Will Drags Down Journalism With Him

This week we have seen perhaps a tipping point in the decline of American newspapers. Hearst announced they may sell or close the San Francisco Chronicle, a month after they said the same about the Seattle Post-Intelligencer. The two newspapers in Philadelphia, the Inquirer and the Daily News, filed for bankruptcy, as did the Journal Register Company, which owns 20 papers in the Northeast. And the Rocky Mountain News in Denver ran its last edition yesterday.

As much as we don't want to admit it, some of this is inevitable. The medium of delivered print newspapers in an environment where anyone can hop online and read virtually any article around the nation or the world is going to be threatened. That advertising revenue is falling because of the economic meltdown is just accelerating this decline. While newspaper websites generally do quite well, they haven't been able to monetize the content to a degree that's economically feasible. And the overall threat here is the death of news reporting, not the physical newspapers themselves. At least that's the view of Gary Kamiya.

If newspapers die, so does reporting. That's because the majority of reporting originates at newspapers. Online journalism is essentially parasitic. Like most TV news, it derives or follows up on stories that first appeared in print. Former Los Angeles Times editor John Carroll has estimated that 80 percent of all online news originates in print. As a longtime editor of an online journal who has taken part in hundreds of editorial meetings in which story ideas are generated from pieces that appeared in print, that figure strikes me as low.

There's no reason to believe this is going to change. Currently there is no business model that makes online reporting financially viable. From a business perspective, reporting is a loser. There are good financial reasons why the biggest content-driven Web business success story of the last few years, the Huffington Post, does very little original reporting. Reported pieces take a lot of time, cost a lot of money, require specialized skills and don't usually generate as much traffic as an Op-Ed screed, preferably by a celebrity. It takes a facile writer an hour to write an 800-word rant. Very seldom can the best daily reporters and editors produce copy that fast.

But the story is more complicated than that. At the same time that newspapers are dying, blogging and "unofficial" types of journalism continue to expand, grow more sophisticated and take over some (but not all) of the reportorial functions once performed by newspapers. New technologies provide an infinitely more robust feed of raw data to the public, along with the accompanying range of filtering, interpreting and commenting mechanisms that the Internet excels in generating.

As these developments expand, our knowledge of the world will become much less broad. Document-based reporting and academic-style research will increasingly replace face-to-face reporting. And the ideal of journalistic objectivity and fairness will increasingly crumble, to be replaced by more tendentious and opinionated reports.

Paul Starr makes a similar argument in The New Republic, saying that the loss of newspapers will most impact local news coverage and lead to a rise in local corruption.

Now, I agree with this to an extent. The breadth of material presented in a newspaper is not entirely likely to be replicated online, at least not at any one place. More things would happen in the shadows in a post-newspaper world. And I hope for that not to happen. At the same time, there's a lot of redundancy in newspapers. Dozens if not hundreds of different writers across the country cover the exact same Obama address to Congress that I watched with my eyes as well, and can just as easily form an opinion on. There is an argument that local papers should focus on local reporting, and get their national news from national sources, which would probably still offer enough of a variety.

This breaks down when the papers that are able to weather the decline, the ones with the highest reputation and the broadest base of reporters, who could funnel news across the country and present themselves as an established brand, soil themselves with demonstrably mendacious columnists that call into question the editorial aptitude of the whole project.

Clearly, the main cause of the crisis is structural/technological shifts in the media and economic landscape. But a small number of news organizations are actually well-positioned, in principle, to benefit over the long run from these changes. Papers like The New York Times and The Wall Street Journal and The Washington Post have strong brands and the possibility of becoming national news organizations that partially fill the space left empty by the receding metro dailies in Detroit, Seattle, San Francisco and elsewhere. But The Washington Post, by standing behind the claim that up is down if George Will says that is is, is pissing that brand away. Rather than complaining to me, people who work at, or care about, The Washington Post need to complain to Fred Hiatt and ensure that something gets done.

