A Thousand Or So Words Of Despair On Health Care Reform

I may have dismissed the difficulties in paying for health care and the time frame a little prematurely. To be sure, it's a problem. Not the nature of the revenue ideas themselves - a surtax on the wealthy may work, although I'd prefer to go back to President Obama's idea to lower the charitable deduction, and Matt Yglesias explains why:

When possible, it’s better to raise money by broadening the tax base—curbing loopholes, deductions, and exemptions—than by simply raising the rates. The reason is that higher rates on a narrow base do a lot to encourage people to shift income into loopholes, which both undermines your revenue-raising efforts and also distorts the economy. Both the employer tax exclusion proposals and the itemized deductions proposal fit that good model.

The problem is that we're pretty far down the road on the various bills and we're still trying to figure out how to pay for it, which suggests to me that Congress doesn't want to make any hard choices on it. They have a bunch of ideas, but no real strategy. And they've taken the employer deduction off the table because unions don't want to give back what they already have, which makes sense for them but not necessarily the country.

One related point I'd make on this is that there is, in progressive circles, a tendency to confuse the interests of labor unions and the interests of progressivism. The two things often overlap. But they are not, in fact, the same. And that's okay. But this is very much one of those cases. The employer tax exclusion is regressive. It gives employers more power over workers. It reduces choices, fractures the system and increases health-care costs (which in turn decreases wages). Unions are protecting what they have, and that's their right. But protecting the employer-based health-care system, particularly at the expense of a regulated and integrated alternative, is not a terrifically progressive thing to do.

And without changing the incentives in health care and reversing the dynamic of doctors ordering more, insurance companies trying to pay for less and employers still paying the bulk of the costs in an inefficient way, we're not reforming health care. We're just expanding coverage and heading toward the same fiscal iceberg. Which is important in its own way, but not a full solution.

And meanwhile, as the timing of the bill slips, conservatives get emboldened and start running ads in the districts of key Senators. Blue Dogs and Conservadems get cold feet and start looking for ways to deep-six the bill. The problem in that case is that the answer to the Blue Dogs' entreaties would be more reform, which they don't want either.

The emerging bill "lacks a number of elements essential to preserving what works and fixing what is broken," 40 members of the Blue Dog Coalition of moderate to conservative Democrats wrote in a letter to party leaders. To win their support, they said, any legislation would need to be much more aggressive in reining in the growth of health care.

A public option and capping the employer deduction would go a long way for that, but they're against that, too.

Meanwhile, the White House is making all these deals with stakeholders that may have strings attached that would preserve their revenue streams and fail to rein in health care costs. Take a look at this, for example:

The Wall Street Journal reports: "Industry representatives met at the White House Tuesday with officials to consider specifics of a cost-saving agreement the industry reached last month with health-care negotiators and to discuss other concerns that the pharmaceutical industry has with the larger health-care overhaul being considered by Congress. As a presidential candidate, President Barack Obama endorsed re-importation, an idea the industry opposes. White House officials have told the industry if the larger health care bill passes, the cost savings will be so great that reimportation will be unnecessary, according to Billy Tauzin, president of the Pharmaceutical Research and Manufacturers of America." Some of the pharmaceutical companies represented at the Tuesday meeting included Merck & Co., Pfizer Inc., Amgen Inc., Abbott Laboratories and AstraZeneca.

The Wall Street Journal notes: "Sen. Bernie Sanders, an independent from Vermont, said he disagrees with any move to drop the reimportation idea. He has pushed to import drugs from Canada, where they are cheaper because of price controls" (Mundy, 7/7).

Are we going to side-deal ourselves to death here? Will we assure medical equipment makers that we will not ensure comparative effectiveness research that would align costs with results instead of the mish-mash we have today? Will we deal with hospitals but leave the full picture of how they rein in costs unanswered? Who will decide the limits to the system, and the tough choices around end-of-life care, now managed by insurers?

The major problem we are running into with health care is that the political class is so obsessed with allowing everyone to keep what they have, and not putting enough emphasis on the system's unsustainable course, that they risk wringing all the benefit for real people out of the bill, and at that point, it can tip over and die.

This isn't terribly surprising: it's not obvious what health-care reform will do for the average American. I could give you a long answer about delivery system reforms and so forth because it's my job to know these things. But it would have to be a long answer. The basic structure of health-care reform has been specifically built to avoid changing people's existing arrangements. The hope was that Americans would be convinced that their health-care coverage wouldn't change for the worse. But that's also made it hard to explain why it will get better.

One of the president's health-care reform principles is that everyone must be able to keep what he or she currently has. But that means we're not really going to change, or improve, what they have. And that means they're not getting much in the way that's new. Higher taxes aren't buying them obvious benefits. Instead, they seem to be paying the health-care bills of poorer Americans.

If support for the overall effort were more robust, the polling on the tax exclusion would matter less. People are willing to pay for things they want to buy. But though they might abstractly favor health-care reform, it doesn't seem directly related to their lives.

This is the problem of liberalism since the Great Society - people don't feel like they're getting anything for their payments to government, because Democrats have stopped pushing for anything tangible for everyone. A reform constructed to expand coverage for the poor without something tangible for everyone - like a public option to bring down premium costs and not wed people to their job for the health benefits - just will not pass. It has no shot. Because the public needs convincing that they have something at stake in this reform.

The End Of The Roland Burris Era

Roland Burris has decided not to run for election to the US Senate from Illinois. Also, from his jail cell, Charles Manson has passed on a Congressional run. And that guy who accidentally caught the ball to ruin the Cubs' World Series chances is begging off a run for Alderman of Wrigleyville.

All of these announcements have about the same element of surprise. Burris raised $845 in the first quarter of the year, and the rumor was that the second quarter wouldn't be much better. He'll go down in history as one of the oddest characters to wind up in the world's most deliberative body (by the way, they can be less deliberative, we won't mind).

So who will take his place in the Obama seat in the Senate? Attorney General Lisa Madigan, who would have been a lock, passed on the race, and moments later, Republican Congressman Mark Kirk jumped in. Kirk represents a moderate district and some in Illinois think he would be formidable for either State Treasurer Alexi Giannoulias or Kennedy spawn Chris Kennedy. This could be a tough race for the Democrats, but Giannoulias' ties to the Obama Administration can hopefully help get him across the line.

I'll tell you, the news has not been hopeful for Democratic Senate races lately. Obviously there's lots of time and it'll all depend on the economy, but considering the state of the Republican Party and the number of seats the GOP has to defend, this cycle is starting to look like an opportunity lost.

They should grant early release of the whole parole system

Today's LA Times story about a handful of prisoners released with 60 days or less remaining on their sentences probably raises hackles on the backs of the necks of the Tough on Crime crowd, but it really shows how fundamentally broken the state's prison system remains. Because look what the charges were on all of the prisoners released.

Reporting from Sacramento -- California prison officials, facing severe overcrowding and a financial crisis, have been granting early releases to inmates serving time for parole violations.

State officials said the dozens of prisoners set free from the California Institution for Men in Chino and from lockups in San Diego and Shasta counties had 60 days or less left on their terms, or had been accused of violations and were awaiting hearings. The releases were approved by the state parole board.

At least 89 inmates have been freed or approved for early release during the last two months. Others have been sent to home detention, drug rehabilitation programs or similar alternative punishments.

It's not an anomaly to see just 89 inmates charged with parole violations. In fact, more than two-thirds of all prisoners admitted to state prisons in 2007 commit the crime of violating parole guidelines. This is at least twice as many as virtually any other state.

On average, the nation's state and federal prisons took in almost two new offenders for every parole violator, but in California, the reverse is true. In 2007, California prisons took in 139,608 inmates and 92,628 of them were parole violators, almost a 2-1 ratio. In only one other state, Washington, did parole violators outnumber those being jailed by the courts, and that was only by 126 inmates.

If Arnie Antionette were truly talking about reform instead of policies that destroy the social safety net, he'd talk about completely overhauling a parole system that is clearly too constrictive, that fails Californians and makes us all less safe. When you warehouse 170,000 inmates in jails that only fit 100,000, you turn them into institutes of higher learning for violent crime instead of rehabilitation centers. In addition to the cost of overtime for parole officers and prison guards, the costs to the criminal justice system naturally increase with the revolving door for inmates, not to mention the societal and human costs.

Unfortunately, we don't have a reform agenda in this state, just a bunch of lawmakers trying to get across the line to the next budget, to the next election. If there was such a thing as innovation and leadership we would have revamped this failed parole policy long ago.

The Ultimate Coda

INT. HART SENATE OFFICE BUILDING - DAY

Al Franken, after being sworn in as the 60th Democratic vote in the Senate, goes back to his office and shuffles through his mail, and he finds a $96,000 check from the Minnesota Republican Party that Norm Coleman's campaign owed him as part of the "loser pays" laws in the Land of 1,000 Lakes. And there's even an extra $872 in interest.

Franken chuckles as we CRANE SHOT out....

*************

Sadly, I think we'd like it all better if the movie ended there, rather than having to watch the horror show of what this group of Democrats will do with that 60-vote majority.

An Aggressive Strategy

As the Governor has tried to hijack the budget crisis to serve his own ends of punishing union workers and shredding the social services net, over the last couple days we've seen Democrats fighting back. For example, Dean Florez surgically took apart the Governor's idiotic smear attempt on legislators for doing their job of legislation. Considering that the Governor has never invited all 120 lawmakers into his smoking tent for a pow-wow, I think there's room for multitasking here. But understanding that would involve basic knowledge about how government works, as Florez said:

Assembly bill 606 creates a commission to serve the marketing interests of the blueberry industry. Another bill defines "honey" to mean the natural food product resulting from the harvest of nectar by honey bees, and a third bill adopts regulations establishing definitions and standards for 100-percent pomegranate juice.

"Look, we're pro-condiment, we're pro-fruit, but the focus needs to be on the budget crisis," McLear said.

Senate Majority Leader Dean Florez (D-Fresno) called Governor Schwarzenegger's criticism "childish" and said he is fed up.

"The governor's turned from an action hero into just another politician," Senator Florez said. "He should really, really take a course on fundamental government on how the legislature works."

"The fact that he doesn't understand these things worries me," he added.

Asm. Nancy Skinner held a press event with small business owners, again using the imagery of Arnold Antionette smoking a stogie in his Jacuzzi to contrast with the state's struggles:

Skinner called a news conference at the corner of Solano Avenue and The Alameda in Berkeley, outside the vacant storefront formerly occupied by A Child’s Place. Near her podium was a poster of Arnold Schwarzenegger with a cigar in his mouth, with the headline “While the state drowns in IOUs ARNOLD DOESN’T CARE” and featuring a quotation from this past Sunday’s New York Times Magazine article on the governor’s method of coping with the stress of the budget crisis: “I will sit down in my Jacuzzi tonight. I’m going to lay back with a stogie.”

Skinner said that’s pretty cheeky talk for a governor who nixed bills that would’ve helped solve the state’s cash crisis, avoided the need for the IOUs now going out and kept the deficit from growing by another several billion dollars. And it’s particularly distasteful, she said, to small businesses that are struggling through this recession even as Schwarzenegger proudly talks about vetoing a plan to collect sales tax from large online retailers doing business through California-based affiliates.

You can debate AB 178, the plan to collect sales tax on affiliate sales (I don't sell enough in affiliate sales to have much skin in the game, but there are decent arguments on both sides), but aligning with small business to attack a supposedly business-friendly Governor has good optics.

For the wonks, the Assembly produced an analysis of the Governor's so-called "reform" agenda, showing that most of it would be completely irrelevant to the current budget year, and all of it uses math that magically eliminates implementation costs but assumes outrageously oversized savings years down the road. These are cuts to social services pretending to be reform. I guess it's a step up from completely eliminating programs like CalWorks, but it's fundamentally dishonest.

Moments after the Governor's press conference yesterday about CalWorks "reform" (fact-checked here by the CBP), welfare advocates held their own press event that made most of the news items:

"I've never liked when people pick on the poor because they haven't got the ability to fight back," said John Burton, the state Democratic Party chairman and former Senate leader known as a fierce advocate for the poor. "It's a Republican syndrome. It isn't tough for Republicans to beat up on poor people. When finances are terrible, they go after the poor and blame the poor. Republicans constantly use that and don't worry about all the benefits government gives to businesses." [...]

Welfare advocates countered that nearly two-thirds of recipients are working or participating in training, and that half are making some kind of income. They also said that the governor's own May revised budget proposal estimated an annual savings of $100 million with that reform.

"He's reinforcing negative stereotypes and scapegoating people for the failure of his own administration," said Frank Mecca, executive director of the County Welfare Directors Association of California. "It's a reflection of a bully mentality, to go after the problems of struggling families when he doesn't get his way. The last thing those families need is to have a powerful figure accuse them of fraud, of not trying."

Furthermore, the CA Democratic Party has collected budget horror stories to highlight the human cost of the crisis. Here's one picked at random:

I am on Social Security Disability and with the amounts allowed to get SSI having been cut, it has also cut my income. Also, my medical coverage is being hit as well as so many of the social programs all of us depend on. Fortunately, I am not homeless yet, but it is a good possibility. I just do not understand how you could make all Californians suffer, especially those of us who are very low income, in favor of giving a huge tax break to oil and tobacco. This is not just or right and I believe that the solution is to sign the compromise bill, and tax the big corporations that are not now paying their fair share! – Christine, Victorville

The structural barriers in the state are so high that I'm not sure any of this can work. One thing is certain, however - this aggressive strategy creates energy in the grassroots, inspires changes to the system and can leverage public opinion far better than desperately seeking some compromise behind closed doors.

Genetically Modified GM

In just a little over a month, a bankruptcy judge approved the sale of GM to essentially itself, which took effect in a record amount of time.

General Motors Corp. sped toward a record-short escape from bankruptcy protection Thursday when a judge's order approving the sale of most of its assets to a new company went into effect.

The order, delayed four days to allow time for appeals, became effective despite a last-minute appeal from plaintiffs in an Arizona product liability case against GM involving a Chevrolet Malibu.

GM spokeswoman Julie Gibson said U.S. Bankruptcy Judge Robert Gerber's order allowing the sale became effective at 12 p.m. EDT. GM lawyers are working on paperwork to close the sale as quickly as possible, after which GM would leave bankruptcy protection.

Once the world's largest and most powerful automaker, GM will become a leaner and greener company, cleansed of debts and burdensome contracts that nearly dragged it into liquidation.

But it faces brutal international competition and the worst auto sales market in more than 25 years.

Emerging from bankruptcy in 39 days, considering the size of the company and the nature of the tangle of debt, is pretty remarkable. Some predicted 6 months.

The question becomes, "Now what?" Nobody's buying cars, and GM still has some significant legacy costs, particularly in that little thing called health care, which we want to reform so American businesses can actually compete on a global stage. Sadly, keeping the employer-based system largely intact won't do much for GM. Sadly, I don't think Congress is taking into account the importance of how what we'll see on the other side of the health care debate can help businesses and manufacturing.

...the geniuses in Congress want to reverse the closing of thousands of auto dealerships, saddling GM and Chrysler with costs they cannot possibly manage and basically kissing billions of taxpayer dollars goodbye. Great move, guys!

Cue My Eyes Rolling Into The Back Of My Head

The Republicans will trot out Frank Ricci, the firefighter from New Haven, to testify against Sonia Sotomayor at hearings next week. And then we'll all get to hear once again about the poor guy who studied hard - hard! - to pass that promotions test, and then the MAN, in this case represented by a Latina following the established laws on the books which the Supreme Court had to change, knocked him down and took everything he had. He needed that promotion, see, and he was the best qualified, but they had to give it to a minority throw out the test because they could have been sued until the Supreme Court changed the law to essentially indemnify them.

The reality of the case doesn't matter, so this will just be a launching pad for a series of "white man's burden" colloquys among Villagers.

Man, the blowhards are going to make me sick next week. Pat Buchanan is probably testing out new slurs as we speak. "Does Sombrero Lady sound pejorative enough? How about Phi Beta Hubcappa?"

The Opening On Tom Coburn

Other than it being a breach of ethics, I don't care about the mini-Peyton Place going on with John Ensign and the Hampton family who worked for him, including Cindy, with whom he had an adulterous affair. I guess Ensign paid the family, but he didn't actually do it, his mother did. Adulterer, conservative, hypocrite, got it.

What does interest me is the role of Tom Coburn (R-OK) in all of this. Hampton's husband Doug suggested that Coburn came up with the idea to pay off the family. Now remember, Coburn is the guy who goes on and on in the Senate about fiscal responsibility and debt and how we can't afford anything. The hundred-grand to clear up your wandering willie problem, I guess, is OK. But here's the kicker.

Sen. Tom Coburn (R-Okla.) on Thursday said he would not testify in court or before the Ethics Committee about any advice he gave Sen. John Ensign (R-Nev.) on how to handle his affair with a former staffer, citing constitutional protections for communications during religious counseling, as well as the patient confidentiality privilege.

“I was counseling him as a physician and as an ordained deacon. ... That is privileged communication that I will never reveal to anybody. Not to the Ethics Committee, not to a court of law, not to anybody,” Coburn said.

First of all, Coburn is an Ob/Gyn. Unless Ensign was trying to grow a womb, I don't know what the medical nature of their conversations would be. Second, I don't think any of this rises to the level of criminality or even a breach of Senate rules. But it's sublime to see Coburn, the self-styled pillar of moral rectitude in the Senate, arrogantly deny any view into his own behavior at the Ethics Committee. Smart Democrats would throw this right in his face every time he tries to derail a bill by talking about the cost or the possibility of corruption. They could make his life miserable. After a few months of it, I'll bet the WATB would decide not to run for re-election. He's only happy being a thorn in the sides of others, after all.

...now, if this was federal campaign money being tracked through Ensign's parents, then we have some kind of hush money deal. But I think he structured it with just enough plausible deniability to get away with it.

A Second Chance

The state of Massachusetts upped the ante in the fight over same-sex marriage by suing the federal government over its DOMA policy.

Massachusetts, the first state to legalize gay marriage, sued the U.S. government Wednesday over a federal law that defines marriage as a union between a man and a woman.

The federal Defense of Marriage Act interferes with the right of Massachusetts to define and regulate marriage as it sees fit, Massachusetts Attorney General Martha Coakley said. The 1996 law denies federal recognition of gay marriage and gives states the right to refuse to recognize same-sex marriages performed in other states.

Massachusetts is the first state to challenge the federal law. Its lawsuit, filed in federal court in Boston, argues the act "constitutes an overreaching and discriminatory federal law." It says the approximately 16,000 same-sex couples who have married in Massachusetts since the state began performing gay marriages in 2004 are being unfairly denied federal benefits given to heterosexual couples.

True, Massachusetts is the first state to challenge DOMA, but several individuals have chosen to do so. And the Obama Justice Department's brief in that case was basically the touchstone to seething in the gay community over the White House disrespecting their civil rights. Just yesterday AIDS activists shut down the Capitol Dome over a broken promise from Obama on needle-exchange programs.

It appears that Obama will have an opportunity, at some point, to submit a new brief and right this wrong. I hope he takes it.

Are We Calling This Victory?

You all probably know by now that Karl Rove was deposed in front of House Judiciary Committee staffers the other day, about the US Attorneys scandal and the prosecution of former Alabama Governor Don Siegelman. But what you don't know, and what I don't know, and what nobody knows, is why. At some level, I'm glad that Congress was able to assert a modicum of its authority and at least get Rove (and apparently, Harriet Miers back in June) on the record with a set of questions. But to what end? Certainly not one of precedent, and not an investigative one as well, it seems.

The White House's foot-dragging may have inflicted some measure of political damage. But in terms of the legal repercussions, by coming to a deal while the case was still pending in an appeals court, the Bushies have largely succeeded in one of their goals: ensuring that no clear precedent has been established limiting the president's power to claim executive privilege in such cases. And the Obama White House's role in helping to secure the deal for Rove's testimony suggests that's an outcome they wanted too.

As for the underlying issue -- the quest to learn what really happened in the firings and the Siegelman prosecution, things remain murky at best. There are conflicting reports about whether Rove will sit for another day of testimony. It's also unclear when and how the committee will decide which parts of Rove's testimony, if any, can be made public, and in what form the probe's findings will be released.

Siegelman, quoted later in the piece, thinks John Conyers will continue to investigate until he finds the truth. He must be an eternal optimist. This has reached the point where Republicans can demagogue with the words "old news," and that was precisely the Bush White House's goal. Even if House Judiciary eventually cobbles together a report and makes recommendations, the chances of the Justice Department taking whatever recommendations concern accountability measures are, in a word, remote. They haven't even moved to set aside the verdict on Siegelman, though I did notice that the Justice Department whistleblower in the case has been fired. At least someone is held to account, right?

Why Nixing The Employer Deduction Is A Shame

Am I the only one who finds it weird for media types and Congress to be freaking out over the timing of the health care bill? If lawmakers don't get their August recess or have to work a weekend, I think the Republic can survive. The point is not to get it soon, but get it right.

That said, Jon Cohn does make a good point about the employer deduction.

According to several sources on and off Capitol Hill, Reid’s primary message was about the financing of reform. Baucus had hoped to get around $300 billion in funding over the next ten years by capping the tax exclusion on group health benefits. I’m not sure what the exact parameters of the cap were supposed to be, but it's safe to assume they would either have hit a small number of people, hit people with a small tax hike, or some combination of the two.

This apparently was unacceptable to several members of the Democratic caucus. Highly unacceptable. If reform included a cap on the exclusion, Reid warned, between ten and fifteen Democrats would oppose it. That's why Baucus and his colleagues on Finance are back to looking for money.

What sparked this Democrats' resistance? Unions like the American Federation of State, County, and Municipal Employees (AFSCME) have been up in arms about the idea, because some of their members would end up paying slightly higher taxes. But the polls showing widespread opposition to the idea may have been more influential.

I’ve discussed the merits of the capping the exclusion in this space before, many times. Like many health care experts, I think it achieves two important policy goals: It helps raise the large sums of money necessary to pay for expanding coverage and it fixes some of the poor incentives in our health care system. But the public skepticism is real, even if the polls phrase the questions in leading ways. And there are other, perfectly reasonable ways of financing reform.

It's a shame that the unions knee-capped this deal, though politicians deserve some of the blame for failing to sell it to the public in the way that Cohn describes. Capping the tax exclusion would reverse some of the incentives in the health care system. It would eliminate the kind of bargaining for better health care in such a way that drives up costs. What's more, like Willie Sutton said, it's where the money is, and one can envision a scenario where enough votes exist for the structure of reform and not the funding, and the whole thing breaks apart, a fatal blow to the progressive agenda.

I do know one thing, though. It’s going to cost at least $1 trillion over ten years to accomplish these goals, probably a bit more if we want to do it right. And if somebody doesn’t put together 50 votes in the Senate, let alone 60, for a combination of new revenue and spending cuts equal to that amount, the goals will not be realized.

To be clear, the situation is not dire. (See, no panic light today!) The legislative process is messy. As sure as there will be bad times, there will be good. Just a week ago, the Senate Health, Education, Labor, and Pensions (HELP) Committee put out a bill that showed how you could cover most people, providing mostly good insurance, for between $1 and $1.3 trillion, give or take. Previous CBO estimates suggested that might not be possible. So this was no small thing.

And while the structure of reform may look like a mess if it went through reconciliation, certainly the funding could travel through that gauntlet virtually intact. Funding mechanisms and offsets are, after all, the POINT of reconciliation. So 50 votes are required for that element of it, in my view.

We may end up with Obama's initial idea of capping charitable deductions, which I find perfectly reasonable. But Ezra Klein makes an important point. Losing the elements of the policy that would change the system of health care delivery and funding leaves you possibly with expanded coverage, but not with anything you can really call reform:

There are certain policies under consideration right now that could significantly change how the health-care system functions. A tax on employer benefits, for instance, that begins to reduce the primacy of employer-sponsored health coverage. A public plan that's accessible to all Americans. A Health Insurance Exchange that's open to everyone and can offer an alternative to both the employer and the individual markets. An individual mandate creates the expectation of universal coverage and a mechanism for achieving it.

But if those elements -- and maybe a few others I'm forgetting -- are stripped from the final legislation or significantly weakened, then the bill will not be a reform of our health-care system. It will be a coverage expansion. It might make certain improvements to the current system through insurance market regulations and delivery system changes. That might be, on balance, a hefty improvement against the status quo. But it will not be health-care reform. It will not change the fundamental dynamics of our current system. It might even strengthen them.

In other words, keeping the employer-based system in place, failing to increase competition for insurance, keeping a health amount of the uninsured - I don't see how all of these things can stay in place and, simultaneously, the cost of health care lowers over time, for individuals, businesses and government. And I don't see how quality improves, either.

