Entries from March 2011

Left and Right Switch Sides in the Media Wars

David Frum March 29th, 2011 at 5:51 pm 16 Comments

Have we passed into some kind of space-time discontinuity, where all the most prominent newscasters are right-wing – and the people most enraged by media bias are left-wing?


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Boehner Faces GOP Budget Revolt

March 29th, 2011 at 5:06 pm 13 Comments

Today’s news that conservatives in the House Republican Study Committee will draft their own alternative Fiscal Year 2012 budget to challenge the GOP leadership highlights Speaker Boehner’s problems in keeping his caucus unified. But he’s not the only one. In the budget fight, neither President Obama, nor Speaker Boehner, nor Leader Reid can lead, because by and large their troops won’t follow.

So far in the spending fight, delay may have actually helped congressional leaders.  All the strum und drang has been about very tiny spending numbers and the CR.  The FY12 budget (and its five- and ten-year projections) will involve very big numbers and very basic fiscal policy.  And the debt ceiling will involve both.

Instead of trying to make a deal on FY 11, then another on the FY12 budget, and a third on the debt ceiling, the best strategy would be to make a “grand bargain” on all three at the same time.  If Ryan delays a couple of weeks, and Congress forges another CR until mid-April or so, then the debt ceiling may be nearly breached and a “global” discussion of all three could take place.

All of this complicated scenario-devising can’t hide the underlying problem.  Just ask yourself these three questions:

  • How can Chairman Ryan get the necessary votes either in committee or on the House floor when he will be asking his colleagues to vote for at least 2 years of trillion dollar deficits?
  • Who in either party will vote to radically change federal pensions, Medicare, Medicaid, and other entitlements with an aging voting population and no short term deficit reduction in the offing?
  • Why would the President begin public negotiations when it is clear that neither Boehner nor Reid have their own troops in line?

In short, none of the three principals can make a deal that they may be able to deliver on.

The revolution in the GOP ranks is dramatized by the announcement today that the Republican Study Committee within the House caucus will develop its own budget, countering what they perceive will be an insufficiently aggressive budget by Boehner and Ryan.  Since almost two-thirds of House Republicans belong to the RSC, their challenge cannot be ignored.

At the same time, House Democratic Minority Whip, Steny Hoyer, has repeated that once again it may be the House Democrats who come to Boehner’s aid and provide enough votes to pass the CR for FY11.  Recall that at the last vote, it was Democrats who voted in enough numbers to pass the CR, as 54 Republicans voted against it.  Whether Hoyer’s remarks help or hurt Boehner remains unclear.

One of the most famous verses in the Bible is 1 Corinthians 14:8.  It reads, “For if the trumpet give an uncertain sound, who shall prepare himself to the battle?”

The President has sounded the trumpet—we have unsustainable deficits and debt and we must take action.  Boehner and Reid agree resoundingly.  Every serious policymaker and economist concurs—America’s fiscal path will lead to fundamental damage to America’s economy and international standing in the future.

And yet, in his own way, each sounds an uncertain trumpet to the troops.  The president wants Congress to go first; Reid wants the House to act first; Boehner doesn’t know if he has the votes to go first.  The American people look on, confused and bemused, in a state of “buyer’s remorse” over the election of November 2010.

In such a melee, with no one blowing the trumpet and leading the charge, the troops haven’t even formed up yet.

The dust will clear one way or the other.  Congress will act in a convincing fashion to get projected deficits trending down or the bond traders in international markets will strike.  So we end with a final question:

“What happens when a 30-year-old bond trader in London all of a sudden wants 5.5 per cent on the American 10-year note, instead of the current 3.4 per cent?”

Stay tuned.


Cantor: No More Budget Stopgaps

March 29th, 2011 at 4:41 pm 2 Comments

The Hill reports:

House Majority Leader Eric Cantor (R-Va.) raised the stakes in the budget showdown on Capitol Hill Tuesday by ruling out another stopgap funding measure.

“I want to see a long-term CR here,” he said. “We’ve got bigger things to deal with. Time is up here.”

That leaves House and Senate lawmakers and White House officials little more than 10 days to negotiate a long-term continuing resolution to fund the government through the end of the fiscal year in September.

Cantor called out Senate Democratic leaders — and President Obama — during a press availability in his Capitol suite Tuesday afternoon.

“We need to see [Senate Majority Leader] Harry Reid and [Sen.] Chuck Schumer get serious,” he said. “We need to see the president get involved.”

The House approved a government funding measure 39 days ago that would cut $61 billion from current spending levels. The Senate failed to pass the House version or a Democratic alternative to cut some $10 billion.

