart and Stephen Colbert to come to Madison because “we came to your rally.”

No one is telling the people who are sitting on sleeping bags, where they intend to spend the night, to go home. Sheryl Labash, who drove to Madison from Detroit on Thursday, has carved out a little section of a hallway on the second floor, where she reads the Socialist Worker’s Web site as she charges her Blackberry. Not far away, another protester is taking the time to nap, happily earplugged against the din of hundreds of screaming comrades.

The drum lines and the out-of-state sleepovers are a relatively new part of the protest. They were probably inevitable. One reason why Madison is a tricky place to start a Republican crackdown on union power is that it’s home to a sprawling university and all manner of left-wing organizations, magnets for Midwest liberal activism. The Grassroots Leadership College, based here, is using the occasion to hold Nonviolent Demonstration Trainings around the clock, sharing tips like “Don’t make sudden moves around the police” and “Write the ACLU’s phone number on your body” (for when you’re arrested and your phone is taken). Ian’s Pizza, a restaurant close to the Capitol, has been delivering an endless supply of free food paid for by donors from around the world; the leftover boxes are immediately turned into makeshift protest signs. There’s free coffee and water, and on some days free bratwurst, all from local shops.

The hardiest protesters, the ones who have been on strike—a teacher’s strike ends tomorrow—say they feel they are doing something worthwhile. Alyson Pohlman, who works for the university, walks in and out of the capitol building with one of the 12 signs she’s made over seven days of protests. If the budget repair bill passes, she calculates that she’ll make 14 percent less than she used to. But this concerns her less than the cause she is supporting, which she describes as ensuring that “the voice of the people” remains strong enough to speak out against corporate America.

A lot of the protesters talk like this. They don’t want to lose bargaining rights, but they couch that worry in a broader, more existential fear: What if they’re losing their country? It is almost impossible not to hear echoes of Tea Party protesters. (There are some common slogans: I spotted one “Mad as Hell” and one “Can You Hear Us Now?” sign.) The Tea Party worries about George Soros and ACORN; the Cheddar Revolutionaries worry about libertarian billionaires Charles and David Koch, and an overall Republican strategy to “defund the left.” They cite New Yorker and New York Timesreports to make this case, and they’re scared.

There are countless signs attacking the Kochs, or Walker as a “Koch tool,” or listing which products to boycott in order to hit the Kochs’ pocketbooks. And there are detailed charts explaining that if unions are neutered politically, the biggest campaign donors in America will be “right-wing.” Mark Jansen, who drove to the protests from Indiana, walks the capitol with a yellow umbrella that came free with some Eggo waffles, and is now festooned with anti-Koch, anti-Citizens United slogans.

“Walker’s a pink, naked purse dog for the Kochs!” he says.

Jonathan Chait at TNR:

Imagine a Democratic governor proposed a plan to close a budget crisis. First he jacked up the Earned Income Tax Credit. Then he proposed a tax hike on the rich and on corporations to close the deficit. And then he packaged it with a stringent campaign finance law, a law to require corporations to obtain permission from shareholders before engaging in any kind of political activism, and other laws designed to crush the political power of corporate America. (Pro-Democratic businesses would be exempted.) It’s budget-related, because, after all, you can’t maintain higher taxes on the rich if the rich are able to bend the political system to protect their interests. Oh, and Republicans accepted the tax hikes on the rich but opposed the other provisions, but Democrats refused to negotiate them.

I suspect conservatives would interpret this not as a genuine effort to close the deficit but as an exercise in class warfare and raw politics. They’d be correct.

Ann Althouse:

You know, it really was rather smart of the Republicans to let the protest/exile peter out over time. The teachers couldn’t keep canceling school, and the group at the Capitol will, more and more, be UW students/TAs and old Madison lefties with more radical slogans. The legislators-in-hiding look more and more ineffectual and more and more Chicago. I don’t think these developments are increasing political support around the state.

Meanwhile, Walker and his GOP cohort are waiting patiently — it only takes a few days — to get going working on the state’s problems.

“They can vote on anything that is nonfiscal,” said Senator Jon Erpenbach, a Democrat, from his hotel across state lines.

(There’s a Senate rule that requires a larger quorum for fiscal matters. The Republicans need one Democratic senator to return to give them that quorum.)

“They can take up their agenda; they can do whatever they choose to do.”

Mr. Erpenbach said that his caucus was determined not to return until the restrictions to collective bargaining were off the table. But he worried aloud about what legislation could emerge in the meantime.

What legislation should the Republicans put on the agenda? They have the votes to pass things with or without the Democrats, so the question might be: What do they want to do that will be especially convenient to do without Democrats around to pester them? Or: What are the things that, if done without the Democrats’ participation, will most hurt the Democrats politically? Or: What issue will prompt at least one Democrat to return, thus enabling them to get to the fiscal matters?

UPDATE: Concealed carry, voter ID, race-blind admissions in the University of Wisconsin system…

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Filed under Economics, Legislation Pending

Who Is Happy With This Budget? No One? Bueller? Bueller?

David Rodgers at Politico:

Long on tough choices, short on final answers, President Barack Obama’s new 2012 budget goes to Congress on Monday in what many hope is only an opening bid before he and Republicans come to the table on a bipartisan deficit reduction plan.

For the current year, the White House projects a more-than-$1.6-trillion deficit — even higher than the Congressional Budget Office forecast. But outlays would actually drop in 2012 and stabilize in the $3.7 trillion range, as deficits fall to $1.1 trillion in 2012 and $768 billion in 2013.

After November’s election results, no one assumes this is sufficient, but more than any of Obama’s prior efforts, the new budget makes choices that help define the man himself.

He bets big on education spending — an 11 percent increase next year — while altering the Pell Grant program to try to save the aid levels now allowed for college students from the poorest families. The National Institutes of Health would grow by about $1 billion, even as old anti-poverty programs and heating assistance would be reduced. And $62 billion in Medicare savings would be plowed back into paying physicians who care for the elderly.