It's almost not worth the effort if the dynamics of the system remain constant.

Throw Them A Life Raft

Yesterday, Brian Kilmeade walked down a rhetorical blind alley and found himself arguing in favor of "ethnically pure" societies. It's painful to watch. And yes, the likes of Pat Buchanan and Lou Dobbs call America home. But in fairness, we don't have all the racists. My favorite part of this is the backtrack ("Hey, I didn't say kill them!"):

Boats carrying illegal migrants to Europe should be sunk, Nick Griffin, the leader of the British National party, said yesterday.

In a provocative intervention, Griffin, elected to the European parliament last month, called on the EU to introduce "very tough" measures to prevent illegal migrants entering Europe from Africa.

"If there's measures to set up some kind of force or to help, say the Italians, set up a force which actually blocks the Mediterranean then we'd support that," Griffin told BBC Parliament's The Record Europe.

"But the only measure, sooner or later, which is going to stop immigration and stop large numbers of sub-Saharan Africans dying on the way to get over here is to get very tough with those coming over. Frankly, they need to sink several of those boats. Anyone coming up with measures like that, we'll support, but anything which is there as a 'oh, we need to do something about it' but in the end doing something about it means bringing them into Europe we will oppose."

Shirin Wheeler, the programme's presenter, interrupted him to say the EU did not murder people. "I didn't say anyone should be murdered at sea – I say boats should be sunk, they can throw them a life raft and they can go back to Libya," Griffin said. "But Europe has, sooner or later, to close its borders or it's simply going to be swamped by the third world."

Maybe Britons should pay more attention to those European Parliament elections, ay? Do us all a favor.

"I don't know what we're getting out of it."

I kind of buried it in a separate post, but the deal in Russia for the world's top two superpowers to reduce their stockpiles is a pretty big deal. This would eliminate up to 28% of all nuclear weapons on the planet. And the President followed on that success with an agreement at the G8 summit to reduce all nuclear arsenals toward a goal of eliminating them; strengthening the Non-proliferation Treaty; and cleaning up loose nukes and preventing them from falling into the hands of extremists. The President will also host a Global Nuclear Security Summit in March 2010, and has taken more legitimate steps to rid the world of nuclear weapons than any President in decades.

And in response, Lindsey Graham says:

Republicans are already demanding that Obama press Russia into allowing a missile defense system in Eastern Europe in return for the U.S. agreeing to reduce its nuclear arsenal to between 1,500 and 1,675 warheads.

“I don’t want the Russians to get something and we get nothing. I don’t know what we’re getting out of this,” said Sen. Lindsey Graham (R-S.C.), an influential member of the Armed Services Committee.

“I think the administration is going to make a mistake if they don’t recognize the missile-defense components of this debate have to be addressed.”

How about the ability to live without the threat of being vaporized?

This is really the problem with a philosophy of selfishness. The idea of eradicating nuclear weapons isn't good enough. We need a payoff as well.

So much for politics ending at the water's edge...

Blood Sausage

It's probably easier just to not parse every statement coming out of the Congress on health care. This is the sausage-making period, and it's rarely pretty. But everyone is reporting that, a day after Harry Reid asked his caucus to support the majority's goals by not supporting a filibuster and told Max Baucus to drop bipartisan efforts on the health care bill that would lose Democratic votes, he reached out to a limited group of Republicans and asked them for help on the bill. And Max Baucus and Charles Grassley, according to the LA Times, continue to move forward on their centrist bill in the Senate Finance Committee.

Well, sure. This is the talking phase, and I wouldn't expect a stonewall of silence at this point. Chasing exactly what will remain in the bill or not is like chasing a rainbow.

However, a couple elements to the chatter seem significant. Politico adds up the numbers:

But taxing health benefits to pay for an overhaul? That's still dead, Democratic leaders made clear again Wednesday.

And another thing that's increasingly in doubt: any hopes of getting a health reform bill voted out of the Senate by August, a byproduct of the leadership's decision to lay down the law on finding a new way to pay for it.

Reid's move blows a gigantic hole in efforts to find $1 trillion to pay for health reform - and set off a scramble Wednesday to come up with a replacement for the suddenly missing $320 billion over 10 years.

And if Democrats thought taxing health benefits was unpopular, the second-least-popular idea might be a tough sell, too - a straight-up income tax hike on people making more than $250,000 a year. That idea gained new currency in the Senate and the House Wednesday in part because it would not divide the Democratic base as much as taxing health benefits, which could hit the middle class, and unions strongly oppose it.

Sin taxes on sugary sodas and drinks were back on the table - despite being dismissed weeks ago as too small to be worth the fight it would take to pass them. A few Democrats were talking again about resurrecting President Barack Obama's plan to lower income tax deductions for wealthy Americans, an idea that died barely weeks after Obama first floated it earlier this year.

It does look like changing the employer deduction is right out (which is kind of a shame - I support capping that deduction). But if we're only talking about $320 billion to go, then they should just adopt the Obama Administration's plan to return the rate of deductions for charitable donations to where it was in the Reagan Administration. It's the most defensible (I envision rhetoric like "you mean you give charity for the tax break, not out of the goodness of your heart?") and has already been vetted by the White House.

Now, to get a bill that spends more than $1 trillion a year, you might need something else. But add in the charitable deduction piece and you're up to $1 trillion, which is definitely a better place than I thought.

There's also the wrangling over whether Democrats will join Republican filibusters. Dick Durbin implored the caucus on this:

If they will stick with us on the procedural votes, we at least know that we can move forward.... They may vote against final passage on a bill, they may vote with Republicans on an amendment. That's entirely their right to do. But this idea of allowing the filibuster to stop the whole Senate.... We ought to control our own agenda.

Just making this public is probably part of the strategy. Sadly, plenty of Democrats have swallowed the notion that procedural votes equal the votes themselves:

"Most Senators vote their conscience and they do what they think is right. They didn't come here to be told what to do by somebody else," moderate Sen. Evan Bayh (Ind.) said [...]

"You know how this place operates. Very often, it's the procedural votes that determine the substantive outcome. Sometimes not, but it's not uncommon that that is the case. So those votes on procedural issues will be cast as if they are the ultimate substantive vote," he said.

That's really only true if someone like Evan Bayh believes it. He can separate procedure and the final vote to his constituents if he wanted to. So we can only conclude that he'd rather not.

Good to know.

The Role Of Grassroots Action In Policy Debates

I've seen a lot of buzzing about this story from Harold Meyerson, about the faltering of Barack Obama's online army when it comes to health care:

Organizing for America (formerly Obama for America), which maintains that list within the confines of the Democratic National Committee, has asked those 13 million Obamaites to "create a conversation within their communities," in the words of one DNC official. Specifically, the DNC has asked them to collect health insurance horror stories and put them online, to support a set of broad health-care principles, and to go door-to-door among independent voters in their neighborhood and talk to them about those principles. On June 27, some activists participated in what the DNC termed a "day of service," working in blood banks, volunteering at health clinics, raising money for medical research.

All very commendable, and about as likely to affect the outcome of the health-care deliberations as the phases of the moon. "What made the presidential campaign so potent were clear goals and a strategy that made sense to people," says Marshall Ganz, one of liberal America's foremost organizing geniuses (who led training sessions for Obama campaign staffers and volunteers last year). Such goals and strategies are hard to discern today, and the participation of Obama volunteers has declined accordingly.

Even when the battle for health care finally comes down to a single bill, the plans to activate Obama supporters are conceptually modest. "We can't target individual members of Congress," says one DNC official. "To tell people to target certain Democrats puts the party in a weird position." Not even 13 million supporters, apparently, can instill party discipline into a political culture that scarcely knows the meaning of the term.

Meyerson thinks we need a mass movement strategy to win the day on health care. Well, that can never possibly come from inside the party machinery. In a 60-vote environment, Republicans have no part in the debate. It will rise or fall based on the actions of conservative Democrats. And a DNC-based organization, as the official says, won't go after Democrats, at least not in public.

Now, Organizing for America has built a large list of health care horror stories that activists can use. And their architecture of calling and canvassing tools is more than available to anyone to start their own independent push toward particular legislators. In fact, I know that some grassroots groups have already done so, whether OFA likes it or not. And they are really in a capacity-building phase right now, and there's going to be a learning curve. Things are happening that columnists in Washington might not see.

As for the efforts by outside groups to push recalcitrant lawmakers, Meyerson thinks they are pursuing a legislative strategy and not a movement-building strategy. Well, that's not entirely true. There are health care rallies at Congressional offices tomorrow. Health Care for America Now put 10,000 people in Washington for a rally. I don't really know what he wants. Meyerson hints that single-payer advocates are actually building a movement, one I believe will endure no matter what reform bill passes, but it currently lacks critical mass.

Even if we grant Meyerson these points, I'll say this. Health care is a maddeningly complex topic. Everyone's for fixing this broken system but they have about 100 different ways to do so. If Meyerson thinks that ordinary Americans can actually impact that debate at the granular level, I'd love to see his blueprint. When elements of reform - like single-payer, like a public insurance option - have been used to stand in for reform, it has moved a couple legislative mountains. I believe in movement politics, but on health care reform that movement, unlike with "civil rights now" (the 1960s) or "We're in a Depression" (the New Deal era) there's just no bumper sticker for health care reform that's going to turn it into a mass movement. You're seeing the best digital-age equivalent of it - online organizing, grassroots ads, etc. - but it doesn't throw people into the streets.

I don't totally disagree that OFA isn't a great model, it being situated inside a party infrastructure. But I really fail to see a vision of a million people on the Washington Mall shouting "national health insurance exchanges with subsidies up to 400% of the poverty level now!" And, activism circa 2009 is different than activism circa 1963.

Thing Is, The CIA Does Lie

The CIA trains their agents to lie pretty much as a matter of course, and they have a long history of at the very least concealing the truth from the American public, if not outright lying to them. I don't think anyone in the entire country could say with a straight face that the CIA tells the whole truth to anyone, be it Congress or anyone else. And now we have verbal confirmation of this fact.

Remember how CIA Director Leon Panetta said in May that members of the House Intelligence Committee “will have to determine” whether the CIA accurately and appropriately briefed Congress about the agency’s “enhanced interrogation program”? It appears that Panetta reached a conclusion himself.

On June 26, six Democrats on the committee — Anna Eshoo (Calif.), John Tierney (Mass.), Rush Holt (N.J.), Mike Thompson (Calif.), Alcee Hastings (Fla.) and Jan Schakowsky (Ill.) — wrote to Panetta, “Recently you testified that you have determined that top CIA officials have concealed significant actions from all Members of Congress, and misled Members for a number of years from 2001 to this week.” The letter — which doesn’t explain what those “significant actions” concerned — asks that Panetta “publicly correct” his May 15 statement that it isn’t CIA “policy or practice to mislead Congress.” TWI acquired a copy of the letter, which comes after CQ reported that committee chairman Silvestre Reyes (D-Texas) also nebulously stated that CIA “affirmatively lied” to the committee.

But CIA spokesman George Little says it’s “completely wrong” to say Panetta determined CIA misled Congress, as the six legislators charge. “Director Panetta stands by his May 15 statement,” Little said. “It is not the policy or practice of the CIA to mislead Congress. This Agency and this Director believe it is vital to keep the Congress fully and currently informed. Director Panetta’s actions back that up. As the letter from these six representatives notes, it was the CIA itself that took the initiative to notify the oversight committees.”

Here's more on Silvestre Reyes' claim that the CIA lied to the House Intelligence Committee.

The backstory here is that, in the wake of this seeming breakdown of information between the CIA and Congress, the House wants to change the way the CIA must brief their actions to Congress. The "Gang of Eight" process - the leaders of the intelligence committees, and the leaders of both Houses of Congress - just flat-out isn't working. And the White House has threatened a veto of the entire intelligence appropriations bill based on the changes.

The Administration strongly objects to section 321, which would replace the current “Gang of 8” notification procedures on covert activities. There is a long tradition spanning decades of comity between the branches regarding intelligence matters, and the Administration has emphasized the importance of providing timely and complete congressional notification, and using “Gang of 8” limitations only to meet extraordinary circumstances affecting the vital interests of the United States. Unfortunately, section 321 undermines this fundamental compact between the Congress and the President as embodied in Title V of the National Security Act regarding the reporting of sensitive intelligence matters – an arrangement that for decades has balanced congressional oversight responsibilities with the President’s responsibility to protect sensitive national security information. Section 321 would run afoul of tradition by restricting an important established means by which the President protects the most sensitive intelligence activities that are carried out in the Nation's vital national security interests. In addition, the section raises serious constitutional concerns by amending sections 501-503 of the National Security Act of 1947 in ways that would raise significant executive privilege concerns by purporting to require the disclosure of internal Executive branch legal advice and deliberations. Administrations of both political parties have long recognized the importance of protecting the confidentiality of the Executive Branch's legal advice and deliberations. If the final bill presented to the President contains this provision, the President's senior advisors would recommend a veto.

This is simply wrong. The Gang of Eight style of intelligence briefings facilitates abuse, and the politicization of intelligence. Obama probably sees the system as a good way for the executive to maintain control over intelligence and the CIA's actions, but if he wants money for those actions, he's going to have to stop the process that enables official lying. So the House, especially after this series of events, should go ahead and pass the intelligence appropriation as is, and if Obama vetoes it, he can go ahead and live with a CIA that has no funding.

The further context for this is that House Republicans screamed like banshees when Nancy Pelosi suggested that the CIA lied to Congress. Except they do. All the time. And whether or not it's inconvenient to say it, it's true.

What Could Possibly Go Wrong?

Morgan Stanley has this amazing plan to take a bunch of toxic crap, call it a different name, put a bow on it and sell as a magic moneymaking product. Innovative!

Morgan Stanley plans to repackage a downgraded collateralized debt obligation backed by leveraged loans into new securities with AAA ratings in the first transaction of its kind, said two people familiar with the sale.

Morgan Stanley is selling $87.1 million of securities that it expects to receive top AAA ratings and $42.9 million of notes graded Baa2, the second-lowest investment grade by Moody’s Investors Service, according to marketing documents obtained by Bloomberg News. The bonds were created from Greywolf CLO I Ltd., a CDO arranged in January 2007 by Goldman Sachs Group Inc. and managed by Greywolf Capital Management LP, an investment firm based in Purchase, New York.

Two years after the credit markets began to seize up, costing the world’s biggest financial institutions $1.47 trillion in writedowns and losses, banks are again taking so- called structured finance securities and turning them into new debt investments with top credit ratings. While the Morgan Stanley deal is the first to involve CDOs of loans, banks have been doing the same with commercial mortgage-backed securities in recent weeks.

A lot of banks and insurers “cannot buy anything but AAA,” said Sylvain Raynes, a principal at R&R Consulting in New York and co-author of “Elements of Structured Finance,” which is due to be published in November by Oxford University Press. “You’re manufacturing AAA out of not AAA, therefore allowing those people who have AAA written on their forehead to buy.”

That last paragraph is my favorite part - investors cannot buy anything but AAA, so we'll call a bunch of garbage AAA and sell it to them! Genius! And if you're still wondering why that federal buy-up of toxic assets has amounted to nothing, I guess it's because enough customers have been found for this "New and Improved Shitt With Two T's."

It says in the article that Goldman Sachs is preparing a similar sale. Matt Taibbi, you have the floor.

The Climate Saga: Too Much For The Senate, Not Enough For The World

Though there were early indications that the House package of the Waxman-Markey energy and climate bill were spurring the development of similar policies abroad, among the Europeans who have already set up a cap and trade system for carbon emissions, the relatively weak standards forced into the bill by Blue Dogs and farm-state Democrats have them looking unkindly at it:

The European hosts of the Group of 8 summit meeting welcome the shift. But the new stance also worries them, in part because they fear that the United States is working toward an independent deal with China outside the global negotiating framework.

President Obama has stated a commitment to addressing climate change. That has been followed by the recent passage by the House of a landmark bill that, if also approved by the Senate, would begin to regulate heat-trapping gases. Those moves have given the Europeans, as well as climate scientists and some environmental groups, hope that the United States will take a leadership role in global talks toward a new climate-change treaty [...]

But Europe is also unhappy with the Obama administration’s reluctance to accept aggressive near-term goals for cutting greenhouse gases and its refusal so far to formally accept language that would limit the rise in global temperatures to 2 degrees Celsius, or 3.6 degrees Fahrenheit, above pre-industrial levels [...]

The president and other American policy makers also insist that no deal can effectively reduce emissions unless China, India and other major developing countries are on board. The United States has been pursuing a separate track of climate diplomacy directly with Beijing.

Michael Starbaek Christensen, a senior climate-change official in Denmark, said he was worried that the United States and China — the two largest emitters of greenhouse gases in the world — would cut a separate deal and push the rest of the world into a treaty that did too little to curb emissions.

“I can only encourage Europe to stay in the lead and not let a bilateral U.S.-China relationship take over,” Mr. Christensen said, “because one concern I would have with the U.S.-China relationship is that they would find a lower common denominator.”

The G8 leaders could not even agree on the same aspirational targets of a 50% reduction in greenhouse gas emissions by 2050 that George Bush agreed to in Japan at the G8 in 2008. Put simply, the rest of the developed world finds the US targets too low. I agree with them, but of course our political process is almost uniquely wired against coming to a solution that matches the needs in the science. Plus we have an entire political party composed of denialists from the Exxon Mobil school of Energy Policy.

In the first Senate hearing today on clean energy legislation supported by President Barack Obama, Sen. Sheldon Whitehouse (D-RI) compared the Senate to the “ExxonMobil board room.” Whitehouse expressed his concern that the United States would be left behind in the clean energy race, saying, “I do not want to see American industries at the back of that parade with a broom.” Addressing the Obama Cabinet members before him — Ken Salazar, Stephen Chu, Tom Vilsack, and Lisa Jackson — Whitehouse apologized for the denial of man-made climate change by his fellow senators:

"We know that this is probably — along with the ExxonMobil board room — the last place that sober people debate whether or not these problems are real, but we intend to work with you anyway, and we hope to give you strong legislative support if we can."

As I've often said, with climate change being a "boiling frog," intangible kind of concern, it's hard for me to believe that a Democrat from Idaho, for example, will face negative consequences from his No vote on Waxman-Markey. I'd like to be wrong about that. But the dynamics just haven't moved in the right direction yet.

As to the Senate, where the climate bill will almost certainly weaken again, Nate Silver postulates that there are 62-66 potential votes for legislation, and Bill Scher sees some possibilities among the GOP as well. I'm significantly more skeptical, especially with the lack of mass grassroots action, which just has not materialized.

...There's now a tentative agreement on a more limited plan to not let global temperature rise above 3.6 degrees Fahrenheit.

The Battle Of Urumqi

While the Chinese government is claiming that the Uighur riots in Urumqi, Western China are under control, the importance of this uprising for the future of China should not be overlooked. It took thousands of troops to quell Uighurs brandishing makeshift weapons. The Chinese have engaged in brutal repression in Tibet and in Xinxiang Province, but it doesn't look entirely sustainable to me. Rebiya Kadeer writes in the WSJ:

On Sunday, students organized a protest in the Döng Körük (Erdaoqiao) area of Urumqi. They wished to express discontent with the Chinese authorities' inaction on the mob killing and beating of Uighurs at a toy factory in Shaoguan in China's southern Guangdong province and to express sympathy with the families of those killed and injured. What started as a peaceful assembly of Uighurs turned violent as some elements of the crowd reacted to heavy-handed policing. I unequivocally condemn the use of violence by Uighurs during the demonstration as much as I do China's use of excessive force against protestors.

While the incident in Shaoguan upset Uighurs, it was the Chinese government's inaction over the racially motivated killings that compelled Uighurs to show their dissatisfaction on the streets of Urumqi. Wang Lequan, the Party Secretary of the "Xinjiang Uighur Autonomous Region" has blamed me for the unrest; however, years of Chinese repression of Uighurs topped by a confirmation that Chinese officials have no interest in observing the rule of law when Uighurs are concerned is the cause of the current Uighur discontent [...]

The unrest is spreading. The cities of Kashgar, Yarkand, Aksu, Khotan and Karamay may have also seen unrest, though it's hard to tell, given China's state-run propanganda. Kashgar has been the worst effected of these cities and unconfirmed reports state that over 100 Uighurs have been killed there. Troops have entered Kashgar, and sources in the city say that two Chinese soldiers have been posted to each Uighur house.

The nature of recent Uighur repression has taken on a racial tone. The Chinese government is well-known for encouraging a nationalistic streak among Han Chinese as it seeks to replace the bankrupt communist ideology it used to promote. This nationalism was clearly in evidence as the Han Chinese mob attacked Uighur workers in Shaoguan, and it seems that the Chinese government is now content to let some of its citizens carry out its repression of Uighurs on its behalf.

It's possible that this works in the short-term, but not in perpetuity. Closed societies like China's struggle to remain close. Eventually, Xinxiang will be free just as Tibet will be free.

Multi-Pronged Attack

It's sad that one comment can mean more to a debate than years of attacking public employees and public works and months of attempting to destroy the California dream. That should be disqualifying enough. But Governor Hot Tubs and Stogies' "let them eat cake" comment in the New York Times has gained some traction. Apparently this was a target big enough for everyone in Sacramento to hit. The Assembly Democrats included it in a video showing the Governor's hypocrisy during recent budget talks.



And that's great. Narrative-setting can be powerful and important. That's what's behind the Governor's idiotic crusade to criticize legislators for legislating while he stamps his little feet. At least for today, I think the Democrats are getting the better of ol' Hot Tubs and Stogies.

But I'm more excited about this:

Labor groups file initiative to repeal corporate tax breaks included in recent budget deals.

These are the massive corporate tax breaks, which could cost the state up to $2.5 billion dollars a year, agreed to in secret by the Governor and the Legislature during the February budget agreement. In a time of recession, the state's political leadership, hijacked by the 2/3 requirement, gave away billions of dollars to the largest corporations in America while crying poor about social services for the indigent and the needy. And those corporate tax breaks are the ONLY permanent tax changes made in the budget this year.

Damn right they should be repealed. They offend the conscience, cost the state needless cash, and do nothing to help the vast majority of businesses (80-90% of the proceeds of these tax breaks will go to just 200 corporations).

Bottom line: Budgets are about values, and they are about priorities. Before lawmakers take health coverage away from children whose parents are struggling to make ends meet, eliminate financial aid for students who understand that hard work and a college education provide the best promise of future success, or shutter state parks that protect California's natural environment and provide affordable recreational opportunities, they should reverse these permanent and massive giveaways that will compromise the state's long-term financial security.

With newfound spunk from Democrats, at least in the Assembly, and serious moves by progressive advocates to reverse the horrible decisions made in past budget years, I think the ground is being prepared for a legitimate reform of the broken structure that has brought us to this point.

Pressure Works

Several weeks ago Digby and Blue America noticed that Blanche Lincoln, one of the few centrist Democrats facing re-election in 2010, was taking the side of the insurance companies over her constituents in the health care debate. She claimed that "if all Congress comes up with is a government-backed plan, then there will be very little incentive for the private industry to be able to be competitive perhaps in the plans they will be offering and the individuals they will be offering,” showing exactly where her sympathies lie - with those poor, henpecked insurance industry CEOs who scrape by on $14.9 billion dollars over five years.

So we decided to do something about it. Blue America kicked off the Campaign for Health Care Choice and produced three advertisements to press Lincoln on supporting a quality public insurance option to compete with private companies. Digby write the spots, John Amato helped with locations and logistics, I directed and edited them, Howie Klein managed the fundraising. Blue America held a contest to pick the best spot, and after raising $23,740, voters chose their favorite:



Today, we can announce that, before the spots even fully hit the airwaves in Arkansas, Blanche Lincoln is already hedging on her rejection of a public insurance option.

Lincoln, who’s getting hammered by ads demanding she commit to the public option, has now shifted towards supporting one, at least in rhetorical terms. In a piece for today’s Arkansas Democrat-Gazette, she says health care reform should include a public plan or a non-profit substitute.

Here’s the key graf from Lincoln (the piece is subscription only):

Health care reform must build upon what works and improve inefficiencies. Individuals should be able to choose from a range of quality health insurance plans. Options should include private plans as well as a quality, affordable public plan or non-profit plan that can accomplish the same goals as those of a public plan.

The assertion that reform “should” have a public plan or non-profit substitute is a shift from her previous position, which was only that she was “evaluating” a public plan or a substitute.

