On Friday, the Obama administration laid the foundation for what is sure to be a fierce debate about the role government should play in supporting homeownership in the United States in the wake of the housing bubble and financial crisis.
The Treasury Department and the Department of Housing and Urban Development issued a report to Congress outlining how government can gradually scale back its involvement in the mortgage market and transfer housing finance to the private sector. The report proposes abolishing the government-backed mortgage providers Fannie Mae and Freddie Mac within ten years and suggests three possible systems to take their place.
With that said, however, the government’s presence in the housing market will not disappear entirely. In fact, it would certainly remain intact for the affordable housing initiatives through the Federal Housing Authority and other targeted programs, as it had in the past. The big change would be how mortgage funding would be provided for the vast majority of mortgages in the U.S., which have heavily relied on Fannie and Freddie for decades. The Treasury wants the private market to step in and take on most of that funding responsibility and relieve taxpayers of some or almost all of the mortgage market’s risk.
Before getting into the three alternative policy possibilities that it offers, the plan explains how the mortgage market would be weaned off of Fannie and Freddie over a period of time. One change would be to gradually increase the guarantee fees that the GSEs charge, so that private guarantors would be able to better compete. Another change would be to require Fannie and Freddie to obtain more private capital to cover subsequent credit losses. The Treasury also intends to reduce the size of mortgages that qualify for Fannie and Freddie guarantees. Finally, the administration intends to wind down Fannie’s and Freddie’s mortgage portfolios, by at least 10% per year.
The Treasury also provides some guidance on mortgage underwriting and measures to crack down on predatory lending. Perhaps the most surprising assertion was that loans that obtain government backing going forward — excluding those in designated programs specifically targeting lower-income borrowers — should eventually be required to “have at least a ten percent down payment.” The Treasury also stressed the importance of ensuring borrowers have the ability to pay the mortgages they obtain.
While the report does say a lot of the right things — such as protecting the taxpayer — it is awfully short on any real details. And in many areas, the report makes clear that the Obama administration intends to keep the taxpayer on the hook for future losses arising from Fannie and Freddie. For instance, after assuring us that the GSEs will have sufficient capital to meet their obligations, including debt, the report tells us that such capital will not come from investors, but from the taxpayer. One has to wonder whether this report was written for the benefit of the Chinese Central Bank (one of the largest GSE debtholders) or for the benefit of the U.S. taxpayer.
Equally vague is the discussion of “winding down” Fannie and Freddie. While that sounds great, how is this to be accomplished? And how long will it take? Again it seems that this “wind-down” will be financed by the taxpayer. It is suggested that the GSE guarantee fees will increase. Again, by how much and when?
Paragraph 2 of Section 1074 of the Dodd-Frank act, which required this study, also requires an “analysis” of various options and impacts. In all due respect to HUD and Treasury and their efforts, there is nothing in this report that remotely resembles an “analysis” — just vague generalities.
I appreciate the administration’s stated desire to move us closer to a private market solution, but we’ve heard these empty promises before. Remember that financial reform was going to end “too big to fail” and bailouts? Health care reform was going to “bend the cost curve”? It is past the time of fluff. We need actual details and an actual plan.
Beyond the basically insane structure of Fannie Mae and Freddie Mac — private institutions with lobbyists, profit motives, and the protection of an unarticulated but widely acknowledged government guarantee to cover their big losses — the administration’s diagnosis of what went wrong in the housing market speaks much more to issues dealt with in the financial-regulation law than issues included in their three options for reform of the government’s system of housing finance and insurance.
The story they tell begins in the consumer market, where inadequate protections and incompetent regulatory oversight allowed the brisk trade in bad mortgages to people who couldn’t afford them to take off. It then moves to the opaque and underregulated finance system, where the banks were packaging products they didn’t understand into securitized bonds and selling them off so quickly that they stopped worrying about how risky they were, and where regulators didn’t see what was going on and thus didn’t demand the banks hold enough capital to protect themselves from the inevitable reckoning.
Fannie Mae and Freddie Mac were part of this story, of course. But they were late to the party. They only got into the riskier stuff in 2006, while the rest of the financial industry had been playing in the mud since 2001. Reforming them can help mitigate a housing crisis in the future. But given this chain of events, it can’t prevent it.
The root causes will be fixed — or not — in Dodd-Frank. It’s up to the Consumer Financial Protection Bureau to strengthen the weak consumer protections that allowed these mortgages to be sold in the first place. Regulators will have new powers to force financial players — particularly the megafirms whose failure threatened the whole system — to hold more capital as a buffer against bad times. Banks won’t be able sell off all their risk because the law says they have hold five percent of the risk of any product they originate — though as Bethany McLean notes, that’s not true when the product consists of “qualifying residential mortgages,” and it’s up to the regulators implementing Dodd-Frank to define what a qualifying residential mortgage is.
That’s not to say reforming the way the government structures its presence in the housing market doesn’t matter. It does. But the government isn’t looking to dramatically change the role they play in the housing market. They’re just looking to get away from poorly designed institutions like Fannie and Freddie. The real action — the work that could prevent another crisis — is still in Dodd-Frank, where many of the questions central to how the housing markets works going forward haven’t been answered, and where many of the rules that might stop it from blowing up again have yet to be written.
Incidentally, the more I think about it, the more outraged I am by the sketchiness of their proposal. It takes up only a few paragraphs, and those are quite vague. It is the sort of thing that, if somebody tossed it out at a meeting or in a blog post, you would say, “Might be interesting, but I am not quite sure how you would do it. Do you have a background paper on it somewhere?” In the form that it is presented in the report, I think that it is irresponsible to even call it a proposal. Shame on Treasury for putting something so half-baked at the center of their report.
This puts me in the strange position of defending Freddie and Fannie. My first choice would be for government not to hand out any goodies. But if you are going to have the government hand out goodies, the ability of regulators to control the costs and mitigate the risks will be much greater if we revert to Freddie and Fannie than if we try something new. Under any arrangement, the hard part will be what I call “staying off the booze,” meaning keeping the government from guaranteeing riskier mortgages (second mortgages, cash-out refis, loans on investment properties, loans with low down payments, etc.) when house prices start rising again.
It’s far to ask whether we’ve been over-promoting homeownership, and, as Alyssa Katzdoes in the latest issue of the Prospect, what we maybe should do instead. Alyssa will have more detail on what happens after Fannie and Freddie on TAP Monday, but for the meantime, I’d like to point out what a symbolic victory this is for conservatives. Whether Fannie and Freddie should have been preserved probably wasn’t considered lightly, but conservatives have been vilifying the agencies as the cause of the crisis since the beginning. They weren’t, they were simply the last to ride a wave that started on Wall Street. That doesn’t mean the weird private/public limbo in which they did business wasn’t also a bad thing, but it does mean that conservatives will point to their demise as proof they were right.
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.
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 Obamahas 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.
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.
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.
Given the mixed signals of late, it’s worth noting that Politicohas 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.
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.
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.
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.
With his brother Charles, who is seventy-four, David Koch owns virtually all of Koch Industries, a conglomerate, headquartered in Wichita, Kansas, whose annual revenues are estimated to be a hundred billion dollars. The company has grown spectacularly since their father, Fred, died, in 1967, and the brothers took charge. The Kochs operate oil refineries in Alaska, Texas, and Minnesota, and control some four thousand miles of pipeline. Koch Industries owns Brawny paper towels, Dixie cups, Georgia-Pacific lumber, Stainmaster carpet, and Lycra, among other products. Forbes ranks it as the second-largest private company in the country, after Cargill, and its consistent profitability has made David and Charles Koch—who, years ago, bought out two other brothers—among the richest men in America. Their combined fortune of thirty-five billion dollars is exceeded only by those of Bill Gates and Warren Buffett.
The Kochs are longtime libertarians who believe in drastically lower personal and corporate taxes, minimal social services for the needy, and much less oversight of industry—especially environmental regulation. These views dovetail with the brothers’ corporate interests. In a study released this spring, the University of Massachusetts at Amherst’s Political Economy Research Institute named Koch Industries one of the top ten air polluters in the United States. And Greenpeace issued a report identifying the company as a “kingpin of climate science denial.” The report showed that, from 2005 to 2008, the Kochs vastly outdid ExxonMobil in giving money to organizations fighting legislation related to climate change, underwriting a huge network of foundations, think tanks, and political front groups. Indeed, the brothers have funded opposition campaigns against so many Obama Administration policies—from health-care reform to the economic-stimulus program—that, in political circles, their ideological network is known as the Kochtopus.
In a statement, Koch Industries said that the Greenpeace report “distorts the environmental record of our companies.” And David Koch, in a recent, admiring article about him in New York, protested that the “radical press” had turned his family into “whipping boys,” and had exaggerated its influence on American politics. But Charles Lewis, the founder of the Center for Public Integrity, a nonpartisan watchdog group, said, “The Kochs are on a whole different level. There’s no one else who has spent this much money. The sheer dimension of it is what sets them apart. They have a pattern of lawbreaking, political manipulation, and obfuscation. I’ve been in Washington since Watergate, and I’ve never seen anything like it. They are the Standard Oil of our times.”
A few weeks after the Lincoln Center gala, the advocacy wing of the Americans for Prosperity Foundation—an organization that David Koch started, in 2004—held a different kind of gathering. Over the July 4th weekend, a summit called Texas Defending the American Dream took place in a chilly hotel ballroom in Austin. Though Koch freely promotes his philanthropic ventures, he did not attend the summit, and his name was not in evidence. And on this occasion the audience was roused not by a dance performance but by a series of speakers denouncing President Barack Obama. Peggy Venable, the organizer of the summit, warned that Administration officials “have a socialist vision for this country.”
Five hundred people attended the summit, which served, in part, as a training session for Tea Party activists in Texas. An advertisement cast the event as a populist uprising against vested corporate power. “Today, the voices of average Americans are being drowned out by lobbyists and special interests,” it said. “But you can do something about it.” The pitch made no mention of its corporate funders. The White House has expressed frustration that such sponsors have largely eluded public notice. David Axelrod, Obama’s senior adviser, said, “What they don’t say is that, in part, this is a grassroots citizens’ movement brought to you by a bunch of oil billionaires.”
Obama’s coordinated character assassination campaign against anyone who disagrees with him strikes of Soviet style politics. Saul Allinsky would be proud.
For perspective, the Koch brothers have been funding right-of-center and largely libertarian causes since the 1970’s. David Koch was the Libertarian Vice Presidential nominee in 1980. That’s right — against Reagan. This is nothing new for the Koch family. Through Carter, Reagan, Bush, Clinton, and Bush the Koch’s have been politically engaged, sometimes even against Republican Presidents.
But Barack Obama is so used to demagoguing and is the first Democratic President to really believe the rich are evil, and not just preach it for the base, he needs an enemy. The Koch family will be that enemy.
The New Yorker has an eleven page, 6,000 word article on David and Charles Koch, who own Koch Industries. The article, “Covert Operations,” appears in the August 30, 2010 copy of the magazine. In other words, this article was being manufactured well before Mr. Obama launched the opening salvo on August 9, 2010.
Writing in yesterday’s Playbook, Mike Allen referenced the article, highlighting a passage that David Axelrod, Mr. Obama’s advisor, is concerned about the Koch brothers. Mike Allen has more today.
Most troubling, the New Yorker cites as objective sources both the Center for American Progress and Media Matters without ever bothering to mention they are left-wing sources with biases and competing interests against those of the Koch brothers.
This is a coordinated character assassination against Koch Industries and the Koch brothers for daring to use their money to prevent the destruction of the American economy at the hand of a bunch of effete socialists in the White House.