Meanwhile, one of the Post’s main competitors in the world of papers with potential to attract a national audience is The New York Times. So faced with a humiliating abrogation of basic responsibilities by its competitor, does the Times take the opportunity to pour some salt in the wounds? No! Instead, out comes Andrew Revkin with a false equivalence article painting Will with the same brush as Al Gore. Will’s sin is to say that the world is not getting warmer when, in fact, it is. Gore’s sin was to say that warming is happening (it is) and to illustrate the problems with this trend by referring to a chart that Revkin deems unduly alarmist but that Gore found in The New York Times. Hm.

And since this was written, George Will responded to that falsely equivalent NYT article with a pissy rant standing by the substance of his global warming denialist column of the week prior. In doing so he defends the substance of a data point he included about sea ice levels in Antarctica, despite the climate research center where Will got the data has publicly disavowed it. And then, Will's editor Fred Hiatt defends his writer in some of the weirdest ways possible.

Hiatt insists Will's entitled to his opinion about the global warming facts because those facts are just too complicated--too unknowable--and who the hell are readers to claim otherwise? Hiatt told CJR:

"If you want to start telling me that columnists can’t make inferences which you disagree with—and, you know, they want to run a campaign online to pressure newspapers into suppressing minority views on this subject—I think that’s really inappropriate. It may well be that he is drawing inferences from data that most scientists reject — so, you know, fine, I welcome anyone to make that point. But don’t make it by suggesting that George Will shouldn’t be allowed to make the contrary point. Debate him."

That sound you hear is Hiatt digging the Post an even deeper and more embarrassing hole.

I have two favorite parts. The first was Hiatt's insistence that Will has every right to draw inference--to make claims of fact in his column--based on data that most scientists reject. Good Lord, what is Will not allowed to do in a Post column? And does the Op-Ed page maintain any guidelines?

And second, I chuckled when Hiatt insisted that if people disagree with Will's published falsehoods, they shouldn't try to pressure the paper to publish corrections, they should, y'know, "debate him." Right, because Will and Post editors have been so open and willing to address--to debate--the controversy.

Now, to his credit, the Post's ombusdman will write tomorrow that Will was wrong on the science, and that the paper should have addressed this more quickly. But clearly there is a problem with accountability at the Post when it comes to their star columnists.

(By the way, good for John Kerry for trying to get some measure of accountability by himself.)

But this is a serious concern. With the viability of the newspaper model looking less clear, we will necessarily shrink the amount of reporters covering both local and national issues. Online sources cannot fill the gap without substantial resources (endowments, anyone?). Therefore we vest more power in the fourth estate in the hands of a number of established brands. And yet those brands are gradually proving themselves unworthy of the power. It shouldn't look unfavorably on the entire profession, and the many fine reporters working under these brands, but it inevitably does.

It would be nice to say that, after being trashed and abused by major media for so long, that we don't need journalism. But we clearly do. And when they damage their reputations, it actually affects all of us.

Shittybank

The Treasury Department announced its purchase of a large share of Citibank yesterday, about 36% of common stock, and the best that can be said is this plan could be worse.

After two multibillion-dollar lifelines failed to shore up Citigroup, the government will increase its stake to 36 percent, from 8 percent.

The chief executive, Vikram S. Pandit, will remain, but Citigroup will shake up its board so that it has a majority of new independent directors, a move that federal regulators had been pursuing. The announcement comes as the bank said its 2008 loss had spiraled to $27.7 billion, among the largest in corporate history. Under the deal, the Treasury Department agreed to convert up to $25 billion of its preferred stock investment in Citigroup into common stock, giving taxpayers more risk, but more potential for profit if the company recovers.

The Treasury will convert its stake to the extent that Citigroup can persuade private investors, including several foreign government investment funds, to go along. Treasury will match the private investors’ conversions dollar for dollar, and do so at the most favorable price and terms offered to any other private investor.

The plan was intended to reassure the markets and stabilize Citigroup, but plenty of uncertainty remains. Each rescue has made Citigroup more financially sound, yet its shares — a crucial sign of confidence in the company — continue to tumble. Shares were down 36 percent, to $1.57, on Friday afternoon, and analysts worry that regulators are running out of options.