In this op-ed, Lincoln makes absolutely no mention of an employer mandate to provide coverage to their workers, which Wal-Mart, America's largest employer and a virtual kingmaker in Arkansas, signed onto this week. Instead, Lincoln goes out of her way to support a public insurance option in competition with private insurance. There are weasel words there, of course - note the "non-profit plan that can accomplish the same goals." And I don't doubt that Wal-Mart's general support of something called health care reform played a role. But in the final analysis, two events happened to Blanche Lincoln in health care recently - Wal-Mart's sign-on to the employer mandate and the prospect of Blue America running ads in her state ($25,000 can go a fairly long way on cable in Arkansas, by the way). She chose to specifically align herself with the element of health care policy that Blue America endorses.

But she's not all the way there, so we plan to keep pushing. But this should be a valuable lesson - every small thing you do to advance solutions to the health care crisis can make a difference. The political animals in the Senate know that on this high-profile vote, defying the public on a popular plank will cause them some difficulty. It's up to us to make sure of that.

Please support the Campaign for Health Care Choice so we can continue to raise the pressure on the ConservaDems who want to hijack this crucial policy goal.

Listen To The Hippies This Time

Looks like the leaders of the eight largest economies agree with the hippies, at least in part, that the economy still faces rough patches and additional stimulus could still be necessary.

G8 leaders believe the world economy still faces "significant risks" and may need further help, according to summit draft documents that also suggest failure to agree climate change goals for 2050 [...]

Documents seen by Reuters before the G8 summit began on Wednesday cautioned that "significant risks remain to economic and financial stability" while "exit strategies" from pro-growth packages should be unwound only "once recovery is assured."

"Before there is talk of additional stimulus, I would urge all leaders to focus first on making sure the stimulus that has been announced actually gets delivered," Canadian Prime Minister Stephen Harper said.

That chimed with comments from the International Monetary Fund, which said it believed the global economy was starting to pull out of recession but recovery would be sluggish and policies needed to remain supportive.

Harper isn't wrong, the stimulus in the queue must get out. But recovery has not yet been assured, and so the smart move would be to prepare for some contingency where more public money has to go into the economy.

It's interesting that everyone has whitewashed the debate from early this year.

During the initial discussion of the stimulus, the debate was framed almost entirely as a debate between Obama and those who said the stimulus was too big; the voices of those saying it was too small were largely frozen out. And they still are — if it weren’t for my position on the Times op-ed page, there would be hardly any major outlet for Keynesian concerns.

And here’s the thing: in this case, there isn’t any hidden evidence — you can’t argue that the CIA knows something the rest of us don’t. And the voices calling for stronger stimulus are, may I say, sorta kinda respectable — several Nobelists in the bunch, plus a large fraction of the prominent economists who predicted the housing crash before it happened.

But somehow, the pro-stimulus people are unpersons. Who makes these decisions?

I don't think Krugman wrote that without knowing the answer.

America's Jack-Off

Remember when T.Boone Pickens tried to convince everyone that we had to give his natural gas and wind power companies hundreds of billions of dollars RIGHT NOW or the world would explode? Remember that?

Never mind, it's not profitable anymore...

T. Boone Pickens has temporarily shelved plans to build the world's biggest wind farm in the Texas Panhandle because of tight credit markets and low natural gas prices, and his company Mesa Power is looking for other projects that could use the $2 billion worth of wind turbines already on order.

Pickens unveiled plans in 2007 for the 4,000-megawatt wind farm -- big enough to power 1.3 million homes -- at a projected cost of $10 billion. In May 2008, Pickens ordered 667 wind turbines from General Electric for the first of four project phases. Mesa is scheduled to begin taking delivery in 2011.

The project was a symbol of the oilman's commitment to his high-profile campaign to slash the nation's dependence on foreign oil with a combination of wind power and the use of natural gas in vehicles.

"Boone still remains committed and focused on developing wind energy in the United States," said Jay Rosser, a spokesman for Pickens's BP Capital Management. "The timing is not as aggressive as he originally outlined because of the collapse of the capital markets and because of the steep downturn of natural gas prices." (Many utilities are choosing natural gas to generate electricity.)

Remember, we had to end our dependence on foreign oil as an urgent national security and environmental issue. "We've been talking about it for 40 years," and the consequences of delay were grave.

Unless the market drops.

So, the moral of the story is, don't do business with right-wing greedheads who really aren't committed to anything but lining their pockets.

The Airbrush Of Human Beings From The California Budget Crisis

Peter Schrag is one of the few columnists left in this state who consistently makes sense, and today he attacks that silly NYTimes article about California, in particular the elements of conventional wisdom:

In his passing references to California’s serious issues, many of which have major implications for the nation as a whole, Leibovich collects pieces of the conventional wisdom, even when, as in his facile summary of the causes of gridlock in Sacramento, it’s wrong. Since Democrats have again and again agreed to multi-billion dollar cuts, it is not, as he thinks, just a matter of “’no more taxes’ (Republicans) and ‘no more cuts’ (Democrats).”

And while Jerry Brown, in his prior tenure as governor was indeed labeled “Governor Moonbeam” (by a Chicago columnist) for his space proposals, as Leibovich says, the label applied much more broadly to his inattention to the daily duties of his office and, most particularly to his dithering while the forces that produced Proposition 13 began to roll.

Brown later acknowledged that he didn’t have the attention span to focus on the property tax reforms that were then so urgently needed to avert the revolt of 1978. But to this day, almost no one has said much of Brown’s role in creating the anti-government climate and resentments that helped fuel the Proposition 13 drive.

It was the Brown, echoing much of the 1970s counter-culture, who, as much as anyone, was poor-mouthing the schools and universities as failing their students and who threatened to cut their funding if they didn’t shape up. It is Brown who spent most of his political career savaging politics and politicians, even as he ran for yet another office. Now this is the guy who wants to be governor again. But Leibovich doesn’t tell his readers that long history. Maybe he doesn’t know it.

The line about how those who fail to learn from history are doomed to repeat it can be inserted here. But Schrag hits on the most important failing of the article, and indeed of a good chunk of the political media here in California - they airbrush out the people who suffer for the failures of the politicians.

Where are California and the people who are feeling the pain – the school kids and teachers in hopelessly underfunded schools, the children who are losing their health care, the minimum-wage working mothers struggling to pay their child care, the students who are losing their university grants? Is all this really about nothing?

To far too many, the answer is yes. It's politics as theater, as a sporting event, where winners and losers are checked on a board, and whether or not a leader will keep their position is made the story rather than the principles he or she represents. And yet it's not Governor Hot Tubs and Stogies who will feel the pain of an economic downturn and massive budget cuts, nor well-heeled consultants or columnists who make up the scorecards. It's people.

People like the students in the Cal State system who may see their fees raised 20%, just months after a 10% hike approved in May. This will effectively block higher education for a non-trivial number of students, as will proposed enrollment reductions of 32,000 students.

People like LA County homeowners who have defaulted at twice the rate in May as they have in the previous month, as a foreclosure backlog builds up due to various moratoriums and an increase in repossessed homes entering the market.

People like IOU holders who may have to turn to check-cashing stores to get less-than-full value for their registered warrants after Friday, when most major banks (who have all been bailed out by the federal government, by the way) stop the exchange of the notes.

And people like the elderly, disabled and blind, who rely on the in-home support services that the Governor is trying to illegally cut in contravention of a contempt-of-court citation, at least in Fresno.

These are the great unmentioned in this California crisis, the people who Dan Walters tries to smear in his column today by turning every Democratic concern for the impacts of policy as a sellout to "public employee unions." Behind those unions are workers, and the people they serve need the help the provide, in many cases, simply to survive. But it would be too dangerous to Walters' beautiful mind to consider those faces, so he chooses to make political hay out of the violation of people.

This is the point of the People's Day of Reckoning Coalition. They refuse to have their existence denied any longer.

Even The Not-Liberal New Republic...

With Ellen Tauscher's departure from Congress, Patrick Murphy is taking up the cause of repealing Don't Ask Don't Tell.

Murphy, a second-term Democrat, will be lead sponsor of the Military Readiness Enhancement Act, which would repeal "Don't ask, don't tell" — a policy first passed by Congress and signed into law under President Bill Clinton.

"It's our job," Murphy said of a repeal. "This was an act of Congress in 1993 and it will take an act of Congress" to reverse it.

The measure got a subcommittee hearing last year, but Murphy says Rep. Ike Skelton (D-Mo.), the chairman of the House Armed Services Committee, has promised him a full committee hearing on the bill this session.

And The New Republic editorializes for its repeal as well this week.

This magazine has made no secret of its high regard for Barack Obama. Which makes it all the more distressing for us to observe the approach that his administration is taking on gay rights. During the campaign, Obama said all the right things (well, almost all--like most national politicians, he wouldn't endorse same-sex marriage). He invoked the importance of winning "equality" and "dignity" and "respect" for gays and lesbians. Now he is president. And one of the perks of being president is that you get to lead. But, when it comes to gay issues, leading does not seem to interest this White House [...]

In all of this, nothing is more infuriating than Obama's refusal to act on Don't Ask, Don't Tell. It is true that the issue affects a relatively small number of gays and lesbians. But discrimination in our armed forces carries a potent symbolism: It tells an entire class of people that the country is not interested in their service. And it would be an easy problem to fix. As Nathaniel Frank argued at tnr Online last month, Obama may need Congress's approval to officially repeal Don't Ask, Don't Tell, but he has the legal authority to tell the Pentagon to stop enforcing the policy via executive order. He could do it tomorrow. As for the political risks: Obama should look at some polls. Unlike same-sex marriage, the question of whether gays should serve openly in the military is no longer a particularly controversial issue. According to Gallup, 69 percent of Americans believe gays should be able to serve openly. To put that number in perspective, it is 25 points higher than the percentage of Americans who endorse Obama's handling of health care, 19 points higher than the percentage who currently support the war in Afghanistan, and 18 points higher than the percentage who approve of the administration's economic policies. Obama is not afraid to push health care reform, send more troops to Afghanistan, or stand by his stimulus program--nor should he be. But why, when it comes to the far less controversial cause of gays serving in the military, is he apparently willing to punt?

So, take a look at the coalition here. Patrick Murphy, a Blue Dog Democrat, replaces New Democrat Ellen Tauscher as the lead sponsor on the repeal bill. The New Republic, easily the most centrist of major Democratic publications, which still has Charles Krauthammer on the frickin' masthead, calls the President's refusal to act "infuriating." We're not talking about Barbara Lee and The Nation teaming up on a bill. This is the consensus opinion of virtually everyone in the Democratic Party.

Except Barack Obama, who could stop implementation of the policy immediately through a stop-loss order.

If it's true that senior military leadership is to blame for the holdup of this basic, and modest, civil rights gain, someone needs to start naming names.

Everyone's Leaving Their Options Open

Lynn Woolsey let Rahm Emanuel have it yesterday over his comments on a trigger for the public option. I get the sense that Rahm still craves capitulating to the insurance companies on this one, but he's being invited to recognize the contours of the debate, and the fact that there aren't enough votes for a health care bill without a public insurance option.

White House Chief of Staff Rahm Emanuel reassured House Democrats on Tuesday night that President Barack Obama strongly backs a government-run health insurance plan, seeking to quell a firestorm among liberals upset at Emanuel’s comments in the Wall Street Journal that suggested such a plan could be delayed.

Progressive Caucus Co-Chairwoman Lynn Woolsey (D-Calif.) warned Emanuel that he would lose the caucus’ votes if the White House compromised on the issue and included a “trigger” that could delay a public insurance plan indefinitely. The trigger idea is backed by conservative Democrats but is anathema to liberals.

“We have compromised enough, and we are not going to compromise on any kind of trigger game,” Woolsey said she told Emanuel. “People clapped all over the place. We mean it, and not just progressives.”

House Energy and Commerce Chairman Henry Waxman (D-Calif.) said he was reassured by Emanuel. “He doesn’t stand by that trigger,” Waxman said. “He said the president and his administration and he are for a public plan as one of the options.”

Of course, Emanuel stands by the public plan as "one of the options." They have no line in the sand drawn on that, and everything's open to negotiation. Still, if the Progressive Block holds, even a weasel like Emanuel can figure out the math. They cannot take progressive votes on this for granted, and that's a good message to push.

The other message getting pushed over in the Senate by Harry Reid and the leadership is a variation on Bernie Sanders' suggestion, that all Democrats in the caucus should agree not to join Republican filibusters as a matter of course and out of respect for the majority's agenda. The most conservative Democrats don't agree, incidentally.

Landrieu:

However, she flatly refused to rule out filibustering any bill, including health care and climate change legislation. “I’m going to keep an open mind, but I am not committing to any procedural straitjackets one way or another,” she said.

Nelson:

“I’m not a closed mind on cloture, but if it’s an abuse of procedure, if it’s somebody trying to put a poison pill into a bill, or if it’s something that would be pre-emptive of Nebraska law, or something that rises to extraordinary circumstances, then I’ve always reserved the right to vote against cloture,” Nelson said.

Reid's next step should be to remind his colleagues of the tools available to him as Majority Leader. Namely - not approving any bills of individual Senators for floor votes; throwing members off of prized committees in the next session; refusing to contribute to members' re-election campaigns through the DSCC; not respecting members' holds on legislation; using manager's amendments to simply rewrite bills coming out of members' committees; and on and on. These were some of the tools of persuasion used in the 1950s and 1960s, under far more preocedural hurdles, to pass progressive legislation:

I recently read a book called "The Liberal Hour" about the Great Society. And the authors there made the point that one of the important underlying factors to Johnson's ability to move Civil Rights legislation and Medicare and Medicaid was a change House Speaker Sam Rayburn made to the Rules Committee when John F. Kennedy was president. He expanded it to give it a more liberal majority. And there have been a couple moments like this where legislative change is preceded by procedural change.

One of the things that brings up is that it's interesting how central the filibuster has become to not only how the Senate operates, but also how the House operates, as much of the legislating is done in recognition that it'll have to pass the Senate. As political scientists will tell you, of course, this centrality of the filibuster is actually a relatively recent innovation. So I'm curious how much you think it's actually possible to achieve these changes under the current system. Even with a popular new president and a large House majority and 60 Democrats in the Senate, it seems unlikely we'll actually solve these underlying problems. We might get legislation. But it's not likely to avert the existence-level fiscal threat from health-care reform or the existence level environmental threat from climate change. But if not now, then when? And if Congress can't respond to challenges of that magnitude, doesn't it suggest that something is quite wrong?

I think we need to be open-minded and think about the possibility in changes of process as well as policies. We shouldn't be so burdened by the past that we can't face the future. The seniority system in the House was traditionally dictated by members who didn't like the speaker having so much power over the committees. But when I came to Congress, if you were the senior member, you became chairman no matter how competent you were, no matter how in sync you were with the majority caucus. That was enormously advantageous for many of the Dixiecrats who remained Democrat for that reason, to take advantage of the seniority, but who aligned themselves on policy with the Republicans, and created a situation where even when Democrats had large margins, there was this sort of Southern Democrat-Republican coalition that ruled.

The fight by Sam Rayburn to allow the Rules Committee to be controlled by the leadership was an enormous and brutal fight, but a necessary one. The chairman before that time was Judge Smith from Virginia, who wouldn't let civil rights legislation go to the House floor because he was a segregationist himself. That meant that even when the Judiciary Committee proposed a bill for civil rights, members of the House couldn't vote on it.

There are anti-democratic rules that need to be changed. In some ways, the filibuster is an issue we might want to look at more closely. It is a two-edged sword. But I come from California, where to pass a budget you need a two-thirds vote. And they've been unable to pass a budget for years now able to deal with the fiscal problems. And it has thrown the state into chaos because they can't get the two-thirds vote.

The filibuster used to be a two-thirds requirement, and it wasn't until 1975 that they changed it to 60 votes. Well, that was a move in the right direction. For sure.

This speaks more to the ability to recognize the ability for procedural change, but the other story of the 1950s and 1960s was how the Master of the Senate, Lyndon Johnson, used everything at his disposal to break 2/3 majorities, unlock the strangehold from Dixiecrats over major committees, and generally pass his agenda, as Majority Leader and then as President. Political leaders have more power than most people think they realize today. So while Mary Landrieu and Rahm Emanuel and Ben Nelson and Max Baucus think they can have their way in the Senate, it's simply untrue. This begs the question as to whether the leadership WANTS to hold their conservative flank accountable. It's the question of what their priorities are.

...Evan Bayh, too.

And Justice For None

Glenn Greenwald has the gory details about yet another civil liberties backtrack for the White House, introducing the new term of "presidential post-acquittal detention power." Basically, if the Administration puts a terror suspect on trial and they are actually found innocent, the President reserves the right to detain them anyway for an indefinite period.

All of this underscores what has clearly emerged as the core "principle" of Obama justice when it comes to accused Terrorists -- namely, "due process" is pure window dressing with only one goal: to ensure that anyone the President wants to keep imprisoned will remain in prison. They'll create various procedures to prettify the process, but the outcome is always the same -- ongoing detention for as long as the President dictates. This is how I described it when Obama first unveiled his proposal of preventive detention:

If you really think about the argument Obama made yesterday -- when he described the five categories of detainees and the procedures to which each will be subjected -- it becomes manifest just how profound a violation of Western conceptions of justice this is. What Obama is saying is this: we'll give real trials only to those detainees we know in advance we will convict. For those we don't think we can convict in a real court, we'll get convictions in the military commissions I'm creating. For those we can't convict even in my military commissions, we'll just imprison them anyway with no charges ("preventively detain" them).

After yesterday, we have to add an even more extreme prong to this policy: if by chance we miscalculate and deign to give a trial to a detainee who is then acquitted, we'll still just keep them in prison anyway by presidential decree. That added step renders my criticism of Obama's conception of "justice" even more applicable:

Giving trials to people only when you know for sure, in advance, that you'll get convictions is not due process. Those are called "show trials." In a healthy system of justice, the Government gives everyone it wants to imprison a trial and then imprisons only those whom it can convict. The process is constant (trials), and the outcome varies (convictions or acquittals). Obama is saying the opposite: in his scheme, it is the outcome that is constant (everyone ends up imprisoned), while the process varies and is determined by the Government (trials for some; military commissions for others; indefinite detention for the rest). The Government picks and chooses which process you get in order to ensure that it always wins. A more warped "system of justice" is hard to imagine.

I get the feeling that if those left at Guantanamo wanted to engage in mass suicide right now, someone in the White House would give the go-ahead to mix the Kool-Aid for them. This is just a problem they don't want to solve.

And of course, the focus on Guantanamo, and the fate of the prisoners there, keeps everyone's eye off of those indefinitely detained at Bagram Air Force Base in Afghanistan, without charges, and in greater numbers at this point than in Cuba. Furthermore, what Obama's team has not answered is if they plan to continue these show trials and preventive detention tactics for those they capture, not just the artifacts of the Bush regime. That answer could come soon.

We have, through expansion of executive power, extreme Congressional deference and a failure to counteract the push in the popular culture, allowed the arguments of reactionaries - that any suspect in the so-called "war on terror" must be detained indefinitely until the end of combat in an endless, figurative war - to take hold in the public mind. When these issues made the public debate, when torture became the stuff of online poll topics, when they were allowed legitimacy, we inevitably and inescapably lost that debate. The genie has left the bottle, and while a popular President could put it back in, he has shown absolutely no willingness to expend an ounce of political capital to do so. And we will look back on decisions like this as part of a sad legacy, regardless of the rest of the tenure.

Stimulus II: The Restimulating

Laura Tyson, an informal advisor to the Obama White House, dared to talk about a second stimulus yesterday. I don't totally agree with her about the focus, but it's good that someone values preparation.

The United States should be planning for a possible second round of fiscal stimulus to further prop up the economy after the $787 billion rescue package launched in February, an adviser to President Barack Obama said.

"We should be planning on a contingency basis for a second round of stimulus," Laura D'Andrea Tyson, a member of the panel advising President Barack Obama on tackling the economic crisis, said on Tuesday.

Addressing a seminar in Singapore, Tyson said she felt the first round of stimulus aimed to prop up the economy had been slightly smaller than she would have liked and that a possible second round should be directed at infrastructure investment.

As Chris at Americablog notes, the first stimulus should have been designed to be sufficient enough, but it wasn't, and the President and his team should just drop the "nobody could have anticipated" crap and start anticipating the reality of a continued shortfall in output.

Where I disagree with Tyson is in the focus of Stimulus II. She says infrastructure investment, which is of course important. Maybe more of our projects could have been shovel-ready if we followed France in recognizing that any construction-creating jobs are valid, instead of disqualifying the building of museums or parks due to nonsense about "pork." But more to the point, we should in a Stimulus II provide relief for the states so they can maintain their budgets and contribute to economic recovery instead of damaging it. The perverse nature of balanced budget amendments and a recession is really stagnating the national economy. We need a permanent state fiscal stabilization fund that kicks in during recessions.

I guess Wall Street doesn't like the notion of a second stimulus, mainly because it turns their green shoots to mud. Tough. We have to look at reality, which is that the economy is not working for regular people, and without consumer spending or private investment only government can provide the kickstart necessary.

Prioritize The Populism

Out of nowhere, the Obama Administration and its federal agencies have started to crack down on speculation and monopolies, while improving individual safety. These populist positions deserve pride of place from the White House; they should talk a lot more about them.

Hold a press event about stopping oil speculation:

In a big departure from the hands-off approach to market regulation of the last two decades, the chairman of the Commodity Futures Trading Commission, Gary Gensler, said his agency would consider new limits on the volume of energy futures contracts that purely financial investors would be allowed to hold.

The agency also announced that it would pull back part of the veil on the oil and gas markets, publishing more detailed information about the aggregate activity of hedge funds and traders who arbitrage between domestic and foreign energy prices.

....Oil prices have swung wildly in the last year, hitting about $145 a barrel last summer, then plunging to $33 in December before rising to about $70.

....A growing number of critics have blamed some of the extreme volatility on the role of purely financial investors — those who are simply betting on the direction of energy prices, as opposed to those who actually use such products, like airlines....Non-commercial traders accounted for almost a fifth of the activity in several major oil and gas products for the week that ended June 30, according to data compiled by the commodities agency.

Matt Taibbi, in his great story on Goldman Sachs, writes about how last year, "a barrel of oil was traded 27 times, on average, before it was actually delivered and consumed." That's just unconscionable, and the CFTC has a role to play in dialing that back.

Furthermore, the President should deliver a live speech on telecom monopolies:

The U.S. Justice Department has begun looking at big telecom companies to try to determine if they have abused their market power, the Wall Street Journal reported in its online edition Monday.

The journal, which cited people familiar with the matter, said that the Antitrust Division's review was in its very early stages and was not official.

Lawmakers have recently raised questions about whether large wireless carriers were hurting smaller rivals by entering exclusive agreements with the makers of popular phones.

I think they could reel in a lot of people by telling them they shouldn't have to change carriers to use an iPhone.

Finally, rather than a fact sheet and a webcast, how about a prime-time special on food safety?

The Food and Drug Administration (FDA) is issuing a final rule to control Salmonella contamination of eggs during production. This rule is estimated to reduce the number of foodborne illnesses associated with consumption of raw or undercooked contaminated shell eggs by approximately 60%, or 79,000 illnesses every year, and will generate annual savings of over $1 billion [...]

Stepped Up Enforcement in Beef Facilities: FSIS is issuing improved instructions to its workforce on how to verify that establishments handling beef are acting to reduce the presence of E. coli. Also, FSIS is increasing its sampling to find this pathogen, focusing largely on the components that go into making ground beef.

Preventing Contamination of Leafy Greens, Melons, and Tomatoes: By the end of the month, FDA will issue commodity-specific draft guidance on preventive controls that industry can implement to reduce the risk of microbial contamination in the production and distribution of tomatoes, melons, and leafy greens. These proposals will help the Federal government establish a minimum standard for production across the country. Over the next two years, FDA will seek public comment and work to require adoption of these approaches through regulation [...]

Building a National Traceback and Response System: A system that permits rapid traceback to the source of foodborne illness will protect consumers and help industry recover faster. Yet despite the dedicated efforts of food safety officials across the country, our current capacity to traceback the sources of illness suffers from serious limitations [...]

Improving Organization of Federal Food Safety Responsibilities: Building a more effective safety system requires federal agencies to improve management of their food safety responsibilities and coordinate more effectively with each other.

I hear that the President's approval rating is sinking in Ohio. They are experiencing a terrible economy like the rest of the country, but they also see bank bailouts without the same attention paid to the auto industry, and think they're getting the shaft. Maybe if they knew that their government was trying to stop oil speculation to lower the price of their gas, stop the phone companies from ripping them off, and stop food manufacturers from making them sick, they'd have a little more comfort that their President is on their side.