Cantor disputed reports that Senate Democrats and the White House had discussed striking a deal to cut $20 billion more from current spending levels.

“I’m telling you that the nature of progress you’ve been discussing with members on the other side of the Capitol [does] not reflect where I think that the negotiations are,” Cantor said.

He called “far-fetched” a statement he said House Minority Whip Steny Hoyer (D-Md.) made earlier in the day that a deal could be struck relatively soon.

56 Killed in Iraqi Hostage Siege

March 29th, 2011 at 4:14 pm Comments Off

The AP reports:

Wearing military uniforms over explosives belts, gunmen held a local Iraqi government center hostage Tuesday in a grisly siege that ended with the deaths of at least 56 people, including three councilmen who were executed with gunshots to the head.

The five-hour standoff in Tikrit, former dictator Saddam Hussein’s home town, ended only when the attackers blew themselves up in one of the bloodiest days in Iraqi this year.

First they set fire to the bodies of the three slain Salahuddin province councilmen in a brutal, defiant show of how insurgents still render Iraq unstable – even if it has so far escaped the political unrest rolling across the Arab world.

“Why did they shoot him and set fire to his poor body?” said Salahuddin government spokesman Mohammed al-Asi, trying not to weep when confirming the killing of lawmaker Mehdi al-Aaran, an elderly man who headed the council’s religious affairs committee.

Speaking in a muted voice, Salahuddin Governor Ahmed Abdullah called the attack “a tragic incident carried out by ruthless terrorists.”

Iraqi officials were quick to blame al-Qaida in Iraq for the slaughter, noting that executions and suicide bombers are hallmarks of the extremist group. A senior intelligence official in Baghdad likened the attack to al-Qaida’s horrifying hostage raid last fall on a Catholic church in Baghdad that left 68 dead and stunned the nation.

Tuesday’s attack left 56 victims dead and 98 wounded, including government workers, security forces and bystanders, said Salahuddin health director Dr. Raied Ibrahim. Many died in the volleys of gunfire and explosions.

Among the dead were councilman Abdullah Jebara, a vocal al-Qaida foe; the council’s health committee chairman, Wathiq al-Samaraie; and Iraqi journalist Sabah al-Bazi, a correspondent for Al-Arabiya satellite TV channel and a freelancer for CNN and Reuters.

Members of Iraq’s parliament immediately called for an investigation into how the band of eight or nine insurgents could pull off the attack and paralyze a mostly-Sunni Muslim city that was once a hotbed for al-Qaida in Iraq and Saddam sympathizers. Tikrit is the capital of Salahuddin and is located 80 miles (130 kilometers) north of Baghdad.

Hillary: U.S. May Arm Rebels

March 29th, 2011 at 4:04 pm Comments Off

The Guardian reports:

Hillary Clinton has paved the way for the United States to arm the Libyan rebels by declaring that the recent UN security council resolution relaxed an arms embargo on the country.

As Libya’s opposition leaders called for the international community to arm them, the secretary of state indicated that the US was considering whether to meet their demands when she talked of a “work in progress”.

The US indicated on Monday night that it had not ruled out arming the rebels, though it was assumed this would take some time because of a UN arms embargo which applies to all sides in Libya.

But Clinton made clear that UN security council resolution 1973, which allowed military strikes against Muammar Gaddafi’s regime, relaxed the embargo. Speaking after the conference on Libya in London, Clinton said: “It is our interpretation that [resolution] 1973 amended or overrode the absolute prohibition of arms to anyone in Libya so that there could be legitimate transfer of arms if a country were to choose to do that. We have not made that decision at this time.”

Clinton’s remarks came after the Libyan Transitional National Council used the London conference to issue a plea to be armed.

Mahmoud Shammam, the council’s head of media, told a press conference at the Foreign Office: “We asked everybody to help us in many ways. One of them is giving our youth some real weapons.

Schumer Caught on Open Mic

March 29th, 2011 at 4:01 pm 21 Comments

The New York Times reports:

Um, senators, ever heard of the mute button?

Moments before a conference call with reporters was scheduled to get underway on Tuesday morning, Charles E. Schumer of New York, the No. 3 Democrat in the Senate, apparently unaware that many of the reporters were already on the line, began to instruct his fellow senators on how to talk to reporters about the contentious budget process.