I’m not sure about Erickson’s speculation, but it’s hard not to notice that Mayer’s article paints an grim portrait of the Koch brothers without actually reporting anything objectionable that they might have done. For instance, here is how the article (headline: “Covert Operations: The billionaire brothers who are waging a war against Obama”) describes the Kochs’ efforts to promote libertarianism:
In Washington, [David H.] Koch is best known as part of a family that has repeatedly funded stealth attacks on the federal government, and on the Obama Administration in particular.
If that is how you describe peaceful, lawful activism, then what words are left to describe, for instance, the actions of al Qaeda, which funded an actual stealth attack on the federal government?
Later in the article, Mayer writes that “the Mercatus Center released a report claiming that stimulus funds had been directed disproportionately toward Democratic districts; eventually, the author was forced to correct the report, but not before Rush Limbaugh, citing the paper, had labelled Obama’s program ‘a slush fund…'”
Mayer is referring to Veronique de Rugy’s working paper. It is not accurate to claim that de Rugy was “forced to correct” the paper. A better description would be that she “voluntarily, in the spirit of transparency, improved the paper and found that her initial results still obtained.” You can read a less tendentious account of that episode here or de Rugy’s own explanation here.
I am a big admirer of Jane Mayer, and her article is worth reading for anyone who’s interested in the topic, but is seems a clear case of describing two apples with different adjectives because one smells funny (the George Soros paragraph in the article is a classic of the form). Whether the piece amounts to a kind of opening White House legal salvo against some of its biggest critics is something worth monitoring closely over the next two-plus months (and two-plus years). Given President Obama’s increasingly hysterical (and hypocritical) attacks against “the influence wielded by corporations and foreign entities,” it’s clear that the campaign will have rhetorical legs at the least.
Exactly how are the Koch brothers under the radar or underground? They show up every year in the Forbes super-rich lists. Charles Koch wrote a best-selling business book a year or two ago and makes no secret of his belief in free markets and limited government. David Koch ran for vice president of these United States on the Libertarian Party ticket in 1980 (where he helped Ed Clark pull over 900,000 votes, by far the highest total gained by the LP). Both are known for a wide range of philanthropic giving, whether to arts and medical outfits or think tanks or political action groups.
Full disclosure: David Koch has been on the board of trustees of Reason Foundation, the publisher of this website, for decades, and his name appears in the masthead of Reason magazine; I have also taught at various programs for the Institute for Humane Studies, which the Kochs fund, and will speak at an Americans for Prosperity event later this week. While I have never had more than brief interaction with either brother, I am perhaps overdue in thanking them on this blog for supporting my career at Reason, where I have argued in favor of gay marriage, drug legalization, non-interventionist foreign policy, open borders, sales in human organs, an end to corporate welfare, and a wide variety of other shamelessly libertarian policies.
While the Kochs are not publicity hounds, they certainly don’t hide their giving or their political agenda under a bushel basket. They are consistently in favor of smaller government (even if Koch Industries gave 15 percent of its political donations to Democrats in the 2008 election cycle). They may in fact be “out to destroy progessivism” but they are hardly using secret means to combat the growth and reach of government.You can argue whether The New Yorker story is “shameful,” but there’s no question that it is a great example of the demonization of opposing points of view (this happens on the right, too, where way too many liberals are labeled socialists or communists or whatever). It’s not enough that opponents believe different things, they must be cast as underhanded and duplicitous, acting out of only the most vulgar or awful of motives.
There’s just one element missing from these snapshots of America’s ostensibly spontaneous and leaderless populist uprising: the sugar daddies who are bankrolling it, and have been doing so since well before the “death panel” warm-up acts of last summer. Three heavy hitters rule. You’ve heard of one of them, Rupert Murdoch. The other two, the brothers David and Charles Koch, are even richer, with a combined wealth exceeded only by that of Bill Gates and Warren Buffett among Americans. But even those carrying the Kochs’ banner may not know who these brothers are.
Their self-interested and at times radical agendas, like Murdoch’s, go well beyond, and sometimes counter to, the interests of those who serve as spear carriers in the political pageants hawked on Fox News. The country will be in for quite a ride should these potentates gain power, and given the recession-battered electorate’s unchecked anger and the Obama White House’s unfocused political strategy, they might.
All three tycoons are the latest incarnation of what the historian Kim Phillips-Fein labeled “Invisible Hands” in her prescient 2009 book of that title: those corporate players who have financed the far right ever since the du Pont brothers spawned the American Liberty League in 1934 to bring down F.D.R. You can draw a straight line from the Liberty League’s crusade against the New Deal “socialism” of Social Security, the Securities and Exchange Commission and child labor laws to the John Birch Society-Barry Goldwater assault on J.F.K. and Medicare to the Koch-Murdoch-backed juggernaut against our “socialist” president.
Only the fat cats change — not their methods and not their pet bugaboos (taxes, corporate regulation, organized labor, and government “handouts” to the poor, unemployed, ill and elderly). Even the sources of their fortunes remain fairly constant. Koch Industries began with oil in the 1930s and now also spews an array of industrial products, from Dixie cups to Lycra, not unlike DuPont’s portfolio of paint and plastics. Sometimes the biological DNA persists as well. The Koch brothers’ father, Fred, was among the select group chosen to serve on the Birch Society’s top governing body. In a recorded 1963 speech that survives in a University of Michigan archive, he can be heard warning of “a takeover” of America in which Communists would “infiltrate the highest offices of government in the U.S. until the president is a Communist, unknown to the rest of us.” That rant could be delivered as is at any Tea Party rally today.
Last week the Kochs were shoved unwillingly into the spotlight by the most comprehensive journalistic portrait of them yet, written by Jane Mayer of The New Yorker. Her article caused a stir among those in Manhattan’s liberal elite who didn’t know that David Koch, widely celebrated for his cultural philanthropy, is not merely another rich conservative Republican but the founder of the Americans for Prosperity Foundation, which, as Mayer writes with some understatement, “has worked closely with the Tea Party since the movement’s inception.” To New Yorkers who associate the David H. Koch Theater at Lincoln Center with the New York City Ballet, it’s startling to learn that the Texas branch of that foundation’s political arm, known simply as Americans for Prosperity, gave its Blogger of the Year Award to an activist who had called President Obama “cokehead in chief.”
First of all most of what Rich wrote was but rehashed words from Jane Mayer’s slam against the Koch Brothers of New York. Three quarters of what Rich penned really came from Mayer’s New Yorker piece on the philanthropists. So, big demerits for Frank Rich for simply appropriating Mayer’s piece.
But the real point of Rich’s piece was to pile onto Mayer’s slanted attack piece with some echoed slams against the Tea Party movement in order to discredit it all. Rich is desperate to make the movement seem like a marionette show with rich “sugar daddies” funding it and controlling it from the top.
“There’s just one element missing from these snapshots of America’s ostensibly spontaneous and leaderless populist uprising,” Rich says of the Tea Party events, “the sugar daddies who are bankrolling it, and have been doing so since well before the ‘death panel’ warm-up acts of last summer.”
Rich then rehashes Mayer’s examples of where the Koch brothers put their money in the form of Americans For Prosperity and Freedom Works, two nationwide, very active, and successful conservative advocacy groups.
Now, it is absolutely true that both AFP and Freedom Works have had the cash to put on large events in Washington D.C. and other cities. But it is not true that either of these groups controls and runs “the Tea Party” movement from above.
In fact, both AFP and Freedom Works were sort of caught unawares when the Tea Parties started forming spontaneously all across the nation in early 2009. Both had to rush to try and tap into that passion. Neither was initially prepared for the amazing energy that the Tea Party has unleashed.
Yes, these two organizations have held many events. But the number of evens that they have held, funded and had a hand in operating are but a small number compared to the hundreds if not thousands of Tea Party groups that started up all on their own, all with their own funding and members, all without the bankrolling of a “sugar daddy” named Koch.
To say that the Koch brothers, or Dick Armey, or Americans for Prosperity’s Tim Phillips control the Tea Party movement is simply a lie. In fact, these advocacy groups are like the 80-pound child taking his 200-pound dog for a walk. The kid may seem like the owner, but it is the big dog in control of where the walk ends up heading! The Tea Party is the 200-pound dog that neither AFP, nor Freedom Woks can control. These groups are the 80-pound kid holding on for dear life, trying to stay relevant in the minds of the Tea Party movement.
And Rich makes a second mistake — or calculation — in addressing the Tea Party movement. He keeps saying “the Tea Party” as if it is a single entity. It is not. I have been interacting with, writing about, and attending rallies with various Tea Party groups since the first days of the movement. There is one thing that holds true throughout. They are not connected one to the other in any meaningful way.
But you see, if Rich and his anti-traditional American ideologues can make it appear as if “the Tea Party” is run from the back pocket of the Koch brothers, it is easier to discredit as a false front set up by secretive, shadowy forces. If it were all a Koch enterprise, now that is a strawman that Frank Rich could knock down. But if the Tea Party is understood as millions of individual Americans following their patriotic hearts, that is an impossible image to discredit.
So you can see why Rich and his cohorts are desperate to make it “the Tea Party” instead of revealing the truth.
Here’s more on the story I published this morning — a letter that the Charles G. Koch Charitable Foundation is sending around arguing that Jane Mayer’s New Yorker profile treated the Kochs unfairly.
“The New Yorker article, and those pieces that have echoed it, rely heavily on innuendo and unsubstantiated assertions,” writes foundation president Richard Fink, who is the public face of the brothers’ ideological work. “Unnamed sources and those with a strong philosophical opposition to the Kochs – many of whom have no current or first-hand knowledge of Koch Industries, Koch Family Foundations, Charles Koch or David Koch – go unchallenged. Supporters of the Kochs are largely ignored (as evidenced by the fact that the reporter chose not to include the vast majority of supportive comments made by a number of people familiar with the Kochs and the organizations they support). On the other hand, those who reinforce the reporter’s preconceptions are given a free pass.”
Fink argues that Mayer treated the Kochs unfairly despite the access she received, but Mayer reports that she didn’t get face time with David or Charles. That’s the point I’m making — these attempts to keep the brothers out of the political fray just don’t work anymore.
All this is to say that I’m very comfortable with critiques of the rise of the right, including left-of-center critiques. Let’s just say I don’t think Rich is an authority on this subject. That said, I would never question his knowledge of the history of Broadway, Vaudeville, or theater more broadly.
I don’t doubt that a talented reporter could illuminate the worldview of the Kochs and the extent of their reach. But Mayer might be the most talented reporter writing today, and she’s written a piece that relies heavily on Gus diZerega, incendiary quotes from a wide range of scrupulously non-partisan but decidedly left-of-center think tanks, a credulous statement from a Soros spokesperson, a conversation with Matt Kibbe of FreedomWorks, references to Andrew Goldman’s article in New York and Brian Doherty’s Radicals for Capitalism, and something else I’m sure I’m missing. One possibility is that Mayer’s editors pressed for early publication of the Koch story, spurred by the fact that New York had published its piece in late July and the prospect of more articles on the Kochs in other magazines. If that is indeed the case, I think Mayer’s editors have done her a disservice.
As someone who has benefited from left-of-center and right-of-center foundations, I definitely have a bias here: I don’t think it’s a bad thing for rich people to devote some of their money to spreading ideas, including bad ideas. The U.S. economy is vast enough that I can’t imagine even the largest fortunes holding undue sway over our national political life, which could be Pollyannaish on my part. I’m not even all that threatened by the influence of the Ford Foundation, which, as David Bernstein observes, is considerable:
According to Mayer, the Kochs have spent “more than a hundred million dollars” on “right-wing” foundations since 1980. Let’s be aggressive, and assume arguendo the figure, adjusted for inflation, is four hundred million dollars. That’s a whole $13 million or so a year since 1980. By contrast, the Ford Foundation, one of many well-endowed “mainstream” liberal foundations, spends over $500 million a year, a decent fraction of which goes to left-wing organizations and causes. Any given major American university employs far more liberal academics in the social sciences annually than can possibly be employed on a $13 million budget. Soros’ Open Society Institute annually spends over $150 million to “support individuals and organizations advancing a more open, just, and equal society in the United States.”