Fighting Back

The structure of California government makes rational solutions impossible. But the people who bear the brunt of the pain from a structure wired to drown government in the bathtub have an option. They can stand their ground and refuse to be moved.

And so it begins. As Anthony Wright is tweeting, a group of disabled activists have taken up positions in the Capitol building and are refusing to leave until the health and human services cuts are reconsidered:

Wheelchairs blocking the Governor's office for the last two hours over the budget cuts.. CHP threatens arrest, they say they are prepared...

Over 100 folks protesting cuts in the hall outside Governor Schwarzenegger's office. Gov is at Mason's having lunch... maybe Jacuzzi later?

CHP threatens not just arrest-and-release, but taking disabled protestors to county jail. They say they rather be in jail than nursing home.

Outside Gov's office... Several Dem legislators came down to talk to/cheer on the disabled protestors: Cedillo, Perez, Beall, Skinner, etc

Budget protesters call out "hold the line" when someone tries to pass. The wheelchairs effectively stop any traffic in hallway.

Bad budget boon for Blimpie's: Food arrives for protestors with disabilities, as thet settle in for the long haul in front of Gov's office...

UPDATE: The protest organizers, the "People's Day of Reckoning Coalition" (an offshoot of the IHSS Coalition) have explained their actions to the media:

Caregivers and people with disabilities are furious that Gov. Arnold Schwarzenegger is asking for more cuts to California's in-home support services.

About 100 protesters said they successfully blocked the entrance to the governor's office Tuesday. The People's Day of Reckoning Coalition organized the protest.

The coalition sent a letter to Schwarzenegger in June, asking him to come up with a budget solution that includes new sources of income and not just cuts to services.

"We are calling for a budget solution that is based upon shared responsibility and shared sacrifice -- not a solution that falls squarely upon on the shoulders of children, people with disabilities, elders, the chronically ill, the unemployed and the impoverished," the letter said.

The People's Day of Reckoning Coalition represents human services, health care, community improvement and educational interest....

John Campbell, a caregiver, said claims of fraud are exaggerated, calling the governor's remarks "just a bit of political theater."

The California Highway Patrol cited about a dozen protestors. They'll be back, to coin a phrase.

The long story of Governor Stogie and In-Home Supportive Services (IHSS) is here. The short version is that Arnold up and decided, after months of budget negotiations, that there was massive fraud in this program (there isn't), which allows the elderly, disabled and blind to receive in-home care rather than being consigned to a nursing home, and he demanded that anti-fraud provisions immediately get adopted as part of a budget deal, adding a massive, complex policy shift 24 hours before the budget deadline. There's more about how ridiculous this all is at the link.

What's important here is that those with a stake in Governor Stogie's ruthless cuts - the people who actually feel the effects - have had enough. The structure makes decent solutions impossible, but the only way to fix that structure starts with activists like this, literally blocking the way to right-wing shock doctrine tactics.

Can I Write The Sack Of Rome II?

I've been reading The Sack of Rome: How a Beautiful European Country with a Fabled History and a Storied Culture Was Taken Over by a Man Named Silvio Berlusconi by Alexander Stille, which is a rollicking read, about one of the greatest monsters currently running the world, Italy's richest man, who basically cheated his way to billions, bought his way into the Prime Minister's chair, and saved his own ass from criminal charges time and again by having his handpicked Parliament give him amnesty. It's really good, but I keep thinking that I'm reading the original but missing out on the sequel. Berlusconi returned to power this year, and immediately sank into a sex scandal, a divorce, a scheme to run a bunch of starlets as candidates for Parliament to get notoreity, and a general series of embarrassments for the people of Italy. Now this is all coming to a head with a potentially ultimate ignominy: getting kicked out of the G8.

Preparations for Wednesday's G8 summit in the Italian mountain town of L'Aquila have been so chaotic there is growing pressure from other member states to have Italy expelled from the group, according to senior western officials.

In the last few weeks before the summit, and in the absence of any substantive initiatives on the agenda, the US has taken control. Washington has organised "sherpa calls" (conference calls among senior officials) in a last-ditch bid to inject purpose into the meeting.

"For another country to organise the sherpa calls is just unprecedented. It's a nuclear option," said one senior G8 member state official. "The Italians have been just awful. There have been no processes and no planning."

"The G8 is a club, and clubs have membership dues. Italy has not been paying them," said a European official involved in the summit preparations.

The behind-the-scenes grumbling has gone as far as suggestions that Italy could be pushed out of the G8 or any successor group. One possibility being floated in European capitals is that Spain, which has higher per capita national income and gives a greater percentage of GDP in aid, would take Italy's place [...]

Silvio Berlusconi has come in for harsh criticism for delivering only 3% of development aid promises made four years ago, and for planning cuts of more than 50% in Italy's overseas aid budget.

This really would be a delicious come-uppance for Berlusconi, the mogul who turned to politics to "save Italy" and has only succeeded in tossing it into the toilet. He's holding the summit in L'Aquila, which basically crumbled to the ground in an earthquake three months ago, and the region is still having aftershocks. Both the images of Berlusconi showing off his country by proudly displaying rubble, and the idea of the Prime Minister pronouncing Italy's stability in an area where the ground is still moving have rich figurative possibilities.

PA-Sen: Sestak Waiting Too Long?

Joe Sestak may be embarking on a tour of every county in Pennsylvania, but if you tell anyone that he's running for Senate, he'll track you down and immediately disavow any official announcement. And this hemming and hawing has led another candidate to enter the race.

While Congressman Joe Sestak keeps sticking his toe in the water, another Democrat has already plunged into a primary race against U.S. Sen. Arlen Specter - state Rep. Bill Kortz, a little-known two-term legislator from the Mon Valley, outside Pittsburgh.

Kortz, 54, a 30-year veteran of the steel industry who's held elective office for just 2 1/2 years, announced his candidacy in April, when Specter was still a Republican and various Democrats were licking their chops about taking him on. Specter's metamorphosis to a Democrat won endorsements from President Obama, Gov. Rendell and Sen. Bob Casey, and convinced Joe Torsella to drop out of the Senate race.

But Kortz says that the party leadership is out of touch with Democratic voters and vows to drive his Ford minivan throughout the state to contest Specter's re-election.

Kortz doesn't have much money, though his populist message may connect a bit, particularly because he'll be the only candidate from the western half of the state. But significantly, as an elected official he'll need to be part of all the debates and process stories about the race. And he splits a sliver of the anti-Specter vote. Which makes Sestak's job more difficult. If he'd quit dipping his toe in the water and just get in the damn race, maybe Kortz gets out of his own accord.

Learning To Count

This has been a consequential day in the health care debate, and it all started when Rahm Emanuel opened his trap and tried to turn the public option trigger into the compromise, rather than the public option being the compromise between nothing and single payer. First the White House tried to staunch the bleeding, with the President shifting the emphasis (but not really deviating from what Rahm said all that much). The advocacy groups pounced at the mention of the trigger. Sam Smith reported that Rahm has been looking to cave on this point for months:

It was, White House aides insist, far from a commitment to a trigger option. But a source close to the administration, who has been in contact with the White House on health care matters, said that Emanuel has been "floating" the trigger compromise since January.

"Rahm's problem with this is he is on the more conservative end of the Democratic Party and he is a very political guy," the source added. "He is working for a way out without a bloody fight. The problem is he doesn't mind taking that fight to the left. And what I worry could happen is the left will just quit."

Bernie Sanders confronted Emanuel directly, vowing that he had plenty of votes to scuttle any bill that didn't include a public option, and in fact taking aim at the bill being pushed through the Senate Finance Committee, which doesn't even have so much as a trigger:

"I think that it is fair to say that there are a number of us who would not be voting for anything resembling a Baucus-type plan as we understand it right now," the senator told the Huffington Post, referring to Finance Committee Chairman Max Baucus' effort at constructing a reform bill [...]

"Emanuel is dead wrong," Sanders said. "The triggers are meaningless. The American people have shown in poll after poll their contempt for private health insurance companies. They don't trust them and for good reason.

"Now, where we are right now politically is the HELP Committee, of which I'm a member, is going to bring forth a public plan," Sanders added. "The House of Representatives is supporting a public plan. And President Obama ran for office talking about a strong public plan. Why, with that political reality of the American people wanting it, the House going forward, the Senate HELP Committee going forward, would Rahm Emanuel suggest that we would compromise on this issue?"

More significantly, Harry Reid basically told Baucus that his watering-down efforts will only end in failure, and he will lose too many Democratic votes in the exchange.

Senate Majority Leader Harry Reid (D-Nev.) on Tuesday ordered Finance Chairman Max Baucus (D-Mont.) to drop a proposal to tax health benefits and stop chasing Republican votes on a massive health care reform bill.

Reid, whose leadership is considered crucial if President Barack Obama is to deliver on his promise of enacting health care reform this year, offered the directive to Baucus through an intermediary after consulting with Senate Democratic leaders during Tuesday morning’s regularly scheduled leadership meeting. Baucus was meeting with Finance ranking member Chuck Grassley (R-Iowa) Tuesday afternoon to relay the information.

According to Democratic sources, Reid told Baucus that taxing health benefits and failing to include a strong government-run insurance option of some sort in his bill would cost 10 to 15 Democratic votes; Reid told Baucus it wasn’t worth securing the support of Grassley and at best a few additional Republicans.

I don't think capping the employer deduction (which is not really taxing health-care benefits) is so horrible, but it's clearly a non-starter, to the extent that the House prefers a surtax on the wealthy to get the proper funding. And what's not said here is that all the other sops to the right that Baucus has smashed into his bill don't sit well with Democrats either and would not pass the Senate, including the removal of a public option.

Even more interesting than all that is Raul Grijalva's letter to the White House today on behalf of the Congressional Progressive Caucus, saying flat-out that the caucus will not support any health care reform bill without a "robust public option plan, akin to Medicare." And there's this extremely interesting line:

Public opinion polls show that 76% of Americans want a robust public plan option and I will stand in solidarity with them. Moreover, I consider it unacceptable for any of the cost savings that you are negotiating with hospitals and other sectors of the health care industry to be made contingent upon a robust public plan option not being included in the final legislation.

This is what I was getting at earlier today, that these deals with stakeholders are coming with some strings. Grijalva comes out and says it.

There's a lot of good news here, though of course this isn't over. The White House has learned that they absolutely don't have the votes for a plan without the public option, and hopefully this will carry over to other elements of the debate. I can envision a world with a public option but not enough subsidies, no changes to Medicaid and a health insurance exchange that isn't strong enough to force competition. And there will be other pitfalls: this notion of denying legal abortion funding inside the health insurance exchanges is horrific, for example. And there's the matter of cost, which Republicans are playing up by touting yet another inaccurate CBO score today. But what we see today is the liberals in Congress and the progressive movement standing up to announce that they will not be rolled. Not this time. The centrists threatening the Obama agenda will have to pay a price.

We're a long way from home, with lots of lobbying, both corporate and grassroots (go Mainers!), to follow. But the left is standing up, for now. Let's help them.

CA-10: Quick Sprint For September 1

The primary election in California's 10th Congressional District is set for September 1, with the general election on November 3. If nobody gets 50%+1 on September 1, the top vote-getters in each party advance to the general election, and given the orientation of the district, the top Democrat on September 1 will be the next Congressmember from CA-10.

The New York Times read off the conventional wisdom yesterday:

The lieutenant governor, John Garamendi, is considered the early favorite to replace Ms. Tauscher. Mr. Garamendi, a Democrat who had considered running for governor next year, said he opted instead for Congress in large part because of the abbreviated campaign [...]

Mr. Garamendi’s principal challengers among the Democrats, some polls show, are State Senator Mark James DeSaulnier and Assemblywoman Joan Buchanan. Both were elected to their current posts last fall [...]

The rest of the Democratic field is not as well known, though one candidate has attracted some national attention: Anthony Woods, a 28-year-old graduate of the United States Military Academy at West Point and a veteran of the Iraq war who was awarded the Bronze Star for two tours of duty. Shortly after his return from combat, while at Harvard working toward his master’s degree, Captain Woods told military superiors that he is gay, resulting in an honorable discharge [...]

Others in the Democratic field include Tiffany Attwood, a local planning commissioner and self-described “mom who plays soccer” — do not call her a soccer mom — and Adriel Hampton, a former reporter for The San Francisco Examiner who said he was entering politics because of a “Howard Beale moment,” referring to the fictional insane anchorman from the 1976 film “Network.”

We're slowly starting to learn further details. While candidates don't need to announce fundraising totals until July 15, Anthony Woods got the jump by announcing that he raised over $100,000 from 800 donors, which his campaign reports as twice as many as the number of donors John Garamendi announced a week earlier. He's pushing his online efforts:

Woods’ campaign is also leading his CD 10 competitors in online fundraising and online organizing. According to ActBlue.com, Woods is far outpacing the two other Sacramento politicians in the race–State Senator Mark Desaulnier and Assemblywoman Joan Buchanan—in internet fundraising, and Woods has organized more supporters on Facebook (more than 4,700) than every other CD 10 candidate combined.

Woods has captured some national attention, particularly in the blogosphere, and we'll see if that translates to a quick-sprint campaign. John Garamendi seems not to think so:

Garamendi said it's a three-way race, and he's not counting Woods as a top-tier candidate: "He's a serious young man that's capable, and he's got a national issue and a good story to go with it. And that's to his benefit."

But he said Woods is similar to the half-dozen or so other confirmed or prospective candidates who lack a natural base for their campaigns: "Everybody regards me as the front-runner."

To that end, Garamendi secured a local labor endorsement, from the Alameda County Central Labor Council. There's a small patch of Alameda County in the district, particularly around Livermore. But the dynamic in the race thus far has been that Mark DeSaulnier locked up all the early local support, including Contra Costa County's Labor Council, and Garamendi had roped in the national labor groups. The Lt. Governor getting local labor support helps him with manpower.

I hope to have much more on this race as it moves forward, including some discussions on the issues currently facing Congress.

Neogtiations In Honduras

Some better news out of Honduras. After a meeting between ousted President Mel Zelaya and Secretary of State Clinton today, a diplomatic agreement has been brokered, though I don't think it will be entirely smooth.

Ousted Honduran President Manuel Zelaya on Tuesday accepted a U.S.-backed effort by Costa Rican President Oscar Arias to mediate an end to the political crisis in Honduras and said talks with his rivals would begin on Thursday.

"Our first meeting is set for Thursday, in Costa Rica," Zelaya, told Honduran radio from Washington, saying he would meet the "protagonists" of the June 28 coup that ousted him.

But Arias, a Nobel Peace Prize winner, faces mediating between sharply opposed positions.

Zelaya said that his reinstatement as president was "nonnegotiable," adding of the talks, "What this is is not a negotiation, this is the planning of the exit of the coup leaders."

In Honduras, Roberto Micheletti, who was appointed president by Honduran lawmakers after the coup, also said he accepted Arias as a mediator, but added his government maintained his position that Zelaya could not return.

If you can squint and sort of see the outlines of any deal, let me know. But dialogue can bear fruit if given enough time and backing. You could see some sort of deal where Zelaya gets to serve out his term (which has less than a year left) in exchange for a vow not to change Presidential term limits. And then the people of Honduras get their elected leader and can choose another one. Obama made a good statement:

"America supports now the restoration of the democratically-elected president of Honduras, even though he has strongly opposed American policies," Obama said in a speech in Russia.

"We do so not because we agree with him. We do so because we respect the universal principle that people should choose their own leaders, whether they are leaders we agree with or not," he added.

Sounds reasonable to me, which is why he'll get endlessly attacked for "siding with Castro and Chavez."

"Too Big To Fail" To Fail?

Over the weekend, the White House either released a new part of their regulatory plan or got the AP to bite at its larger intent - that they seek the end of "too big to fail" institutions that threaten to take down the entire economy.

They are the biggest of the big — the Citigroups, the Goldman Sachses, the AIGs and other financial behemoths. The Obama administration doesn't want so many around anymore.

Financial regulations proposed by the president would result in leaner and simpler institutions that don't carry the weight of the system on their marble columns [...]

So far, however, congressional debate has centered on the administration's plan to put the Federal Reserve in charge of these "systemically significant" companies. Less attention has focused on the potential effect on the institutions and the financial system's hierarchy.

Under the administration's proposal, companies such as Citi, Goldman Sachs and others in a broad top tier engaged in complex transactions would face stricter scrutiny and have to hold more assets and more cash as cushions against a downturn.

They also would have to anticipate their own demise, drafting detailed descriptions of how they could be dismantled quickly without causing damaging repercussions. Think of it as planning their own funerals — and burials.

Obama's plan, in short, aims to make it far less appealing to be so big. That was the middle ground the administration sought, a step short of an outright ban on systemically risky companies.

This sounds like a return to the behavioral economics mode that Obama wanted to push going into the White House - in effect, he wants to nudge big institutions from getting so large and interconnected that they must be kept on life support. The rules described here aren't entirely specific, but it sounds like the biggest companies will need to lower their leverage and increase their capital requirements as they grow.

Some believe that eliminating "too big to fail" is impractical. And those beliefs should be taken seriously. But even those critics believe that the way to do it is through capital requirements and leverage. So this is pretty much on the right track.

Now, if the White House takes this advice from the President of the New York Fed, we'd have something.

The Federal Reserve should break with past policy and try to identify and deflate asset bubbles before they can damage the U.S. economy, New York Federal Reserve President William C. Dudley said.

While interest-rate policy may not be the appropriate tool for popping bubbles, Fed officials have "other instruments in their toolbox," Dudley notes in the text of a speech scheduled for July 26 at the Bank for International Settlements in Basel, Switzerland. The New York Fed released his remarks yesterday.

The Fed's view has been that bubbles can be identified only in hindsight, and that all the central bank can do is prepare to clean up after they burst. The current crisis shows that policy is mistaken, Dudley said.

"Asset bubbles may not be that hard to identify," he said. "This crisis has demonstrated that the cost of waiting to clean up asset bubbles after they burst can be very high."

Dudley did not specify what tools the Fed should use. Analysts have suggested that central bankers might raise reserve requirements or amp up restrictions on margin lending.

Simon Johnson links approvingly but wonders if the Fed can actually meet this task.

Of course, if the Fed can’t get better at spotting bubbles, the implication is that no one can. Which means that “macroprudential regulator” is just a slogan – a nice piece of what Lenin liked to call “agitprop”.

And if macroprudentially regulating is an illusion, what does that imply? There will be bubbles and there will be busts. Next time, however, will there be financial institutions (banks, insurance companies, asset managers, you name it) who are – or are perceived to be – “too big to fail”?

You cannot stop the tide and you cannot prevent financial crises. But you can limit the cost of those crises if your biggest players are small enough to fail.

It really all goes back to that. Hopefully the Administration is on the right track.

Froomkin To HuffPo

Dan Froomkin has been hired by the Huffington Post. The post is Washington Bureau Chief, which means the duties are more editorial, but he'll write a column two times a week or so. Glenn writes:

Huffington says that it is Froomkin's views on the media that, for her, is his primary appeal. The key to vibrant, successful journalism, she said, is "getting away from the notion that truth is found by splitting the difference between the two sides, that there is always truth to both sides." Huffington argues that establishment journalism is failing due to "the idea that good journalism is about presenting both sides without a voice -- without any passion." The outlets that continue to adhere to that "obsolete" model "are paying a price." Froomkin -- who has written extensively about how passion-free, "both-sides-are-equally-valid" journalism is the primary affliction of the profession -- echoes that view: "The key challenge is to present an alternative to the 'splitting the difference' culture that has infested traditional media." [...]

For all the self-serving talk about how political journalism is dying, it is striking how new and online media outlets continue to thrive. Yesterday, Josh Marshall's TalkingPointsMemo -- which began as a one-person blog -- announced a major investment from Netscape founder Marc Andreesen that is allowing it to double its reporting staff. And now today, a columnist fired by an old, struggling establishment outlet claiming "business reasons" as a motive is not only almost immediately hired by a new media entity, but was inundated with expressions of interest and even other offers from an electic mix of reporting outlets.
Clearly, journalism itself is not dying. What is dying -- and rightfully so -- is the staid, establishment-serving, passion-free, access-desperate, mindless stenographic model to which establishment journalism rigidly adheres. As The Post's Ombudsman reported from personal experience, Froomkin's firing left "an army of angry followers" and "an outcry from a loyal audience." People are obviously hungry for the type of real journalism Froomkin practices. The Huffington Post immediately capitalized on the Post's short-sighted and myopic decision to fire one of their most (and one of their very few) vibrant, passionate and innovative journalists. In this episode lies many insights about the real reasons establishment journalism is struggling severely.

While this shift to new media necessarily leaves behind those on the other side of the digital divide, and I hope that can get addressed, it's not like traditional media is doing all that much to keep themselves relevant and useful. Journalism won't die, but journalism as it is practiced in print and broadcast really wants to give itself a nice Viking funeral.

The China Syndrome

There's been a serious and ongoing uprising in Western China, between Muslim Uighurs and Chinese police. Apparently the police killed at least 150 people in the capital of Xinxiang Province, Urumqi, with thousands of injuries and even more arrests. The tensions between the ethnic majority Uighurs in this region and the Chinese government have long been known, and after years of cultural and political repression, things are spilling over.

In fact, the reason why the group of 17 Uighurs at Guantanamo could not be sent to China is because of pretty much this outcome - they would have been persecuted and possibly tortured. However, Andy McCarthy at NRO hears "Uighurs" and "riots" and decides to spin out this marvel:

The Wall Street Journal (as flagged in the NRO web briefing) reports on rioting in China by Uighur "students" that has left scores dead and hundreds wounded. The "students," described elsewhere in the story as from a "predominantly Muslim ethnic group[, which has] long chafed at restrictions on their civil liberties and religious practices imposed by a Chinese government fearful of political dissent," expressed their dissent by torching cars and buses, as well as — according to accounts of some witnesses to state-controlled media — rampaging "with big knives stabbing people" on the street.

No reason for non-Muslims in Bermuda, Palau, or the United States to worry, though. The lovable Uighurs are merely trying to address "economic and social discrimination." Once they get social justice, I'm sure they'll stop.

McCarthy decides that state-run media reports in China are credible enough to just regurgitate. And neoconservatives like McCarthy, who used to praise the stirrings of democracy in totalitarian regions, let that go when political points can be scored against a Democratic President.

Remarkable.

The Story of the Governor And IHSS

As the budget talks stall, let's bore in on what new items the Governor has recently proposed. Out of nowhere last week, he called for policy changes as a condition for agreeing to covering the full budget deficit. He can call them budget-related, or part of the "reform" agenda, but that's a lie. He added new issues into the negotiations, and Karen Bass was right to call him out for it.

Among those new items was this call to "root out fraud" in several programs, including IHSS, Cal-Works and Medi-Cal. The Governor claims that implementing programs to end this fraud would save the state $500 million dollars a year - meaning it would take 14-16 years for this program fix to cover the wasted money caused by his intransigence in refusing the stop-gap fix last week, which lead to the issuance of IOUs. On top of that, those numbers are overstated, and changing eligibility standards is a complex, costly process that will neither improve customer service or even reduce an already-low error rate.

The Governor's response to these comments is that Democrats are somehow protecting union allies and the status quo. If that's the case, what to make of this fact:

In April of THIS YEAR, Democrat Bonnie Lowenthal introduced AB682, which would investigate fraud in the IHSS program. Here's the analysis of the bill:

1) Requires that, beginning January 1, 2010, DSS dedicate two positions to evaluate implementation of five specific anti-fraud provisions of the Welfare and Institutions Code related to the IHSS program and authorizes DSS to fill the positions either by using existing resources or, if an appropriation is provided for that purpose, by adding new positions.

2) Requires DSS, in consultation with the state Department of Health Care Services, the district attorney in the county with the largest caseload, and stakeholders, including IHSS consumers and providers, to provide a report to the Legislature by December 31, 2010, which shall do all of the following with respect to IHSS-related fraud:

a) Identify the magnitude of fraud in terms of the total dollars inappropriately spent or removed from the program, and the number of consumers harmed or placed at risk of harm as a result of fraudulent activity, through instances resulting in a fraud conviction between January 1, 2005 and January 1, 2010;

b) Identify the number of people involved in fraud for each of the following categories: IHSS providers, IHSS consumers, state workers, county workers, and others. In the case of "others," the report shall describe the function of the persons committing fraud with specificity but without revealing personal identifying information; and,

c) Provide recommendations on the best means to combat IHSS fraud.