After thanking his colleagues — Barbara Boxer of California, Benjamin L. Cardin of Maryland, Thomas R. Carper of Delaware and Richard Blumenthal of Connecticut — for doing the budget bidding for the Senate Democrats, who are facing off against the House Republicans over how to cut spending for the rest of the fiscal year, Mr. Schumer told them to portray John A. Boehner of Ohio, the speaker of the House, as painted into a box by the Tea Party, and to decry the spending cuts that he wants as extreme. “I always use the word extreme,” Mr. Schumer said. “That is what the caucus instructed me to use this week.”

A minute or two into the talking-points tutorial, though, someone apparently figured out that reporters were listening, and silence fell.

Obama to Announce Reelection Bid in Three Weeks

March 29th, 2011 at 3:55 pm 5 Comments

National Journal reports:

President Obama is fewer than three weeks away from formally announcing his reelection campaign, and will make it public with an online video his aides will post on his new campaign website, Democratic sources familiar with the plans said.

Obama’s team will try to keep the exact date and time a surprise, letting supporters know first by text message and e-mail. By that point, Obama would have opened his campaign account with the Federal Election Commission.

But a major Democratic National Committee fundraiser is set for April 14 in Chicago, and Democratic donors are being told that it will coincide with the announcement. Obama will attend the event.

The campaign-in-waiting, led by manager Jim Messina, will use the announcement as a mechanism to organize online, test responses, and perhaps even solicit donations.

Obama advisers envision the next year as a series of phases. The first is to get the operation up and running.

Senior campaign officials are hiring the teams that will poll, broadcast ads, and conduct research.

Many faces will be the same.

Joel Benenson, the Democratic pollster, will once again serve as Obama’s lead surveyor. But a Democrat familiar with the matter said that Cornell Belcher will play a larger role in that operation than he did in 2008.

Larry Grisolano, who led the paid media effort in 2008, will take the same role in 2012, albeit with an elevated title. It is not clear, however, whether Jim Margolis, who created many memorable Obama television advertisements and videos in 2008, will lead the broadcast part of the team. David Axelrod, of course, remains the senior message-setter.

The DNC will serve as the primary vehicle to bracket Republicans, but they will do so selectively, picking spots, rather than comprehensively.

The campaign will spend the summer and fall building capacity. Bundlers will secure pledges from donors and the DNC’s Organizing for America arm will transition to electoral mode. The White House will lead the messaging effort—Obama will be presidential—and there will be few press releases from the campaign, save for the announcement of fundraising totals and staff hires.

Two former White House aides, Sean Sweeney and Bill Burton, are expected to form an independent political group that is expected to morph into the vehicle for outside expenditures during the campaign. In the wake of the Supreme Court’s loosening of campaign-finance laws, Obama’s team has decided that it will not unilaterally deprive itself of a weapon that Republicans used to batter Democrats in the 2010 election. In 2008, the Obama campaign strongly discouraged the formation of any outside group, preferring to centralize messaging inside a tight circle of advisers in Chicago.

Are American Workers in a Great Stagnation?

March 29th, 2011 at 2:56 pm 14 Comments

Economist Tyler Cowen, of whom I’m generally a big fan, has summarized an interesting post by Michael Mandel suggesting that recent claims of productivity growth have been illusory.  Cowen ends by trumpeting Hamilton Project analyses claiming to show that men’s earnings declined by 28 percent between 1969 and 2009.  This claim, like the Mandel analyses, reinforces Cowen’s argument that we are in a Great Stagnation, but it’s not true!  Stop this meme!

I’ve not had much time to blog recently, so I submitted a brief critique in the comments to the David Leonhardt blogpost that introduced the world to this unfortunate study (co-authored, unfortunately, by a fellow classmate of mine from Harvard’s inequality program) and in the comments to the Hamilton Project post.

Here’s the basic problem: the analyses assign all nonworking men annual earnings of $0, and since labor force participation among men has declined, the result is a big drop in median earnings over time.  But a lot of that decline in labor force participation is attributable to earlier retirement (they include men as old as 64), later and longer school enrollment (they include men as young as 25), rising “disability” rates (which do not correspond in any obvious way with changes in health or job demands but which do correspond with increasing generosity in disability benefits), and other factors having nothing to do with the strength of labor markets.

I re-crunched the numbers as follows.  I included all men age 20 to 59 except for those who said they worked only part of the year or not at all because they were retired, going to school, in the Armed Forces, sick or disabled, or taking care of home and family.  Using the inflation adjustment that the Hamilton guys likely used, I find a decline in median earnings of 9 percent, not 28.

