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


The previous post does not mean that Syria is not a problematic nation–it is. But it always has been, and primarily for Israel, not the U.S. directly. And I believe Syria and the entire world know who wins if war breaks out between Israel and Syria, which tends to keep Syria somewhat in check.

This new drive to mention the “Syrian threat” at every turn is a pretty transparent effort at distraction, even for this administration. After all, if Syria were such a threat, why did we invade a country without any actual weapons of mass destruction? Still, expect the administration to continue using such diversionary tactics until they stop working.


Comments (0) | |

Texas Special Session Number Three–Now with Democrats!

On day one, Democrats had their mike cut, got “quick-gavelled”, sang “Nobody Knows the Trouble I’ve Seen,” and one was warned that her car would be towed if it remained parked at the Capitol (Democrats lose parking and other privileges until they pay the $57,000 fines, each, that the Republicans imposed during the boycott).


Comments (0) | |

Krugman Interview

Calpundit interviewed Paul Krugman, who was on tour promoting his book over the weekend. The entire transcript is here; it appears they talked for quite a while. In case you were wondering but you don’t have time to read the whole thing, here’s the big question and answer:

KEVIN: If you were king of the economy, what’s the Krugman plan?

KRUGMAN: A phased elimination of all the Bush tax cuts, plus some additional taxes. I’d probably look first at some way to make the corporate profits tax actually effective again — the nominal rate is 35% but the effective rate is only 15% or so. Look at some cuts, maybe you start to talk about retirement age, and possibly some means testing of Medicare, and that’s enough to bring the budget under control. And meanwhile you have to manage the economy, you have to talk about what we can do to actually get demand going faster, and there are lots of things you can do….

Of course, for anything remotely like that to happen, Democrats would have to control both houses of Congress and the Presidency, and even then the changes in the retirement age and means-testing for Medicare are unlikely. Krugman makes a good case that there a lot of things that can be worse than a top marginal tax rate over 33% and a tax on the countries wealthiest estates: inflation and high interest rates, for example.


P.S. Some may also find this interesting:

I’m on the web, I read Josh Marshall regularly, and Atrios regularly, and I read you [CalPundit] occasionally, once every couple of days so I know what’s going on.

UPDATE: Link fixed.

Comments (0) | |

The Civil Service Laws

Republicans often deride the Civil Service Laws as creating a giant union of inefficient government employees, and in a very small way, they are right. It is in fact hard, though not impossible, to fire protected government workers, and that can lead to instances of startling incompetence. But that factor is partly offset because managers, knowing they will later find it difficult to fire bad workers, will place more emphasis on pre-hiring screening. In any case, Republicans generally cite such obstacles to hiring and firing as reasons to, in the interest of “flexibility,” weaken or remove the Civil Service rules.

However, the Civil Service statutes serve another, and in my opinion, even more important purpose: ensuring that hiring and promotion decisions are made on the basis of competence rather than political patronage. So when I see Republicans weakening the Civil Service laws, I often suspect that some of the motivation is to facilitate patronage hires of political favorites.

Henry Waxman explained the issue well, in a May 2003 letter to Tom Davis (R-VA), chairman of the House Committee on Government Reform. At the time, the Dept. of Defense was seeking (I believe successfully) to get exemptions from the Civil Service statutes similar to those that the Homeland Security Department’s:

Until the Civil Service Act of 1883, federal jobs were often awarded through the spoils system. Civil service jobs went to supporters of elected officials and loyal party members, which often led to incompetence and corruption.

We’ve come a long way since 1883. But we’re about to embark on a path that will reverse many of the legislative accomplishments of the past century. Today, we begin the process of stripping away the fundamental rights of one-third of federal civilian employees. And in doing so, we’ll be opening the door for the rest of the federal workforce to have their rights taken away as well. That’s wrong. As yesterday’s hearing demonstrated, members on both sides of the aisle agree that the Defense Department needs certain flexibilities to allow it operate more effectively and more efficiently. But the bill we’re considering today goes well beyond those flexibilities. The Defense Department seeks blanket waivers from large parts of the civil service laws.

Why do they need such broad waivers? No one seems to know. At two hearings in this Committee and one hearing in the Armed Services Committee, members have asked DoD to justify its desire to be exempt from large portions of the civil service laws. … Mr. Wolfowitz explained that it would be more efficient to bargain at the national level, instead of the local level. … But when we asked Mr. Wolfowitz why the Department needed to be exempt from all collective bargaining responsibilities, he had no answer. He simply said that DoD should get this authority because the Department of Homeland Security got the same authority.

This reminds me of how kids behave. One child wants something just because his brother or sister got it, not because he needs it. Giving into that kind of logic is no way to be a parent, and it’s certainly no way to be a legislator.

