Relevant and even prescient commentary on news, politics and the economy.

A Caesura in Canadian Opposition

[Expletive Deleted].

It will be interesting to see whether the Libya of Brad DeLong and Juan Cole’s beliefs produces a respectable opposition leader—one of the surer signs of rule by the people—before Canada does.*

UPDATE: Via Amy Wilkins Twitter feed, Layton’s final words. Can anyone imagine the 2011 Obama** being able to say this:

You decided that the way to replace Canada’s Conservative federal government with something better was by working together in partnership with progressive-minded Canadians across the country. You made the right decision then; it is still the right decision today; and it will be the right decision right through to the next election, when we will succeed, together…

All my life I have worked to make things better. Hope and optimism have defined my political career, and I continue to be hopeful and optimistic about Canada….More and more, you are engaging in politics because you want to change things for the better. Many of you have placed your trust in our party. As my time in political life draws to a close I want to share with you my belief in your power to change this country and this world. There are great challenges before you, from the overwhelming nature of climate change to the unfairness of an economy that excludes so many from our collective wealth, and the changes necessary to build a more inclusive and generous Canada. I believe in you. Your energy, your vision, your passion for justice are exactly what this country needs today. You need to be at the heart of our economy, our political life, and our plans for the present and the future. [emphasis mine]

*I said “respectable.” This does not include the Liberal Party for as long as they are led by Michael Ignatieff, to whom this post was Far Too Nice.

**I’ll be nice to those of you who thought that Obama was anything other than a Corporatist from the start.

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Bachmann-Perry Overdrive, the Snag, and Other Notes

The real story of Michelle Bachmann’s “win” in the Iowa straw poll (not to be confused with the Iowa primary) isn’t that she got just over 4,800 votes—it’s that she paid for 6,000, proving at least 1,200 Iowa straw pollers are smarter than most of the reporters covering her “win.”

Late to the party mention: The Kauffman Institute’s Blogger Survey results are here (I hope).

The people who rant about 51% of Americans “paying no income taxes” are strangely silent about the fact that more than two-thirds of corporations don’t pay any—and they aren’t subject to Social Security or Medicare/Medicaid taxes either.

More Dr. Seuss is good, though “newly enhanced Seuss illustrations” sounds suspiciously like a step beyond even the later collaborations, such as The Butter Battle Book.

Robert (at least on his FB feed) is trying desperately to be nice to Matt Yglesias. I’m not, since Matt “I’ve never attended a public school so I know what’s wrong with them” Y. continues to fool himself about “the need for education reform” and refuses to pay attention to the research that shows most of those “reforms” his hedge-fund buddies are championing have been tried and failed. Jersey Jazzman does the heavy lifting here and (especially) here, while Bruce Baker notes the core of the Charterist argument.

Want a clear explanation for why people become writers or, if they don’t write well enough, bloggers? Jason Albert in, of course, Slate explains his own ego.

(The idea that maybe we need a third category of uncreative typist—Slate columnists—rises up when they try to make an economic argument without understanding sunk costs. But giving them any more pageviews would be a violation of the Douthat Rule.)

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It’s Not that the White House Lies Even to Itself…

It’s that they are so bad at it.

At least they made clear that Glenn Greenwald was correct when he said the deal is exactly what Obama wanted:

Fact: President Obama laid out key priorities that had to be part of any deal. Those priorities are reflected in this compromise.…the initial down payment on deficit reductions does not cut low-income and safety-net programs such as Medicare, Medicaid, and Social Security. Third, we set up a path forward that will put pressure on Congress to adopt a balanced approach. And finally, we raised the debt ceiling until 2013, ensuring that House Republicans could not use the threat of default in just a few months to force severe cuts in Social Security, Medicare, and Medicaid. [emphasis theirs]

Uh, yeah, about that “we protect Medicare shtick.” Maybe you should try actually saying that in public, or in negotiations.

And they play with straw men:

when push came to shove, Republicans backed down on their key demands. For months, Republicans called for a budget that would have ended Medicare as we know it, made catastrophic cuts to Medicaid, or cut investments in education by 25 percent, clean energy by 70 percent and infrastructure spending by 30 percent. As if that wasn’t enough, they also demanded that we repeat this debt-ceiling crisis, just a few months from now.

Gosh, I feel so “protected” now. Instead, the White House agreed to cut education loans, sidebarred the EPA discussion until they can lose that (h/t Mark Thoma) (having already surrendered on a “market-based” energy solution), and had Goolsbee lying to Jon Stewart last night about how there will be a National Infrastructure Alliance that will work in the same manner as TARP.

With friends like this, who needs enemies?

In a related aside, Dow 3,600 anyone?