Foreign wars, particularly the one in Afghanistan, would cost $118 billion, but for the first time in many years, total expenditures for the Pentagon and military would begin to fall. And while Republicans ridicule Obamat’s five-year cap on domestic spending, it has bred new restraint in the president.

Jonathan Cohn at TNR, before the budget came out:

Between the administration’s recent statements and a series of calculated leaks, we have a pretty good idea of what Obama is trying to do. He’s going to call for spending more money on education and other public investments, but he’ll also endorse enough cuts to keep overall non-defense discretionary spending at last year’s levels. Elementary and secondary school education, for example, should get a boost. But Pell Grants, for low-income college students, are going to take a hit, albeit a carefully crafted one.* There will be more money for building high-speed rail but less for helping low-income families pay their heating bills.

Is this a good thing? In absolute terms, clearly, the answer is no. The demand for Pell Grants is unusually high right now; among other things, cash-strapped states are raising tuitions at state schools just as cash-strapped students and families have fewer resources to pay them. Energy costs for next winter, when the cut in heating assistance would take effect, are likely to be higher than at any time since 2008. Unless the economic recovery quickens very suddenly, plenty of people will struggle to pay those heating bills. And those are just two examples of program reductions that will leave needy Americans even more needy.

But everything is relative, and that means judging these cuts alongside both the modest increases you’ll find elsewhere in this budget and the much larger increases you saw in previous ones. Robert Greenstein, director of the Center on Budget and Policy Priorities, will spend the next few days dissecting the Obama spending request and, as he does, he will likely find plenty not to like. But, during an interview, he also put disappointments in context:

I think [Obama’s] record is very strong — major expansions in refundable tax credits for the working poor, major expansion of student financial aid for low-income students so that more of them can go to and complete college, and of course, major health reform that will extend coverage to 32 million uninsured people. This is the most impressive record of any president since LBJ.

Obama’s spending request looks even better when you consider what the Republicans would do if left to their own devices. They haven’t committed themselves to a 2012 budget just yet. But they’ve said they want a far deeper freeze than Obama’s, reducing non-defense discretionary spending to what it was in 2008. On Friday, they offered a preview of that vision when they announced their proposal for how to finance government for the remainder of the current fiscal year.

They want far more severe cuts to Pell Grants and home heating assistance, plus reductions to such essential services as food inspections and the elimination of programs like Americorps. They also want to reduce spending on the Special Supplemental Nutrition Program for Women, Infant, and Children. That initiative, known as WIC, provides nutritional assistance to expectant mothers and newborns. As Paul Krugman notes, that cut will hurt today and tomorrow, since kids who grow up malnourished are more likely to have problems later in life.

Ezra Klein:

Happy Valentine’s Day, Wonkbook readers: I know you said not to get you anything this year, but I saw the president’s 2012 budget coming out and, well, I couldn’t resist. Head here at 10:30AM EST to download it. You’re welcome.

The budget — which proposes to spend $3.73-trillion in 2012 — includes $1.1 trillion in deficit reduction over the next 10 years. Two-thirds of that comes from spending cuts, with the largest chunk the administration’s proposed five-year freeze of non-security discretionary spending. The final third comes in tax increases. If all goes well, that’ll take the deficit down from the 10.9 percent of GDP we’re projecting for 2011 to 3% of GDP in 2017 — a much more manageable level. Entitlements, tax expenditures, and other traditionally toxic parts of the federal budget are not being addressed. The final document bears very little resemblance to the report produced by the president’s fiscal commission.

One thing to note: The document assumes that the high-income tax cuts expire in 2012, as they’re currently projected to do. The administration isn’t counting that in their $1.1 trillion of deficit reduction, but if the prediction is wrong and the Bush cuts do get another extension, they’ll wipe out most of this budget’s savings in one fell swoop. Conversely, if we decided to get serious about the deficit and let all of the Bush tax cuts expire in 2012 — yes, including the cuts for the not-so-rich — the reduction in the deficit would be vastly larger than anything envisioned in this budget. It’s an odd turn of events, but for all that this budget, and the various Republican proposals, attempt to actually do for the deficit, the biggest single thing we could do would be to do, well, nothing: Let the Bush tax cuts expire and let the health-reform law and the associated Medicare cuts and excise tax get implemented as planned. Doing by not doing: That’s the zen of deficit reduction. Somehow, I doubt Washington will find it very calming.

Peter Suderman at Reason:

Echoing the administration’s line that “the easy cuts are behind us,” Politico’s David Rogers says Obama’s 2012 budget is “long on tough choices.”  That depends on how you define “tough.” Jake Tapper of ABC News gives those alleged hard choices some context: “At no point in the president’s 10-year projection would the U.S. government spend less than it’s taking in.” By the president’s own definition, then, today’s budget plan isn’t sustainable.

Instead, the president outlines a plan that would keep the yearly deficit above $1.6 trillion this year and around $1.1 trillion the year after. The 10-year plan is to shave off about $1.1 trillion from the next decade’s total expected deficit. But in the context of a $7 trillion-plus projected deficit, this is hardly a breakthrough, or a serious fix. Last December, the president’s own fiscal commission proposed about $4 trillion in cuts, including an overhaul of Social Security. The president’s budget, by contrast, barely touches our unsustainable entitlements—and certainly doesn’t offer anything in the way of major reform.

In other words, despite the president’s recognition of the basic math underlying our country’s ongoing fiscal distress, his budget still doesn’t fix the problem that we spend more than we make. So much for confronting the facts.

Brian Darling at Redstate:

The fact of the matter is that the President is using fuzzy math to create an inflated budgetary baseline (in other words he has inflated projected spending over a 10 year period) so that he can claim cuts that don’t exist.  Today is the President’s day to pitch his plan, but the Obama Administration has to answer why his baseline is so inflated and why he is planning to raise taxes at a time of economic pain.

The President’s budget has something called the “Bridge From Budget Enforcement Act Baseline to Adjusted Baseline.”  This is the math theory used to create the fiction of cuts to the deficit.  This document has a “Budget Enforcement Act Baseline” deficit of $5.5 trillion over the 2012-2021 period and adds in some calculations to inflate that deficit baseline.