I am definitely open to strong arguments that suggest the Ford Foundation or the Kochs are a danger to our democratic freedoms. I’m still waiting for them.
Treasury Secretary Timothy Geithner has expressed opposition to the possible nomination of Elizabeth Warren to head the Consumer Financial Protection Bureau, according to a source with knowledge of Geithner’s views.
The financial reform bill passed by the Senate on Thursday mandates the creation of a new federal entity charged with protecting consumers from predatory lenders.
But if Geithner has his way, the most prominent advocate for creating the agency may not be picked to lead it.
Warren has been an aggressive proponent for the bureau in public and behind the scenes, working regularly with President Barack Obama’s top advisers and the Democratic leadership in Congress. Since 2008, she has overseen the Congressional Oversight Panel, a bailout watchdog created to keep tabs on how two administrations spent hundreds of billions of taxpayer dollars to bail out Wall Street while struggling to keep distressed homeowners out of foreclosure and small businesses from collapsing.
Yet while her work on behalf of a federal unit designed solely to protect borrowers from abusive lenders has been embraced by the administration, Warren’s role as a bailout watchdog led to strained relations with the agency her panel has taken to task with brutal reports every month since Obama took office: Geithner’s Treasury Department.
It’s no secret the watchdog and the Treasury Secretary have had a tenuous relationship. Geithner’s critics have enjoyed watching Warren question him during his four appearances before her panel. Her tough, probing questions on the Wall Street bailout and his role in it — often delivered with a smile — are featured on YouTube. One video is headlined “Elizabeth Warren Makes Timmy Geithner Squirm.”
With his track record of survival, Geithner and his team apparently feel they can push hard against Elizabeth Warren and give the new consumer protection job to someone closer to their philosophy – which is much more sympathetic to the banking industry.
This would be a bad mistake – trying the patience of already exasperated Congressional Democrats. If the Obama administration can’t even complete the deal they implicitly agreed with Senators over the past months, this will set of a firestorm of protest within the party (and with anyone else who is paying attention).
Financial “reform” is already very weak. If Secretary Geithner gets his way on consumers protection, pretty much all of the Democrats efforts vis-à-vis the financial sector’s treatment of customers have been for naught.
Tim Geithner is sometimes compared to Talleyrand, the French statesman who served the Revolution, Napoleon, and the restored Bourbons – opportunistic and distrusted, but often useful and a great survivor with a brilliant personal career. In the end, of course, no one – including Talleyrand – proves indispensible. And everyone of this sort eventually pushes their luck too far.
If the Democratic leadership really wants to win in the November elections, they should think very hard about the further consequences of Mr. Geithner.
Undoubtedly her actions made many people in positions of power uncomfortable. But, that is exactly what we need in order for the new consumer protection agency to be effective.
The Federal Reserve Board already had the power and the responsibility to do the job that the new consumer board has been assigned. The problem was that Ben Bernanke, Alan Greenspan, and their colleagues on the Fed board (with some notable exceptions) never took this responsibility seriously. As a result, consumer protection was a joke.
Shifting the responsibility to a new board does not by itself guarantee that consumer protection in financial matters will now be treated seriously. Just ask the folks at the Mineral and Management Service about their oversight of deep-sea drilling.
Ensuring that the new board carries through its responsibilities in the way that is intended will require a leader with integrity, intelligence and independence. Elizabeth Warren clearly fits that description. Selecting anyone else will be an insult not only to her, but to all the individuals and organizations who worked so hard to bring the Consumer Financial Protection Board into existence.
Shahien Nasiripour says, plausibly enough, that Tim Geithner is opposed to tapping Elizabeth Warren for the job, despite the fact that she’s the obvious choice. I hope he doesn’t get his way. The bureau would never have come into being without Warren pushing it hard; it’s only fair she gets a chance to run it at inception, and shape the way it does business. Even if she has been harsh in her public questioning of Geithner.
Boy, and bloggers are called the immature ones. Geithner gets his fee-fees hurt because Warren dares to tell the truth about the Wall Street cartel and the woefully inadequate job Treasury has done, particularly on the foreclosure crisis, and so that makes her unacceptable for a position she literally dreamed up. I think it’s time to end the fiction that the Treasury Department is in any way interested in fundamentally changing the balance of power between Wall Street and consumers. If this report is correct, Geithner is using his power to block someone who would actually make Wall Street nervous from having a position of authority.
At least one progressive group is already fighting back. The Progressive Change Campaign Committee has blasted an email to their supporters demanding that Warren be named the head of the CFPB.
As a Harvard professor, her credentials are impeccable. And she was the one who came up with the idea for the Consumer Financial Protection Bureau — perhaps the best piece of this bill — in the first place.
In short, Warren is perfect for the position and most financial insiders have just assumed she would get it. That’s why it’s so outrageous that Geithner — a longtime Wall Street insider — would attempt to sabotage her appointment.
I will be in a position to gather more information about this in the near future, not only from Treasury, but from Elizabeth Warren. It turns out I’m on a panel with her next week at Netroots Nation. We’ll talk about the Forgotten Foreclosure Crisis along with Sen. Jeff Merkley and the Huffington Post’s Ryan Grim. So if you’re in Vegas, please come out as I speak with the next head of the Consumer Financial Protection Bureau – unless Timmeh has something to say about it.
I wouldn’t put a ton of stock in a story based on “a source with knowledge of Geithner’s views” but the two of them have clashed in the past so this could be the case. For example, speaking on the record earlier today Assistant Treasury Secretary for Financial Institutions Michael Barr said Narisipour’s report was wrong, and that he and Geithner both regard her as “exceptionally well-qualified.”
I’m firmly of the view that nobody is indispensable ever, and Warren is no exception to that, but there’s a good prima facie case for her. That’s because good agencies not only need good people at the top, they need good people in the middle and the bottom too. Once an agency’s been up and running for a while, this is largely a question of lock-in. Effective, high-prestige public agencies (the United States Navy, the Federal Reserve) attract a lot of motivated applicants and thus get on a self-reenforcing path of effective personnel and high prestige. But when you start something new, everything is wide open. Launching the agency with someone like Warren—a reasonably well-known high-status individual whose status among people interested in consumer financial protection is very high—will draw other committed people into the new bureau.
There’s also a political aspect. The Obama administration suffers from the perception that it’s been too much in the pocket of Wall Street — partly because there’s at least a grain of truth to the accusation. Appointing a prominent pro-consumer crusader would have to help repair the image, while appointing somebody unknown to the public, especially when expectations are running high, would hurt.
And bear in mind that Warren really is a pioneering expert on household debt and financial distress, who has also shown an ability to work effectively in an official position. Against that, whatever personal quarrels she may or may not have had shouldn’t count at all.
On a conference call with reporters this afternoon, President Obama’s top political adviser David Axelrod sought to calm the waters. “Elizabeth is certainly a candidate to lead it,” he said.
That sentiment was echoed this morning by Michael Barr, Assistant Treasury Secretary for Financial Institutions. “I don’t know where that came from,” he said on a conference call. “She’s been working closely with me and Secretary Geithner for a year and half to push for this consumer protection bureau. I believe and Secretary Geithner believes that she’s exceptionally well-qualified to run it.”
Geithner and Warren haven’t exactly had a warm public relationship, so the news that he has reservations, and may be trying to block her, is no surprise. Just ask Sheila Bair. But this puts the White House in a tricky spot now if it turns out Obama does not nominate her.
It’s quite another thing to deny in public, for the record, that any such blocking is going on (e.g., see this report; Michael Barr apparently said something quite similar today).
There is a strong groundswell of opinion on this issue from the left – see the BoldProgressives petition. But the center also feels strongly that, given everything Treasury has said and done over the past few months, it would be a complete travesty not to put the strongest possible regulator in change of protecting consumers. (See Ted Kaufman on the NYT’s DealBook, giving appropriate credit to the SEC, and apply the same points to broader customer issues going forward.)
This can now go only one of two ways.
Elizabeth Warren gets the job. Bridges are mended and the White House regains some political capital. Secretary Geithner is weakened slightly but he’ll recover.
Someone else gets the job, despite Treasury’s claims that Elizabeth Warren was not blocked. The deception in this scenario would be nauseating – and completely blatant. “Everyone was considered on their merits” and “the best candidate won” will convince who exactly?
Despite the growing public reaction, outcome #2 is the most likely and the White House needs to understand this, plain and clear – there will be complete and utter revulsion at its handling of financial regulatory reform both on this specific issue and much more broadly. The administration’s position in this area is already weak, its achievements remain minimal, its speaking points are lame, and the patience of even well-inclined people is wearing thin.
Failing to appoint Elizabeth Warren would be the straw that breaks the camel’s back. It will go down in the history books as a turning point – downwards – for this administration.
The continuing undersea gusher of oil 50 miles off the shores of Louisiana is not the only source of dangerous uncontrolled pollution spewing into the environment. Worldwide, the amount of man-made CO2 being spilled every three seconds into the thin shell of atmosphere surrounding the planet equals the highest current estimate of the amount of oil spilling from the Macondo well every day. Indeed, the average American coal-fired power generating plant gushes more than three times as much global-warming pollution into the atmosphere each day—and there are over 1,400 of them.
Just as the oil companies told us that deep-water drilling was safe, they tell us that it’s perfectly all right to dump 90 million tons of CO2 into the air of the world every 24 hours. Even as the oil spill continues to grow—even as BP warns that the flow could increase multi-fold, to 60,000 barrels per day, and that it may continue for months—the head of the American Petroleum Institute, Jack Gerard, says, “Nothing has changed. When we get back to the politics of energy, oil and natural gas are essential to the economy and our way of life.” His reaction reminds me of the day Elvis Presley died. Upon hearing the tragic news, Presley’s manager, Colonel Tom Parker, said, “This changes nothing.”
For years, much of the political right has claimed that global warming is a scientific hoax perpetrated by statists in order to justify further government control over the economy. I have repeatedly pointed out that this is more or less nonsense, usually to audiences that are far less amenable to this message than the readership of The New Republic, with predictable results. It is certainly true, of course, that there are political actors for whom climate change is a convenient excuse for amassing power, and scientific researchers, bankers, and businesspeople who are just jumping onto a funding gravy train; but this doesn’t mean that the underlying technical risk assessment is invalid.
The political left has its own conspiracy theory on the issue. It was on almost perfect display in Al Gore’s article (“The Crisis Comes Ashore”) in the June 10 TNR. Gore argues that public confidence in the warnings of “looming catastrophe” presented in “the most elaborate and impressive scientific assessment in the history of our civilization” is being undermined by a “cynical and lavishly funded disinformation campaign” paid for by “carbon polluters.” It is certainly true, of course, that some oil companies and other interest groups have funded PR campaigns in pursuit of their narrowly-defined self-interest; but once again, this shouldn’t change our rational evaluation of the environmental impact of greenhouse gas accumulations one way or the other.
Gore agrees in his article that the proper response to this issue is not to be found in the political sound and light show, but in a rational assessment of risks, saying that “rather than relying on visceral responses, we have to draw upon our capacity for reasoning, communicating clearly with one another, forming a global consensus on the basis of science…”. Gore goes on to suggest a technical foundation for this reasoning process:
Over the last 22 years, the Intergovernmental Panel on Climate Change has produced four massive studies warning the world of the looming catastrophe that is being caused by the massive dumping of global-warming pollution into the atmosphere.