And yet there is an option, one unpalatable to American government and its people, seemingly for reasons of semantics, that is really the only chance for us to get out of this mess instead of prolonging the agony and wasting hundreds of billions if not trillions of dollars. David Leonhardt does a good job of defining the difference between the scary nationalization demonized as the work of hippies, and what most on the left are actually advocating.

There are really two different kinds of nationalization. The first draws on a belief that the government can run large enterprises more justly and efficiently than self-interested capitalists can. This is the nationalization of Lenin, Chávez and Mitterrand, and its record is pretty dismal. France’s economy staggered through the 1980s, as government-run banks backed political pet projects that didn’t work out.

The second version of nationalization is the one that today’s advocates point to. It is a temporary takeover born out of crisis. Sweden pursued this kind of strategy in the early 1990s to clean up its banking system. Even the United States has nationalized banks on occasion, including IndyMac Bank last year.

In these cases and others, the government had none of the grand ambitions that Mitterrand-style nationalizers had. The same would clearly be the case with a nationalization of banks today. “Nobody in their right mind wants the government to be in the banking business any longer than it needs to be,” said Adam Posen, an economist in Washington and a prominent voice for nationalization. Instead, the federal government would declare a bank insolvent, wipe out its existing shareholders, fire its top executives and inject enough money to keep it functioning. The government could then siphon off the worst assets into a so-called bad bank — pooling them with toxic assets from other nationalized banks — and resell the bank’s healthy parts to private investors. Once the crisis lifts, some of the toxic assets may even have value.

We can keep trying intricate schemes that involve giving more money to the same people who caused the crisis, or we can rip off the band-aid and go with what history reminds us is the only way to definitively solve the problem. I know what a pragmatist would do. With the economy in shambles and the shortfall of investment and consumer demand so great that more fiscal spending will almost certainly be needed, setting piles of money on fire is not the prudent course of action.

Teabaggery

Wingnut populist of the nation united yesterday for a mass action of tea parties that shook the government to its knees. OK, its ankles.

Remember all those "Chicago Tea Parties" Americans were supposed to participate in, taking out their righteous anger against Obama's anti-American economic plans? It was supposed to the be first wave of Americans taking to the streets against socialism, the birth of the New Minutemen.

The results? Not so impressive.

Let's see...a whopping 79 people showed up today in Jacksonville, FL. Looks like maybe over a dozen showed up in Asheville, NC. Almost 10 people made it to the Buffalo, NY, protest. About 100 people throughout all of Los Angeles came out to Santa Monica Pier. All of about 300 people made it out throughout the entirety of Atlanta. 250 made it out to Dallas for the tea party there. 150 in Lansing. Looks like about 100 went to watch the Joe the Plumber and Michelle Malkin teabag fest in D.C. (if you had to retch, it's not my fault, just your dirty, dirty mind...)

The very best numbers these jokers managed to pull was 1,500 people in St. Louis, and somewhere between 500-1,000 in Chicago--if reports from the organizers are to be believed.

Perhaps most hilarious is the 250-person turnout in Houston which was said to be

"pretty good turn-out considering the livestock show barbeque cook-off in Reliant Park was a competitor."

Dave Weigel was on the scene in Washington - where thousands of CPAC activists were already gathering and yet only 100 were willing to trod their butts out in front of the White House. I don't even know what to say about this.



Now, I've put together things like this. They're not easy to coordinate. Especially when your entire movement is composed of armchair ranters who are more comfortable typing about what other people are doing. Of course, I didn't have huge wingnut email lists behind me. And when you fall this flat, you don't brag about it, using the line "fiscal responsibility is the new counterculture." Yeah, man, they're doing their own thing, baby! Free love and cuts in the capital gains tax!

And Glenn Reynolds used the opportunity to reminisce about Lebanese protest babes. Computer cleanup at the Univ. of Tennessee Law School, I imagine.