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Mark Thoma Has Become a Fiery, Liberal Spirit

Mark Thoma joins Dr. Black, putting him one-up on some Liberal Bloggers Who Should Know Better.* Thoma:

1. You have to make the Republicans pay in terms of eroded public support before they will agree to cooperate at all. The president in particular has not played a long-run strategy, the Republicans have, and the results reflect this.
2. “Let’s agree that what matters isn’t how many jobs you ‘get caught trying’ to create.” Why should I agree to take as given the point being debated here? When we need jobs as bad as we do right now, making it clear the other side is standing in the way of that goal, and fighting for the policies you’d like to enact has more value than it did in the past.

3. To me, this is about leaders and followers, and the administration is not the one leading policy right now.

4. The other side is not shy about going public, and that was also true when they controlled the White House. If this advice is correct, why didn’t it hurt Republicans when they were in power?

5. Yes, jobs at election time would be best. But if the other side is pushing policies that work against that goal so that it is unlikely to be attained…making that clear to the public would hurt. [slightly edited; emphases mine]

As Yves said, can Ezra Klein should stick to being (slightly less but still) wrong about health care?

At this point, the list of Obama Administration Unforced Errors—Summers, Geithner, John Walsh, lack of nominations, etc.; see here—is so long I would be willing to swear they put a one-armed man on the tennis court.

UPDATE: Contrast the Obama Administration statements (and lack of same) with today’s Press Release from CGI America:

Today, President Bill Clinton opened CGI America, hosting a plenary session on job creation and announcing new programs that will help foster economic growth in the U.S.

Speaking to more than 700 leaders from businesses, nonprofits, and government at the opening session, President Clinton announced three “Commitments to Action” that will be implemented by CGI America participants. These commitments, presented by Kiva, Visa, Onshore Technology Services, and the AFL-CIO, will expand access to microfinance, train workers, and fund infrastructure development.

“When these commitments are fully funded and implemented, 140,000 people will receive access to job training, 1,000 information technology jobs will be created in rural America, and $3.5 million will be loaned to small businesses in the U.S.,” President Clinton said. “Initiatives like these prove that organizations and individuals around the country have the power to take action to spur economic growth.”

CGI America is the first Clinton Global Initiative (CGI) meeting focused exclusively on the U.S. The purpose of the event is to develop new ideas for spurring economic growth and to highlight existing programs that can be replicated and scaled.

Can’t anyone in the current Administration—Tim Geithner is attending CGI America—understand that Bully Pulpits are Meant to Be Used? The last Democratic Administration did.

*I should be fair to Bernstein, but he perpetuates the horse droppings about “people want to see spending cuts and see them they will.” The unemployed innumerate vote, sometimes, and they’re not going to cheerfully vote for someone who keeps them unemployed by doing what they said they want. That’s not leadership, as David Frum (whose ex-boss knew even less about leadership than BarryO does) noted.**

**Frum’s claim that Obama is not imaginative enough is clearly bollocks, and his toughness (as distinct from his determination) should be unquestionable too. But “not determined enough” has rung true since his Senate days, and the bad Gerald Ford imitation is wearing thin even with those who were originally nostalgic.

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McKinsey Thought-Experiment: What If They Are Correct?

I’m not going to do this with graphics (at least for now), but the finger exercise seems intuitive.

Assume—against all evidence—that the “once we educated them, 30% said they would stop offering health insurance to their lowest-paid employees” study is accurate.

How does that, as John Boehner declares, cost America jobs?

From Boehner’s site:

At least 30 percent of employers would gain economically from dropping coverage even if they completely compensated employees for the change through other benefit offerings or higher salaries.

This should be intuitive. If the company is paying $1,000 a month for my family’s health care along with my $800 a month,* it can raise my paycheck by $1,000 a month—employee compensation is employee compensation—and cut back on its health care administration. If I’m not a health-care administrator, it’s win-win.**

Aside: Reality will interfere. If we make the Baumolian assumption that cost of health insurance will continue to grow faster than GDP—at a slower rate, probably, but still faster—I’ll give you odds that the labor share of revenues will decline, cet. par. over time. But we’re talking about jobs, not profits.***

Any economist worth her salt should know that lower costs of employment increase overall employment (assuming there is not a demand-side problem).

If the McKinsey “study” were accurate—again, not the way to bet—we should expect overall employment to increase. As with the Earned Income Tax Credit, the expansion of HIEs will benefit firms, allowing them to reallocate capital into more useful areas.

The follow-on effects in that universe: more people joining the HIEs than expected, improvements in the measurement of “real” wage growth, greater transparency in the current health-insurance system, and arguably a larger contingency of workers demanding something closer to a single-payer solution,**** all improve efficiency and provide opportunity for economic expansion.

Which is supposed to mean more jobs, not fewer.

If the McKinsey presentation accurately reflects what companies will do given the opportunity—think the Wal-Mart Effect Writ Large—then the prospects for employment will be, if anything, increased.

Greater political pressure for cost-reduction that leads to single-payer becoming more politically viable is just lagniappe.

*Not the real numbers, of course.