So, what does the IPCC actually have to say about what we should expect to happen as a result of our “massive dumping of global-warming pollution into the environment”
According to the IPCC’s currently-governing Fourth Assessment Report, under a reasonable set of assumptions for global economic and population growth (Scenario A1B), the world should expect to warm by about 3°C over roughly the next century (Table SPM.3). Even in the most extreme IPCC marker scenario (A1F1), the best estimate is that we should expect warming of about 4°C over roughly the next century. How bad would that be? Also according to the IPCC (page 17), a global increase in temperature of 4°C should cause the world to have about 1 to 5 percent lower economic output than it would otherwise have. So if we do not take measures to ameliorate global warming, the world should expect sometime in the 22nd century to be about 3 percent poorer than it otherwise would be (though still much richer per capita than today).
Prior to consideration of the more detailed economic issues—e.g., costs versus benefits of attempts to forestall the problem; the danger of worse-than-expected outcomes, etc.—pause to recognize that according to the IPCC the expected economic costs of global warming under the plausible scenarios for future economic growth are likely to be about 3 percent of GDP more than 100 years from now. This is pretty far from the rhetoric of global destruction and Manhattan as an underwater theme park.
[…]
The only real argument for rapid, aggressive emissions abatement, then, boils down to the weaker form of the uncertainty argument: that you can’t prove a negative. The problem with using this rationale to justify large economic costs can be illustrated by trying to find a non-arbitrary stopping condition for emissions limitations. Any level of emissions imposes some risk. Unless you advocate confiscating all cars and shutting down every coal-fired power plant on earth literally tomorrow morning, you are accepting some danger of catastrophic warming. You must make some decision about what level of risk is acceptable versus the costs of avoiding this risk. Once we leave the world of odds and handicapping and enter the world of the Precautionary Principle—the Pascal’s Wager-like argument that the downside risks of climate change are so severe that we should bear almost any cost to avoid this risk, no matter how small—there is really no principled stopping point derivable from our understanding of this threat.
Think about this quantitatively for a moment. Suspend disbelief about the real world politics, and assume that we could have a perfectly implemented global carbon tax. If we introduced a tax high enough to keep atmospheric carbon concentration to no more than 420 ppm (assuming we could get the whole world to go along), we would expect, using the Nordhaus analysis as a reference point, to spend about $14 trillion more than the benefits that we would achieve in the expected case. To put that in context, that is on the order of the annual GDP of the United States of America. That’s a heck of an insurance premium for an event so low-probability that it is literally outside of a probability distribution. Gore has a more aggressive proposal that if implemented through an optimal carbon tax (again, assuming we can get the whole word to go along) would cost more like $20 trillion in excess of benefits in the expected case. Of course, this wouldn’t eliminate all uncertainty, and I can find credentialed scientists who say we need to reduce emissions even faster. Without the recognition that the costs we would pay to avoid this risk have some value, we would be chasing an endlessly receding horizon of zero risk.
So then, how should we confront this lack of certainty in our decision logic? At some intuitive level, it is clear that rational doubt about our probability distribution of forecasts for climate change over a century should be greater than our doubt our forecasts for whether we will get very close to 500 heads if we flip a fair quarter 1,000 times. This is true uncertainty, rather than mere risk, and ought to be incorporated into our decision somehow. But if we can’t translate this doubt into an alternative probability distribution that we should accept as our best available estimate, and if we can’t simply accept “whatever it takes” as a rational decision logic for determining emissions limits, then how can we use this intuition to weigh the uncertainty-based fears of climate change damage rationally? The only way I can think of is to attempt to find other risks that we believe present potential unquantifiable dangers that are of intuitively comparable realism and severity to that of outside-of-distribution climate change, and compare our economic expenditure against each.
Unfortunately for humanity, we face many dimly-understood dangers. Weitzman explicitly considers an asteroid impact and bioengineering technology gone haywire. It is straightforward to identify others. A regional nuclear war in central Asia kicking off massive global climate change (in addition to its horrific direct effects), a global pandemic triggered by a modified version of the HIV or Avian Flu virus, or a rogue state weaponizing genetic-engineering technology are all other obvious examples. Any of these could kill hundreds of millions to billions of people.
Consider the comparison of a few of these dangers to that of outside-of-distribution climate change dangers. The consensus scientific estimate is that there is a 1-in-10,000 chance of an asteroid large enough to kill a large fraction of the world’s population impacting the earth in the next 100 years. That is, we face a 0.01% chance of sudden death of a good chunk of people in the world, likely followed by massive climate change on the scale of that which killed off the non-avian dinosaurs. Or consider that Weitzman argues that we can distinguish between unquantifiable extreme climate change risk and unquantifiable dangers from runaway genetic crop modification because “there exists at least some inkling of a prior argument making it fundamentally implausible that Frankenfood artificially selected for traits that humans and desirable will compete with or genetically alter the wild types that nature has selected via Darwinian survival of the fittest.” That does not seem exactly definitive. What is the realism of a limited nuclear war over the next century—with plausible scenarios ranging from Pakistan losing control of its nuclear arsenal and inducing a limited nuclear exchange with India, to a war between a nuclearized Iran and Israel?
Let me start by saying that Manzi is easily one of the smartest, most interesting conservative writers out there when it comes to global warming. Many people on the right, unfortunately, still stick to the crazed view that climate science is all a hoax. Manzi wants nothing to do with those folks. He agrees with the mainstream scientific consensus that human activities are heating up the planet and that this poses a problem (and he’s taken a lot of flak from conservatives like Rush Limbaugh for staking out this position). Where he parts ways with most liberals is on just how big a problem a hotter planet will be.
Manzi bases his argument on his reading of the IPCC’s 2007 Fourth Assessment Report. According to the IPCC’s own estimates, he points out, a temperature rise of 4°C can be expected to reduce global GDP by about 3 percent in 2100. And on the flip side, the IPCC pegs the cost of keeping carbon concentrations in the atmosphere below a “safe” level of 450 parts per million at around 6 percent of GDP. And so, Manzi concludes, mitigation probably isn’t worth it. (To be fair, he has elsewhere expressed interest in a small carbon price to fund clean-technology research, so he’s not in the “do-nothing” camp.)
I see a couple problems with this argument. The first is that Manzi is clinging way too tightly to the IPCC report. Yes, the IPCC puts out the best summary of scientific knowledge about our climate system. I rely on it all the time. But the 2007 report is also dated. Climate science is a rapidly moving field, and more recent research has suggested that things may be bleaker than was projected three years ago. What’s more, the 2007 report had some glaring holes in it. The panel avoided making predictions about how melting ice sheets would affect sea levels because, at the time, ice-sheet dynamics were too difficult to model. This isn’t me offering up a strained reading of the IPCC’s work—the 2007 report was explicit on this point. Given that sea-level rise is likely to be one of the costliest consequences of global warming by 2100 and (especially) beyond, this is a huge omission for any sort of cost-benefit analysis.
Second, it’s a bit too simplistic to use a single global GDP figure when talking about the effects of climate change. True, a 3 percent drop in global GDP may not sound so bad. We’ll all be much richer in 2100, we can take a hit. But that top-line figure can obscure some serious distributional issues. Climate change, after all, is expected to hit developing countries much harder than wealthier ones. And as Nate Silver once noted, you could completely wipe out the poorest 81 nations in the world, with a total population of 2.8 billion, and the blow to global GDP would “only” be about 5 percent:
From a cynical utilitarian perspective, sure, maybe it would be worth it to devastate a bunch of impoverished African countries if it makes the rest of the world richer on balance. But that raises quite a few glaring ethical questions, and I’ll just note that most conservatives wouldn’t leap at this trade-off in other contexts (very few on the right would support seizing property through eminent domain for the greater good of economic development, for instance).
Third point: Harvard economist Marty Weitzman has recently been arguing that there’s plenty of uncertainty in climate projections, and the worst-case scenarios could be really freaking bad. Like, civilization-destroying bad. And that prospect, even if it’s slim, is a great reason to cut emissions—think of pollution curbs as an insurance policy against total annihilation. In reply, Manzi accuses Weitzman of doing “armchair climate science.” But that’s unfair. There are plenty of actual climate scientists who are exploring these worst-case scenarios, too. A recent paper in the Proceedings of the National Academy of Sciencesconcluded that there’s a roughly 5 percent chance that rising temperatures could render vast regions of the planet—like the eastern United States or most of India—simply uninhabitable. An insurance policy against that doesn’t sound too shabby.
I’ve been waiting for Brad Plumer to write a response to Jim Manzi’s argument, which he’s been making for several years, that preventing climate change is not worth the cost. Now that he’s done it, I urge you to check it out. Like Brad says, Manzi’s argument is probably the most persuasive case you can find against reducing carbon emissions. But it’s still not very persuasive.
Bradford Plumer‘s response to Jim Manzi on climate change addresses my No. 1 complaint about conservatives who, while not denying climate change is real, think the threat is exaggerated. The do-nothing analysis is that the economic impact of pricing carbon or curbing emissions will be so great that it will be worse than doing nothing. Plumer goes into the technical reasons why we should be skeptical about this position, but I want to note that Manzi shows little interest in the non-economic consequences of climate change — it’s just one big Econ 101 puzzle to be solved.
Why would you trust a magazine that doesn’t trust itself? In a baffling display of ‘balance as bias’ — or perhaps ‘balance as baloney‘ — The New Republic has hired right-wing misinformer Jim Manzi to spread confusion about their articles.
Maybe magazines don’t bother employing fact checkers anymore, but when I coauthored the cover story for the Atlantic Monthly in 1996, “MidEast Oil Forever?” Drifting Toward Disaster, the magazine not only edited the piece, they made me provide a credible published source for every claim. Even today, I know magazines like Wired fact-check every article.
But TNR appears to have proudly hired Manzi to un-fact-check their articles — at least in the area of energy and the environment, Manzi mostly spreads misinformation. Indeed, as I will show, Manzi utterly misrepresents the important work of Harvard economist Martin Weitzman, which he discusses at length but doesn’t appear to know the first thing about.
I say TNR “proudly” hired Manzi because editor Franklin Foer has a June 22 column bizarrely titled, “The In-House Critics: Keeping TNR Honest” touting this self-inflicted wound to its credibility: “it is an honor to be the subject of their criticism.”
I know, you probably thought that the “center-left” magazine paid Foer and Martin Peretz and a slew of other editors (and, one hopes, fact checkers) to keep them honest. How wrong you are!
As an aside, what’s doubly annoying is that you can read Manzi’s full on misinformation, “Why the Decision to Tackle Climate Change Isn’t as Simple as Al Gore Says,” in full here, but the piece he is nominally debunking, Al Gore’s, “The Crisis Comes Ashore,” from the June 10 TNR is behind their firewall. You can read extended excerpts of Gore’s accurate piece here.
Joseph Lawler at The American Spectator, responding to Romm:
It seems as if it is because of Manzi’s track record of being honest, open, and accommodating that Romm is unable to stand his arguments in a liberal publication without trying to undermine his credibility. It was for that same reason that many conservatives found Manzi’s criticism of Levin so grating — it’s in a way easier to deny global warming altogether than to argue on Manzi’s level. At the time, a number of liberals cast the reaction to Manzi-Levin as a sign that conservatives are close-minded, despite the fact that National Review did publish the piece, after all. But now that the tables have turned and Manzi is writing for TNR, some of the same liberal observers are questioning his motives and accusing him of “lowering the standard of discourse.”
It is to National Review‘s credit that they published Manzi then, it is to TNR‘s credit that they publish him now despite the left-wing outcry, and it is to Manzi’s credit that his soldiers on producing impeccably factual articles only to be derided as dishonest by both the right and left. If only the same could be said of Romm about his willingness to consider reasoned challenges to his assumptions.
(By the way, Romm’s post originally contained a clear factual error: he cited someone who incorrectly claimed that Manzi was the CEO of Lotus (I can’t find a cached version, but it’s noted in a comment left in the morning). Since then Romm has fixed the error, but there is nothing in the post indicating that it has been changed. A meaningless mistake, but suffice it to say that the “misinformer” Manzi would not make a factual error and then fail to acknowledge it in the post.)