The President is actually cutting the projected deficit using projections created by his own administration.  This is a great way to make it look like he is going to balance the budget in 2021, a date where he will be far away from the Oval Office and in no way can he be blamed if his numbers do not pan out.

The Obama Administration adds in a factor, the “indexing to inflation the 2011 parameters of the Alternative Minimum Tax” which adds $1.5 trillion to the Obama baseline.  Then the Obama numbers crunchers add a continuation of the tax cuts for middle income taxpayers to the tune of $1.3 trillion.  Please note that this projection does not calculate in an extension of tax cuts for job creators — this is an projected increase in taxes starting in the first year of President Obama’s replacement.

More Obama math.  Add in a $3.3 trillion in program adjustments and $642 billion in debt services on adjustments.  Add in all of these projections to the baseline and you have adjusted the baseline from $5.5 trillion to $9.39 trillion in debt from 2012-2021.  That is how you adjust debt upward to make it look like the President’s budget is cutting spending.  You inflate projected spending over the next 10 years then increase spending at a lower rate than the baseline, you can create a “cut.”

On taxes, the President has hidden a massive increase in the gas tax.  There is a line item in the President’s budget summary tables titled “Bipartisan financing for Transportation Trust Fund” that adds up to $328 billion from 2012-2021.  In the President’s Bipartisan Debt Commission Report, they recommended a 15 cent increase in the gas tax.  The President’s budget seems to assume that his commission’s report is implemented by Congress and send to his desk.  This is an implicit endorsement of a massive increase in the price of gas at the pump in the form of increasing the federal gas tax from $18.4 cents.  If this idea does not pass, then you have a $328 billion shortfall in the projected transportation budget.

Jonathan Chait at TNR:

Andrew Sullivan is back from his absence and in incredibly high dudgeon over the Obama administration’s failure to propose a more austere budget. Andrew concedes that any such proposal would fail and exact huge political damage upon Obama but somehow thinks it’s unconscionable Obama didn’t do it anyway:

The cynical political calculation is obvious and it is well put by Yglesias and Sprung. If Obama backs Bowles-Simpson, the GOP will savage him for the tax hikes, while also scaring the wits out of the elderly on Medicare. The Democratic left – just look at HuffPo today – will have a cow. Indeed, if Obama backs anything, the GOP will automatically oppose him. He has to wait for a bipartisan agreement which he can then gently push ahead. But that’s exactly why we are in this situation today. Because no president has had the balls to deal with it, and George W. Bush made it all insanely worse.

So… why would proposing something that gets shot down not be not only useful but an absolute moral obligation? I don’t really get it. It seems like the smart play is to first win the budget showdown and try to beat some sanity into the Republicans, who can’t possibly compromise right now, and then either cut a deal or (preferably) just let the GOP kill the entire Bush tax cuts for you, which would more or less take care of the medium-term deficit problem.

Anyway, that’s not even my main point. My main point is that Andrew seems to endorse the endlessly discredited doc fix myth:

But in a mere nine years, entitlements will account for 64 percent of all federal spending. And Obama just punted on his promise to cut Medicare payments to doctors, as pledged under Obamacare as a core part of the case that health insurance reform would cut the deficit. So congrats, Megan. We can chalk that up as a cynical diversion (even though Obama pledges to find savings elsewhere in the Medicare budget to make up for this lie – a promise we now have no reason to trust or believe).

Once again, the physician reimbursement is not part of the Affordable Care Act. It’s part of a poorly-drafted 1997 law. Promising to carry out the never-intended 1997 physician reimbursement cuts was not part of the Affordable Care Act. Nor is it anybody’s idea of good policy. I’ve seen this myth circulating among conservatives and hard-core libertarians but it’s the first time I’ve seen it leap over the ideological divide. One of my many attempts to dispel the myth can be found here.

Andrew Sullivan:

Chait says there is no point in Obama proposing a real solution to the country’s medium-term fiscal collapse … because of the nature of the current Republicans. That’s Jon Cohn’s and Josh Marshall’s position too. I have not exactly been easy on the GOP either and their fiscal fraudulence when it comes to the long-term debt. And yet Tom Coburn boldly came out in favor of Bowles-Simpson, and Saxby Chambliss and Kent Conrad are on board for serious long-term entitlement and tax reform. It seems a little strange to believe that a GOP just elected on a platform of ending the debt would oppose Bowles-Simpson’s outline for eventual fiscal sanity. And if they did, Obama could call them out for their fiscal recklessness.

Instead, Obama’s transformation into a “what debt crisis?” liberal means that the GOP for the first time can legitimately call Obama out on his fiscal recklessness. Like Megan, I can see the point of spending in a recession. But when you have a new opportunity to set a new fiscal compass in a slowly recovering economy, outflank the GOP on the long-term debt, and help prevent a looming fiscal collapse, and you give the lame-ass SOTU Obama gave and unveil the risibly unserious budget we got yesterday, you reveal yourself as, well, not exactly change and certainly not hope.

I am not turning on the president given the alternatives, but I am not going to use the alternatives as excuses for the president to shirk his core responsibility to the next generation. I didn’t send eight years excoriating George “Deficits Don’t Matter” Bush to provide excuses for Barack “Default Doesn’t Matter” Obama. Like other fiscal conservatives, I’m just deeply disappointed by Obama’s reprise of politics as usual – even as the fiscal crisis has worsened beyond measure in the last three years. My point is that actually being honest about the budget and what it will take to resolve its long-term crisis is not political suicide, as Chait says. It’s statesmanship. It’s what a president is for.

One reason many of us supported this president was because he pledged not to return to the cynical politics of the Washington game in which partisan maneuvring always, always outweighs the national interest. But what he is telling us now is that he is indeed a classic pol, aiming for re-election, even if the US risks becoming a fiscal banana republic in the next decade.And if you really wanted to help the economy, wouldn’t reassuring domestic industry and international markets that the US is not on an auto-pilot for default be a lot more effective than planning more broadband access (however admirable that may be)? Does the president really believe that leaving Medicare and defense and Medicaid as they are is sustainable?