This is what's left of the conservative movement. Their folk hero is an unemployed plumber who is quickly wearing out his welcome with the general public. Their new mascot is a 13 year-old kid which some kind of hyperactive disorder who's two years away from being permanently stuffed in a locker for his entire high school career. Their key innovations to the policy debate include questioning the President's citizenship and wondering what "volcano monitoring" means. Their formal leader is a black guy to which their membership feels comfortable saying You be da man, probably because he is some sort of parody of a black man himself, the kind of guy who vows an "off the hook" public relations offensive. Their response to the worst economic crisis in the past 70 years is to throw a tea party. And their spiritual guru, the man who is as singularly powerful as anyone in the movement, is a drug-addled radio talk-show host who hopes the country fails.



Is this a political ideology or a circus?

60 for Employee Free Choice?

At CPAC yesterday, Newt Gingrich predictably demonized the Employee Free Choice Act, calling it "a mortal threat to American freedom." Somebody should arrest it! But the more interesting admission came from Mitch McConnell, who intimated that Arlen Specter is a lost cause when it comes up for a vote.

RedState.com caught up with McConnell at the CPAC conference and asked him about the coming Employee Free Choice battle. McConnell said he was “somewhat optimistic” about keeping his troops together. However, referring to the three GOP Senators who voted for the stimulus package, he added:

“I’ll say I’m hoping for an epiphany for [Specter]. Senators Snowe and Collins will be with us.”

That strongly suggests that McConnell has concluded that this key GOP vote will likely defect to the pro-Employee Free Choice side. Since the Senate vote is expected to be hard-fought and excruciatingly close, that could conceivably prove a big deal.

That's a bit of an understatement. Specter voted for the bill last year when it came up. Assuming Al Franken makes it through the Twelve Labors of Hercules they're running up there in Minnesota, Specter and a solid Democratic caucus gets you to exactly 60 votes.

I don't know how solid the Democratic caucus is, of course. Blanche Lincoln and Mark Pryor hail from Arkansas, home of Wal-Mart, and are probably getting a lot of pressure to vote no. What Harry Reid ought to do is ask the caucus to vote the full Lieberman - yes on cloture, free to vote no on the final vote. There is no reason the Democrats should fear a filibuster from their own party on such an important priority. There are all kind of carrots and sticks to be offered backbenchers - committee assignments, campaign funds from the DSCC, etc. Reid does have leverage over his caucus, doesn't he? Right?

Friday Random Ten

Time to party. I'm seeing Raphael Saadiq on Monday at the House of Blues here in LA... pretty exciting, I can't remember the last legitimate live music show I've been to. Somehow I got away from going to them. Here's your Friday set:

Up For The Down Stroke - Parliament
How Many Cans? - Soul Coughing
I Almost Forgot - Matthew Sweet
Mary - Supergrass
Gold Digger - Kanye West feat. Jamie Foxx
Cherry Cherry - Neil Diamond
Watch Me Jumpstart - Guided By Voices
Say It Loud, I'm Black And I'm Proud - James Brown
Fun For Me - Moloko
Gasoline Rag - Robert Pollard

This list meets the USDA recommended daily allowance of eclecticism.

Conservative Losing-Team Slap-Fights

There ultimately will be no "conservative crackup" - a party espousing authoritarian and business-friendly policies will always exist. But there are fissures - and pretty much due to personality rather than ideology. For example, Rush Limbaugh gets personally upset when politicians challenge his "I want Obama to fail" mantra. Tim Pawlenty is personally hurt by national Republicans urging on Norm Coleman to continue fighting the Minnesota election despite impossible odds, because his state isn't getting what it needs. And another example is Kentucky Senator Jim Bunning, who the party wants to ease into retirement because, well, he's crazy and would lose a re-election fight, but who is too stubborn to go quietly:

But Bunning, a famously irascible former pitcher enshrined in baseball's Hall of Fame, is digging in. He insists he will run despite lackluster fundraising and is rebuking those who suggest he shouldn't.