Letting greenhouse gases build in the atmosphere is a bit like letting a tree grow roots beneath the foundation of your house. It may not be that bad this year, or next year, or even the year after that. But with each year that goes by, the problem becomes incrementally more severe, and harder to reverse. So even if Manzi is right that the costs are manageable into 2100 — a century, after all, is a long time for a human, but not for the atmosphere — what does that do to our descendants who have to deal with a scorching planet between 2100 and 2200? And then into 2300, and then 2400?
I think Manzi’s answer is that technology will save us by then. And maybe he’s right. But maybe he’s not. And if he’s not, then we’ve let the problem become unimaginably bad for our descendants. If you bet on technology and you’re wrong, it’s not like we’ve got another of these planets waiting in the back somewhere.
The appropriate technological approach, it seems to me, is to pair a strategy of aggressive emissions reduction with a huge effort to develop technological solutions. Then, if the research begins to pay off, we can transition over to those technologies and ease up on the regulations. But if we don’t so mitigation and instead trust in technology, we may let the situation get so bad that by the time we’re ready to do mitigation, the problem is essentially irreversible.
When thinking about taking actions now to shape the future environment, we should start with the recognition that our ability to make meaningful predictions generally declines as we look further and further into the future. This proceeds in shades of gray from, illustratively, “2030” to “10,000AD.”
At several points in my post I described the projected impacts of climate change through about the year 2100. This is because numerous IPCC forecasts are done through about that point in time, due to the view that projections beyond this point are too speculative.
When thinking about time after 2100, we have, in cartoon terms, two choices: (i) simply treat it as unknowable fog, or (ii) attempt to guess. I think that if we take the first choice, then we simply try to forecast through the next century, and let future generations worry about the world beyond 2100 (though I’ll point out that it is a very unusual political debate in which we call trying to manage the entire world for about the next 100 years as “short-termism”).
If we take the second approach, how far out do we try to guess? The Nordhaus economic calculations that I cited in my post as formal attempts to compare odds-adjusted costs versus benefits actually extend out for 250 years. That is, they consider expected costs and benefits to about 2250. Therefore, Klein’s point is really about potential damages beyond 2250,not 2100. That’s a long way off.
This doesn’t mean that I don’t care about problems that might occur hundreds of years from now, just that I don’t care much about current predictions about those problems.
There’s perhaps nothing more heartbreaking to a filmmaker than knowing that their first major film was considered their masterpiece, and that the rest of their career was a slow progression into frustration, mediocrity, or – worst of all – sheer awfulness. Just ask Orson Welles who created what is considered the greatest film of all time, “Citizen Kane,” when he was just 23 but spent much of the next half-century begging for financing and doing work like voice-overs for an animated “Transformers” movie.
If he doesn’t watch out, writer-director M. Night Shyamalan is heading towards the same fate. His latest film, “The Last Airbender,” continues a string of disappointments that began at least three films ago, with 2004’s “The Village” (a film I admired, but which flopped after a huge opening weekend), the misfired 2006 fairy tale “Lady in the Water” and 2008’s utterly embarrassing and inert “The Happening” (or as I like to call it, “The Nappening.”)
“Airbender” is Shyamalan’s attempt to reverse his fortunes and return to the heady blockbuster days of his early films, 1999’s “The Sixth Sense” and 2002’s “Signs.” After the ridiculously bad “The Happening,” no studio would trust him with an original idea again, so he turned to making an adaptation of a popular children’s cartoon series originally called “Avatar: the Last Airbender.” For obvious reasons, he had to drop the word “Avatar” from the title, but unfortunately there’s little else of interest to be found in the film.
The story, such as it is, follows Aang (Noah Ringer), a bald, tattooed boy-mystic who is found packed in an ice bubble one snowy morning by siblings Katara (Nicola Peltz) and Sokka (Jackson Rathbone). Katara and Sokka, we learn, belong to the Water Nation, some of whose members (Katara among them) can manipulate ice and water with their minds; Aang, meanwhile, is the last survivor of the Air Nation (no relation to the Aryan Nation, tattoos and baldness notwithstanding). All three have suffered at the hands of the Fire Nation, which bullies the Water folk and has eradicated all of Aang’s people save him. Aang, as it happens, is the Avatar, the sole being in the world with the power to manipulate all four elements (air, water, fire, and earth). Unfortunately, his Avatar training was cut short before he’d learned to manipulate anything other than air. So he spends the duration of the film hanging out with tribes of the Water Nation, learning to use their element and overcoming various attempts at kidnapping or invasion by competing Fire Nation bands led by ambitious Commander Zhao (Aasif Mandvi) and exiled Prince Zuko (Dev Patel, looking decidedly cranky at the wrong turn his career has taken since Slumdog Millionaire).
It’s a remarkably flat arc, though tolerable movies have been made from less. But I think it’s fair to say that none of those movies boasted quite the array of leaden performances, overscripted dialogue, narrative inertia, and underwhelming visual effects that characterize The Last Airbender. This is a film that resembles a video game in all the bad ways–Manichean premise, non-existent characterization, an obsession with dutifully explained “rules”–while still managing to miss out on the kinetic momentum of Xboxiness. If there has been a duller, more stagnant action film released this decade, I managed, thank God, to miss it.
Where to start with this one? How about this: If any movie ever warranted a class-action lawsuit against the filmmakers, it’s The Last Airbender. Not because it’s a terrible movie—though it is—but because its release as a 3-D film becomes false advertising a few seconds after a comin’-atcha gush of water appears behind the Paramount logo. From there, it becomes painfully obvious—even more painfully obvious than in Alice In Wonderland—that a few 3-D elements have been added to satisfy the current 3-D craze, and the higher ticket prices they allow. Worse still, the process makes the already-dark imagery darker, and turns the action blurry. Viewers who see it in this form will pay more for an even shittier experience than the one they would have had in 2-D.
And that would have been plenty shitty already. Adapting a well-regarded, epic-in-scope Nickelodeon animated series, writer-director M. Night Shyamalan has failed to do right both by his source material and his own strengths as a filmmaker. Set in a world in which the population is divided amid the four elements, and some skilled practitioners can control those elements to their own ends, the film vomits out complicated mythology in mouthfuls of exposition, when not putting a supporting character’s voiceover narration in charge of relaying major developments. Shyamalan manages a few striking images, most of them involving otherworldly landscapes created in Greenland and Vietnam. But none of the care and craftsmanship evident in projects he originated, even lousy ones like The Happening, find their way into this movie.
It’s clear that Shyamalan’s ambition is to create a grand fantasy epic; at times the picture’s production design has an almost Middle Earth-y look. (The cinematographer here is Andrew Lesnie, who also shot the Lord of the Rings trilogy.) But oddly enough — or perhaps not oddly at all — the most impressive and entertaining aspects of the picture have less to do with spectacular effects than with human skill. The movie’s young star, Ringer, is a Taekwondo champ, and it’s fun to watch his hands slice through the air ever so gracefully, or execute kicks and jumps and pirouettes that defy gravity. So many action movies these days are devoid of real human action. At least Shyamalan understands that watching the human body move is one of the pleasures of moviegoing.
Of course, because this is an M. Night Shyamalan movie, the stink of pretension is high: There’s no doubt that these warring, troubled tribes are supposed to be metaphorical, revealing big truths about the messed-up world we actually live in. But some of the actors rise above the sillier-than-silly dialog: Aasif Mandvi (who played Mr. Aziz in Spider-Man 2, but who was even more wonderful in a smallish role in David Koepp’s superb romantic comedy Ghost Town) plays an amoral military commander; he walks a fine line between sending up the movie’s kiddie hokum and treating the material as seriously as if it were Shakespeare. And Dev Patel, of Slumdog Millionaire, shows up as the unfortunately named Prince Zuko. (Would you want to play a character whose name sounds like a sugar substitute?)
Still, The Last Airbender, for all its Shyamalan-style grandiosity, is completely harmless and inoffensive, and at the very least, Shyamalan appears to be having a little fun here. The movie’s finale comes not as a big surprise but as a turn we’re completely ready for. There’s something to be said for giving the audience what it needs, instead of what you think it wants.
At 5 percent approval on the film review site Rotten Tomatoes, M. Night Shyamalan’s new movie The Last Airbender is in the running for the title of worst-reviewed movie ever.
Lane Brown at New York Magazine, interviewing Shyamalan:
Have you read the reviews for Last Airbender?
No, I haven’t.
Well, are you aware of the reviews?
No, actually.
Well, for the most part, critics have not been kind. Are you just ignoring them? Will you read them this weekend? Have you just not had time?
Are you saying that in general they didn’t dig it?
In general, no. Roger Ebert, who liked The Happening, did not. The first line of his review is, “The Last Airbender is an agonizing experience in every category that I can think of and others still waiting to be invented.” How do you react to something like that?
I don’t know what to say to that stuff. I bring as much integrity to the table as humanly possible. It must be a language thing, in terms of a particular accent, a storytelling accent. I can only see it this certain way and I don’t know how to think in another language. I think these are exactly the visions that are in my head, so I don’t know how to adjust it without being me. It would be like asking a painter to change to a completely different style. I don’t know.
Critics haven’t been kind to your last couple of films. Do you still worry about reviews?
I think of it as an art form. So it’s something I approach as sort of immovable integrity within each of the stages. So if you walk through the process with me, there’s not a moment where I won’t treat with great respect. So it’s sacred to me, the whole process of making a movie. I would hope that some people see that I approach this field with that kind of respect, and that it’s not a job.
Were you trying to please critics with this film? Did you have an audience in mind while you were making it?
For everybody, actually. It’s just a very cool, spiritual, action-y, family film — a family adventure.
The documents involved date from the Clinton White House. They show Miss Kagan’s willingness to manipulate medical science to fit the Democratic party’s political agenda on the hot-button issue of abortion. As such, they reflect poorly on both the author and the president who nominated her to the Supreme Court.
There is no better example of this distortion of science than the language the United States Supreme Court cited in striking down Nebraska’s ban on partial-birth abortion in 2000. This language purported to come from a “select panel” of the American College of Obstetricians and Gynecologists (ACOG), a supposedly nonpartisan physicians’ group. ACOG declared that the partial-birth-abortion procedure “may be the best or most appropriate procedure in a particular circumstance to save the life or preserve the health of a woman.” The Court relied on the ACOG statement as a key example ofmedical opinion supporting the abortion method.
Years later, when President Bush signed a federal partial-birth-abortion ban (something President Clinton had vetoed), the ACOG official policy statement was front and center in the attack on the legislation. U.S. District Court Judge Richard Kopf, one of the three federal judges that issued orders enjoining the federal ban (later overturned by the Supreme Court), devoted more than 15 pages of his lengthy opinion to ACOG’s policy statement and the integrity of the process that led to it.
Like the Supreme Court majority in the prior dispute over the Nebraska ban, Judge Kopf asserted that the ACOG policy statement was entitled to judicial deference because it was the result of an inscrutable collaborative process among expertmedical professionals. “Before and during the task force meeting,” he concluded, “neither ACOG nor the task force members conversed with other individuals or organizations, including congressmen and doctors who provided congressional testimony, concerning the topics addressed” in the ACOG statement.
In other words, what medical science has pronounced, let no court dare question. The problem is that the critical language of the ACOG statement was not drafted by scientists and doctors. Rather, it was inserted into ACOG’s policy statement at the suggestion of then–Clinton White House policy adviser Elena Kagan.