Leadership is not a bullshit SOTU that dredges up that ancient cliche about a “Sputnik moment” (really, Favreau? That’s all you got?), as if Obama were Harold Wilson extolling the “white heat” of the technological revolution as some sort of cure-all. It is not new slogans like “cut and invest”, which involve trivial amounts of money in the grand scheme of the things and may do actual harm to good government programs, instead of tackling where the real money is. It isn’t trimming a pathetically small amount from defense, while still adhering to Cold War troop deployments across the entire globe.

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Talkin’ About Adding The Value

Grace Snodgrass at Huffington Post:

One day soon, my name and performance evaluation could be printed in your morning newspaper. It will tell you that I’m a teacher who has clear strengths and weaknesses in helping my students advance academically.

But as valuable as my so-called “Teacher Data Report” is in helping me identify these areas, it really doesn’t say much about the overall quality of my teaching. And printing the results — as an NYC judge just gave the city the right to do — will do little to make me, or any of my colleagues, better teachers. At least, not right away. What will help is the Department of Education and the teachers’ union putting aside their differences and improving these reports so that teachers like me receive good information about our performance and clear steps towards achieving our classroom goals.

As an educator, I want to be evaluated. I know that my students’ success hinges on the quality of my teaching. The Department of Education is actually on the right track with the “value-added” method it uses to calculate the impact teachers have on their students’ academic growth. Value-added compares a student’s predicted performance on standardized assessments with how he or she actually performs.

Dana Goldstein and Megan McArdle on Bloggingheads

Jim Manzi at The Corner:

Recently, Megan McArdle and Dana Goldstein had a very interesting Bloggingheads discussion that was mostly about teacher evaluations. They referenced some widely discussed attempts to evaluate teacher performance using what is called “value-added.” This is a very hot topic in education right now. Roughly speaking, it refers to evaluating teacher performance by measuring the average change in standardized test scores for the students in a given teacher’s class from the beginning of the year to the end of the year, rather than simply measuring their scores. The rationale is that this is an effective way to adjust for different teachers being confronted with students of differing abilities and environments.

This seems like a broadly sensible idea as far as it goes, but consider that the real formula for calculating such a score in a typical teacher value-added evaluation system is not “Average math + reading score at end of year – average math reading score at beginning of year,” but rather a very involved regression equation. What this reflects is real complexity, which has a number of sources. First, at the most basic level, teaching is an inherently complex activity. Second, differences between students are not unvarying across time and subject matter. How do we know that Johnny, who was 20 percent better at learning math than Betty in 3rd grade is not relatively more or less advantaged in learning reading in fourth grade? Third, an individual person-year of classroom education is executed as part of a collective enterprise with shared contributions. Teacher X had special needs assistant 1 work with her class, and teacher Y had special needs assistant 2 working with his class — how do we disentangle the effects of the teacher versus the special ed assistant? Fourth, teaching has effects that continue beyond that school year. For example, how do we know if teacher X got a great gain in scores for students in third grade by using techniques that made them less prepared for fourth grade, or vice versa for teacher Y? The argument behind complicated evaluation scoring systems is that they untangle this complexity sufficiently to measure teacher performance with imperfect but tolerable accuracy.

Any successful company that I have ever seen employs some kind of a serious system for evaluating and rewarding / punishing employee performance. But if we think of teaching in these terms — as a job like many others, rather than some sui generis activity — then I think that the hopes put forward for such a system by its advocates are somewhat overblown.

There are some job categories that have a set of characteristics that lend themselves to these kinds of quantitative “value added” evaluations. Typically, they have hundreds or thousands of employees in a common job classification operating in separated local environments without moment-to-moment supervision; the differences in these environments make simple output comparisons unfair; the job is reasonably complex; and, often the performance of any one person will have some indirect, but material, influence on the performance of others over time. Think of trying to manage an industrial sales force of 2,000 salespeople, or the store managers for a chain of 1,000 retail outlets. There is a natural tendency in such situations for analytical headquarters types to say “Look, we need some way to measure performance in each store / territory / office, so let’s build a model that adjusts for inherent differences, and then do evaluations on these adjusted scores.”

I’ve seen a number of such analytically-driven evaluation efforts up close. They usually fail. By far the most common result that I have seen is that operational managers muscle through use of this tool in the first year of evaluations, and then give up on it by year two in the face of open revolt by the evaluated employees. This revolt is based partially on veiled self-interest (no matter what they say in response to surveys, most people resist being held objectively accountable for results), but is also partially based on the inability of the system designers to meet the legitimate challenges raised by the employees.

Noah Millman at The American Scene:

I do want to add a few additional points of my own:

1. Evaluations establish the principle that there is such a thing as performance in the first place. A great deal of discussion nowadays in education revolves around the idea that what we need to “fix the schools” is great teachers. But if that’s what we need, we’ll never do it. What we need, instead, are mechanisms for getting marginally better performance, year after year, from a teaching pool that remains merely adequate.

One bit of low-hanging fruit for achieving that goal, meanwhile, is the ability to dismiss the bottom 5% of teachers in terms of performance. Not only are these teachers failing comprehensively in their own classrooms, but their mere presence has a corrosive effect on an entire organization – on the teachers, on the students, on the management of the school. But right now, firing these teachers is essentially impossible. For all the difficulty of doing a rigorous evaluation in order to improve teaching performance across the board, I suspect it is a whole lot easier to identify the worst teachers in the school. If that could be done, the pressure to be able to terminate them would be significant, and that could do a lot to improve school performance right there.

2. Value-added metrics wind up punishing perfectly good but not spectacular schools with above-average student bodies. It may be that these schools should suffer reputationally, because the staff is not actually delivering as much value as they should. But high-stakes standardized testing actually pushes these schools to destroy themselves, wiping out the programs that actually do deliver value to these high-aptitude students and instead focusing on teaching to the tests.