**If I’m a Benefits Coordinator, I don’t lose my job, and I get to spend more time working on ensuring that the firm is competitive in other areas. If I were doing an economic model of this against employment, I would bet that the coefficient would be small but positive, so let’s be generous and assume it’s equivalent to zero, i.e., no effect on employment supply.

As an aside, this was in part the reasoning behind the Bear Stearns “bag of rubber bands, box of paper clips, go buy all your own supplies” thinking. It didn’t necessarily save on corporate expenses directly, but it meant not having to manage that area of inventory.

***If anything, the extra profits, cet. par., facilitate business expansion and more hiring. That the multiplier effect will not be 1:1 simply reflects what a poor social investment private corporations are.

****More people forced to use the HIEs=> more people demanding similar plans across state lines => more demand for a larger uniform baseline (especially as families move from state to state) => more interest in cost controls => greater need to control Administrative expenses => disequilibrium in service demand and supply => demand for service efficiencies that result in either single-payer or, at worst, unified Servicer processing.

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Fo/u/r/ive Notes

For Mother’s Day, as it were, xkcd presents The Lawrence H. Summers Memorial History of Math and Science.

Buce at Underbelly does this, probably saving me the trouble of a post. (Consider this a SlothBear moment.)

The problem I want Drek the Uninteresting—or anyone else who knows the research—to address: if we assume that mercury in the vaccine wasn’t the cause of the rise in autism, what are the causes that have been identified?

Maligning Tony Kushner by the Trustees of CUNY while he is on the cover of the current issue of his alma mater’s alumni magazine probably was not a good idea.

Update: The one I left out earlier: the Second Quarter Kauffman Economic Bloggers Survey is out (warning: PDF). I’m especially thrilled by Mark Thoma’s victory (p. 12), though surprised that the margin was so small. Suggestions that the 35% who voted for the second-best option were desperately attempting to deny incompetence are, of course, beyond the pale.

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Is the President Reading Angry Bear?

AB, late Thursday:

If you want to stop a dictator from killing his people, freeze any of his personal assets that are held out of the country.

In cases where the dictator is likely to fall, it sends a clear signal to other countries. (In cases where the dictator is likely to succeed, the worst case scenario is that banking relationships will be damaged, a consideration that the domestic government would have considered before making the decision to freeze the assets in the first place.)

The purpose of financial in lieu of military intervention is to balance the tradeoff. A dictator whose funds will remain unencumbered no matter how many of his people he kills will not change his behavior. A dictator who stands to lose a large (and increasing) portion of $70 billion faces a scenario where extending his time in office may well appear too costly.

Treasury, Friday night:

On Friday evening, President Obama took decisive steps to hold the Qadhafi regime accountable for its continued use of violence against unarmed civilians and its human rights abuses and to safeguard the assets of the people of Libya.

The President issued an Executive Order freezing the assets of Muammar Qadhafi and four of his children, as well as the Government of Libya and its agencies, including the Central Bank of Libya and the Libyan Investment Authority – the country’s sovereign wealth fund.

I report. You decide.

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Cousin Brucie Bartlett Explains It All to You

In the context of Dan’s post below, I just want to repeat what Bruce Bartlett said so accurately yesterday:

[H]ere’s what I would be doing if I were organizing opposition to the Republican budgetary disinformation campaign. First of all, I would be holding hearings five days a week in the Senate Appropriations Committee and every other Senate committee on the impact of proposed Republican budget cuts. Whose benefits are going to be cut? What programs will be shut down? What are the real world consequences of the Republicans’ plans?

I have no idea and I have made an effort to try and find out. But there are undoubtedly people who know at the Office of Management and Budget and the various departments of government that are filled with assistant secretaries eager to testify before a congressional committee and respond in detail to the implicit Republican argument that spending can be massively cut without hurting anyone.

Another thing I would be doing is commissioning reports by the Congressional Research Service, the Government Accountability Office, and the Congressional Budget Office to provide data and analysis on the impact of Republican plans. And believe me, any request from the chairman of the appropriations committee gets the very careful attention of those who run these organizations for obvious reasons.

The next obvious step is to get all of the various organizations that represent farmers, defense contractors, health providers and so on to do their own analyses based on their intimate knowledge of how spending cuts will affect them. These people will also be more than happy to testify before a congressional committee on short notice.

Within a couple of weeks I think it would be very easy to put flesh on the bones of the Republican plans and mobilize the millions of people who will be affected but probably have no idea at this time that this is the case because no one has told them. I think the political dynamics could change quickly. But someone needs to get the ball rolling, get the analyses started, organize the hearings and so on. Why this isn’t already being done, is a complete mystery to me. [emphasis mine]

That no one has been willing or able to answer Mr. Bartlett’s question tells me all I need to know about who will be hurt by the cuts: the vast majority of the American people. We’re not just talking the people who scheduled a trip to DC after their kid was fascinated by Night at the Museum: Battle of the Smithsonian. We’re talking the kids, their parents, and their neighbors.

The silence from the DSCC members is deafening. And, in more than one sense of the word, Depressing.

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