It may interest you to know how the Assembly voted on the bill. In the Human Services Committee, the Democrats voted yes, the Republicans NO. In Appropriations, all Democrats voted yes, all Republicans NO. The final floor vote went 49-28, with three abstentions. EVERY SINGLE REPUBLICAN VOTED NO except for Paul Cook, who abstained.

The ostensible reason for the Yacht Party united front against the bill? It costs $350,000 to hire two new employees at the Department of Social Services, and give them a budget to look into fraud at the IHSS. To pursue fraud that the Governor says would save the state $500 million a year.

This is basically what you do in government. You learn of a problem, you study it, and then you implement potential fixes for the problem. IHSS fraud was brought up as a problem in April, and Bonnie Lowenthal sought to fix it. The Governor waited around for a few months, then barged in and said Democrats, who were taking the steps to fix the problem, were safeguarding public employees, and that anti-fraud measures must be taken immediately in conjunction with an unrelated budget deficit.

The only fraud here is the Governor. He's tried to cut IHSS funding since the day he entered office. The Assembly passed a "quality assurance" provision in 2004 to ensure that the program ran smoothly, and the county investigations were kicked up to the state, and then the Governor NEVER FUNDED THE NEW POSITIONS for investigators to look over the county referrals. Small wonder a lot of cases with no action ensued.

In the final analysis, the Governor is doing what he has done multiple times in the past - attempting to cheat the needy out of lawful care and services instead of doing the politically unpalatable work of cutting programs. He'd rather reduce costs by making it virtually impossible for enrollees to stay eligible. It's cowardly and craven.

That's our Arnold.

Al Franken Is A US Senator

Hope for us ex-comics everywhere.



I too miss funny Al. And while I understand the desire not to give the right any openings, if he truly wants to follow the legacy of Paul Wellstone, he's going to have to be loud and unyielding. And you use what you've got, and for Franken, that's wit. So the whole "I want to be a work horse, not a show horse" thing makes sense at the beginning, but I hope he doesn't forget his roots. I'm not looking for him to pull out a full-length mirror or put a mobile satellite dish on his head, but some occasional displays of satire or sarcasm will do.

And yes, Franken is a policy wonk, which is sadly rare under the Capitol dome.

Quitter States "I Am Not A Quitter," Invents Non-Existent Federal Agency

Sarah Palin decided she needed some damage control, so she delivered a series of interviews to the press (I thought they were the problem?), which included statements like this:

Sarah Palin's not a quitter, she wants the public to know.

"I am not a quitter. I am a fighter," Palin told CNN on Monday while on a family fishing trip, on the heels of her Friday bombshell announcement that she was resigning as Alaska's governor.

Palin did her interview standing on the shores of Dillingham, Alaska, wearing hip waders. She granted 10-minute interviews to CNN and three other news networks Monday.

She resigned because of the tremendous pressure, time and financial burden of a litany of ethics complaints in the past several months, she said. The complaints were without merit and took away from the job she wanted to do for Alaskans, Palin said.

Like Kevin Drum I'm willing to believe that she's sincere about this, that she couldn't take the pressure and the time and the cost of all the ethics complaints. At the same time, that means she CAN'T HANDLE BEING A POLITICIAN, then. Which is fine, there are only a handful of politicians governing hundreds of millions, in the final analysis. It does take a toll. Her lawyer said "she needed a break" after being on-duty for two and a half straight years. OK, fine. Then don't run for public office.

ABC's Kate Snow probed that juxtaposition:

As to whether another pursuit for national office, as when she joined Sen. John McCain, R-Ariz., in the race for the White House less than a year ago, would result in the same political blood sport, Palin said there was a difference between the White House and what she had experienced in Alaska. If she were in the White House, she said, the "department of law" would protect her from baseless ethical allegations.

"I think on a national level, your department of law there in the White House would look at some of the things that we've been charged with and automatically throw them out," she said.

There is no "Department of Law" at the White House.

Should I even bother to comment?

Rafsanjani Shows His Cards

It seemed that Akbar Hashemi Rafsanjani was cutting bait. A member of the establishment, he was not willing to stick his neck out for the reformers, and seeing the crackdown in Iran, was content to work inside the system rather than openly commit to revolution. And then...

Reporting from Beirut -- A day after commanders of the Revolutionary Guard warned there was no middle ground in the dispute over the reelection of President Mahmoud Ahmadinejad, the political party of one of Iran's most powerful clerics Monday defiantly issued a statement dismissing the vote.

The statement by the Kargozaran Sazandegi, or Executives of Construction Party, all but cleared away weeks of ambiguity about the stance of the powerful cleric Ayatollah Ali Akbar Hashemi Rafsanjani.

The cleric, who heads two government councils that oversee the supreme leader and mediate disputes between branches, openly backed Mir-Hossein Mousavi. But he has not spoken definitively about the election since the June 12 vote, which was validated after a partial recount by the powerful Guardian Council.

"We declare that the result is unacceptable due to the unhealthy voting process, massive electoral fraud and the siding of the majority of the Guardian Council with a specific candidate," said the statement issued by the party.

That's a major statement of support, unprecedented from Rafsanjani since the election. It shows that the reform movement will not go away and doesn't mind a bit of boldness.

Opposition leaders are seeking the release of all political prisoners. Ali Khamenei is retrenching and blaming outside enemies. Mahmoud Ahmadinejad will head to television tonight with a national address. There are large demonstrations scheduled Thursday.

This isn't over.

Rahm Is Desperate To Cave

In The Wall Street Journal, Rahm Emanuel explained how he could live with a trigger option on the public plan:

It is more important that health-care legislation inject stiff competition among insurance plans than it is for Congress to create a pure government-run option, White House Chief of Staff Rahm Emanuel said.

"The goal is to have a means and a mechanism to keep the private insurers honest," he said in an interview. "The goal is non-negotiable; the path is" negotiable [...]

One of the most contentious issues is whether to create a public health-insurance plan to compete with private companies.

Mr. Emanuel said one of several ways to meet Mr. Obama's goals is a mechanism under which a public plan is introduced only if the marketplace fails to provide sufficient competition on its own. He noted that congressional Republicans crafted a similar trigger mechanism when they created a prescription-drug benefit for Medicare in 2003. In that case, private competition has been judged sufficient and the public option has never gone into effect.

The President quickly walked back the comment, saying that "one of the best ways to bring down costs, provide more choices, and assure quality is a public option that will force the insurance companies to compete and keep them honest."

It's curious that Emanuel cites the trigger in the prescription drug benefit. That has never been tripped, and indeed the White House needed to strike a deal with the pharmaceutical industry to lower costs under Medicare Part D. So a lack of competition unnecessarily raised profits for the industry by at least $80 billion (the cost of the deal) over a decade, and there's STILL no public drug company option. These triggers are Washington compromises designed to never meet the standard where they would have to be tapped.

Emanuel's orientation is to accommodate centrists and kick liberals. He's been doing it since he entered politics. There's plenty of elements to health care just as important as a public option, but that's the most controversial, and so the Chief of Staff wants to cave on it to reach a compromise. The other issues, like the health insurance exchanges, the subsidies for the poor, Medicaid eligibility, the baseline level of care, etc., isn't getting the same attention, so Emanuel figures he can just strangle them behind closed doors. With the public plan, a high-profile issue, Emanuel probably thinks he has to lay the groundwork for a capitulation. Or, he's maybe lowering expectations, so Chuck Schumer can rush in and dictate the process, watering down the public plan down to a "level-playing field" piece of insignificance. But Rahm's problem is exactly the same as during the Clinton Administration:

If short-term pressures to accommodate concerns about the deficit curb Obama's ambitions, the result could be not only disaffection among progressives but also disappointment among the less ideologically inclined. Despite their skepticism about government, most in this latter constituency want Washington to foster economic expansion and improve their health coverage.

The president will thus have to balance worries about losing some moderate support against the larger danger of failing to achieve the sweeping change he promised. The obvious path for Obama -- the one he is likely to take -- is first to achieve his reforms, particularly in health care, and later to pivot to dealing with the deficit, once the economy starts improving. (Obsessing about the deficit in a downturn is not a recipe for recovery.) And centrist Democrats in Congress could usefully recall that the party's inability to deliver on Bill Clinton's 1992 campaign pledges, particularly on health care, led to a stunning defeat two years later that decimated its moderates and liberals alike.

In his first six months, Obama showed he was up to the job. This summer will test his ability to make agonizing choices -- and make them stick.

The public won't be bullshitted by a bill, any bill. People will need a tangible benefit, and for better or worse, that has become the public plan. Those who stand in the way will have trouble reclaiming their legitimacy.

Censure and MoveOn?

The South Carolina Republican Party took a page from the largest progressive organization in America. Never thought I'd write that.

After nearly four hours of deliberation and multiple rounds of balloting, the South Carolina Republican Party voted Monday night to censure Mark Sanford for traveling overseas to visit his mistress -- but stopped short of calling on the governor to resign.

Members of the South Carolina GOP's executive committee approved a resolution censuring Sanford for conduct that demonstrated "repeated failures to act in accordance" with the party's core principles and beliefs, according to GOP sources on the teleconference.

The resolution also reprimands the governor for "falling below the standards expected of Republican elected officials."

Sanford issued a short response to the censure through his spokesman late Monday.

"The governor fully appreciates the party's position, and he intends to work diligently to earn back its trust," said spokesman Joel Sawyer.

The censure is a first for any sitting Governor in South Carolina, but it looks like the state GOP will let it lay there.

Just like they did for Bill Clinton.

Right?

(Incidentally, Clinton didn't leave America without telling anyone to go huddle with Monica Lewinsky for a week. That would be the difference.)

Holding Back The Tide

The White House has done a pretty good job of rolling out these deals with the health care industry. They made the main announcement of $2 trillion in savings months ago, and that got a large news hit. Then they've been dribbling out each element of the industry and their pledges to lower costs. We haven't reached $2 trillion - in fact, we haven't come close - but every time they do it, the White House gets another news hit. It's pretty brilliant.

The latest is an agreement with the hospital industry to give back $155 billion in profits over a decade, on the heels of an $80 billion dollar agreement with the drugmakers to help fill the dreaded donut hole for prescription drugs for seniors. Because of the way in which Max Baucus (who is brokering most of these deals) and the White House have done it, assenting to changes in how they are paid, this money can be used to help pay for reform, unlike the $2 trillion, which was outside the purview of the CBO. But they seem to be bargaining, like the drug industry, for the best deal they can get, instead of designing the policy and forcing the various industries to accept it.

Still, you have to wonder: Could these industries be giving up more? The drug deal, at least, doesn't look all that great--except, perhaps, to the drug industry. My reading of the agreement--and, to be clear, there's still a lot of ambiguity here--is that the drug industry has agreed to kick in some of its own money to help fill in the "donut hole" in the Medicare drug benefit.

That's very nice and will, I think, make it easier for seniors to afford their drugs. But it also seems that, as part of the deal, seniors have to buy more drugs from name-brand manufacturers rather than generics. It's entirely possible that the name-brand drug industry--that is, the companies represented by PhRMA--could actually come out ahead [...]

The expected hospital agreement seems may be more signfiicant--and, for liberals, more encouraging. Although it's impossible to know without seeing the details, $155 billion is a decent chunk of change. That could represent a serious sacrifice on the part of the hospitals.

On the other hand, it's not clear whether, perhaps, this is an example of some hospitals effectivelly cutting a deal that hurts others. Insofar as the savings come from reduced payments for charity care--payments that now flow through Medicaid--is this a case in which suburban and speciality hospitals actually do just fine but charity hospitals take a hit?

Perhaps the most important question to answer is what these industry groups are getting in return. Changing payments to the health industry isn't simply about generating savings that can finance expansions of insurance coverage. It's also about changing the behaviors of these industries--and, in so doing, creating a health care system that offers better quality care for less money.

To accomplish that, reform should ideally include measures like strengthening the hand of the Medicare Payment Advisory Commission (MedPAC), developing more data on comparative effectiveness (CE), or building a strong public insurance plan. But hospitals don't like the idea of a stronger MedPAC, drug makers are pretty hostile to good CE, and insurers (among others) hate the idea of a public plan. When the industries cut these deals, are they prying promises from Baucus--or the White House--not to push too hard on these levers?

The effect has been to set a ceiling for what the drugmakers and the hospital industry and the other stakeholders will accept, brokered through the most conservative and industry-friendly committee in Congress, Max Baucus' Senate Finance Committee. Any committee that seeks more savings from industry immediately gets attacked, even though they never made such an agreement.

Having struck a bargain with Senate Finance Committee Chairman Max Baucus (D-Mont.), the industry is aggressively targeting individual House Democrats, warning of repercussions in the 2010 elections if they go along with a tougher set of savings advocated by House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.).

PhRMA, the powerful Pharmaceutical Research and Manufacturers Association lobby, is openly playing one chairman against the other. Billions of dollars are at stake; a politically sensitive population, the elderly, is caught in the middle. With House Democrats expected to finalize their bill this week, President Barack Obama could face pressure to come off the sidelines and spell out better where he stands.

What Baucus agreed to specifically in his June 20 bargain is still in some dispute. But PhRMA is bluntly telling House moderates that the senator will oppose the rebates demanded by Waxman and that the smart move is to kill that provision outright and save themselves political pain in 2010.

Then there's the effort in the Senate Finance Committee to deny women legal medical services inside any insurers operating inside the Health Insurance Exchange:

The Senate Finance Committee has been writing a health care reform bill and struggling to create legislation that will have bipartisan support. Chairman Max Baucus considered several compromises to win Republican support, so they can claim it is bipartisan legislation. One of these potential compromises comes in the form of an abortion exclusion, which would prevent abortion services from being covered by some or all insurance plans in the Health Insurance Exchange. We fear that members of the Senate Finance Committee are considering such a compromise.

Remember, most of the groups inside the insurance exchange are private companies. I thought conservatives didn't want to put a government bureaucrat between the patient and the doctor. I guess when it comes to reproductive choice, that's OK.

The Senate HELP Committee's favorable budget score raised hopes that a workable solution was on the way, which was affordable and used a public health insurance plan to increase that affordability. But there's a whole maze of committees and votes to maneuver through. And the Senate Finance Committee is really building a dam to hold back the tide of a legitimate overhaul. Must be all of that industry money.

...see also the tactic of arbitrarily lowering the cost of the bill for no real reason other than $1 trillion is a nice round number.

Joe Galloway On McNamara

Starts off with a brilliant quote:

"I have never killed a man, but I have read many obituaries with great pleasure." —Clarence Darrow (1857–1938)

Gets even better from there. Read.

Luckiest Man On Earth

Mark Sanford made his big announcement about walking the Appalachian Trail with a woman not his wife, and the next day Michael Jackson died. He gave maybe the biggest no-no of an interview to the AP, where he called his mistress his "soul-mate," and within a couple days the Quitta from Wasilla stepped up to the mic. At this rate, Sanford will strangle a bear cub live on South Carolina television, and the next day Osama bin Laden and Britney Spears will announce a secret wedding in Vegas. The guy has timing.

But while it's slipped off the radar nationally, locally in South Carolina the story continues. FWIW, Sanford doesn't want to resign.

After spending the holiday weekend with his family in Florida, Mark Sanford is apparently intent on fighting off calls for his resignation and staying in office, according to one South Carolina Republican who spoke with the governor on Monday.

Richard Yow, a member of the South Carolina Republican Party executive committee from Chesterfield County, received a phone call from Sanford on Monday afternoon. Yow said he spoke to the embattled governor for ten minutes, during which Sanford asked Yow for his forgiveness.

Yow said he told Sanford he could forgive him, but he told the governor that he should resign for the sake of the state and his family. Sanford, he said, rejected the idea.

"He said resigning would be the easy way out," Yow told CNN.

There's a conference call for the South Carolina Republican Party to decide on a formal response to the Sanford troubles. That could range anywhere from a show of support to a formal call for resignation. It's really anyone's guess.

Did Biden Threaten Iran?

A lot of buzz about Joe Biden's strange construction of an answer about Israel's potential airstrike to take out suspected Iranian nuclear facilities:

BIDEN: Look, Israel can determine for itself — it's a sovereign nation — what's in their interest and what they decide to do relative to Iran and anyone else.

STEPHANOPOULOS: But just to be clear here, if the Israelis decide Iran is an existential threat, they have to take out the nuclear program, militarily the United States will not stand in the way?

BIDEN: Look, we cannot dictate to another sovereign nation what they can and cannot do when they make a determination, if they make a determination that they're existentially threatened and their survival is threatened by another country.

It's just not the same as how the Administration has answered this question in the past. Robert Farley thinks this is an effort by the Administration to distance the United States from Israeli actions, while Kevin Drum thinks it was a warning to Iran. I tend to follow the latter. There's no way Israeli and American actions could truly be divorced in this case, not only because of US foreign military aid to Israel, not only because of historical precedent, but because Israel would have to fly over Iraqi airspace and get American go-aheads to carry this off. I agree that an assertion of Israeli soveriegnty is UN Charter biolerplate, and certainly Biden insisted that engagement with Iran would continue, but one statement can send two messages. Here's Drum's take:

Rhetorically, though, this amps things up. Biden is basically saying that Israel really might launch an attack, and the best way to avoid that is for Tehran to start dealing seriously with the United States. "If the Iranians respond to the offer of engagement, we will engage," he said carrotishly — and if they don't, well, there's not much we can do to stop our crazy cousin. You know how he is. You're better off dealing with us.

Hard to say if this will work. But that seems to be what's going on. This isn't distancing, it's pressure to quit screwing around and instead sit down and talk.

The good news is that Admiral Mullen, at the same time on CBS, announced that military action on Iran would be destabilizing. But an awkward statement like this could have the same destabilizing impact in the Muslim world.

LAST UPDATE (Monday morning): a variety of comments from assorted well-placed worthies have come my way over the last day, some online and others privately. Most suggest that Biden's comments were not meant to change U.S. policy, and that if anything he meant to distance the U.S. from any Israeli strike (though a few speculate that it was actually meant to strengthen the U.S. bargaining position ahead of the Moscow talks). If that's the case, then it is only that much more important to repeat that his comments are being nigh-universally presented in the Middle Eastern media (Israeli and Arab, at least) as a "green light." If that wasn't the intended signal, then the administration needs to recognize that its signaling has gone awry and clear it up before it's too late...

The White House has prided itself on engagement through Arab media, so if they truly didn't mean for this to be the message, they need to explain themselves publicly to that constituency.

Ah, The Good Old Days

Just a précis on budget negotiations today: the Big Five leadership has met over the last couple days, with more heat than light. The Governor remains committed to adding unrelated policy changes into any budget deal, items like changing contributions to public employee pensions, and tightening eligibility and rooting out fraud in programs like in-home supportive services for the disabled, Medi-Cal and Cal-Works. These items will do nothing to affect the current budget numbers, a fact Schwarzenegger has acknowledged, but he continues to leverage the impasse to capture long-sought goals. The Governor also has taken to lying about how these issues suddenly appeared in the negotiations, claiming that "reform issues were very clear" from the start, which is true if you define "reform" as "whatever Arnold wants it to mean." Karen Bass signaled her frustration with the Governor's clear unwillingness to close a deal by inserting unrelated items, boycotting today's meeting and questioning the Governor's figures on what reducing "fraud" would actually reap in savings (and since he's been consistently wrong on this front in the past, it's a good bet). The Governor did concede that suspending the Prop. 98 education funding mechanism would not be viable, but he keeps pushing for the amorphously defined "reform", no doubt because he thinks it plays well with the public (Matier and Ross transcribe that private polls show a jump in Arnold's approval ratings). This speaks more to the Democrats' inability to clearly explain reality than anything else, though Bass gave it a try today:

But Bass said she believes talks have gotten worse, not better. And she publicly blasted the governor for comments he made in Sunday's New York Times Magazine, in which he said he explained why he doesn't go home depressed by budget woes.

"Someone else might walk out of here every day depressed, but I don't walk out of here depressed," Schwarzenegger told the Times. Whatever happens, "I will sit down in my Jacuzzi tonight," he said. "I'm going to lay back with a stogie."

"He said he's happy to just go home and sit in his Jacuzzi every night," Bass said Monday. "I'm very, very concerned about this. He doesn't seem to be concerned that people are getting IOUs, and all he has to do is go out and blame the Legislature."

With squabbling and posturing like this, you'd think I'd agree with the Calbuzz take of why this crisis has dragged on for so long.

The constitutional requirement for a two-thirds vote of the Legislature to pass a budget is clearly the single most important reason why the Capitol is in a state of near-permanent political gridlock. But the two-thirds rule has been around since the New Deal and budgets used to get passed. So what’s the hang-up?

Power: Nobody’s got it.

The governor and the Legislature fulminate and flounder simply because no one in the Capitol in 2009 has the stature, clout or influence to cut a deal like Ronnie and Jesse or Pete and Willie once did.

Actually, the budget has ALREADY been passed once this year, closing a $42 billion dollar deficit. The new $26 billion dollar problem points to the unique nature of the current deep recession. I'd like to see good ol' Ronnie and Jesse and Pete and Willie deal with a $68 billion shortfall in the space of six months.

But beyond that, what is also missing from this analysis is the lengths to which the "big bully" theory of how to manage California government, where Democrats and Republicans get together and "cut a deal," is in a real sense RESPONSIBLE for the problem we now face. Take the assessment of the 1992 budget in the midst of a recession:

Contrast this year’s with the budget meltdown of 1992, the last time California issued IOUs. Although many of the same conditions applied, the big difference was that both Gov. Pete Wilson and Speaker Willie Brown wielded enough political authority to sit down in a room and cut a deal: Wilson took responsibility for rounding up Republican votes for tax increases and Brown for putting a lid on Democratic caterwauling over program cuts.

Somehow the inability of these major players to avoid a situation where IOUs had to be issued gets put to the side. But what Willie Brown did not use that clout to do, what no Democrat has done since 1978's Prop. 13 opened the structural revenue gap enforced by the 2/3 requirement for budgets and taxes, is actually solve the real problem. Instead he cut a deal, relying on a future asset bubble to bail him out again and again, and setting the table for today's crisis.

The 1980s saw the construction of the model. Sprawl was used to provide affordable housing. Special tax systems were set up to pay for suburban schools - the 1982 Mello-Roos Act - which were funded as long as there was enough credit to sustain sprawl. The loss of property tax revenue led cities to shift toward retail, further promoting sprawl (big box stores, malls). The jobs and spending created by sprawl provided enough prosperity to keep voters happy and the politicians in power. For those who were left behind - those living in the city centers, people of color, and the poor - 1978 had been partly about their political and economic marginalization, and the majority of Californians embraced it as part of the deal.

The ideal feature of the centrist system, from the view of its practitioners, is that it apparently neutralized the right-wing revolt of 1978. Low taxes could be paired with preservation of core services, albeit at a slightly reduced level, and thereby avoided another Jarvisite outburst. Well-paid consultants could run statewide TV campaigns to force the public to accept the consensus, without having to do the messy work of engaging a grassroots that would challenge the centrist status quo.

When the system came crashing down in 1991-92, the centrists found it possible to cut a deal to keep things going. Pete Wilson and Willie Brown had much in common, and were able to hammer out a package of tax increases and spending cuts that got a 2/3 majority. I don't romanticize that deal, but instead use it to show that it confirmed to the centrists that the system they'd built in 1980s could withstand crisis as long as everyone was willing to sit down and make a deal, damn the consequences.

However, the right-wing wasn't sleeping. In 1990 they managed to convince a bare majority of voters to approve Prop 140, a radical term limits measure that should have fallen afoul of the "revision" rule. But the real moment of change came in 1994, when the far-right in the Republican Party grabbed control of the agenda and launched a massive attack on Latino Californians. Pete Wilson wholeheartedly embraced the attack, and although it brought Republicans gains that year, it was a victory to make Pyrrhus jealous. Latinos registered for citizenship and to vote in massive numbers, and beginning in 1996 what had once been a state whose politics were fairly balanced shifted massively to the Democrats.

As long as Republicans stood a reasonable chance of winning control of California's legislature or its electoral votes, Democratic deal-cutting with Republicans could be sold to the base as a necessary move to stave off the Jarvisite hordes. But after 1996 this became less and less plausible. The California Republican Party became a captive of the extreme right, even more than usual, and in one of its last acts before leaving power in 1998, pushed through a massive and reckless series of tax cuts.