Note, however, that comparing 1969 and 2009 holds up a likely peak year (when the business cycle was at a high) to a trough year (when it was at a low).  Comparing 1969 to 2007 is apples-to-apples, and when I did that, the median was exactly the same in both years (to the dollar, which is a pretty crazy coincidence).  Finally, if I use the Bureau of Economic Analysis “personal consumption expenditures” deflator, which I think overstates inflation somewhat less than other commonly-used deflators, median earnings among men rose 7 percent from 1969 to 2007.

Seven percent is no great shakes, but this figure is also too small for assessing how men’s economic fortunes have changed over time.  None of these analyses account for the fact that as a group, husbands reduced their hours over time in response to rising work and wages among wives.  Nor do they account for the rising share of non-wage benefits in total compensation (health and retirement benefits have eaten into wages, presumably following the preferences of the median worker).  Nor do they include the impact of taxes (which have declined) and tax credits (which have increased).  In addition, even my figures may overstate inflation, thereby understating the earnings increase over time–inflation measurement is much more tricky when choices within categories of goods and services and retail outlets explodes. Finally, the analyses do not account for changes in the composition of the population.  For instance, the fact that more men today are nonwhite and foreign-born pushes the 2009 median down, but it is likely that the typical white, nonwhite, native-born, and foreign-born men are all doing better than the trend in the overall median implies.  Someday I’ll get to a full analysis.

Subject for discussion (and a future post): how are we as a nation supposed to clearly understand the state of the economy and our living standards when even moderate think tanks and researchers are so eager to hype negativity?  As I’ve said before, policymakers aren’t the only people who–individually or collectively–can talk down the economy.


No Bailouts for Incumbents

March 29th, 2011 at 2:27 pm 1 Comment

The Supreme Court in McComish v. Bennett and a companion case, is addressing an Arizona law that attempts to “equalize” speech in political campaigns.

The Arizona law is in many ways a state analog to a scheme struck down in Davis v. Federal Election Commission. The “problem” being addressed is the advantage that well-funded candidates have over less well-funded candidates.  The law at issue would boost public spending for one side if the other side spent more of its own money.  The idea is that rich people have an advantage over poor ones in running for office.

In actuality this acts as an incumbent protection scheme.  Incumbents live in fear of a well-funded rich candidate running against them.  They have built-in name recognition and political networks that a challenger normally does not.  In fact, it’s a good idea whenever reviewing a campaign finance law to look at it as a conspiracy to weaken non-incumbent challengers.  That is what they almost always turn out to be because of who is actually passing them.

Now, from one kind of conservative standpoint this promotes stability as it impedes elective turnover.  From a First Amendment standpoint it has some problems.  Why should anyone be taxed to fund a candidate and speech he disagrees with?  To tax Keith Olbermann to fund Patrick Buchanan’s campaign, and to tax Rush Limbaugh to fund Al Sharpton’s campaigns is unjust.

Second, the First Amendment does not contemplate the government making an even playing field for ideas.  In fact, this would put government in the position of assuming all ideas and candidates are equally good.  This is the exact opposite of  Brandeis’s First Amendment theory that good ideas will have more support in a free marketplace of ideas than bad ones.  There should be no subsidy for bad ideas.

Nor can this be taken as a preference by this Court for the rich.  Back in the 1970s in Buckley v. Valeo the Burger Court ruled that the government could not prevent a man from spending his own money on his own campaign.  The present court makes speech by others on behalf of a candidate possible and unregulated.  Good candidates can attract such support.  After all how did a little know first term Senator attract enough money to overthrow the Clinton dynasty?


U.S. Open to Qaddafi Exile Deal

March 29th, 2011 at 1:56 pm Comments Off

ABC news reports:

Is there a deal in the works to give Moammar Gadhafi safe haven out of Libya?  Lots of tantalizing clues out there this morning, with the NY Post and the Times of London reporting that Italian officials are developing a plan that would grant Gadhafi immunity from war crimes prosecution if he goes into exile.  And when I asked UN Ambassador Susan Rice about the idea on this morning’s “GMA”, she opened the door pretty far.

“The expectation, both of the Libyan people and the international community is that there needs to be justice for the crimes that are committed,” she said. “But obviously should there be an opportunity for some sort of arrangement for Gadhafi to step aside that is something the Libyan people will have to judge and we will take it as it comes.”

Rice suggested twice that the U.S. would follow the lead of the Libyan rebels. If they’re ok with the deal, all indications point to the U.S. signing off too. Administration officials also say that the U.S. is still getting feelers about a peaceful endgame from people close to Gadhafi. Amb. Rice didn’t deny that either, but said the U.S. needs to see something more concrete.