McConnell has not publicly asked Bunning to retire, but he has ducked questions about the race, saying he will wait until Bunning makes his intentions clear. Bunning, who has said over and over that he is running, said later that McConnell must have "had a lapse of memory."

He has had even harsher words for Texas Sen. John Cornyn, who is leading the GOP's re-election efforts for next year. Cornyn had similarly deflected comment on the race, prompting Bunning to say Cornyn "doesn't understand English."

Bunning did not appear to be mollified when Cornyn said he supports the Kentucky senator. "I don't believe anything John Cornyn says," Bunning said.

That comment came around the same time that word leaked that Republican Kentucky state Senate President David Williams met with the National Republican Senatorial Committee, which Cornyn heads. Bunning told reporters Tuesday that he would have grounds for a lawsuit against the committee if it backed a GOP challenger to him in the 2010 primary.

Bunning first threatened to sue the NRSC if they didn't support him. Then he apparently made an even more substantive threat:

WASHINGTON — Already in conflict with his party’s leaders, Sen. Jim Bunning has reportedly said privately that if he is hindered in raising money for his re-election campaign he is ready with a response that would be politically devastating for Senate Republicans: his resignation.

The Kentucky Republican suggested that possible scenario at a campaign fundraiser for him on Capitol Hill earlier this week, according to three sources who asked not to be identified because of the politically sensitive nature of Bunning’s remarks.

The implication, they said, was that Bunning would allow Kentucky Gov. Steve Beshear, a Democrat, to appoint his replacement — a move that could give Democrats the 60 votes they need to block Republican filibusters in the Senate.

“I would get the last laugh. Don’t forget Kentucky has a Democrat governor,” one of the sources quoted Bunning as saying.

“The only logical extension of that comment is, ‘(Make me mad) … enough and I’ll resign, and then you’ve got 60 Democrats,’ ” said another source who was present at the event.

Bunning is already backing away from the statement. But you can see how a strong daddy conservative with a runaway ego would say such a thing. Just like in sports, when you're a losing team, all the petty jealousies and angry backbiting comes out. I'd say it's unlikely that Bunning bolts, but he'd probably be thrilled to screw Mitch McConnell and the GOP. It's all a game to them, anyway.

The White House Goes All In On Green Jobs

Joe Biden presided over a summit in Philadelphia of his Middle Class Task Force today, and the subject was green jobs. Vice President Biden had an op-ed in the Philadelphia Inquirer today making the case.

So what exactly are "green jobs"? They provide products and services that use renewable energy resources, reduce pollution, and conserve energy and natural resources.

Investing in green jobs also means keeping up with the modern economy. At a time when good jobs at good wages are harder and harder to come by, we must find new, innovative opportunities.

According to the Council of Economic Advisers, green jobs pay 10 to 20 percent more than other jobs. They also are more likely to be union jobs. Building a new power grid, manufacturing solar panels, weatherizing homes and office buildings, and renovating schools are just a few of the ways to create high-quality green jobs that strengthen the foundation of this country.

It's the ultimate win-win. Green jobs can revitalize impoverished communities by bringing back industry, increase unionization and the rise of the middle class, add to re-industrialization, reduce energy costs for the whole country, make us energy independent and save the planet. Most important at this point, they can help increase GDP, as Gar Lipow explains:

The main extra benefits economists overlook are the helpful side effects other than mitigating the climate crisis -- "positive externalities," in economic jargon.

For example, about half of all economic activity takes place in climate-conditioned buildings. Greening these buildings could increase[PDF] productivity [PDF] by around 10 percent. Similarly, switching most long-haul freight trucking miles to long-haul freight rail would increase productivity in transportation. Many energy-saving practices in industry, such as reducing scrapping and reducing spills and other types of emitting stoppages, would increase productivity as well. A switch to wind and solar would reduce labor productivity in the electricity sector; the conventional wisdom is that a switch to organic agriculture would do the same in that sector, though I think this is much less certain that people think. At any rate, sectors where productivity would rise greatly outnumber the tiny sectors where it might fall -- resulting in a huge net increase, probably greater than 5 percent for the economy as a whole.