Here is the shocking part: the ACOG report, as originally drafted, said almost exactly the opposite. The initial draft said that the ACOG panel “could identify no circumstances under which this procedure . . . would be the only option to save the life or preserve the health of the woman.” That language horrified the rabidly pro-abortion Elena Kagan, then a deputy assistant to President Clinton for domestic policy. This is what Kagan wrote in a memo to her superiors in the Clinton White House:
Todd Stern just discovered that the American College of Obstetricians and Gynecologists (ACOG) is thinking about issuing a statement (attached) that includes the following sentence: “[A] select panel convened by ACOG could identify no circumstances under which [the partial-birth] procedure … would be the only option to save the life or preserve the health of the woman.” This, of course, would be disaster — not the less so (in fact, the more so) because ACOG continues to oppose the legislation. It is unclear whether ACOG will issue the statement; even if it does not, there is obviously a chance that the draft will become public.
So Kagan took matters into her own hands: incredibly, she herself appears to have written the key language that eventually appeared in the ACOG report. Coffin writes:
So Kagan set about solving the problem. Her notes, produced by the White House to the Senate Judiciary Committee, show that she herself drafted the critical language hedging ACOG’s position. On a document [PDF] captioned “Suggested Options” — which she apparently faxed to the legislative director at ACOG — Kagan proposed that ACOG include the following language: “An intact D&X [the medical term for the procedure], however, may be the best or most appropriate procedure in a particular circumstance to save the life or preserve the health of a woman.”
Kagan’s language was copied verbatim by the ACOG executive board into its final statement, where it then became one of the greatest evidentiary hurdles faced by Justice Department lawyers (of whom I was one) in defending the federal ban. (Kagan’s role was never disclosed to the courts.)
This is an image of Kagan’s “suggested options” note; click to enlarge:
The note does appear to be in Kagan’s handwriting; you can see a sample of her writing here.
Unless there is some other interpretation of these documents that does not occur to me, it appears that Elena Kagan participated in a gigantic scientific deception.
What’s described in these memos is easily the most serious and flagrant violation of the boundary between scientific expertise and politics I have ever encountered. AWhite House official formulating a substantive policy position for a supposedly impartial physicians’ group, and a position at odds with what that group’s own policy committee had actually concluded? You have to wonder where all the defenders of science—those intrepid guardians of the freedom of inquiry who throughout the Bush years wailed about the supposed politicization of scientific research and expertise—are now. If the BushWhite House (in which I served as a domestic policy staffer) had ever done anything even close to this it would have been declared a monumental scandal, and rightly so.
Apparently scientific integrity only matters as long as it doesn’t somehow infringe on abortion. That, of course, was always the lesson of the stem-cell debate in the Bush years anyhow. But clearly it started earlier. It’s good to know where Kagan’s priorities are. Let’s hope senators are paying attention.
This, as Yuval points out, is not only a shocking “violation of the boundary between scientific expertise and politics”; it is also an outright deception that was subsequently used in litigation by partial-birth-abortion defenders. The former deputy attorney general who defended the partial-birth-abortion ban during the Bush administration, Shannen Coffin, brought the story to light. He reminds us: “U.S. District Court Judge Richard Kopf, one of the three federal judges that issued orders enjoining the federal ban (later overturned by the Supreme Court), devoted more than 15 pages of his lengthy opinion to ACOG’s policy statement and the integrity of the process that led to it.” Had the judge known it was not the work of scientific gurus but that of a Clinton staffer (”nothing more than the political scrawling of a White House appointee”), one can imagine he wouldn’t have spent a sentence, let alone 15 pages, on it.
Some senator should have the wherewithal to take this on and require that Kagan explain herself. Not only is it, if accurate, a disqualifying episode for a Supreme Court justice; it is grounds for a solicitor general to step down. And her failure to advise the courts — which believed they were relying on neutral, expert testimony — constitutes a significant ethical breach.
Given the memos Coffin provides in his article, it’s hard to see how Kagan could explain away her significant rewriting of the statement, which directly affected policy relating to partial-birth abortion. But maybe she can. A senator should give her the opportunity during the hearings.
Before the Senate Judiciary Committee a short time ago, Supreme Court nominee Elena Kagan appeared reluctant to admit that she wrote a 1996 Clinton White House memo aimed at altering a key medical group’s opinion of whether partial birth abortion is medically necessary. The memo, reported yesterday by National Review, has caused a stir in conservative circles because it appeared that Kagan, then a White House policy aide, put words in the medical group’s mouth in order to soften its position on the controversial procedure. But when Republican Sen. Orrin Hatch brought the subject up with Kagan, he had a hard time getting her to admit that she did, in fact, write the document in question.
“Did you write that memo?” Hatch asked.
“Senator, with respect,” Kagan began, “I don’t think that that’s what happened — ”
“Did you write that memo?”
“I’m sorry — the memo which is?”
“The memo that caused them to go back to the language of ‘medically necessary,’ which was the big issue to begin with — ”
“Yes, well, I’ve seen the document — ”
“But did you write it?”
“The document is certainly in my handwriting.”
Although Kagan later explained her thinking in the memo — she said she was only trying to help the medical group express its true opinion — and it was clear that she did write the memo, she looked slippery in her attempt to avoid openly admitting that she did so. That won’t sit well with skeptical senators.
When Mitch Daniels ran for governor of Indiana in 2004, a friend and videographer got the idea of filming the candidate in vidéovérité style as he traveled around the state in his Indiana-made RV. In both his campaigns for governor—in 2004, when he won a close race, and in 2008, when he won reelection against the Obama tide in an 18-point landslide—Daniels visited each of Indiana’s 92 counties at least three times, appearing in places that hadn’t seen a statewide candidate in generations, or ever. If he wasn’t riding the RV, he came to town on his custom-built Harley Davidson, a solitary aide trailing behind.
He insisted on spending every night on the road in the home of a local family. Nearly all the families were strangers to him. He slept in guest rooms, family rooms, dens, and children’s bedrooms, on bunks and foldout couches, with pictures of pop stars staring from the walls and an occasional Disney mobile dangling overhead, proving to the people of his state that he could sleep anywhere. He was bit by a pig and, later, a farm dog. For his website he wrote a day-by-day account of the places he went and people he met. He paid special attention to the quality of pork tenderloin sandwiches he found in the local bars and diners. Pork tenderloin sandwiches, the size of a platter, are unavoidable in Indiana, no matter how hard you try, and Daniels made it clear he didn’t want to try. Food became a theme of the campaign. The best dessert he’d discovered, he said, was a Snickers Bar dunked in pancake batter and, this being Indiana, deep-fried.
All of this was the stuff of what became MitchTV. Daniels said he was skeptical of having his every move placed under the eye of a crew with a handheld camera and a boom mike. The first line of the first episode is: “The first thing you need to know about this is, it was not my idea.” But it was a good idea. The campaign edited the video down to half-hour episodes every week and bought time in nearly every TV market in the state, on Saturday nights, Sunday mornings, and Sunday evenings. A typical episode received a five or six share, a rating that shocked everybody and translated into tens of thousands of regular viewers.
I was alerted to MitchTV by a politically connected friend. Most of the episodes are available on YouTube. The shows are bizarrely compelling, as if D.A. Pennebaker had been let loose on the set of Hee Haw. The Hoosiers themselves—grizzled old farmers, bikers with attitude, housewives in floral prints, chubby kids in too-tight T-shirts—are part of the attraction. They are alternately delighted, disbelieving, and annoyed to find a well-known politician in their midst. The action, if that’s the word, plays out in county fairs and barn auctions and meetings of the chamber of commerce, against the woebegone beauty of small towns slowly sinking back into the Indiana prairie.
What ties the episodes together, of course, is the presence of Daniels. His telegenic appeal is highly unlikely. He’s 5′7″. His pale coloring is set off by his reddish gray hair, and the day is fast approaching when the combover will no longer be able to work its magic. He favors pressed sport shirts and sharply creased Dockers, public-golf-course casual. His accent is hard to place. He calls it “hillbilly hybrid,” a term he coined to describe what happens when the rounded tones of Tennessee and Georgia, where he lived as a boy, are stomped flat as a griddle by the adenoidal twang of Central Indiana, where he’s lived, off and on, since he was ten. He has a fine sense of humor—after their dog bit him he told the family he was off to a diner for his new favorite breakfast, “two eggs over easy, biscuits and gravy, and a tetanus shot”—but his manner is just awkward enough to make you wonder, when you talk to him, if you’re making him nervous.
Daniels is in Washington this week doing interviews and meeting with groups like the Business Roundtable. This morning, he met with a group of mostly conservative new-media and print journalists. He proved both impressive and problematic for conservatives seeking a favorite in the 2012 race.
On the positive side, he is plainly not Obama. He is precise, self-effacing, down to earth, and rooted in conservative philosophy. The first question was about education, and, out of the box, he acknowledged that education was “one of the shortcomings of our administration,” and although he has made limited progress, he wants to step up his efforts in the remainder of his term. He then went on to discuss the substantial reforms he has made with the help of a new superintendent (ending social promotion, insulating teachers from lawsuits if they enforce discipline, opening up credentials so people who have had other careers can get into the classrooms, etc.). What he conveyed was both candor and a big-picture view (”Public education has evolved into a situation . . . where it is set up as much for the benefit of the adults as for the kids.”)
He also explained his effort to tame public-employees’ unions, pointing out that teachers in his state are paid 22 percent more than the average worker and that he needed to bring the union to heel if “we were going to overhaul government.” By executive order, he ended mandatory union dues, and 90 percent of the employee chose not to pay. (”They gave themselves a 2 percent pay increase.”) But he is not anti-union by any means. He explained that the playing field should be level, and workers should have the choice to unionize. He said the right to join a union is “fundamental” and has “led to freedom in a lot of countries.”
He was at his best when discussing political theory and domestic policy. Asked what conservatives he looks to for guidance, he listed Hayek, Friedman, and Charles Murray. All of them, he explained, “are realistic and therefore modest in what government is capable of doing.” He continued that they evince “skepticism of bigness — in all its forms.” When I asked him what the principle errors of Obama and Congress had been, he began by pointing out that most of them “have not spent a day in a profit-making enterprise.” He explained that the choice between political parties is the clearest we’ve ever had. Conservatives believe, he said, that public service is a temporary job and that their duty is “to promote free enterprise, family, and other intermediary institutions.” Democrats believe the opposite, he said — that society will work better “if the ‘enlightened’” make the decisions.
He explained: “I’m concerned. I’m alarmed about the direction of the country.” Even apart from the theoretical argument, he observed that looking at entitlements and the debt, “Can we all agree the arithmetic doesn’t work?” But he said he is interested in the bigger philosophical questions: “What kind of people do we want to be?” Are we still capable of preserving liberty and independence?
About entitlements and the debt, he said he has faith that we can have a “grown-up” conversation. He then proceeded to have one. “Americans,” he asserted, “have a renewed sense of the menace of too much debt.” In their personal lives, with credit-card and mortgage debt, he notes that “they had a searing personal experience.” What to do about entitlements? “Paul Ryan is right — we need to bifurcate these programs.” He said that Democrats would have been best suited to do the hard work, given the negative rhetoric hurled at Republicans when they undertake entitlements control, but he said that is a “lost opportunity. Someone’s got to try.” He continued: “Why should we pay for Warren Buffet’s health care? Why should be pay Bill Gates a pension?” Like businesses that have phased out defined-benefit plans, he recommended that we have “a new plan and an old plan.” And he wasn’t shy about criticizing Republicans for grandstanding on Medicare cuts during the health-care debate.
He explained: “None of this will work if we don’t have a sustained period of growth.” Unfortunately, he said, “Everything they are doing as far as I can see leans against economic growth.” And he pointed to his own job-creation record. Indiana has 2 percent of the population and 7 percent of the new jobs. He has made sure “the next job comes to Indiana and not someplace else.”
He also showed a knack for political message. He questioned “what the hell” did “change you can believe in.” He suggested that the conservatives’ motto should be “Change that believes in you,” stressing that Americans are “fully capable” of running their own lives, buying their own health-care insurance, etc.