That’s not an argument against using value-added metrics as such. It’s an argument that they need to be used intelligently, with some understanding of what “value-added” means at different points on the performance spectrum. But that, in turn, would require admitting that different standards are needed for students with different aptitude, which, in turn, is extremely difficult for our education system to admit. (And, admittedly, it’s a problem in corporate cultures that cross widely different customer bases as well. How well would Wal-Mart manage Tiffany?)

3. Nobody goes into teaching “for the money” – that is to say, teachers in aggregate make significantly less than people with their educational credentials and academic aptitude could make in other professions. So monetary rewards are useful primarily going to prove useful as signaling devices. There’s a lot of evidence coming in from high-performance charter schools suggesting that a monetary reward system tied too closely to evaluations actually degrades performance, because it gets teachers focused on the evaluations rather than on the performance. The evaluations should primarily be used as a diagnostic, to identify correctable deficiencies in teacher performance so they can be corrected through staff development, and to identify gross deficiencies in teacher performance so the teachers in question can be dismissed.

4. Similarly, across a system, what evaluations are useful is for research purposes and to drive market discipline. Evaluations of a school should be very useful to parents seeking to select a school for their child. Schools that consistently achieve high valuations (particularly for value-added metrics) should be objects of study by administrators and others looking to replicate that performance in lower-performing but still basically well-run schools. The least-important use of the evaluation is to directly “reward” or “punish” a school bureaucratically – and, indeed, if that becomes the primary use then the school is likely to start focusing overwhelmingly on the evaluation process and lose sight of actual performance. I’ve seen this happen over and over in New York City schools; it’s not a theoretical question.

Conor Friedersdorf at Sullivan’s place:

And it helps explain the inherent tension between teachers unions and the rest of us. Unions exist to protect the interests of their members. Even in the best case scenario, that means lobbying for an evaluation system that maximizes fairness to the people being evaluated. As citizens, our primary goal should be creating the best education system possible, even if doing so sometimes means (for example) that the teacher most desserving of a bonus doesn’t get one. Saying that there is a conflict between the common good and the ends of teachers unions isn’t a condemnation of the latter. It’s just a fact. And everyone seems to understand the basic concept if you talk about prison guard unions.

Reihan Salam:

Part of what makes me nervous is that productivity varies dramatically within industries. It is very common for comparable factories at the 90th percentile produce four times as much as factories at the 10th percentile. Moreover, the scorecards and shortcuts used by factories at the 90th percentile wouldn’t necessarily work for those at the 10th percentile. Managerial insights are usually embedded in a complex tangle on personalities and practices that can’t easily be replicated. This is natural, and I’d say that I’d much rather see a few firms race ahead than allow all firms to remain mired at the low end of the productivity spectrum.  Suffice it to say, this is not the ethic that governs how we generally think about public schools.

In a time when at least half of the political spectrum is deeply troubled by inequality, i.e., by the fact that some firms, individuals, and households are racing far ahead of others, what at least some education reformers are saying is that we want to unleash a few inventive, well-managed schools to start deploying the same per pupil resources to much greater effect. That is, we want to, in the short run at least, make the K-12 educational landscape more unequal, in the hope that leading schools will identify instructional methods, e.g., effective virtual instruction, that will prove scalable.

Much depends on how one interprets the fact that some firms, individuals, and households are racing ahead of the others. I take what I think of as a nuanced view. Generally speaking, some firms, individuals, and households race ahead of others due to a combination of luck, opportunity, and smart investments in organizational capital. In some cases, we see rent-seeking, tax and regulatory arbitrage, etc. But whereas Simon Johnson and many of my friends on the left see this as the dominant narrative, I see it as a significant but nevertheless relatively small part of the wage dispersion story.

Nicholas Bloom and John Van Reenen have written a neat essay in the Journal of Economic Perspectives on how effective management practices spread. I was struck by many of their observations, including some that will be familiar to those of you who see organizational capital as very important (“firms that more intensively use human capital, as measured by more educated workers, tend to have much better management practices”).

The United States has a commanding lead in terms of the quality of management in firms. This is very interesting considering our relative weakness in terms of educational attainment at the median in the prime-age cohorts. And I suspect that this feeds back into wage dispersion as well as assortative mating, family breakdown, and other sources of “stickiness” at the low end of the income distribution. For a variety of reasons, our economy is rewarding people with managerial skills, and, in a crude sense, one might be able to extrapolate the ability to manage a wide range of tasks in the workplace to the ability to maintain constructive relationships in other domains. The obvious objection is that many hard-charging executives neglect their families and personal lives, etc. But it could also be true that the that neglect of parental responsibilities is somewhat more common among those marginally attached to the labor force, due to the greater prevalence of substance abuse and other risky behaviors.

Jonathan Chait at TNR on Manzi:

That’s an interesting insight into the general problem with quantitative measures. Here are a few points in response:

1. You need some system for deciding how to compensate teachers. Merit pay may not be perfect, but tenure plus single-track longevity-based pay is really, really imperfect. Manzi doesn’t say that better systems for measuring teachers are futile, but he’s a little too fatalistic about their potential to improve upon a very badly designed status quo.

2. Manzi’s description…

evaluating teacher performance by measuring the average change in standardized test scores for the students in a given teacher’s class from the beginning of the year to the end of the year, rather than simply measuring their scores. The rationale is that this is an effective way to adjust for different teachers being confronted with students of differing abilities and environments.

..implies that quantitative measures are being used as the entire system to evaluate teachers. In fact, no state uses such measures for any more than half of the evaluation. The other half involves subjective human evaluations.

3. In general, he’s fitting this issue into his “progressives are too optimistic about the potential to rationalize policy” frame. I think that frame is useful — indeed, of all the conservative perspectives on public policy, it’s probably the one liberals should take most seriously. But when you combine the fact that the status quo system is demonstrably terrible, that nobody is trying to devise a formula to control the entire teacher evaluation process, and that nobody is promising the “silver bullet” he assures us doesn’t exist, his argument has a bit of a straw man quality.