I don't disagree at all that we currently face a lack of leadership and clout to get deals done in Sacramento. Arnold Schwarzenegger has no role inside his own party, and Bass and Steinberg preside over a dysfunctional set of rule requirements and are term-limited out of gathering political capital. My point is that such leadership has ALWAYS been lacking from the Democratic side of the aisle, at least since 1978. When prosperity waned, it was clear that California's political structure would resist responsible governance at every turn. But instead of preparing for that eventuality by changing the rules, those good old boys of the past cut deals that exacerbated the problem. They forced the current crop of non-leaders into ringing up the state credit card and enabled the right-wing faction that holds a veto over economic policies. The center did not hold - but it could never hold. And the centrists who ruled California in the years after Prop. 13, the timid types who ran away from real solutions and put the state in the position to fail, should not be lauded. They should be ashamed.

Health Care, Lobbyists, and Journalism

Happy to be on the opposing side of a lobbyist/access scandal rather than in the middle of it, today the Washington Post writes about the hundreds of former politicians and staffers-turned-lobbyists for the health care industry, fighting tooth and nail against systemic reform.

The nation's largest insurers, hospitals and medical groups have hired more than 350 former government staff members and retired members of Congress in hopes of influencing their old bosses and colleagues, according to an analysis of lobbying disclosures and other records.

The tactic is so widespread that three of every four major health-care firms have at least one former insider on their lobbying payrolls, according to The Washington Post's analysis.

Did that analysis come from the newsroom or the guest list for one of Katherine Weymouth's salons?

Nearly half of the insiders previously worked for the key committees and lawmakers, including Sens. Max Baucus (D-Mont.) and Charles E. Grassley (R-Iowa), debating whether to adopt a public insurance option opposed by major industry groups. At least 10 others have been members of Congress, such as former House majority leaders Richard K. Armey (R-Tex.) and Richard A. Gephardt (D-Mo.), both of whom represent a New Jersey pharmaceutical firm.

The hirings are part of a record-breaking influence campaign by the health-care industry, which is spending more than $1.4 million a day on lobbying in the current fight, according to disclosure records. And even in a city where lobbying is a part of life, the scale of the effort has drawn attention. For example, the Pharmaceutical Research and Manufacturers of America (PhRMA) doubled its spending to nearly $7 million in the first quarter of 2009, followed by Pfizer, with more than $6 million.

This has turned lobbying sessions in the major committees into office reunions, where former staffer get together with the politicians for whom they once worked. It begs the question about those pay-to-play sessions: why would any health care company want to pay up to $250,000 for access to the lawmakers making the biggest decisions on health care, when they all have people on their lobbying staff who already know how that lawmaker takes their coffee, and can surely use the knowledge gained through work experience on Capitol Hill to further their employer's agenda? Aside from the unseemliness of it all, the "salon" idea seems like another bad business model.

The use of insiders who move from politics to K Street has a damaging effect on the whole debate, using the journalist/source model as an interesting parallel:

Suppressing your instinct to trust a former chief of staff and legislative director is a hard thing to do. Refusing to return the calls of favored staffers and colleagues goes against every social grain in our bodies. It should be easy to separate professional responsibilities and personal feelings. But it isn't.

Journalists consistently use this to our advantage: When you hear that someone is well-sourced, it generally means they have good personal relationships that make it more likely that insiders will tell them things. A big part of the job is leveraging social pressures to gain access to protected information. And, somewhat amazingly, it works. But the relationship between a journalist and a longtime source is nothing compared to the relationship between a senator and a longtime staffer. One of the secrets about lobbying in Washington is that money doesn't buy access. It buys people who already have access. And that makes it much more insidious.

Relating this to the pay-for-play scheme, I think we can surmise why corporate insiders would use the media as a pass-through for access, whether it's The Washington Post or The Atlantic (that's quite a good article from Zachary Roth about their long history of corporate-sponsored "salons"). The question lies with who is being bought - the politicians, the lobbyists, or the media itself. I would argue the latter. By facilitating the relationship, they become compromised within it. They start to hedge a bit. They adopt a worldview that aligns pretty perfectly with the forces of the status quo on which they are supposed to report. They interweave themselves into the system and become partners within it. And the establishment thus speaks with one voice.

Sacramento Blues

State employee jobs cluster around state capitals, where most of the regulatory and social services agencies are traditionally headquartered. When a recession causes a shortfall in state budgets, the consequent program cuts and job loss impacts those capital metro regions disproportionately. Such is the case right now with Sacramento.

Between furloughs and layoffs, the state's budget crisis could cost Sacramento's beleaguered economy more than a half-billion dollars in the next year.

As the state began issuing IOUs last week to help pay its bills, the economic impact on Sacramento became depressingly clear: State government, which normally buffers the region against the harsh reality of recession, could actually prolong the downturn.

"The longer this drags on, the worse it will be for the local economy," said economist Jeff Michael, director of business forecasting at the University of the Pacific. He said state cutbacks could blunt the vitality of the economic recovery, once it starts.

The effect will be most visible when "Furlough Fridays" return next week, turning pockets of Sacramento into little ghost towns as most state offices close for the day. Thousands of workers will take off three unpaid furlough days a month, all on Friday, until next June. For the past few months they've been furloughed two days but not all on Friday.

"It's definitely going to affect us," said Sam England, co-owner of Dad's sandwich shop on S Street. "We won't have that additional person in here, running the register. We'll gear down accordingly."

Indeed, one of the more vibrant businesses in the Sacramento area right now is home repossession.

I'd like to see a study of this done in other states. Clearly, cutting state budgets to the bone has a multiplier effect that increases in those capital regions. Particularly in a state like California, where public employees have become so demonized, and the political process leaves them little protection.

Triple-B

Fitch, one of the main credit rating agencies, fresh off downgrading California bonds from A to A-minus a little over a week ago, just took them another step down today.

The downgrade to 'BBB' is based on the state's continued inability to achieve timely agreement on budgetary and cash flow solutions to its severe fiscal crisis. Since no agreement was reached by the June 30, 2009 fiscal year (FY) end, the state's controller has now begun issuing registered warrants (IOUs) for certain non-priority payments to preserve cash, and the budget gap to be addressed has increased to $26.3 billion from $24.3 billion. The use of IOUs for non-priority payments would offset cash shortfalls into September 2009 as now currently projected [...]

With issuance of IOUs for non-priority payments, margins for meeting constitutional and court-required contractual commitments are narrowing. After September 2009, absent any proposed budget and payment adjustments, cash deficits will expand dramatically. Cash flow solutions, including the ability to access short-term borrowing, are inextricably tied to reaching timely agreement on effective and credible budget solutions.

The inability of the state to reach agreement has prompted the controller to begin issuing IOUs for non-priority payments, primarily disbursements to vendors, for certain social services, and for tax refunds, in order to ensure payment of priority payments, including General Obligation and lease debt service. The controller's office estimates that $3 billion in IOUs will be issued during July 2009; priority payments of $10.8 billion will be made for education, debt service, Medicaid, payroll, pensions and other mandatory contractual obligations. Projections will be revised to reflect June revenue performance and other changes but as currently estimated, cumulative cash deficits of $3.7 billion are projected through August, offset by $4.5 billion in non-priority payments that could be covered with IOUS, excluding tax refunds. However, by the end of October, the projected cash deficit expands to $16.1 billion, well beyond non-priority spending of only $10.6 billion, excluding tax refunds.

It's true that the IOUs work only until October. But the credit rating is specifically tied to, in this case, long-term bonds. And as I've laid out previously, as a matter of law debt service has pride of place in the state Constitution - only education must be funded before it. It would take something like $50 billion dollars in program cuts before creditors must be paid, which is far less than current debt obligations.

In other words, this is a gouging effort by Wall Street, and the credit ratings agencies are downgrading California simply because they can. The fact that every single creditor will get paid in full if California has to close every hospital and prison in order to do it is of little consequence. This is all further reason why the federal government ought to provide loan guarantees to stop the gouging from Wall Street.

Paging Marc Andreessen

I stand ready to accept your venture capital funding!

More news about Marc Andreessen making venture investments this morning after the launch of his new $300 million fund, Andreessen Horowitz: he is leading a round of financing for TPM Media, better known as the TalkingPointsMemo blog.

TPM founder Josh Marshall confirmed the pending investment today by phone. The round is small, between $500k and $1 million. Andreessen is leading the round and a number of other angel investors are participating as well.

This comes just a little over a month after Andreessen invested in another blog network, Alley Insider. He clearly likes the format. Both the Alley Insider and Talking Points Memo investments are being done personally by Andreessen, not through the new venture fund.

Huffington Post has received VC support in the past as well. And let me say that new media cannot thrive without outside revenue, or at least very few outlets can. Online ad revenue simply isn't enough.

Jackson Tour No Victory For LA City Budget?

Here's yet another major event - like the Lakers victory parade and various Fourth of July fireworks displays - that a city in California fears having the funds to accommodate - the Michael Jackson memorial event at Staples Center in Los Angeles.

Meanwhile, Los Angeles City Councilwoman Jan Perry said she'd "love it" if the Jacksons helped defray some of the city's expected costs associated with Tuesday's memorial, but that officials hadn't heard from the family.

Perry said the city didn't immediately have an estimate of those costs. More than 1.6 million fans registered online for a chance to attend the Staples Center ceremony, and only 8,750 names were chosen. Los Angeles officials are concerned about other fans clogging city streets.

"We're encouraging people to stay away," Perry said on CBS' "The Early Show" on Monday.

I don't think that the city leaders have entirely thought this one through. The shops and restaurants in the LA Live complex around Staples tomorrow will probably set a one-day record. Obviously the city will have to pay out some overtime for cops and the like, and traffic will put a crimp in productivity (don't expect to get anywhere near downtown tomorrow), but overall, the city stands to make money off of this, given the economic activity generated.

Still, the fact that it's almost become a cliché to discuss major California events in the context of distressed state and local budgets shows the scope of the problem.

Go Ahead, Use Our Roads To Speed Into That Quagmire

So what did the President and Dmitry Medvedev decide upon at their Moscow Summit today? The big news is that the two sides have agreed on arms reduction amounting to as much as a 1/3 cut in nuclear stockpiles. More on that here. This is an excellent first step to the ultimate goal of ridding the world of the scourge of nuclear weapons.

A side deal permits Russia to allow transit of US military supplies through its country and into Afghanistan:

On July 6, 2009, Russian Foreign Minister Sergey Lavrov and Undersecretary of State William Burns concluded an agreement that will enable the United States to transport its military personnel and equipment across Russia to support American and Coalition forces in Afghanistan.

This agreement complements a NATO-Russia arrangement, under which the United States began shipping non-lethal equipment to Afghanistan through Russian territory earlier this year.

This agreement will enable the United States to further diversify the crucial transportation routes and decrease the amount of time needed to move troops and critical equipment to resupply international forces in Afghanistan and to bring needed supplies to the government and people of Afghanistan. This will permit 4,500 flights per year. The new transit routes will save the United States government up to $133 million annually in fuel, maintenance and other transportation costs, and this agreement is free of any air navigation charges. By providing access to these transit routes, the Russian Federation is ena b ling a substantial increase in the efficiency of our common effort to defeat the forces of violent extremism in Afghanistan and to ensure Afghanistan’s and the broader region’s security.

Given Russia's past history in Afghanistan, do you think they signed this agreement with a curl of the lip, saying, "Yes, good luck with your war in Afghanistan, by all means, let us help you!" In the 1980s, the United States helped the mujahedeen fighting the Soviets. These days Russia can just speed the flow of US transit into that snake pit of the country and achieve virtually the same goal. As a side benefit, the move gives the appearance of resetting US-Russian relations at the same time.

A Stimulus For The States?

Yesterday on ABC, Joe Biden claimed that the Administration misread the severity of the economic crisis, and did not dismiss out of hand the need for a second stimulus package, though he preferred to wait and see how the first one takes once more of its money flowed into the system. If the White House failed to anticipate negative economic results previously, they need to fully anticipate the potential for continued losses this time around, and have some form of stimulus ready sooner rather than later.

Among the most pressing problems right now is the widespread revenue shortfall among the 50 states, most all of which have balanced budget agreements and must resort to mostly cuts to deal with the crisis:

Wait — there’s more bad news: the fiscal crisis of the states. Unlike the federal government, states are required to run balanced budgets. And faced with a sharp drop in revenue, most states are preparing savage budget cuts, many of them at the expense of the most vulnerable. Aside from directly creating a great deal of misery, these cuts will depress the economy even further.

Robert Kuttner details the troubles in the states more directly, finding that California is not alone in its fiscal problems, though they may be more intractable here. Cutting program spending directly runs against the purpose of federal stimulus, to make up for the lack of consumer spending and private investment by providing a money injection into the economy. The Center on Budget and Policy Priorities writes that 39 states have cut programs that go directly to the needy. We are not alone.

The combination of a creeping suspicion by economists about the need for a second stimulus and the crisis in state budgets have led many to wonder whether to combine the two. Though no state, and not California either, has called for a "bailout," there are compelling reasons to believe that fiscal stabilization would make sense at this time so that state government doesn't counter-productively nullify the goals of the federal stimulus. One of the last items cut from the stimulus package was a large fiscal stabilization fund for the states that could have mitigated budget cuts.

The Chicago Federal Reserve wrote a paper examining this possibility for state fiscal relief, by comparing today's situation to other recessions.

The idea of federal support for state (and local) governments in a downturn is hardly a new one. For example, in response to the recession of 1973-75, Congress enacted the Antirecession Fiscal Assistance (ARFA) program, which was combined with general revenue sharing grants and the Local Public Works (LPW) program to provide unrestricted grants and infrastructure funding to the states. In addition, Congress had passed the Comprehensive Employment and Training Act (CETA) in 1973, and in conjunction with these other programs, it became an antirecessionary mechanism for delivering job training. More recently, in 2003, Congress passed the Jobs and Growth Tax Relief Reconciliation Act, as states dealt with a slow recovery from the 2001 recession.

The purpose of such funding is primarily to stabilize fiscal behavior in the state government sector. This aid is intended to smooth the budgetary actions states would be forced to take in the face of declining revenues and increasing demands from programs such as Medicaid and unemployment insurance.

The Chicago Fed criticizes the 1973-75 efforts, but their critiques are primarily ones of timing. They say that the funding for state aid arrived while economic recovery was already taking place, coming too late to stop states from taking their budget actions. When it arrived, the aid "may have contributed to post-recession inflationary pressures."

I simply think we're in a different situation right now. Despite the talk of the "green shoots" crowd, the economy has not bottomed, and in fact may be about to head into a "double-dip," W-shaped recession. Rising foreclosure rates and continued unemployment threaten economic recovery, and many economists feel that the economy will not start to recover until mid-2010. So now seems to me to be the perfect time to work to deliver anti-recessionary aid targeted to the 2010 budget cycle in the states. There is a concern that the money to the states would go simply to building a surplus instead of being spent, but with the tough choices being made across the country right now, the possibilities of that seem remote, and anyway language could be written into any bill to negate that possibility.

Significantly, the 1973-75 aid was triggered by unemployment figures.

In the case of the 1973-75 recession, the federal relief programs used three triggers based on unemployment. Aid under the ARFA program was provided when a jurisdiction’s unemployment threshold rose above 4.5 percent. Aid from the LPW program was based on the total number of persons unemployed, as well as the number unemployed in excess of 6.5 percent, in that jurisdiction. And aid under CETA was prompted by all three triggers.

The use of the unemployment rate as a trigger has a number of advantages. First, the unemployment rate is readily available at both the state and local level, so it can be used to direct aid in a more focused manner – even potentially to steer aid to specific metropolitan areas within states. Second, it is available on a monthly basis. However, in evaluating the effectiveness of the federal government’s aid package of the mid-1970s, the GAO found that the structural change built into national labor markets caused this trigger to turn on well into the downturn and maintain aid well into the recovery.

I don't think this is a bug, but a feature. We hear a lot about unemployment as a "lagging indicator" of economic performance, but to the unemployed, it's the ENTIRE indicator. And given that income tax makes up such a large sum of state revenue (particularly in California), unemployment is intimately tied to state budget performance. The Chicago Fed worried about inflation, but again, this recession is not like all other recessions, and right now we're in fear of a deflationary spiral.

Finally, the Chicago Fed worries about rewarding "bad fiscal behavior" when budget shortfalls are caused by a "structural deficit caused by an inefficient tax system and/or unsupportable public spending." We can expect to hear a lot of this if a second stimulus really kicks into gear, and I would just say that it's not morally defensible to punish individuals for the tangle of their state political structure. I don't want the possibility of federal relief to disable local efforts to arrive at sustainable budget practices, but I think there's a way to provide help to those who need it while also not letting the legislative leadership off the hook for their failures.

That the Chicago Fed is putting out papers about state funding at all is a sign that such a prospect has gained momentum. I think their concerns, while legitimate, are all addressed by the nature of this downturn, and legislation can be drafted to allay those concerns as well. Any second stimulus must include state fiscal relief. My one hope would be that the solution is enduring, so that never again will states be in the position to forestall economic recovery through perverse and ill-timed budget cuts.

... Ryan Avent makes the case for denying California federal aid, or at lest conditioning it to changes in the long-term budgeting process. Like Robert Cruickshank, I don't believe that the federal government would provide such a great, progressive solution with their conditioned aid - it would probably look more like an IMF bailout. I agree in a roundabout way that any federal aid may give Democratic leaders the impression that their problems can be solved from outside rather than from within. But that's a leadership problem separate from the problem of real people's lives getting squandered because of a political stalemate.

McNamara And Afghanistan

If any situation in the world right now shows in stark relief the failure to learn the lessons of Robert McNamara it's the escalating war in Afghanistan. Six more troops died in clashes today, and with both the increased numbers as well as a continuing offensive in Helmand Province in the south, we can expect more. This Reuters report gives a good sense of the difficulties with the current strategy:

The mullah's message was blunt. We don't trust you and if you don't earn our trust, our first meeting will be our last.

With that, he stood abruptly and walked out of his first "shura," or council meeting, with U.S. Marines.

U.S. forces who have moved deep into formerly Taliban-controlled territory in southern Afghanistan this week say they are here to stay and will not leave until they have improved the lives of ordinary people [...]

The elders listened, clicking their prayer beads. Then Mullah Zainuddin, the village's religious leader, listed their demands.

They want the provincial authorities to allocate more water for their irrigation system. They want a health clinic, and they want a school. Produce these things or leave us alone, he said.

"I do not trust you. There have been international forces that have come through the village and promised schools, promised clinics. When you are already (delivering) that, then I will trust you," he said.

"We are out of patience here. If you do not do these things and solve these problems, we will leave this village. We will fight: every man, woman and child, we do not fear death."

"This is our last speech, and if you can't solve these problems, we will not have another shura. We will not sit like this again and talk with you," he said. He then got up and walked away, leaving the Marines to finish the shura without him.

Suddenly, a Marine could be heard up the road shouting "stop!" and pointing his rifle at a man driving a motorcycle with two women hidden in burqas sitting behind him on the bike.

The Marine summoned an interpreter. Afghan police searched the driver and allowed the motorcycle to drive on. The village elders and the other Marines holding their shura watched the tense incident in quiet.

"I know you think you are here for our security. But you have come here to disturb us," said one of the elders, Hajji Baluch. "The women on the motorcycle were on their way to a clinic."

I can jut tick off the McNamara lessons and apply them here. We have exaggerated the dangers of a largely local Taliban insurgency, which cannot harm the United States if we use proper law enforcement and intelligence methods. We seem to lack an understanding of the desires of the Afghan people, weary from decades of war and distrustful of foreign presence that has brought them nothing of substance. "We underestimated the power of nationalism to motivate a people to fight and die for their beliefs and values," a direct quote from McNamara. We use high-powered military equipment to blast our way to a victory on paper but fail to recognize the limitations of that approach. We have not hashed out a debate on the merits of escalation in public and with the support of the Congress. We have changed course into a high-intensity counter-insurgency mission after explaining that the goal of the war was to deny Al Qaeda safe havens, and the two are only tangentially related. We have not yet recognized the limits of American involvement to bring peace and security to Afghanistan. And,

We did not recognize that neither our people nor our leaders are omniscient. Our judgment of what is in another people’s or country’s best interest should be put to the test of open discussion in international forums. We do not have the God-given right to shape every nation in our image or as we choose.

Afghanistan is maddeningly complex. Its relations internally among the ethnically diverse factions and with its neighbors across borders are not well-understood. And after seven-plus years of failed promises and millions of tons of ordnance, we must understand that our skills and abilities as a superpower cannot solve every problem. Nor does every problem want to be solved. Such is the conundrum in Afghanistan.

The Best And The Brightest

Robert McNamara died today. McNamara was a smart guy, a business type who rose up through the ranks to run the Ford Motor Company after working at the Pentagon during the firebombing of Tokyo. Kennedy pulled a reluctant McNamara out of Detroit and back to the Pentagon in 1960, and he sought to manage it with corporate precision. But this precise structure and its focus on measurements crashed against the shoals of the Vietnam War. Night after night, McNamara would stand before the press in his rimless glasses, looking very much like Don Rumsfeld would decades later, talking of body counts and targeted airstrikes and victory, disassociated almost completely from the realities of the ground and the futility of the enterprise. If you've seen "The Fog of War" you know that the pressure certainly got to McNamara, and he understood his mistakes after the fact (though he never took full responsibility for them). He directed subordinates to write the study that would eventually become The Pentagon Papers, hoping that future generations would avoid the pitfalls that he and his colleagues did in Vietnam.

Part of the framing of "The Fog of War" as well as one of McNamara's later books was the 11 causes and lessons that he listed coming out of Vietnam. It's worth listing them here again.

We misjudged then — and we have since — the geopolitical intentions of our adversaries … and we exaggerated the dangers to the United States of their actions.

We viewed the people and leaders of South Vietnam in terms of our own experience. We saw in them a thirst for – and a determination to fight for — freedom and democracy. We totally misjudged the political forces within the country.

We underestimated the power of nationalism to motivate a people to fight and die for their beliefs and values….

Our misjudgments of friend and foe alike reflected our profound ignorance of the history, culture, and politics of the people in the area, and the personalities and habits of their leaders….No Southeast Asian [experts] existed for senior officials to consult when making decisions on Vietnam.

We failed then — and have since — to recognize the limitations of modern, high-technology military equipment, forces and doctrine in confronting unconventional, highly motivated people’s movements. We failed as well to adapt our military tactics to …winning the hearts and minds of people from a totally different culture.

We failed to draw Congress and the American people into a full and frank discussion and debate of the pros and cons of a large-scale military involvement … before we initiated the action.

After the action got under way and unanticipated events forced us off our planned course … we did not fully explain what was happening and why we were doing what we did….We had not prepared the public to understand the complex events we faced…confront[ing] uncharted seas and an alien environment. A nation’s deepest strength lies not in its military prowess, bur rather in the unity of its people. We failed to maintain it.

We did not recognize that neither our people nor our leaders are omniscient. Our judgment of what is in another people’s or country’s best interest should be put to the test of open discussion in international forums. We do not have the God-given right to shape every nation in our image or as we choose.

We did not hold to the principle that U.S. military action — other than in response to direct threats to our own national security – should be carried out only in conjunction with multinational forces supported fully (and not merely cosmetically) by the international community.

We failed to recognize that in international affairs, as in other aspects of life, there may be problems for which there are no immediate solutions … At times, we may have to live with an imperfect, untidy world.

…We thus failed to analyze and debate our actions in Southeast Asia - our objectives, the risks and costs of alternative ways of dealing with them, and the necessity of changing course when failure was clear….

If this isn't an accusatory note toward the practitioners of American foreign policy during the entire post-war period up through today, I don't know what is. And although I'd like to think that some statesman could learn from these lessons and take America off such a self-destructive course, given the nature of the people who rise to power in this country I don't know if that's possible. Certainly McNamara's lessons represent the experience of a man who lived in the crucible and at least appears to have judged his actions against some moral set of precepts. But the peculiar dynamics of the political world, the need to act tough in foreign policy, the seeming inability for leaders to step outside themselves and view things through the lens of others, the narrow and incomplete renderings of history often at work, and of course the lure of money and power and the industry of war, resist politicians coming to any of these conclusions in the moment. We have so frequently bungled into conflicts, presuming our role in them when the other participants see it differently, making shortcuts while rationalizing ourselves as heroic, changing the rules if found to violate them, and controlling the message of moral rectitude rather than the actions. I find these cautions from McNamara to be crucially important, but even in my most optimistic moments I don't believe America is even wired to live up to them.

This is from The Fog of War, with McNamara talking about the firebombing of Tokyo in World War II:

Curtis LeMay said, “If we’d lost the war, we’d all have been prosecuted as war criminals.” And I think he’s right. He, and I’d say I, were behaving as war criminals.... But what makes it immoral if you lose and not immoral if you win?