So what’s the real Republican motive behind the attacks on the Civil Service Laws? Flexibility or Patronage? Until yesterday, I always thought mostly the former but a fair bit of the latter. As the hiring of the loony, lying, partisan, and incompetent (but virulently anti-Clinton) L. Jean Lewis clearly demonstrates, I had the weights exactly wrong. (Story here; discussion and links here and here).


Comments (0) | |

Electronic Voting

This CNN story, Gaffe casts doubts on electronic voting, is a bit dated but important. In a nutshell, Diebold Election Systems Inc. is the leading vendor of electronic voting machines, particularly touch-screen voting machines. Diebold’s machines have already been hacked (not in an actual election) and, as CNN reports, Diebold recently posted the results of absentee votes for an election in San Louis Obispo, CA hours before the polls were closed.

The odd part in all this is that Diebold, for some reason I’ve never heard explained, is opposed to having its system keep a paper record of the votes-for example, a simple step like having the machines print and store a hard copy of each voters’ selections (or maybe the voter would review the hard copy and drop it in a box, though that increases the likelihood of a discrepancy). At the end of the day, the number of hard copies at each machine should equal the number of recorded electronic votes. If so, then electronic tabulation can proceed. If not, then the print-outs are counted manually. ATM machines have been doing something similar for decades. Has anyone heard why voting machine makers oppose this?

The Diebold FAQ does not address this question. However, it does say that “[The Diebold software’s] process eliminates the need for the generation and storage of paper ballots for use with provisional voters,” which leads me to suspect that the Diebold marketing people fear that states and municipalities would see little reason to buy Diebold machines if they still produce paper. I think that’s misguided because, paper or not, touch-screen voting would still prevent over and under votes while also dramatically increasing the speed and accuracy of the count. But if a hacker breaks into the system, or even alleges to have done so, there needs to be a hard copy of all the ballots. It’s so common sensical that it’s sure not to happen.


Comments (0) | |


Dick Cheney on Sunday (from the Washington Post):

“If we’re successful in Iraq . . . then we will have struck a major blow right at the heart of the base, if you will, the geographic base of the terrorists who had us under assault now for many years, but most especially on 9/11,” he said in an hour-long interview on NBC’s “Meet the Press.”

Iraq was the “geographic base” for 9/11? Here’s another rather egregious statement:

Asked about his earlier dismissal of Gen. Eric K. Shinseki’s prewar view that an occupation force would have to be “on the order of several hundred thousand soldiers,” Cheney replied: “I still remain convinced that the judgment that we will need, quote, ‘several hundred thousand for several years,’ is not valid.

In fact, Shinseki had not mentioned “several years” in his testimony to the Senate Armed Services Committee on Feb. 25.

But wait, there’s more. After speculating for a while about Iraq/al Qaeda links, Cheney refused to speculate about Saudi Arabia:

“I don’t want to speculate,” he said, adding that Sept. 11 is “over with now, it’s done, it’s history and we can put it behind us.”

Also, this exchange did not make the Washington Post story, but it’s in the transcript of the Russert interview:

MR. RUSSERT: Democrats have written you letters and are suggesting profiteering by your former company Halliburton and this is how it was reported: “Halliburton, the company formerly headed by Vice President Cheney, has won contrast worth more than $1.7 billion under Operation Iraqi Freedom and stands to make hundreds of millions more dollars under a no-bid contract awarded by the U.S. Army Corps of Engineers, …Were you involved in any way in the awarding of those contracts?

VICE PRES. CHENEY: Of course not, Tim. Tim, … when I ran Halliburton for five years and they were doing work for the Defense Department, which frankly they’ve been doing for 60 or 70 years, I never went near the Defense Department. I never lobbied the Defense Department on behalf of Halliburton. … And since I left Halliburton to become George Bush’s vice president, I’ve severed all my ties with the company, gotten rid of all my financial interests. I have no financial interest in Halliburton of any kind and haven’t had now for over three years. And as vice president, I have absolutely no influence of, involvement of, knowledge of in any way, shape or form of contracts led by the Corps of Engineers or anybody else in the federal government…


UPDATE: To see the president in action, click here.

Comments (0) | |

It’s Your Children’s Money. Quick, Take It!

When it comes to the federal deficit, there are few free lunches. What we don’t pay for today, we and our children will pay for tomorrow, with interest–the birth tax:

When President Bush informed the nation last Sunday night that remaining in Iraq next year will cost another $87 billion, many of those who will actually pay that bill were unable to watch. They had already been put to bed by their parents.