Manzi responds to Chait:

My post wasn’t about if we should use quantitative measures of improvement in their students’ standardized test scores as an element of how we evaluate, compensate, manage and retain teachers, but rather about how to do this.

Two of the key points that I tried to make are that the metrics themselves should likely be much simpler than those currently developed by economics PhDs, and that such an evaluation system is only likely to work if embedded within a program of management reform for schools and school systems. The bulk of the post was trying to explain why I believe these assertions to be true.

An additional point that I mentioned in passing is my skepticism that such management reform will really happen in the absence of market pressures on schools. Continuous management reform, sustained over decades, that gets organizations to take difficult and unpleasant actions with employees is very hard to achieve without them. There’s nothing magic about teachers or schools. The same problems with evaluation and other management issues that plague them arise in big companies all the time. It’s only the ugly reality of market discipline that keeps them in check.

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Where Will Harold Ford Go Now?

Ben Smith at Politico:

The Democratic Leadership Council, the iconic centrist organization of the Clinton years, is out of money and could close its doors as soon as next week, a person familiar with the plans said Monday.

The DLC, a network of Democratic elected officials and policy intellectuals had long been fading from its mid-’90s political relevance, tarred by the left as a symbol of “triangulation” at a moment when there’s little appetite for intra-party warfare on the center-right. The group tried — but has failed — to remake itself in the summer of 2009, when its founder, Al From, stepped down as president. Its new leader, former Clinton aide Bruce Reed, sought to remake the group as a think tank, and the DLC split from its associated think tank, the Progressive Policy Institute.

But Reed left the DLC last year himself to serve as Vice President Joe Biden’s chief of staff, leaving Ed Gresser, a trade expert, to lead the group in the interim. Since then the board “hasn’t been able to find someone who wanted to come on in a permanent capacity,” a person familiar with the group’s woes said, with the central problem the difficulty of raising money for a Democratic group that isn’t seen as an ally of the White House.

Gresser declined to comment on the DLC’s future, and referred a call to From, who didn’t immediately respond to a message left with an assistant.

Jonathan Chait at TNR:

It’s hard to remember, but the whole rise of the progressive netroots was organized around opposition to the DLC, which liberals saw as Satan incarnate. Bill Clinton was an early member, and the DLC helped frame his presidential candidacy.

I always had mixed feelings about the group. I think it was about half innovative effort to counterbalance traditional Democratic interest groups, and half naked effort to suck up to corporate America and/or give contentless messaging cover to red state Democrats.

But for the main part, the DLC disappeared because its work was over. The remaking of the Democratic Party begun by Clinton held in place. The DLC floundered because it had nowhere else to go — having moved the party to the center, it could only advocate for the party is it stood in the Clinton and post-Clinton era, or advocate that it move further still toward the center. It became a an anachronism.

Ezra Klein:

What it hasn’t been able to do is adapt to success. It hasn’t mended relations with liberals, so it never could become the all-purpose Democratic think tank and holding pen that the Center for American Progress is. Its policy shop and messaging shops got a bit stale, which allowed upstarts like Third Way to pass it in influence. It continued picking fights with people like Howard Dean and Markos Moulitsas, which meant that when it got headlines, they weren’t necessarily good ones. It hasn’t nurtured and held onto the young talent that could help it build new constituencies or really update its thinking. It never figured out the Web.

But if I were Al From, the organization’s founder, I’d feel pretty good about myself. For better or for worse, the DLC won. That’s why potential donors and others are now comfortable letting it die.

Marc Ambinder at National Journal:

More prosaically, the DLC did something in 2006 to permanently alienate them from virtually the entire party: they endorsed Joe Lieberman’s re-election bid. Lieberman’s stalwart support for the war in Iraq and for President Bush was just about the biggest sin of all to Democrats of the era. Some issues are zero sum, and the DLC found itself on the wrong side of history, as least as far as the Democratic Party was concerned.
There are two other factors worth mentioning. One was that Big Labor became all the more important to helping Democrats get out the vote, and that made it more difficult for Democrats to affiliate with the DLC. The second was that the Netroots — Atrios and Daily Kos and Chris Bowers — thought the DLC’s “centrism” was equivalent to the politics of concession and compromise.
No question: the Netroots and progressive left are at the center of gravity for the Democratic Party as an institution. There is a distinction, though, between energy and influence. And it still isn’t clear how Democrats win the election without galvanizing the type of voters the DLC sought to attract. The group may be going away, but debates about its ideas will dominate politics for a long time to come.
The truth of the matter is that the DLCs function has been taken over by Third Way. Nobody needs to fear that the centrists aren’t going to be well represented in the Democratic Party. They run the place.
David Dayen at Firedoglake

Jim Geraghty at NRO:

Way back in 2005, Markos Moulitsas of the liberal Daily Kos was quite irked with the centrist Democratic Leadership Council, and declared:

Two more weeks, folks, before we take them on, head on. No calls for a truce will be brooked. The DLC has used those pauses in the past to bide their time between offensives. Appeals to party unity will fall on deaf ears (it’s summer of a non-election year, the perfect time to sort out internal disagreements). We need to make the DLC radioactive. And we will. With everyone’s help, we really can. Stay tuned.

He was going to make them “radioactive.” To think, if a conservative had said it, it would be considered encouraging dirty bomb attacks.

We scoffed. But no more. Apparently Kos really has perfected the promised radioactive superweapon. Ben Smith:

The Democratic Leadership Council, the iconic centrist organization of the Clinton years, is out of money and could close its doors as soon as next week, a person familiar with the plans said Monday…  Its website currently leads a Harold Ford op-ed from last November, titled, “Yes we can collaborate.” It lists as its staff just four people, and has only one fellow. Recent tax returns weren’t immediately publicly available, but returns from 2004-2008 show a decline in its budget from $2.6 million to $1.5 million, and a source said funding further dried up during the financial crisis that began nine months before Reed took over.