Another example would be huge benefits to health. Eliminating or greatly reducing the use of fossil fuels would reduce air pollution, water pollution, and exposure to toxics. A switch to organic and low input agriculture would decrease direct ingestion of toxics, and increase available vitamins and minerals in food. Whether such a switch alone would encourage a switch to healthy increase in the consumption of non-starchy vegetables and fresh fruits I don't know, but it certainly could be part of policy that accomplished this. Overall, I think it is almost impossible that switching from fossil fuels to renewables and efficiency, that switching from toxic soil-consuming agriculture to non-toxic soil building agriculture, from unsustainable to sustainable forestry, would not increase GDP.

Because so much of the Administration's success depends on major increases in GDP after the recession ends to close the debt and reduce unemployment, they know that green jobs which can spur industrial growth are crucial. We're seeing much more activity in this area than even talked about during the campaign.

Here's a liveblog of the summit, with remarks from Biden and green jobs advocate Van Jones, among others. And here's a staff report from the White House going into more detail on the preferred policies on green jobs from the Administration, in the stimulus and beyond. Finally, the Departments of Energy and Housing & Urban Development have announced a partnership to spend $16 billion dollars in stimulus funds to retrofit and weatherize existing homes, lowering energy consumption in those homes by 20-40% and creating thousands of jobs.

These aren't bumper stickers or slogans, these are real policies that will have a lasting effect.

No Public Option, No Deal

President Obama's health care reform plan as described in the budget outline includes eight principles, designed to guide lawmakers as they fill in the details of the plan. Here they are:

• Guarantee Choice. The plan should provide Americans a choice of health plans and physicians. People will be allowed to keep their own doctor and their employer-based health plan.

• Make Health Coverage Affordable. The plan must reduce waste and fraud, high administrative costs, unnecessary tests and services, and other inefficiencies that drive up costs with no added health benefits.

• Protect Families’ Financial Health. The plan must reduce the growing premiums and other costs American citizens and businesses pay for health care. People must be protected from bankruptcy due to catastrophic illness.

• Invest in Prevention and Wellness. The plan must invest in public health measures proven to reduce cost drivers in our system—such as obesity, sedentary lifestyles, and smoking—as well as guarantee access to proven preventive treatments.

• Provide Portability of Coverage. People should not be locked into their job just to secure health coverage, and no American should be denied coverage because of preexisting conditions.

• Aim for Universality. The plan must put the United States on a clear path to cover all Americans.

• Improve Patient Safety and Quality Care. The plan must ensure the implementation of proven patient safety measures and provide incentives for changes in the delivery system to reduce unnecessary variability in patient care. It must support the widespread use of health information technology with rigorous privacy protections and the development of data on the effectiveness of medical interventions to improve the quality of care delivered.

• Maintain Long-Term Fiscal Sustainability. The plan must pay for itself by reducing the level of cost growth, improving productivity, and dedicating additional sources of revenue.

In my opinion, this is a blueprint for what can pass Congress, not a blueprint for a plan that can best serve the people. It preserves choice - and essentially the current system - because 85% of Americans already have a health care plan, and the Clinton plan in the 1990s was partially sunk by repeated attacks on how it "takes away your health care." The rest of it is fairly clean. Obama wants to make health insurance affordable to every American, and he'll do that through subsidies and an individual mandate, while controlling costs through prevention, health IT, comparative effectiveness, etc., to make the plan better for the 85% who have coverage, too. He's also giving incentives to lower Medicare spending by region through higher payments for patients who don't have repeat visits and phasing out Medicare Advantage, which sought to privatize Medicare through the back door at more cost to the government. But there's one huge element missing - a public option to compete with private insurance, which in my view would bring down premiums as insurers would have to compete on price and quality.