Mitch Daniels told THE WEEKLY STANDARD’s Andy Ferguson that the next president “would have to call a truce on the so-called social issues. We’re going to just have to agree to get along for a little while,” until economic issues are resolved.
This morning, at the Heritage Foundation, I asked Daniels if that meant the next president shouldn’t push issues like stopping taxpayer funding of abortion in Obamacare or reinstating the Mexico City Policy banning federal funds to overseas groups that perform abortions. Daniels replied that we face a “genuine national emergency” regarding the budget and that “maybe these things could be set aside for a while. But this doesn’t mean anybody abandons their position at all. Everybody just stands down for a little while, while we try to save the republic.”
To clarify whether Daniels simply wants to de-emphasize these issues or actually not act on them, I asked if, as presdient, he would issue an executive order to reinstate Reagan’s “Mexico City Policy” his first week in office. (Obama revoked the policy during his first week in office.) Daniels replied, “I don’t know.”
Is it a winning strategy to put the so-called social issues on the back burner? Thinking in terms of what a “truce” on social issues would like like substantively, it’s not obvious how Daniels’s truce would differ from past Republicans’ policies. What exactly did Bush do on the social issues that President Daniels would have to forgo?
If Daniels’s strategy is a widely palatable campaign platform aimed at bringing on board disaffected and economic issue voters, the question is how much of a trade-off would social conservatives have to make to vote for him. What typical Republican policies would he have to suspend and they have to sacrifice? It’s not clear to me that it would be anything more than simply the usual social conservative rhetoric. He might not have to do more than what he’s already started doing, which is merely playing down the importance of social issues and telling liberals that we “just have to agree to get along for a little while.”
If that trade-off would allow for a coalition that would elect president that would actually cut spending — and that’s a big if — then it’s one social conservatives should definitely be willing to make.
Truces are usually popular, and most people see the economic issues as more important than the social ones at this moment. But I’m not sure how a truce would work. If Justice Kennedy retired on President Daniels’s watch, for example, he would have to pick someone as a replacement. End of truce.
I also can’t help but think of Phil Gramm’s presidential campaign in 1996. Like Daniels, Gramm was an enthusiastic budget-cutter. Concern about big government was running strong in the years just prior to that election. Gramm had a solid social-conservative record, but consciously chose not to campaign on it; he famously flew out to Colorado Springs to tell James Dobson, “I’m not a preacher.” That approach helped to doom Gramm’s campaign.
Daniels, presumably, won’t be trying to unite conservatives against the party establishment’s candidate, as Gramm was, and so these issues will play out differently next time. But I am not at all sure that the party’s grassroots will be less interested insocial issues in 2012 than it was in 1996.
Apparently, a 2012 Republican presidential prospect in an interview with a reporter has made the suggestion that the next President should call for a “truce” on social issues like abortion and traditional marriage to focus on fiscal problems.
In other words, stop fighting to end abortion and don’t make protecting traditional marriage a priority.
Let me be clear though, the issue of life and traditional marriage are not bargaining chips nor are they political issues. They are moral issues. I didn’t get involved in politics just to lower taxes and cut spending though I believe in both and have done it as a Governor. But I want to stay true to the basic premises of our civilization.
With tea partiers rallying against government debt and faith in government’s abilities to achieve the basic, let alone the moon we were promised two years ago, 2012 seems awfully convenient for the likes of Mitch Daniels, the affable skinflint governor of Indiana.
At a presser for bloggers held this morning at the Heritage Foundation, Daniels held forth on a number of national issues. While he didn’t say outright that he is running to replace Obama, the formerly Shermanesque denials that he might do so have been replaced with much more flirtatious language.
Part of that might be simply Daniels taking the advice of former U.S. House speaker Newt Gingrich who is quoted by the Hoosier in a must-read profile by Andrew Ferguson in the Weekly Standard that “keeping the door open” gives a state politician a lot more national press attention than he’d otherwise receive.
That can’t be entirely it, however, because, as mentioned above, things seem almost made for a Daniels run, not just in terms of current events, but also in terms of his persona.
In the midst of a recession, mountains of state and federal debt and worldwide financial crisis, running on a platform of “humility” toward government (Daniels’ term) contra Obama is a bit of a no-brainer, however, Daniels also seems to have learned one thing few GOP politicians have: being able to think quickly on his feet in response to uncomfortable questions.
He’s had a lot of practice at that crisscrossing Indiana’s 92 counties multiple times, eagerly interacting with fellow Hoosiers. That’s great for someone wanting to run for president. It’s also given him an ability to overcome the “unfortunate stereotype” of Republicans that they don’t care about the average person.
In that sense, Daniels is a bit of an anti-Bush, he’s also that way in that the former Office of Management and Budget director has no fear of tangling with the bureaucracy at their own game of spreadsheets and inventory audits
[Daniels] and his wife Cheri divorced in 1994. She moved to California, leaving Daniels with the four daughters, aged 8 to 14, and married a doctor. She divorced again and moved back to Indiana. She and Mitch remarried in 1997.
Cheri has never spoken about this publicly, and from what I can tell it’s been mentioned in print only twice. Daniels’s only comment was to the Indianapolis Star in 2004: “If you like happy endings, you’ll love our story.”
For those of us who have labored long and hard in the fight to educate the Democrats, voters, the media and even some Republicans on the importance of strong families, traditional marriage and life to our society, this is absolutely heartbreaking. And that one of our Republican “leaders” would suggest this truce, even more so. Governor Daniels is a personal friend and a terrific Governor, and I’m very disappointed that he would think that pro-life and pro-family activists would just lie down.
Christina Romer, chair of the president’s Council of Economic Advisers, says the reason unemployment remains so painfully high is clear: It’s not the inadequacy or laziness of the workers or the long-standing mismatch between workers’ skills and employers’ needs. It’s the old-fashioned Keynesian diagnosis: Too little demand in the economy.
“The overwhelming weight of the evidence is that the current very high—and very disturbing—levels of overall and long-term unemployment are not a separate, structural problem, but largely a cyclical one. It reflects the fact that we are still feeling the effects of the collapse of demand caused by the crisis. Indeed, at one point I had tentatively titled my talk “It’s Aggregate Demand, Stupid”; but my chief of staff suggested that I find something a tad more dignified,” Ms. Romer said in remarks prepared for a conference at Princeton University today.
It doesn’t have to be this way, she argued, essentially making the case for more government stimulus to help the economy. “We have the tools and the knowledge to counteract a shortfall in aggregate demand. We should be continuing to use them aggressively.” Her comments contrasted with a recent flurry of optimism among some forecasters that the recovery may turn out to be stronger than the lackluster one many anticipated. “We we are growing again, but not booming,” she said. GDP is rising at a solid pace, but not as quickly as after other severe recessions and not as quickly as it needs to. As a result, the unemployment rate remains painfully high and is not predicted to reach normal levels for an extended period.” The jobless rate, at last report, was 9.7%
The view gaining strength is that additional stimulative policies won’t do much good because much of our current employment i “structural.” This is,best as I can see, simply not true: there is no evidence for it. But that if we let unemployment linger above 9 percent for several years, it is highly likely to become structural–and then we will have even more huge problems than we have now.
And at the moment it looks like getting unemployment below 9 percent will take some luck. Certainly fiscal policy and monetary policy are unlikely to provide much additional stimulative force going forward.
Every time there’s a downturn a certain swathe of the elite starts to label it unfixable and structural. And the worse the downturn, the louder come the calls. Look at the history of the Great Depression and you see an enormous chorus of voices from the right arguing that nothing could be done and people would just have to suffer through it. They were countered by a chorus of voices from the left arguing that nothing could be done and people would just have to stage a revolution. It wasn’t true then and it wasn’t true now. The fact of the matter is that key people responsible for running the global economy—people at the European Central Bank and the Federal Reserve Board, and the Bank of Japan, people in the United States Senate, people in the Germany cabinet—are screwing up. In the developed world, those countries who’ve been able to respond aggressively to the crisis with aggressive expansion-via-devaluation are all doing pretty well. The bigger developed economies can’t do that exact thing, but they can mount more aggressive expansionary responses—they just aren’t.
It seems to me that if the problem is aggregate demand, then there should be some sectors that currently are temporarily depressed where you think that employment will recover. Are there inventories to be worked off in automobiles and steel? Do we think that lots of job growth is going to come in the capital goods sector? Should the state and local government sector that Romer moans about, which has lost–what, 100,000 jobs?–be the engine for employing the six million or so people who have lost private sector jobs?
Also, Romer writes, The recent recession was obviously not caused by tight monetary policy. Interest rates were not especially high when it began, and so the Federal Reserve had only limited room to cut them. It has brought short-term rates down to virtually zero, but it cannot push them below that. The result is that we have not had the strong monetary stimulus that we would normally have in these economic circumstances.
She’s telling Scott Sumner to move along, also. Note that she focuses on short-term interest rates as a monetary indicator. But long-term interest rates are not zero, and the Fed certainly has not run out of securities to buy.
Basically, her speech is a plea for more Obaminations. She admits that recovery is needed in the private sector, but her top priority is aid to state and local governments. I can remind you that state and local governments can balance their budgets without cutting jobs simply by reducing pay to workers.
I don’t expect Romer to turn a speech into an academic debate and in this sense I don’t fault her. Nonetheless I did not find her account very persuasive.
I would start with the fact that output has bounced back more robustly than employment has. AD theories per se do not explain that differential. One simple possibility is that better management and better measurement have allowed us to identify (and fire) hundreds of thousands of low-wage people who just weren’t producing much of value. That’s a real shock, even if it does not qualify as a sectoral shift in the traditional sense.
It’s also the case that the rate of new job creation has been especially low. Yet the nominal wages on those jobs-to-be are not constrained by previous contracts or agreements. Tell stories as you may, but it’s hard for me to see that as exclusively an AD problem.
I wonder what is the behavioral postulate for how long all these unemployed workers are all staring jobs in the face yet persistently stubborn about their appropriate nominal wage. I’m all for behavioral economics, but I don’t buy the necessary story here.
I don’t want to oversell the minimum wage hike + unemployment compensation extension + means-testing hypothesis here, but surely it deserves a mention as one relevant factor. Those are real factors too.
I also see that wages, and the job market, are more flexible today than in a long time, with so much service sector employment, so much flex-time and part-time, and such a low rate of unionization. In most AD theories that implies the job market bounces back relatively quickly yet that is not what we observe.
A separate question is what Romer believes the major AD shock to have been. She clearly repudiates the Scott Sumner story that monetary policy was too tight. Is it all from the collapsed bubble in the housing market? Keep in mind those are paper values and that the real services from the country’s housing stock haven’t declined. Again, you can tell behavioral stories about the asymmetric perception of losses vs. future gains (for many people, buying a future home is now much cheaper, though perhaps they don’t notice the positive wealth effect), but is that going to drive the whole cycle?
To be sure, AD is a major factor in this recession but it is not the entire story by any means. In major recessions usually it is AD and AS forces together.
Most of all, the Romer essay convinces me that current economic policymakers — not to mention many bloggers — should not be so certain they understand what is going on.
Still, I broadly concur with Tyler and Arnold Kling: I don’t think you can explain this all by falling aggregate demand. Consider that, as Romer notes, unemployment is about 1.7 percentage points higher than can normally be explained by the change in GDP. That doesn’t sound like so much. But it’s really quite a lot. If you assume that the natural rate of unemployment is probably somewhere around 5.3%, that means the total shift has only been 4.4 percentage points. In other words, almost 40% of our currently elevated unemployment rate comes from something other than the decline in GDP.
Moreover, we know that there are large sectors that require structural readjustment: autos and construction. Those workers are geographically and skill-constrained. To think that the current level of unemployment is all about aggregate demand, you have to think that there are lots of jobs into which those displaced workers could easily transition. But if you own a house in the Detroit era, or have a spouse who still has a job, this is just clearly not the case.