Could the long-promised superweapon be real? I felt a great disturbance in the Force, as if millions dozens of centrist Democrats suddenly cried out in terror and were suddenly silenced

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The Smoked Salmon At Iwo Jima

Alexander Burns at Politico:

THE REVIEWS ARE IN – SNAP POLL FROM CBS: “An overwhelming majority of Americans approved of President Obama’s overall message in his State of the Union on Tuesday night, according to a CBS News Poll of speech watchers. According to the poll, which was conducted online by Knowledge Networks immediately after the president’s address, 92 percent of those who watched the speech approved of the proposals Mr. Obama put forth during his remarks, while only 8 percent disapproved. … Americans who watched the speech were generally more Democratic than the nation as a whole.” … FROM CNN: “A CNN/Opinion Research Corporation survey indicated that 52 percent of speech watchers had a very positive reaction, with 32 percent saying they had a somewhat positive response and 15 percent with a negative response. … Those numbers indicate that the sample is about nine to ten points more Democratic than the population as a whole.” … AND FROM GQR, VIA POLITICO44: “The firm monitored the reactions of swing voters and unmarried women from Colorado as they watched the speech. According to the analysis, before the address, the test group’s approval of the president was 30 percent – by the end of the speech, the approval rating had gone up to 56 percent.” http://bit.ly/dMdVnT and http://bit.ly/fhBhgN and http://politi.co/ffVLil

Jonathan Chait at The New Republic:

The substance of Obama’s speech was moderate liberalism — we like business, but government has a role too, neither too much nor too little, etc. It’s hard to attach that kind of case-by-case pragmatism to an overarching theme. But I do think Obama pulled it off pretty well. He took a fairly hackneyed idea — the future — and managed to weave it into issue after issue, from infrastructure to energy to deficits to education and even foreign policy.

I thought Obama explicated his idea about American unity better than he has in the past. The notion of unity has always sat in tension with the fierce ideological disagreement of American politics, and indeed the latter has served as a rebuke to the former. I thought Obama effectively communicated that the messiness of political debate is a part of what makes America great, to turn that into a source of pride. He simultaneouly placed himself both within and above the debate.

Ross Douthat:

If you were a visitor from Mars, watching tonight’s State of the Union address and Paul Ryan’s Republican response, you would have no reason to think that the looming insolvency of our entitlement system lies at the heart of the economic challenges facing the United States over the next two decades. From President Obama, we heard a reasonably eloquent case for center-left technocracy and industrial policy, punctuated by a few bipartisan flourishes, in which the entitlement issue felt like an afterthought: He took note of the problem, thanked his own fiscal commission for their work without endorsing any of their recommendations, made general, detail-free pledges to keep Medicare and Social Security solvent (but “without slashing benefits for future generations”), and then moved swiftly on to the case for tax reform. Tax reform is important, of course, and so are education and technological innovation and infrastructure and all the other issues that the president touched on in this speech. But it was still striking that in an address organized around the theme of American competitiveness, which ran to almost 7,000 words and lasted for an hour, the president spent almost as much time talking about solar power as he did about the roots of the nation’s fiscal crisis.

Ryan’s rejoinder was more urgent and more focused: America’s crippling debt was an organizing theme, and there were warnings of “painful austerity measures” and a looming “day of reckoning.” But his remarks, while rhetorically effective, were even more vague about the details of that reckoning than the president’s address. Ryan owes his prominence, in part, to his willingness to propose a very specific blueprint for addressing the entitlement system’s fiscal woes. But in his first big moment on the national stage, the words “Medicare” and “Social Security” did not pass the Wisconsin congressman’s lips.

Paul Krugman

Allah Pundit

David Frum at FrumForum:

What to like in Obama’s SOTU:

  1. The gracious congratulations to the Republicans and John Boehner.
  2. His reminders of the country’s positive accomplishments, including the country’s huge lead in labor force productivity.
  3. His explanation that the challenge to less-skilled US labor comes much more from technology than from foreign competition.
  4. Opening the door to firing bad teachers.
  5. Call for a stepped-up national infrastructure program. If only he’d explained how this would work.
  6. Call for lower corporate tax rates with fewer loopholes.
  7. Openness to amendments on healthcare reform.
  8. Endorsement of cuts to Medicare & Medicaid.
  9. Endorsement of malpractice reform.
  10. Bringing forth the designer of the Chilean miner rescue tunnel. Nice!

What’s not to like:

  1. The disingenuous suggestion that China’s growth is driven by superior Chinese education system. Don’t confuse Amy Chua’s kids with off-the-farm peasants in Chinese factories.
  2. The call for more creative thinking in American education. Creative thinking is good, obviously. But the kids who are in most trouble need more drill, not more questions about their feelings.
  3. The too clever-by-half slip from the need for government to invest in basic research (yes) to the value of government investment in development of particular energy technologies (a record of failure).
  4. The pledge to put electric vehicles on the roads. So long as 50% of our power comes from coal, electric vehicles are not “clean.”
  5. The pledge to reach 80% clean electricity by 2035. If this is done by neutral across -the-board means like carbon taxes, fine. If done by favoritism for particular energy forms – and especially by tax credits or subsidies – it’s national industrial planning and is bad.
  6. The misleading implication that bestowing more college degrees will address educational deficits. It’s the low quality of American secondary education that is the problem.
  7. The endorsement of DREAM – made worse by the total fuzz of the commitment to immigration enforcement.
  8. No mention of Colombia FTA in trade section of speech.
  9. Very backhanded comments on deregulation
  10. Repudiation of benefit cuts to future Social Security beneficiaries.
  11. Silly earmarks pledge 100% guaranteed to be broken.
  12. Graceless comment about restoring America’s standing: ill-judged from a president whose foreign policy becomes more continuous with his predecessor’s seemingly with every month.

Jennifer Rubin:

If you were expecting a moderate Obama or a bold Obama, you were disappointed, most likely, by Tuesday’s State of the Union Address. In a nutshell: Obama proposed a ton of new domestic spending, promised to freeze discretionary spending (attained by savaging defense), abstained from offering specifics on entitlement reform and largely ignored major foreign policy changes. Moreover, the delivery was so listless that this State of the Union address likely garnered less applause than any address in recent memory.