...Just to respond to this point about The Fog of War, which Robert Farley thinks "Morris let McNamara get away with far too much at too low of a price." Right near the beginning of the film, Morris inserts a line from McNamara about how you should always answer the question you hoped to be asked, not the question you were asked. This line colors the entire reading of the film. McNamara, for all his confessions in later life, was never a reliable narrator, and he tried valiantly to color his reading of history, leaving him blameless. It didn't work, and Morris knew it, so he presented the folly instead of attacking it. McNamara's lessons of war are important and can stand alone, but that doesn't mean I sympathize with him in any way. He spun until the bitter end. He earned his legacy of failure, and all the rationalizing and compartmentalizing in the world won't make a difference.

Air Drama In Honduras

Moving to the other country locked in a political crisis, as I mentioned yesterday Mel Zelaya's plane was blocked fom landing on the runway in Tegucigalpa Airport. The military placed army trucks across the landing strip to prevent the plane from touching down. Meanwhile, large crowds massed at the airport and were pushed back by the military, causing at least one death. I will say that reporters and photographers do seem to have more access in Honduras than in Iran, leading to more in-depth stories. This, from Marc Lacey and Ginger Thompson at the NYT, is a good example.

An airborne drama that held Honduras in suspense for most of the day ended Sunday evening with the ousted president’s plane circling over the airport here in the capital, where soldiers and riot police officers blocked the runway and used tear gas and bullets to disperse supporters who had awaited what was supposed to have been his triumphal return.

As the plane carrying the ousted president, Manuel Zelaya, swept in low and made two passes over the city, cheers erupted from the crowds below. An air force jet then streaked across the sky and Mr. Zelaya’s plane flew off to Nicaragua, where he made a brief stopover before heading to El Salvador.

“The runway is blocked,” Mr. Zelaya said in an interview from the sky that was broadcast over loudspeakers to his supporters on the ground. “There is no way I can land.”

He vowed to make another attempt soon.

There are some diplomatic efforts going on between the new Honduran government and the Organization of American States, which suspended Honduras last weekend. But who knows whether that will bear fruit.

At least there's something new to monitor on Twitter.

The Long War In Iran

We've hit the attrition stage in the Iranian election uprising. The protests have become more sporadic, but can the regime risk isolation from the rest of the world? Mir Hossein Mousavi wants to form a new political party dedicated to curbing the power of the mullahs and promoting democratic reform, but can he stay out of jail? The regime has been able to put down protests to this point, but could they possibly stop a general strike? And how will the statements of the Association of Researchers and Teachers of Qom affect the outcome?

An important group of religious leaders in Iran called the disputed presidential election and the new government illegitimate on Saturday, an act of defiance against the country’s supreme leader and the most public sign of a major split in the country’s clerical establishment.

A statement by the group, the Association of Researchers and Teachers of Qum, represents a significant, if so far symbolic, setback for the government and especially the authority of the supreme leader, Ayatollah Ali Khamenei, whose word is supposed to be final. The government has tried to paint the opposition and its top presidential candidate, Mir Hussein Moussavi, as criminals and traitors, a strategy that now becomes more difficult.

“This crack in the clerical establishment, and the fact they are siding with the people and Moussavi, in my view is the most historic crack in the 30 years of the Islamic republic,” said Abbas Milani, director of the Iranian Studies Program at Stanford University. “Remember, they are going against an election verified and sanctified by Khamenei.”

This dovetails with Mousavi's release of documents detailing the fraud at the polls, including the printing of millions of extra ballots before the vote; as well as past statements from clerics that many Iranians are "unconvinced" about the poll results. It chips away at the legitimacy of the Supreme Leader, and even in dictatorial societies, you need legitimacy.

It's interesting that, in the midst of an internal crisis, Ahmadinejad wants to hold talks with President Obama, perhaps to buttress his own standing among his people. In this war of attrition, who would have thought that sitting at a table with an American President would aid an Iranian one in crisis?

The Rest Of The Week In Review

An early-in-the-evening version, just to get it out of the way.

• In New Hampshire, John Sununu has decided not to run for the open Senate seat being vacated by Judd Gregg. More good news for Democrats in a state trending their way, although for the moment, Attorney General Kelly Ayotte (R) has a slight lead over Rep. Paul Hodes (D). Both have a way to go to cement their reputation among the electorate.

• I'm sorry I didn't highlight this story during the week, because it's a textbook example of how Republicans have gutted all regulatory oversight and turned so much of our corporate and political processes into a Wild West Show. In this case, the Republicans on the Federal Election Commission have basically turned it into a non-entity, because they oppose the very existence of the FEC itself. We have options to fix this and actually allow the campaign finance laws to be enforced, but the system appears so broken that chances aren't very likely.

• The FBI's Saddam tapes had plenty of interesting nuggets, including the big story that Saddam refused to allow inspectors into Iraq because he feared the response from Iran when they discovered his weapons program had more bark than bite. Maybe we should have looked into that.

• Chris Bowers has a good post showing the path to victory on the public option. I don't view it as the end-all be-all, but it's an important element of overall reform. However, there are other potential roadblocks on the horizon - like this letter from conservative House Democrats warning that they won't support any bill that aids funding of reproductive choice. This is an artifact of Rahm Emanuel's stupid decision to back pro-life Democrats throughout red districts who had little mitigating benefits other than the D next to their name.

• Joe Biden isn't wrong that most of the stimulus money has not been released yet. For example, he just kicked off the broadband expansion piece of the funding, releasing $4 billion dollars out of a total of $7.2 billion. Significantly, the White House instituted rules requiring all telecoms participating in the broadband grants to comply with net neutrality principles. I'm excited about the broadband part of the stimulus, which leaves something tangible while creating good jobs and building toward the future with digital infrastructure.

• Great news from India, which has finally lifted the criminal ban on consensual gay sex. The ban dated back to the colonial era. Very few nations still have sodomy laws.

• Speaking of gay rights, the only state in New England without legalized marriage for same-sex couples is Rhode Island, and with geniuses like these running the state, who accuse states like Vermont of "legislative activism," I don't see that changing too soon.

• In case you're holding out hope that Mark Sanford's resignation (which may or may not be imminent) would bring a better life to the citizens of South Carolina, check out his potential replacement.

• Here's the Associated Press using the Fourth of July as a hook to fearmonger about the national debt. These are the kind of stories that magically disappeared under George W. Bush, only to return with a vengeance once a Democratic President came into power seeking a modestly progressive agenda. It's disingenuous crap.

• I think the lesson here is not to blindly trust the word "organic". At my local farmer's market, they'll tell you that they cultivate their crops according to organic practices but cannot afford the label to promote it. The USDA needs to improve the process.

• Limbaugh on military coups: "If we had any good luck, Honduras would send some people here and help us get our government back." Classy.

• Tom Lee thinks that investing so much communications infrastructure on Twitter, a privately owned technology, has the potential for real disaster down the road. It's worth considering whether such a centralized tool that can be used to, say, track individuals, could become problematic.

• Did the Bush Administration deliberately leak the existence of a federal wiretap to tip off the Republican Congressman who was the subject of the surveillance, and help that subject win re-election in 2006? Murray Waas reports. (The happy ending is that Rick Renzi, the aforementioned Congressman, eventually was indicted.

• More bondholders put their personal profits over common sense and try to block the sale of GM, as if they'll be able to recoup their money from a company that doesn't exist rather than one that does.

• I really have no interest in any conscience rule, because it assumes that a pharmacist or other health-care worker has an entitlement to their own job even if they prefer not to carry it out fully, and it puts more importance on the mental well-being of the health-care worker than the physical well-being of the individual
who seeks legal health care services. Obama is wrong to keep these conscience laws alive.

• Every so often, somebody writes about how the blogosphere sucks today compared to the good ol' past. I was around back then, and I don't pay too much attention to these concerns. Mainly because you are your own publisher and can create the blogosphere you desire. If you don't like how nobody's linking to smaller blogs, start linking to them! If you think Huffington Post is sucking up the oxygen, stop reading them! The blogosphere is bigger and therefore more fractured, and Twitter and Facebook have pulled readers away, but I don't really see this as a problem. Considering that this whole thing is pretty much an incredible accident, I'm surprised as many people still participate in it.

Palin's Way

Phillip Rucker writes that Sarah Palin resigned to regain control of her own narrative, which has been assailed by ethics violations and partisan snickering over the past year (So a real leader, in the face of that, quits!). So now we'll see how Palin herself can present her message, unencumbered by the pressures of a day job of governing. Here's how that looks:

The response in the main stream media has been most predictable, ironic, and as always, detached from the lives of ordinary Americans who are sick of the "politics of personal destruction". How sad that Washington and the media will never understand; it's about country. And though it's honorable for countless others to leave their positions for a higher calling and without finishing a term, of course we know by now, for some reason a different standard applies for the decisions I make. But every American understands what it takes to make a decision because it's right for all, including your family.

I shared with you yesterday my heartfelt and candid reasons for this change; I've never thought I needed a title before one's name to forge progress in America. I am now looking ahead and how we can advance this country together with our values of less government intervention, greater energy independence, stronger national security, and much-needed fiscal restraint. I hope you will join me. Now is the time to rebuild and help our nation achieve greatness!

She followed up that statesmanlike rhetoric with a threat to the entire media to stop reporting on the potential of a criminal investigation into the building of the Wasilla Sports Complex, which pretty much nobody was doing until the appearance of a bizarre four-page letter from her lawyer, leading every news outlet to... report about it. For the record, the LA Times has an FBI agent claiming there's no imminent indictment. If she would have shut her trap about it, that statement would have run and vindicated her. Instead she has her lawyer write an open threat to journalists, which usually doesn't elicit favorable journalism as a response. It's going to be beautiful to watch:

Last year, she had the best help and the best strategists the GOP could buy, and other than her recitation of a speech written for someone else at the RNC (before we learned that using teleprompters is bad!), she was an absolute train wreck. Now she has gone rogue, and it is going to get even better and more entertaining, because Meg Stapleton blackberrying from upstate New York is not going to get it done. If you want an idea how bad awesome this is going to get, watch this Anderson Cooper interview of Meg Stapleton:



To fully appreciate the fail parade that is the current Palin insane clown posse, you have to realize that was THE PROFESSIONAL MEDIA HANDLER dealing with Anderson. In fairness to Stapleton, she has been forced to go all in before the flop, and she’s holding 27 offsuit.

Also, this.

Gary Kamiya On The California Crisis

I'm sure many political observers will laud this New York Times magazine article on California's crisis and the men and women who seek to solve it, but I found it oddly pedestrian. The profiles of the candidates reveal little of substance, and aside from displaying the salient fact that Arnold has no interest in the well-being of his constituents, I didn't see the point.

“Someone else might walk out of here every day depressed, but I don’t walk out of here depressed,” Schwarzenegger said. Whatever happens, “I will sit down in my Jacuzzi tonight,” he said. “I’m going to lay back with a stogie.”

Overall, I saw too much focus on personality in dealing with what is essentially a problem of process.

Actually, while I didn't agree with all of it, I thought Gary Kamiya had a much smarter take, and it didn't mention Arnold Schwarzenegger or the names of any of his potential replacements more than once. The headline, "Californians are sinking themselves," doesn't seem to match the bulk of the article, which focuses on the dysfunctional governing process.

The immediate source of California's financial problems is a lethal combination of ideology and rules. It is deeply politically divided, and its governmental mechanisms are completely broken. Bay Area leftists stare at Orange County conservatives across an unbridgeable abyss; a large and potent group of anti-government libertarians faces off against an equally powerful group of pro-tax, proactive government liberals. If California, like most states, required only a simple majority to pass its budget, the disagreements between these camps could be worked out; after all, the Democrats control the Legislature. But California requires a two-thirds majority, which gives the GOP, now dominated by anti-government, anti-tax ideologues, veto power over the process. The result is deadlock.

Compounding this problem is California's notorious initiative process, which allows voters to bypass the Legislature and place initiatives directly on the ballot simply by gathering enough signatures. The initiative process was originally passed by voters in 1911 to circumvent the power of the oligarchic railroad trusts by restoring direct democracy. And it still offers citizens a chance to take control of important issues. But it has gone out of control, abused by powerful interests who hire people to collect signatures and ram through bills that no ordinary citizen can be expected to comprehend. By sidelining elected officials, it achieves the worst of both worlds: It gives ordinary citizens, who lack requisite expertise, institutional memory and accountability, too much power, and then forces legislators to clean up their mess -- except that because of ideological gridlock and the supermajority requirement, they can't.

Kamiya looks at the three strikes law and in particular Prop. 13, which he views as the ultimate manifestation of the Two Santa Claus theory, that California can have endlessly lower taxes with endlessly more social services.

This was, in effect, a mass outbreak of cognitive dissonance, an up-yours delivered to government with the public's left hand, while its right hand reached out for Sacramento's largesse. Now, 31 years later, the bill has finally come due. There is no free lunch. If you want good roads, parks, decent schools (California's schools, once the best in the nation, are now among the worst) and adequate social services, you have to pay for them.

Out of this, Kamiya points his finger at the people who voted in Prop. 13 and failed to modify it over the ensuing 31 years, who are "self-centered" and have "not decided what it thinks about the New Deal, or government itself." They need to "grow up," Kamiya says.

I think this ignores the fact that Californians have traditionally been offered precious few choices to rectify the broken system. The Democratic Party essentially has made a pact with themselves to nibble around the edges for three decades instead of confronting the great unmentionable crisis of governance. People see the dysfunctional politics play out year after year and become rightfully disaffected with the system. And they are never told anything from anyone in a position of power to counteract the Two Santa Claus theory, and so they necessarily believe it. I don't blame citizens for responding to their leaders. The problem lies with the leadership itself, or more to the point the lack thereof.

I was 5 years old and on the other coast of the country when Prop. 13 was passed, and I'm not about to bear the brunt of the blame for that decision. I would blame myself if I continued to live with the failure of the political leadership to confront the root causes. But Californians are starting to use movement politics to go around the leadership and force the necessary solutions. The sheer enormity of the problem and the size of the state makes this a difficult option. But the alternative, to acquiesce and wait patiently for the leadership to figure things out, is unthinkable.

Well Then, This Time, Anticipate

Joe Biden went on ABC's "This Week" today and said that his Administration, along with the consensus economic community, misread the severity of the recession:

STEPHANOPOULOS: While we've been here, some pretty grim job numbers back at home -- 9.5 percent unemployment in June, the worst numbers in 26 years.

How do you explain that? Because when the president and you all were selling the stimulus package, you predicted at the beginning that, to get this package in place, unemployment will peak at about 8 percent. So, either you misread the economy, or the stimulus package is too slow and to small.

BIDEN: The truth is, we and everyone else misread the economy. The figures we worked off of in January were the consensus figures and most of the blue chip indexes out there.

Everyone thought at that stage -- everyone -- the bulk of...

STEPHANOPOULOS: CBO would say a little bit higher.

BIDEN: A little bit, but they're all in the same range. No one was talking about that we would be moving towards -- we're worried about 10.5 percent, it will be 9.5 percent at this point.

STEPHANOPOULOS: But we're looking at 10 now, aren't we?

BIDEN: No. Well, look, we're much too high. We're at 9 -- what, 9.5 right now?

STEPHANOPOULOS: 9.5.

BIDEN: And so the truth is, there was a misreading of just how bad an economy we inherited. Now, that doesn't -- I'm not -- it's now our responsibility. So the second question becomes, did the economic package we put in place, including the Recovery Act, is it the right package given the circumstances we're in? And we believe it is the right package given the circumstances we're in.

We misread how bad the economy was, but we are now only about 120 days into the recovery package. The truth of the matter was, no one anticipated, no one expected that that recovery package would in fact be in a position at this point of having to distribute the bulk of money.

STEPHANOPOULOS: No, but a lot of people were saying that you needed to do something bigger and bolder then, including the economist Paul Krugman. He's saying -- right now he's saying the same thing again -- don't wait. You need a second stimulus, you need it now.

BIDEN: Look, what we have to do now is we have to properly, adequately, transparently and effectively spend out the $787 billion.

First of all, Stephanopoulos was the first to say "misread the economy." So it was kind of a leading question, and a Hobson's choice for Biden between two bad options - a bad read or a failed stimulus. Next, Biden and many of his White House colleagues have been pushing this idea that nobody could have anticipated the depths of the economy for several weeks now. But the truth is quite different. Plenty of people dating back to late last year were saying that unemployment was headed for double digits, and that the stimulus package conceived by the Obama Administration, especially with its 40% tax cuts, would be insufficient. The Administration's white papers and boasts about recovery didn't check out, the same way that their "adverse scenario" for the stress tests didn't check out. The worst thing about Biden's statement is that it's flat wrong.

But beyond that, the White House's touting of the stimulus as a world-historical fix to a broken economy presupposed this backtracking. They knew at the time that it would take months to get the stimulus funds out to people and businesses, and that the economy, which was already reeling, with four straight months of job loss over 400,000 at the end of 2008, would only continue to bleed. And yet the timing of passage, at the beginning of the first term, necessitated touting it as something of a panacea. But we all saw the gruesome legislative sausage-making that went into passage, with Presidents Nelson and Collins pulling this program and that out of the package just to reach some arbitrary number above which we could not spend.

The stimulus package is not bad, and much of it will hit the economy in Q3 and Q4 of this year, so its impact has yet to have been felt. But it was clearly not sufficient to meet the demand shortfall at the time, and the recent job numbers just prove it.

The June employment report suggests that the alleged ‘green shoots’ are mostly yellow weeds that may eventually turn into brown manure. The employment report shows that conditions in the labor market continue to be extremely weak, with job losses in June of over 460,000. With the current rate of job losses, it is very clear that the unemployment rate could reach 10 percent by later this summer, around August or September, and will be closer to 10.5 percent if not 11 percent by year-end. I expect the unemployment rate is going to peak at around 11 percent at some point in 2010, well above historical standards for even severe recessions.

It’s clear that even if the recession were to be over anytime soon – and it’s not going to be over before the end of the year – job losses are going to continue for at least another year and a half. Historically, during the last two recessions, job losses continued for at least a year and a half after the recession was over. During the 2001 recession, the recession was over in November 2001, and job losses continued through August 2003 for a cumulative loss of jobs of over 5 million; this time we are already seeing more than 6 million job losses and the recession is not over [...]

These job losses are going to have a significant effect on consumer confidence and consumption in the months ahead. We’ve also seen extreme weakness in consumption. There was a boost in retail sales and real personal consumption-spending in January and February, sparked by sales following the holiday season, but the numbers from April, May, and now June are extremely weak in real terms. In April and May you saw a significant increase in real personal income only because of tax rebates and unemployment benefits. In April, there was a sharp fall in real personal spending, and in May the increase was only marginal in real terms [...]

The other important aspect of the labor market is that if the unemployment rate is going to peak around 11 percent next year, the expected losses for banks on their loans and securities are going to be much higher than the ones estimated in the recent stress tests. You plug an unemployment rate of 11 percent in any model of loan losses and recovery rates and you get very ugly losses for subprime, near-prime, prime, home equity loan lines, credit cards, auto loans, student loans, leverage loans, and commercial loans – much bigger numbers than what the stress tests projected.

We're just in terrible trouble right now, and the 50 little Hoovers wreaking havoc on state budgets aren't exactly helping, either. At this point, a Japan-style decade of zero growth might be welcome, with a double-dip recession possible.

I think the Administration did a decent enough job reacting to the chaos of a potential depression. But now they need to look at the reality of the situation and recognize that we will need another stimulus, which I would like to see focused on fiscal stabilization for the states. For the second week in a row, a major Administration figure dodged the question when asked, but did not dismiss it out of hand. They need to at least draw up some plans. If nobody could have anticipated the state of the economy prior to the first stimulus, the least the White House can do is anticipate the second round.

...The Shrill One says it better.

The Village Is Very Sorry For Being The Village

In the Apology of the Week (all respect to Harry Shearer), Katherine Weymouth requests a mea culpa for trying to profit off of connecting insiders in government to the lobby community.

So what happened? Like other media companies, The Post hosts conferences and live events that bring together journalists, government officials and other leaders for discussions of important topics. These events make news and inform their audiences. We had planned to extend this business to include smaller gatherings, a practice that has become common at other media companies.

From the outset, we laid down firm parameters to ensure that these events would be consistent with The Post's values. If the events were to be sponsored by other companies, everything would be at arm's length -- sponsors would have no control over the content of the discussions, and no special access to our journalists.

If our reporters were to participate, there would be no limits on what they could ask. They would have full access to participants and be able to use any information or ideas to further their knowledge and understanding of any issues under discussion. They would not be asked to invite other participants and would serve only as moderators.

When the flier promoting our first planned event to potential sponsors was released, it overstepped all these lines. Neither I nor anyone in our news department would have approved any event such as the flier described.

The shorter version of this pretty much tracks with my assessment at the time the scandal broke and Weymouth cancelled the dinner: "Now the Post can go back to being influenced by lobbyists and setting conventional wisdom in Washington without all that dirty money changing hands."

The only difference between this proposed salon and the other "conferences and live events that bring together journalists, government officials and other leaders for discussions of important topics" is that the proceeds went more directly into the pockets of the Post in this case. As Marcy Wheeler notes, Weymouth never disavows the actual content of the salons or the even the exchange of money (as long as it's indirect) to set up meetings between lobbyists and politicians - just the fact that this particular salon would be off-the-record.

I don't suspect for a second that lobbyists have much trouble finding their way into the upper echelons of Washington to speak their peace, anyway. The Washington Post simply wanted to charge for drinks to this particular cocktail party. Other than that, they cannot imagine how any of this could be a problem.

One can hardly blame a struggling newspaper wanting to open up another revenue stream. The problem lies in the barely-discernible difference between essentially a pay-to-play scheme and the normal social and political transactions in Washington.

Reporters Should Do More Than Check Twitter Hashtags

Here's the latest on the Honduran situation: the new government remains defiant despite condemnation from most of the Americas. The Organization of American States has threatened their removal from the group, but the government threatened to leave the OAS right back. Manuel Zelaya attempted to enter the country today, but the military vowed to turn back his jet and divert it to El Salvador. The government has said they would arrest Zelaya if he set foot on Honduran soil. Protests continue in the capital.

Interestingly, while there is significant Twitter traffic about Honduras, very little reporting has gotten out about the protestors, and certainly not to the extent of Iran. It's just interesting what captivates global attention. Iran is obviously a larger country with more technological savvy, but that should not necessarily drive coverage. The truth is that Zelaya's power base comes from the lower classes in Honduras, who don't have access to social media in the way that students in Iran do. And thus, the coverage changes.

Seems like we should be paying more attention to this situation.

...there are conflicting reports, at least as I read them in broken Spanish, of Zelaya arriving in Honduras or touching down in El Salvador. Then there's this report:

Canciller de facto de Honduras: "Obama es un negrito que no sabe nada de nada"

The minister of information on Honduras: "Obama is a little black man who knows nothing from nothing." More.

And On A Lighter Note

...So I'm out to eat burgers and dogs and cole slaw with pineapple (our contribution), have a good holiday.

Here's a nice sing-along for your barbeques.

Happy Torture Of July

I have pulled back from writing about the torture debate of late because it's just too painful. There can be no question that this country used taxpayer-funded federal agencies like the CIA and the Department of Defense to enact cruel, degrading and illegal techniques on terrorism suspects as young as twelve, pushing them into false confessions and generally making it impossible to separate the guilty from the innocent, in a mad search for evidence, including confessions linking Iraq and Saddam Hussein with Al Qaeda and 9-11. These acts of torture, which we reversed engineered from the Chinese Communists (who also used them to extract false confessions) were far from benign or even ephemeral; indeed, at least 100 prisoners in custody died from torture, both at secret prisons abroad, in Iraq and in Afghanistan, where the very same base of operations for the torture of prisoners, Bagram, continues to house hundreds of suspects without charges. When civil liberties groups and ordinary Americans learned of these acts of torture, authorized and directed at the highest levels right out of the White House, those in power sought to destroy the evidence, and even to this day, the Administration that succeeded them has done everything in its power to cover up much of the worst abuses and ensure no accountability for these actions. To this day, some of the people directly involved in the torture regime continue to work in their positions under the Obama Administration.

Some would consider this a terrible subject to write about on the Fourth of July. I think it's the perfect time. I believe that the founding of the nation rings hollow when we can no longer say without laughing that here, the people rule, that no man is king and nobody is above the law, that we have a government of, by and for the people. The difficulties of passing legislation that moves us forward into the future were in many ways baked into the checks and balances of the system. Those processes can change. But the stain of torture, combined with the complete lack of accountability for it, must not get swept out with the old Administration like a bad policy. Indeed, the spectacle of watching the Democratic President essentially follow the Republican President in enshrining civil liberties abuses into law , gaining support on both sides, is deeply distasteful and distressing to me as an American.