How big is the Bush Birth Tax overall? Roughly $7.9 trillion and counting:

The $5.6 trillion surplus once predicted for the 10 years ending in 2011 is now a $2.3 trillion cumulative deficit under the best-case prediction issued by the Congressional Budget Office two weeks ago.

That’s right, when a child is born in the currrent decade, she starts out $28,000 more in the hole than she would have without the Bush deficits. (Presumably “best case” means “if tax cuts that are scheduled to sunset really do, and if the economy grows very rapidly–the latter is unlikey, and the former is a thousand-to-one longshot).

And it’s not just Republican tax cuts that are to blame, there’s also Republican spending:

The conservative Cato Institute noted tartly last month that Mr. Bush had never vetoed a spending bill, had advocated huge farm and Medicare programs and had presided over double-digit increases in spending each year of his term. Barely a month goes by when House Republican leaders do not propose a new form of tax cut, and Congressional Republicans join the administration in saying they fully intend to extend the tax cuts that are now scheduled to expire in 2005, which would add another $1.6 trillion to the cumulative deficit by 2013.

If taxing and spending is bad, and it often is, not taxing and still spending is worse. At least when spending is financed by tax hikes, there’s a political price to be paid and the dollars have to be justified, so there’s a check built into the process. When the government finances spending with deficits the bill comes due later–after the next election–so there’s much less of a political cost and thus much less restraint.

Another nugget from the Times story, which gives a good summary of how we got to where we are now:

“Once the gridlock was broken, it was hard when staring at the surplus to argue that there shouldn’t be a tax cut,” said Mr. Reischauer, now president of the Urban Institute. “Of course there was debate about who should get what share of it. But because there seemed so much certainty about the persistence of these surpluses, there wasn’t a proper caution that would have led lawmakers to say, `We don’t know what the situation will be in the next downturn, we don’t know the priorities of future Congresses, so we should not have a set of tax cuts that phase in over a 10-year period.'”

I seem to recall one candidate in the 2000 election making the exact argument (underlined) that Mr. Reischauer says lawmakers were not led to make. Here’s a (Hint: Gore’s economic plan called for “[Setting] aside $300 billion of the surplus as a reserve in case rosy projections do not materialize.”)

Bush will surely try to blame his deficits on the economy and the war on terror, but while it’s been a jobless recovery, the economy has not been in a recession as traditionally measured (by GDP growth). GDP growth has been modest, meaning that without tax cuts, tax revenue growth would have been positive. Instead, the government now spends more and collects less. For more numbers, see this post, where I also did a ballpark allocation of responsibility for the deficit and conservatively estimated the Bush administration’s share of that blame at two-thirds.


Comments (0) | |

The Consequences of Tax Cuts

Paul Krugman has a piece in this weekend’s New York Times Magazine about the long-term consequences of the Bush tax cuts. His argument is one that has been made elsewhere, but is nevertheless compelling: the Republican tax cuts have intentionally set the US on the path that will lead to the end of the social safety net. Here’s an excerpt:

The advocates of tax cuts are relentless, even fanatical. An indication of the movement’s fervor — and of its political power — came during the Iraq war. War is expensive and is almost always accompanied by tax increases. But not in 2003. ”Nothing is more important in the face of a war,” declared Tom DeLay, the House majority leader, ”than cutting taxes.” And sure enough, taxes were cut, not just in a time of war but also in the face of record budget deficits. Nor will it be easy to reverse those tax cuts: the tax-cut movement has convinced many Americans that everybody still pays far too much in taxes.

A result of the tax-cut crusade is that there is now a fundamental mismatch between the benefits Americans expect to receive from the government and the revenues government collects. This mismatch is already having profound effects at the state and local levels: teachers and policemen are being laid off and children are being denied health insurance. The federal government can mask its problems for a while, by running huge budget deficits, but it, too, will eventually have to decide whether to cut services or raise taxes. And we are not talking about minor policy adjustments. If taxes stay as low as they are now, government as we know it cannot be maintained. In particular, Social Security will have to become far less generous; Medicare will no longer be able to guarantee comprehensive medical care to older Americans; Medicaid will no longer provide basic medical care to the poor.

It’s an extreme scenario, but Krugman may have a very good point. Could the Bush tax cuts really be part of a deliberate plot to dismantle Social Security and Medicare? After all, the Republicans no longer even pretend to have any idea about how to balance the budget anytime in the next 10 years. I’d love to hear someone ask President Bush how and when he expects the budget to be balanced. While they’re at it, I’d love it if they also asked President Bush how much tax revenue he thinks the government should collect. According to some of the things he’s said in the past, I wouldn’t be surprised if it’s zero.

Which is why he is sure to continue appealing to the voters of Alabama.


Comments (0) | |