But the mystery is solved: There is no new Obama, just a less snarly one. But it was also a flat and boring speech, too long by a third. Can you recall a single line? After the Giffords memorial service, this effort seemed like Obama had phoned it in. Perhaps that is because the name of the game is to pass the buck to Congress to do the hard work of digging out of the fiscal mess we are in.

Scott Johnson at Powerline:

Obama’s domestic policy is big on “investments” — not yours, the government’s. That is, spending. It’s a throwback to the vocabulary of the Clinton era. “The kids” must not be far behind. And there they are. They need more of your dough for their education.

“We do big things,” Obama says. I think when he says “we,” he means big government. The speech is long on domestic policy cloaked in the characteristically disingenuous rhetoric designed to conceal the substance. Obama advocates some kind of a freeze in federal spending. I’m not sure how that squares with the call for more “investments.”

Obama acknowledges the tumult in Tunisia thusly: “We saw that same desire to be free in Tunisia, where the will of the people proved more powerful than the writ of a dictator. And tonight, let us be clear: the United States of America stands with the people of Tunisia, and supports the democratic aspirations of all people.” Where does the United States of America stand tonight with respect to the people of Iran? We’re still waiting to hear from Obama on that one, but I guess we can infer he supports their aspirations as well. The people of Iran are included in “all people.”

The speech does have several good lines. Here is one of them: “I call on all of our college campuses to open their doors to our military recruiters and the ROTC.” It’s a pity that Obama has to gild it with the usual gay rights boilerplate. This line also deserves a nod: “I know there isn’t a person here who would trade places with any other nation on Earth.” Unlike most of the rest of the speech, it has the advantage, as Henry Kissinger might say, of being true.

Obama’s advent gets the usual iteration tonight: “That [American] dream is why I can stand here before you tonight.” And he includes Biden: “That dream is why a working class kid from Scranton can stand behind me.” But Biden’s rise too is a tribute to the advent of Obama.” And he includes an uncharacteristically gracious salute to Speaker Boehner: “That dream is why someone who began by sweeping the floors of his father’s Cincinnati bar can preside as Speaker of the House in the greatest nation on Earth.”

It’s a pity that Obama hasn’t found previous occasions to articulate American exceptionalism. Indeed, he has essentially denied it. Maybe he didn’t think it was true before the advent of the Age of Obama, or maybe he chooses not to share his innermost thoughts on the subject with his fellow citizens tonight.

Erick Erickson at Redstate:

Much has been made of Michelle Bachmann’s “Tea Party” response to the State of the Union.

For days the media has been playing this up as a major conflict within the Republican Party. In fact, a number of Republican leadership aides pulled out all the stops trying to get the networks to ignore Michelle Bachmann.

Kudos to CNN for its willingness to cover the speech in full.

I must admit I was deeply nervous about the speech, but I am delighted to say I was wrong. Michelle Bachmann gave the best speech of the night.

While the President sputniked and Paul Ryan went off on some high minded rhetoric, Michelle Bachmann kept to nuts and bolts. Her speech was based on actual economic data with actual, substantive policy suggestions for change.

Paul Ryan’s speech was okay. His blood shot eyes and Eddie Munster, Jr. haircut could have used some work. But he was good. Michelle Bachmann, however, shined in an easy to understand speech with a common man touch.

I’m glad I was wrong. And it just goes to show that the narrative of concern, built up in the media in large part by nervous Republicans, was silly. It yet again shows the GOP is unwilling to seriously treat the tea party movement as a legitimate player.

Mark Joyella at Mediaite:

Rep. Michele Bachmann made history tonight–not just for being the first representative of the Tea Party to give a State of the Union response, but also for flatly refusing to look America in the eye.Bachmann, who came equipped with charts and Iwo Jima photos, began her speech looking slightly off camera. As Bachmann spoke, viewers–including the former MSNBC host Keith Olbermann–took to Twitter to ask a simple question: “what’s she looking at?”

As Olbermann tweeted, “Why isn’t Rep. Bachmann LOOKING AT THE DAMNED CAMERA?” He added later, “Seriously, somebody at the Tea Party needs to run on the stage, grab her, and POINT TO WHERE THE CAMERA IS.”

On CNN, Erick Erickson reported that Bachmann mistakenly focused on a camera recording the speech for the Tea Party Express, instead of the other camera capturing the speech live for the entire country. Jeepers.

Compared to President Obama’s traditional SOTU speech, and Rep. Ryan’s response, the Bachmann speech was unique. It had charts and multimedia, and it had the weird vibe of listening to a person who seems to be talking to somebody else.

Conor Friedersdorf at Sully’s place:

He still loves his wife. But after 25 years of marriage, he has lost his enthusiasm for sex with her. Still. It is Valentine’s Day. And she has been hinting. So he takes her to a nice dinner, uncharactertistically orders an after-dinner drink, and feels extra discouraged when it only makes him more tired. He is 55. And so tired. Upon returning home, he wants more than anything to just fall asleep, but damnit, he makes the effort. He surprises her with a gift, lights candles, and dutifully makes love to her in the fashion he thinks that she will most enjoy.

It is with similar enthusiasm that some responses to the State of the Union are penned. Everyone expects that it will be covered by political bloggers, newspaper columnists and magazine writers. Especially at movement magazines on the left and right, lots of people are going through the motions,  feigning passionate intensity that isn’t there. In marriage, it is perfectly understandable for one partner to occasionally perform despite not being in the mood. Sex is built into the expectations. Justifiably so. But I’m skeptical about the system of expectations in political letters. Fresh insights are nice. I’ve read good stuff about last night’s SOTU. We’ve linked some of it here. What I find pointless is the completely predictable boilerplate that gets published. The banal right-leaning editorial inveighing against the speech. The left-leaning editorial vaguely extolling its virtues. If every possible reader will agree with everything in a piece what exactly is the point of writing it?

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