I find it interesting that Romer is so eager to dispel the idea that structural changes and not aggregate demand has caused the current jobless recovery because I presented that argument in the December-January issue of the Spectator.
Arnold Kling and Tyler Cowen are both unimpressed with Romer’s thesis. For what it’s worth, I do think that there are clearly structural forces at play in the current economy, and that these problems are not “easily amenable to correction” in the sense that Romer means “correction,” i.e. more government spending. But I don’t think that any of the economists I interviewed or read in laying out the structural narrative are resigned to a “new normal” of high unemployment and slow growth.
Basically, there are two sides to this debate: One is that the meltdown either exposed or created an economy where the level of unemployment is simply much higher. That is to say, it’s not just the recession pushing unemployment up, but the new reality of a post-high consumption, post-housing boom, or post-something else America.
Romer’s view is different: “This rise in long-term unemployment is readily explained by the prolonged collapse in aggregate demand.” She sees five factors pushing down demand: Tight credit markets, state and local budget problems, burnt-out consumers, subdued foreign demand, and the Federal Reserve’s inability to stimulate the economy by further cutting interest rates.
The neat thing about a demand-side explanation is that policy can help. Demand, after all, is another way of saying “someone spending money to buy things.” The economy doesn’t much notice if that someone is a household, a business, or the government, So if households and businesses are too weak to play that role right now, the government can, and should, step in and create the demand that will get the economy moving again. Romer suggests a couple of policies in addition to those currently in place, with the most promising being further aid to state and local governments and a lot of money to jump-start lending to small businesses.
The question isn’t whether those policies will work to ease the recession and move us toward recovery. They will. If states don’t have to lay off teachers, those teachers don’t have to stop buying groceries, which means those grocers don’t have to fire their employees, and so on. The question, rather, is whether we actually want to do something about unemployment, or whether we’d prefer to just complain about it.
The University of Arkansas School of Education, home to my good friends Patrick Wolf and Jay Greene, yesterday released new research showing that students in Milwaukee’s two-decade old voucher program (the Milwaukee Parental Choice Program) “scored at similar levels as their peers not participating in the school choice program.”
Wolf, who has led this effort as well as the federally-endorsed evaluation of the DC voucher program, summarized, “Voucher students are showing average rates of achievement gain similar to their public school peers.” Translation: when it comes to test scores, students with vouchers are performing no differently than other kids. (It is worth noting that MPCP students are being educated more cheaply than are district school students).
What to make of the results? First off, 20 years in, it’s hard to argue that the nation’s biggest and most established voucher experiment has “worked” if the measure is whether vouchers lead to higher reading and math scores. Happily, that’s never been my preferred metric for structural reforms–both because I think it’s the wrong way to study them (see “Science and Nonscience“) but, more importantly, because choice-based reform shouldn’t be understood as that kind of intervention. Rather, choice-based reform should be embraced as an opportunity for educators to create more focused and effective schools and for reformers to solve problems in smarter ways. Whether any of that pays off is much more a question of quality control, support, talent, investment, infrastructure, and the rest than it is of whether or not a choice program is in place.
Second, congrats to Wolf and his team for reporting this straight and for not trying to spin the results. There’s way too little of that, for my taste. And I was happy to see Wolf, who generally favors school vouchers (as do I), not engaging in tortured efforts to make the data tell a happy tale. Advocating for vouchers (or charters or merit pay) by struggling to extract some favorable coefficients from math and reading scores has always been a problematic way to argue the need to fundamentally rethink the design of schooling.
I’m having a hard time understanding the distinction here. Vouchers aren’t a teaching method or curriculum or instructional intervention. They are, as Hess notes, purely structural, shifting control over resources toward parents and widening the range of institutions that can receive those resources. Since “more focused and effective schools” are properly defined as “schools where students learn more” i.e. “schools with higher reading and math scores,” if vouchers didn’t result in more such schools then vouchers failed. One might argue that vouchers created the opportunity for educators to create such schools and educators didn’t take advantage of it, but what’s the difference? The whole point of structural reform is to change incentives and conditions; if the change was insufficient to create desired behavior then ipso facto the reform failed. A purely structural metric for evaluating purely structural reforms misses the point altogether.
Hess then suggests that vouchers (or school choice programs more generally) are better understood as a necessary but not sufficient condition for improvement that also requires “quality control, support, talent, investment, infrastructure, and the rest.” Perhaps, although it’s worth remembering that those are things that can be effectively applied to the cause of school improvement without vouchers. All in all, I think this lends credence to my theory that you either try vouchers for real or you don’t. Half-measures, of which even the Milwaukee vouchers are an example, will never produce satisfactory evidence either way.
This strikes me as really wrongheaded. It takes time for more focused and effective schools to emerge. Moreover, if they do emerge, as they have in Sweden under that country’s choice regime, they’d likely scale up as national franchises. Milwaukee is a great American metropolis. It’s not going to spontaneously generate the dense marketplace that you’d need.
Am I just recapitulating the argument made by advocates of state socialism — it didn’t work because we didn’t really try it? I don’t believe so, in light of the socialist calculation problem and other vexing challenges facing central planners. I can see how one might feel otherwise. I do caution us, however, against approaching this problem too narrowly.
The truth is that Hess’s arguments are a little too sophisticated for a binary debate. He has made an active effort to make educational reformers, particularly on the right, to go beyond a narrow focus on school choice, and instead to focus on the secondary markets and institutions that can make the broader educational system better faster.
This, by the way, is a good way to think of lots of complicated regulated markets, including the health sector and the financial sector. Choice is important, but it’s certainly not enough. It’s just that in those sectors, we don’t even contemplate restricting choice as severely as we do in the educational space.
Giving parents choices about where to send their kids to school has certain kinds of virtues. It turns out, however, that parents of low-income kids don’t seem to particularly use this freedom to select schools that are good at improving kids’ academic performance. At least they’re not sufficiently invested in doing that so as to put a lot of pressure on schools to figure out ways to improve academic performance. The choice program does seem to lead to a lot of consumer satisfaction, but not actual improvements in performance. It’s sort of like when people switch to a “low fat” version of a product, find it’s surprisingly delicious, and don’t pay attention to the fact that it actually has just as many calories as the old variety.
At the end of the day, to improve academic performance you need policies that specifically focus on that goal. You can shut down charter schools that consistently deliver below-average demographically adjusted academic performance and allow operators of charter schools that consistently deliver above-average performance to open new franchises. You can pay teachers who consistently deliver above-average performance enough to persuade them to keep teaching. You can recognize that schools that teach a lot of poor kids are going to need more resources rather than fewer. You can try to research which pedagogical methods actually work instead of just guessing. But you can’t just throw some procedural switch and fix everything, especially if the process you put in place doesn’t even specifically focus on improved academic achievement.
The evidence of this literature is starkly one-sided. The vast preponderance of findings show private schools outperforming public schools after all the normal controls. What’s more, when we focus on the research comparing truly market-like systems to state-run school monopolies, the market advantage is found to be even more dramatic (see Figure 2 in the paper linked above). To draw policy opinions from a small, selective handful of those studies while ignoring the rest is policy malpractice, and it is dangerous to children.
Even the recent Milwaukee result described by Yglesias as a failure shows voucher students in private schools performing as well as public school students who receive roughly 50% more government funding. How is a program that produces similar academic results to the status quo at a much lower cost to taxpayers a failure? And what of the research suggesting that students in the Milwaukee voucher program graduate at higher rates than those in public schools?
More importantly from a long term policy perspective, how is a program limited to 20,000 or so children in a single city, being served almost entirely by non-profit entities, a test of market education? Would Apple have spent hundreds of millions developing the iPhone or the iPad if its market were limited to the same customer base? Of course not. The dynamism, diversity and innovation we have come to expect from competitive markets in other fields relies on the prospect of ultimately scaling up to serve mass audiences. Without the prospect of a large-scale return on investment, there is no incentive to invest in the first place.
I think that Coulson has accidentally understated the argument that the vouchers are a lot cheaper because of what looks like a simple arithmetic error: Milwaukee spends $6,442 per voucher student and $14,011 per public school student. That means that they spend more than 100 percent more per public school student, not 50. (The government doesn’t pay all of the voucher students’ tuitions. The average cost per voucher student is $7,703, meaning that the schools must come up with over $1000 of private funding per student.)
The larger point that Hess and Yglesias are getting at is that these voucher students are still not getting a decent education, which truly is a failure. But given the available evidence that school choice works in general and the fact that the system is saving significant amounts (a very salient fact when you consider the condition of state and city finances), it’s probably wise not to overemphasize this one disappointing finding.
So the voucher program achieved the same learning objectives at a lower cost, or more bang for the buck. Since when is that regarded as failure? Let’s consider the following two possibilities:
1. Spending more money on education (at the margin) increases learning.
2. Spending more money on education (at the margin) doesn’t increase learning.
First assume case one is true. This would imply that if we adopted vouchers, and spent as much per student as the Milwaukee public schools spend per student, we would get higher test scores. That is called “success.”
Now assume case two is correct. This would imply that there is no point in spending more money on education. We should simply try to hold down costs. This means that the voucher program in Milwaukee succeeded in the only way schooling can succeed; it provided education at a lower cost than the public school system.
I’m sure that case two sounds very cynical to a progressive like Yglesias. I imagine that he thinks more spending can make a difference, perhaps if targeted to certain methods that have been shown to work. OK, then how about taking the tax saving from voucher schools, and giving those schools a government grant to improve education in whatever area progressives like Yglesias think that money can still help at the margin? Wouldn’t that be a win-win for everyone except unionized public school teachers? I wonder why such a policy has almost no chance of happening.
I suppose the progressive counter-argument is that the policy failed according to the criterion set by the voucher proponents. I have been a voucher proponent from the beginning, and certainly never thought success should be measured by test scores. I’ve always thought parental satisfaction was the proper criteria. Indeed, I would hope that all free market economists agreed on this point. There may be some conservatives who argued that test scores would improve, but why should we care what they think? Every day the progressive bloggers tell us that conservatives are morons. I’d rather judge the program on how well it actually did, using the standard economic criteria of costs and perceived customer benefits, not the single criterion used by central planners.
If a policy that leads to greater consumer satisfaction at lower cost, and produces no negative side-effects in test scores, is viewed as a “failure” by progressives, then I don’t think we need to worry very much when progressives criticize the free market. As Dylan once said: “There’s no success like failure, and failure’s no success at all.”
The piece I penned last week on the new University of Arkansas findings on the Milwaukee voucher program has drawn a fair bit of reaction in the blogosphere. I observed that the unimpressive results from the Milwaukee voucher evaluation (touted as the most ambitious evaluation of a U.S. voucher program yet conducted) are not all that surprising and that the bleak results ought not be taken as evidence that vouchers don’t “work,” but as a reminder of how little attention choice proponents have devoted to creating the kinds of oxygenated ecosystems that can support dynamic markets. (For a lengthier discussion on this, check out my new book, Education Unbound).
As controversial as this stance has been with choice enthusiasts, and as inclined as choice skeptics are to regard it as an apologia or an attempt to move the goalposts, I have always thought it a rather unremarkable and commonsensical attitude. After all, it was Milton Friedman who once famously opined that the “market is not a cow to be milked” but is simply a powerful mechanism for channeling human ingenuity, energy, and talent. If markets are dysfunctional, corrupt, or inhospitable to law-abiding enterprises (think of post-Gorbachev Russia), they are more likely to lead to venality than socially productive work.
Around The Sphere 
Holiday, Celebrate!
Lori Montgomery and Anne Kornblut at WaPo:
David Leonhardt at NYT:
Tyler Cowen
Joseph Lawler at The American Spectator:
Mary Katherine Ham at The Weekly Standard
Jennifer Rubin at Commentary:
Steve Benen:
Megan McArdle:
Atrios:
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