I guess I'm supposed to be cheered by the fact that the President won't sign an executive order bringing the concept of preventive detention, the idea of indefinitely holding prisoners without charges, into this American experiment. And I should take solace that some in the Justice Department believe that detainees in our custody do have protections in the legal system against being charged using evidence gained through torture or coercion. But none of this is really good enough. Torture is a bright line that should separate civilized societies from the uncivilized. It is true that the courts and even some of the internal Justice Department mechanisms at the Office of Legal Counsel have resisted this headlong push into codifying some of the worst abuses of the Bush Administration. And yet those tactics and actions seen as wrong, as illegal, as the cause of hundreds if not thousands of deaths, have no sanction. And we live with this moral rot. And it's a rot which almost necessarily leads to other abuses, as we get swept up in almost a fever dream, where security trumps liberty and fear overpowers reason.

Donald Rumsfeld has finally said he's sorry. Sort of.

In an interview with biographer Bradley Graham, the former secretary of defense says he has regrets about the administration's controversial detainee policy.

The twist is that Rumsfeld doesn't regret the policy itself -- specifically the abandoning of the Geneva Conventions for detainees picked up in Afghanistan. Rather, he regrets how the policy was formulated.

Here's the relevant section from Graham's book:

With the passage of time, Rumsfeld has come to recognize that he made a mistake, although he sees the error as one of process, not basic judgment. He faults himself for taking too legalistic an approach initially, saying it would have been better if senior Pentagon officials responsible for policy and management matters had been brought in earlier to play more of a role and provide a broader perspective. As he explained in an interview in late 2008, policies were developing so fast in the weeks after the September 11 attacks that he did not follow his own normal procedures. "All of a sudden, it was just all happening, and the general counsel's office in the Pentagon had the lead," he said. "It never registered in my mind in this particular instance--it did in almost every other case--that these issues ought to be in a policy development or management posture. Looking back at it now, I have a feeling that was a mistake. In retrospect, it would have been better to take all of those issues and put them in the hands of policy or management."

Further, Rumsfeld conceded, more should have been done to engage Congress in drafting the new policies on detainees--something he said that White House officials had opposed. Although Congress did eventually get involved, he noted that this occurred "in duress" after the Supreme Court ruled in 2006 against the administration's original approach.

"All of a sudden, it was all just happening." Rumsfeld doesn't really take responsibility for the deaths of people in custody, but he recognizes the environment that leads to such mistakes and lapses, a groupthink that eventually consumes the policymakers. It makes a mockery of deliberative democracy to think this could ever happen.

It's not the most festive message on this day, but if we celebrate these United States on the day of its founding, then we must also strive for that union to live up to the founding principles. All men are created equal reads like a punchline in light of the past eight years and even these last several months. And there is no better time to ruminate on how we can be worthy of the sacrifices of those who started a revolution to bring self-government to this colonized collection of states.

IOKIYAR

Actor/Senator Fred Thompson can't believe America would elect a former celebrity to the Senate.

I find this historical amnesia to be all too prevalent.

Dueling Threats

A strange bit of stories coming out of Joe Biden's trip to Iraq yesterday. In the first, the Vice President warned that US troops would bug out if sectarian violence increased.

In meetings with senior Iraqi officials, including Prime Minister Nouri al-Maliki, Biden stressed that the United States would remain engaged in Iraq, even as its military role diminishes in a withdrawal that is expected to dramatically gather pace after parliamentary elections in January.

But a senior administration official briefing journalists said Biden made that support contingent on Iraqi progress in resolving long-standing conflicts, some that bedeviled Iraq even before the United States invaded in March 2003.

If "Iraq were to revert to sectarian violence or engage in ethnic violence, then that's not something that would make it likely that we would remain engaged because, one, the American people would have no interest in doing that, and, as he put it, neither would he nor the president," the official said.

He added that there "wasn't any appetite to put Humpty Dumpty back together again if, by the action of people in Iraq, it fell apart."

I would argue that there's no ability to put Humpty Dumpty back together again is it falls apart. The decisions on sectarian violence and reconciliation will be made by Iraqis. Despite our firepower we have had little ability to control events over there.

At the same time, another report suggests that the US sought a greater diplomatic role in pushing reconciliation, and the Prime Minister rebuffed him:

Biden's meeting with Maliki was a reminder that although the U.S. maintains about 130,000 troops in Iraq, its influence is waning rapidly now that the clock is ticking on the timetable for the departure of all American combat troops next year.

Days earlier, Iraqis had celebrated the withdrawal of U.S. forces from their cities as a "day of national sovereignty." And though Biden's visit was welcomed as evidence that the United States doesn't plan to completely disengage from Iraq, Maliki made it clear that he does not want U.S. officials to be as closely involved in Iraqi politics as they have been.

Maliki told Biden that "the reconciliation issue is a purely Iraqi issue and any non-Iraqi involvement might have a negative effect," said Maliki's spokesman, Ali Dabbagh. "We don't want the Americans to come and get involved."

Biden "received the message well, and he said he is ready to help whenever the Iraqi government asks," Dabbagh said.

I'm trying to piece together the narrative here. It goes something like this:

Biden: We want to help you reconcile.
Maliki: You can't help us reconcile.
Biden: Well, if you don't reconcile, we will leave.
Maliki: We want you to leave.
Biden: Then we're in agreement!

All indications are that Maliki has successfully used the leverage of US military might to crush his internal enemies, and now wants to govern as a potentate without interference from the US. And yet Arab-Kurdish violence does actually threaten to break apart the country, though I wonder if everyone - particularly Biden - would see that as a bad thing.

The Arab-Kurdish divide in Iraq is extremely unfortunate and economically irrational. If Iraq can ever reestablish security and develop the southern oil fields, which are enormous, Kurds will be drawn down south as workers in large numbers, and get spread around the country. The Kirkuk fields are old, water-logged and on the way to being worked out. Iraq's future probably lies elsewhere and therefore probably so does the future of Kurdish citizens of Iraq. Kurds would be wiser to forget about trying to control territory in the 19th century way and surrender to the messiness, ethnic mixing and multiple identities, and uprootedness of postmodern life. And nothing better exemplifies such postmodernism than the polyglot hydrocarbon states of the Gulf. If Kurds aren't careful they'll be stuck landlocked, with small resources, and surrounded by powerful local enemies fearful of their separatism, while Nepalis, Pakistanis and Sri Lankans get rich working in the oil economy of the Arab Shiite south of Iraq.

I think the view of the Administration, at least on Iraq, is that they don't want to get sucked into some other country's internal civil conflict. Maliki obviously believes he can come out on top in such a struggle because he has the numbers behind him. Lots of parts of the world are dangerous, and we don't sit 130,000 American troops in them to babysit. If we cannot affect spasmodic violence - and we can't - we shouldn't sit around waiting.

Something's Up

I tried to sit down and read Sarah Palin's resignation speech. Sometimes when you say something like "the politician clearly wrote the speech themselves" that's a compliment. Not in this case. As Ezra notes, this is just a bizarre thing to allow into a TelePrompTer.

I've read a lot of speech transcripts. They tend to have fewer words in all capital letters. And fewer things in quotation marks that aren't actually, you know, quotes. And I've never seen an official speech transcript, written by an actual speechwriter, that contains this:

*((Gotta put First Things First))*

And that's not even getting into the self-pitying shots at the press, the fact that she mocked those who take "the quitter's way out" in a speech dedicated to quitting, or this agonizing sports metaphor:

"A good point guard drives through a full court press, protecting the ball, keeping her eye on the basket… and she knows exactly when to pass the ball so that the team can WIN. And I’m doing that – keeping our eye on the ball that represents sound priorities – smaller government, energy independence, national security, freedom! And I know when it’s time to pass the ball – for victory."

This had the quality of a written-the-night-before book report. At the least, it was not the product of carefully crafted deliberation.

This is a reactive document based on some new information about to come to light.

Change Happens From The Bottom Up

Ceci Connolly overheard the President telling Senate leaders that he would prefer the progressive hits on Democratic members of Congress to stop.

President Obama, strategizing yesterday with congressional leaders about health-care reform, complained that liberal advocacy groups ought to drop their attacks on Democratic lawmakers and devote their energy to promoting passage of comprehensive legislation.

In a pre-holiday call with half a dozen top House and Senate Democrats, Obama expressed his concern over advertisements and online campaigns targeting moderate Democrats, whom they criticize for not being fully devoted to "true" health-care reform.

"We shouldn't be focusing resources on each other," Obama opined in the call, according to three sources who participated in or listened to the conversation. "We ought to be focused on winning this debate."

Specifically, Obama said he is hoping left-leaning organizations that worked on his behalf in the presidential campaign will now rally support for "advancing legislation" that fulfills his goal of expanding coverage, controlling rising costs and modernizing the health system.

I'm wondering how Connolly knows this much about what appears to be a closed strategy call. My assumption is she knows what the White House wants her to know. So going on the assumption that it's true, I'll say this:

Of course this is what Obama would tell Democratic leaders in the Senate about attacks on Democrats in the Senate. He doesn't want those attacks to have his direct sanction, these are lawmakers he has to work with now and in the future, and so it makes perfect sense for him to play good cop. He can take the pose of just wishing these attacks would stop, without intervening directly in the activities of outside organizations (which would be illegal, I believe). It's a classic Obama middle path.

At the same time, this is also nothing new. He essentially drained progressive groups of funding during the 2008 campaign. So that past set of actions is part of this statement, too. It's one thing to make the idle "I wish they'd jump in with the home team for the big victory" comment, it's another to make it secure in the knowledge that he could move it from "I wish" to "do this or some of your biggest fundraisers might get a phone call."

Obama wants to control message and have all these outside groups pushing alongside him for "reform." But his vision of that reform includes a broad set of principles and a glaring lack of specifics. The Presidential candidate who said "change begins from the bottom up" should be the last one as President to expect his supporters to follow him blindly.

What's more, progressive pressure has worked.

But there is no question that these hard-hitting campaigns representing breast cancer survivors and others have been successful, and they have been instrumental in backing Ben Nelson and Kay Hagan off their opposition to a public plan. The memberships of these organizations are in clear support of their efforts, and with 76% of the country in support of a public plan, the President seems to be one of the unhappy few who oppose their tactics.

I could probably find about 1,000 quotes from candidate Obama about how it's time for Americans to once again participate in their government, and how we are the change we've been waiting for, etc. You cannot empower people for months and months to take action and then try to stage-manage that action. Activism doesn't have an on/off switch.

I was actually at this event where Maxine Waters expressed admiration for the DFA ad against Mary Landrieu ("I'm going to be in New Orleans this weekend, telling everyone about it") and said, "Let me just say to all of our friends out there, that a sustained effort, directed at public officials, demanding no less than a public option, can be very successful. So go to work." I believe this work will continue, even if it makes the President uncomfortable. He didn't create this monster, but he certainly drafted off it during 2008. People want to be actively engaged in politics again. It's a shame for anyone to try and cut them out.

...as expected, progressive groups won't be stopping their ad buys anytime soon. Via email, DFA's Charles Chamberlain said that his group hasn't received any calls from the White House to pull back, nor will they be doing so, and he thinks that "this article is a very good sign that what we are doing is working. If Senators and Reps weren't afraid of us, they wouldn't be asking for us to stop."

Sarah's Exit

I was away all day. Anything happen?

Just a couple words on this Palin thing. It could very well be, and probably is, a realization that an elected official in Alaska can't maintain the schedule necessary to run a Presidential campaign, and that these things begin earlier and earlier and she needed to be on the road as soon as possible. I think she could have stayed governor until 2010 and still made the campaign appearances necessary, but obviously she and her handlers didn't.

But the timing of the announcement just doesn't make any sense. The Friday afternoon of a holiday weekend is when you dump news you don't want anyone to know about. There's also the matter of that virulently negative Vanity Fair article, the consequent backbiting between some of the peripheral players, and then those leaked internal campaign emails depicting Palin in a bad light. You can argue that this pushed Palin to resign because she needed to get control of that story, and only a road tour would do it. But you could also view the leaked emails as a shot across the bow. Clearly the McCain people, who obviously hate her, have a wealth of material on her, and if she stayed perched up in Alaska they could control the spigot and destroy her drip by drip.

There's also the matter of the $500,000 in debt from legal defenses, which can easily be made on the lecture circuit, with the added benefit of raising name recognition. But I cannot help but think that this hastily arranged resignation got her out of Alaska before something very damaging hit her, and Palin must think that she can avoid harm by resigning first and then depicting the matter as inherently partisan and political, with no need for an independent investigation because she's no longer Governor. Max Blumenthal hints at something here.

Many political observers in Alaska are fixated on rumors that federal investigators have been seizing paperwork from SBS in recent months, searching for evidence that Palin and her husband Todd steered lucrative contracts to the well-connected company in exchange for gifts like the construction of their home on pristine Lake Lucille in 2002. The home was built just two months before Palin began campaigning for governor, a job which would have provided her enhanced power to grant building contracts in the wide-open state.

Seems like a small chink in the armor, but this is almost precisely what brought down Ted Stevens in Alaska, so it probably has more resonance there.

From a political perspective, this hurts, but not too much. Expect a couple months of Palin's supporters in full victimization mode, claiming that everyone from the mainstream media to David Letterman forced her out of her job. She thrives on the politics of resentment, and this just seems like a "you won't have Nixon to kick around anymore" moment.

...I finally watched that press conference, and she may as well have been speaking in German. I have no idea what she just said. I do appreciate David Kurtz' three-word assessment: Real winners quit.

Get Yer Souvenir IOUs Today!

Bloomberg reports that people are lining up for those souvenir Arnoldbucks.

Controller Chiang said the warrants can be transferred between individuals, setting up the possibility that a secondary market for the IOUs may develop. Already ads are appearing on Web sites such as Craigslist offering cash for the IOUs at below face value.

In such a transaction, the person who gets the IOU would get most of the cash they were due the state, while the person buying the IOU might then hold onto it until maturity and earn the face value plus the 3.75 percent interest.

At least one person offered to buy an IOU at more than face value as a keepsake.

“I am interested in purchasing a ‘State of California IOU’ as a souvenir,” the ad reads. “I figure it would be an interesting thing to have around when my grandchildren are fighting over my stuff after I’m dead and gone. I will pay two times face value (up to $100, or $50 face value) for a warrant/IOU.”

Of course, after July 10, the deadline that banks like BofA and Wells have given for exchanging these IOUs for cash, souvenirs may be the only value for these IOUs for a few months. Maybe Arnold will go to a baseball card convention and sign them himself!

Here's another FAQ about who receives IOUs and who does not. The unemployed, SSI/SSP recipients, state employees and retirees, IHSS and Medi-Cal providers will NOT receive IOUs. Welfare recipients, contractors with the state, local governments, and income tax refund recipients WILL get them. Felix Salmon made a handy chart that suggest the haves will keep getting paid and the have-nots won't, and that's somewhat true, but some have-nots who have the benefit of their services being partially provided by the Feds will get paid as well. In general, where you stand does depend on where you sit, in this crisis. This again makes clear that the idea of California debtholders, who get priority of payment in the state constitution over everything but education, getting stiffed by the state is a ridiculous one that pretty much cannot happen, and lowering bond ratings should be rightly seen as Wall Street gouging.

And I'll allow Karen Bass to explain exactly who's responsible for this particular outcome of IOUs and lowered bond ratings.

Small businesses, students, seniors, and taxpayers will all start receiving IOUS. This shameful day didn't have to arrive. In fact, Governor Schwarzenegger had several opportunities to prevent it.

On June 12 Governor Schwarzenegger unilaterally blocked the Controller's authority to secure short-term loans to avoid the cash crisis. He said, "let them have a taste of what it is like when the state comes to a shutdown -- grinding halt."

On June 25 after the governor called Senate Republicans to his office for private meetings, $4 billion in immediate cash solutions that had been passed on an overwhelming bipartisan majority in the Assembly were killed in the Senate.

Most recently, the governor vetoed a comprehensive package of budget solutions supported by majorities in both houses of the legislature that would have resolved the $19.5 billion deficit, left a $4.0 billion reserve, avoided the cash crisis and prevented IOUs [...]

We did offer, as a sign of good faith, to begin work immediately on reforms regarding restructuring Medi-Cal and eliminating fraud in the IHSS program. We also committed to working with the governor on other reform legislation for him to sign. But the governor wouldn't take "yes" for an answer. So California businesses, taxpayers and students will be receiving IOUs simply because Governor Schwarzenegger thought it was more important to immediately force last minute changes such as reducing future employee pensions, fingerprinting elderly and disabled Californians who receive services, and denying kids food stamps if their families can't access a computer to sign them up for the program.

See Noreen Evans for more.

The budget gap grows by $25 million a day and we have wasted billions of taxpayer dollars because the Governor wants to teach everyone a lesson. I hope that IOU secondary market is bigger than eBay, because those suffering with the consequences of dysfunction are going to need the help.

Falling Behind

The value of a planned economy: no need for debates that can be hijacked by the forces of regress.

As the United States takes its first steps toward mandating that power companies generate more electricity from renewable sources, China already has a similar requirement and is investing billions to remake itself into a green energy superpower.

Through a combination of carrots and sticks, Beijing is starting to change how this country generates energy. Although coal remains the biggest energy source and is almost certain to stay that way, the rise of renewable energy, especially wind power, is helping to slow China’s steep growth in emissions of global warming gases [...]

This year China is on track to pass the United States as the world’s largest market for wind turbines — after doubling wind power capacity in each of the last four years. State-owned power companies are competing to see which can build solar plants fastest, though these projects are much smaller than the wind projects. And other green energy projects, like burning farm waste to generate electricity, are sprouting up.

To be clear, I don't SUPPORT the kind of totalitarianism evident in China, easier though it may make the transition to renewable energy. I wish that Republicans in this country would figure out that our value to the global economy lies in innovation and entrepreneurship, which is far more flexible here than in China, and if they would only allow it to flourish, America could easily become a world leader on this front. As it is, China uses its buying power and the relative alacrity with which they can turn the ship of state to crush us.

The article contains good news for the planet, and that supersedes the depressing news it augurs for this country's role in the post-American world, but it's frustrating to watch.

...meanwhile, in exceptional America, it takes months of browbeating for the EPA to reveal all the sites where coal ash can get into drinking water, rivers and streams.

He Used To Be The Minority Whip

Harry Reid explains why, I'm guessing, that was a bad fit for him:

Reid says he expects the tactic of gentle persuasion to work best, given the size of his Senate Democratic flock and the political divergences within it. “I don’t dictate how people vote,” he said in an interview this month. “If it’s an important vote, I try to tell them how important it is to the Senate, the country, the president ... But I’m not very good at twisting arms. I try to be more verbal and non-threatening. So there are going to be — I’m sure — a number of opportunities for people who have different opinions not to vote the way that I think they should. But that’s the way it is. I hold no grudges.”

I'm sure that other Senate Democrats would say that this style works well - for them. They don't get pestered into votes they don't like to take, they don't have any consequences for their actions on the floor of the Senate.

But Lyndon Johnson just came back from the dead, read this profile, and stabbed himself in the heart.

Democratic politicians of this age like to speak about raw numbers and votes and lament the lack of the same. Even in this age of 60 Democratic votes, Reid in particular has worked overtime to downplay the significance, in that gentle, not arm-twisting manner of his. Of course, the facts are that 60 votes are only required to end debate, not for every particular bill. And participation in the caucus should mean, almost by definition, not joining in filibusters from the other side.

If I'm not mistaken, there was at one time at least some power in the office of Majority Leader of the Senate, after all. There are committee assignments to dole out, and decisions on funding vulnerable incumbents, or appearing in their states, and legislation that wayward members might need to get to the floor, among other things. There are a whole set of incentives that can work in both directions - carrots and sticks, in the vernacular. Harry Reid's a carrot man in a stick world. And the carrots haven't exactly been enough.

The only person who seems to understand the power of the office of Majority Leader is someone who isn't even in the party, Bernie Sanders, who gets that you can demand the caucus not to participate in Republican filibusters, which would necessarily end them. As soon as we get 40 or so more social democratic-leaning independents in the Senate, I nominate Sanders for Majority Leader. He seems to know what to do with the job.

The Degrees Of Seriousness

Democrats and liberals are wrestling with whether or not to pass the Waxman-Markey climate and energy bill, whether the benefits outweigh the costs, whether the arm-twisting by the Speaker of the House was too unseemly - in other words, the typical sturm und drang exhibited often on the left, the crisis of conscience, the Hamlet-like paralysis of analysis, the desperate attempt to do the right thing.

On the right, they just lie about the bill and try to turn the side-work of a crank into a scandal worthy of a -gate suffix:

Conservatives are jumping up and down over a report by an EPA analyst expressing skepticism about climate change, which, they claim, was suppressed by agency brass because it didn't conform to Obama administration orthodoxy on global warming. The story has sparked explosive claims, on Fox News and other right-wing outlets, that the EPA censored scientific data for political reasons. And Monday, Sen. James Inhofe (R-OK) called for an outright criminal investigation into the matter.

But it's hard to blame EPA for not paying much attention to the study. And it's more than a little ironic that DC Republicans have chosen its author as their new standard-bearer in the defense of pure science against politics. Because the author, EPA veteran Al Carlin, is an economist, not a climate scientist. EPA says no one at the agency solicited the report. And Carlin appears to have taken up the global warming topic largely as a hobby on his own time. In fact, a NASA climatologist has called the report -- whose existence was first publicized last week by the industry-funded Competitive Enterprise Institute (CEI) -- "a ragbag collection of un-peer reviewed web pages, an unhealthy dose of sunstroke, a dash of astrology and more cherries than you can poke a cocktail stick at."

I'm not saying that liberals should learn something from the "Big Lie" tactics of the right. But clearly when you have one responsible party and one who doesn't care about the truth, the latter will sound clearer, more direct and more palatable to the uninformed. It's just easier not to be serious about any of this.

Such A Thing As Too Late

That was a line that Barack Obama used as a justification for running in the 2008 Presidential campaign, but he hasn't applied it yet to Afghanistan:

The mood of the Afghan people has tipped into a popular revolt in some parts of southern Afghanistan, presenting incoming American forces with an even harder job than expected in reversing military losses to the Taliban and winning over the population.

Villagers in some districts have taken up arms against foreign troops to protect their homes or in anger after losing relatives in airstrikes, several community representatives interviewed said. Others have been moved to join the insurgents out of poverty or simply because the Taliban’s influence is so pervasive here.

On Thursday morning, 4,000 American Marines began a major offensive to try to take back the region from the strongest Taliban insurgency in the country. The Marines are part of a larger deployment of additional troops being ordered by the new American commander in Afghanistan, Gen. Stanley A. McChrystal, to concentrate not just on killing Taliban fighters but on protecting the population.

Yet Taliban control of the countryside is so extensive in provinces like Kandahar and Helmand that winning districts back will involve tough fighting and may ignite further tensions, residents and local officials warn. The government has no presence in 5 of Helmand’s 13 districts, and in several others, like Nawa, it holds only the district town, where troops and officials live virtually under siege.

The Taliban’s influence is so strong in rural areas that much of the local population has accepted their rule and is watching the United States troop buildup with trepidation. Villagers interviewed in late June said that they preferred to be left alone under Taliban rule and complained about artillery fire and airstrikes by foreign forces.

“We Muslims don’t like them — they are the source of danger,” said a local villager, Hajji Taj Muhammad, of the foreign forces. His house in Marja, a town west of this provincial capital that has been a major opium trading post and Taliban base, was bombed two months ago, he said.

The current strategy of "clear, hold and build" might have worked in 2002 or 2003. Instead, the Bush Administration neglected the country, broke every single one of its promises to develop it, and used deadly airstrikes when it did try to maintain order, in most cases just leaving the villages to the predations of the Taliban. Now the Taliban is deeply embedded in the Pashtun areas in the south, and those in the villages correctly perceive the only trouble coming when US forces try to enter. This Taliban insurgency has less connection to the Wahhabist Islam sect and more a connection to the response of revenge. Lots of fighters have had their houses bombed and relatives killed and are acting to deny the occupiers, if they're not simply being paid by the Taliban enough to take up their cause.

The result is essentially a stalemate; the US cannot penetrate the Pashtun areas, and for that matter, the Taliban cannot penetrate the non-Pashtun areas, owing mainly to ethnic disparities and memories of past civil wars. I'm happy to be proven wrong by this latest offensive into Helmand Province, but I think it can only work if we adopt a "we had to destroy the village in order to save it" approach. And that will accomplish nothing.