These principles call for universality, but not for a public option. That seems pretty backwards to me. The mandate should in theory be popular with insurance companies (in fact, it should be non-negotiable for them) and it ought to be used as a bargaining chip so that they can't just put all their efforts into fighting other truly progressive measures like the public option. Handing over the mandate gift at the outset and then hoping they agree to a public option down the line, or after the legislation's been introduced makes things much, much harder.

On this very point, Howard Dean said, "If they are allowed to choose Medicare as an option, this bill will be real health care reform. If they’re not, we will be back fighting about it for another 20 years before somebody tries again. "

This seems to be more of that bad bargaining. The Obama team may have convinced themselves that the public option would be a poison pill for getting conservative support, so they dropped it at the start. But we'll never know, because it's gone, and can't be used as a bargaining chip. Of course, Congress could revive the public option, as these are merely principles which are not exclusive.

Obviously single payer advocates are frustrated because this proposal isn't single payer, but I think they should be concerned with the lack of a public option even more, because that was the way for this to evolve into something like a single payer or an 80/15/5 (80% public, 15% private, 5% hybrid) system. There are additional pitfalls with an individual mandate if it does not include guaranteed issue and community rating, but the lack of a public option is a dealbreaker for me.

In other words, for Obama's plan to work it must have individual mandates and a public insurance option open to everyone and insurance companies must be forced to compete on even ground with the public plan - same cost schedule and the same underwriting (basically none).

Likewise individual mandates that don't have high enough subsidies leave large numbers of people uninsured anyway because they can't afford the insurance. If it's a choice of eating, paying rent or paying for insurance, people will take their chances on getting sick or live with their existing health care problems. This is what has happened in Massachusetts, which has a supposedly universal system which actually isn't, because subsidies aren't sufficient [...]

Obama has said he's leaving the details to be thrashed out by Congress, having learned from Clinton's failure. But the details will determine whether it's a plan which will simply help Medicare and Medicaid recipients and raise costs for everyone else; whether it's a repeat of the Massachusetts experiment, whether it really contains costs not just for the government but for everyone; or if he is successful in really giving true universal healthcare where everyone gets the healthcare they need when they need it.

The short version is that an individual mandate can work, but must have a lot of elements that the plan so far neglects to emphasize.

Regressive Tax Burdens - Brought To You By The California Legislature

With the unemployment rate soaring to double digits and less revenue flowing to the state, it was clear that some taxes would have to be raised in the last budget. To the extent I have criticized those taxes, it's because they are flat or regressive, increasing burdens on those with the least ability to pay. Via California Budget Bites, it turns out that it's even worse than I thought:

One of the last-minute changes to the budget agreement substituted a 0.25 percentage point increase in each of the state’s basic income tax rates in place of a 5.0 percent income tax surtax. The enacted change would increase each of the tax rates for two or four years, depending on whether the spending cap that will appear on the May special election ballot is approved by the voters. For example, the 4 percent tax rate would be 4.25 percent under the new law and the 9.3 percent rate would go to 9.55 percent. As discussed in yesterday’s blog post, the increase would be cut in half - to 0.125 percentage points - if the Treasurer and Director of Finance certify that the state will receive at least $10.0 billion in “flexible” funds from the federal economic recovery bill. In contrast, the proposal under consideration until the final night of budget negotiations would have required all personal income taxpayers to add an amount equal to 5.0 percent of their tax liability for the two- or four-year period.

Because of this seemingly minor change, lower-income households will experience a much larger tax increase than under the previously considered proposal. The tax liability of a married couple with a taxable income of $40,000 will rise by 12.9 percent under the enacted policy, as opposed to 5.0 percent under the proposal previously under consideration. In contrast, the tax liability of a married couple with a taxable income of $150,000 will rise by 4.0 percent under the final agreement, instead of 5.0 percent under the original surcharge proposal. High-income earners will experience the most significant change - their tax liability will only rise by 2.9 percent under the enacted policy.

It is somewhat likely that the stimulus trigger will be reached - we will know around April 1 when the Governor's Finance Director and Treasurer Lockyer make the decision. Still, this is an outrageous undermining of the public trust. We are essentially reacting to a yawning budget gap with taxes that mostly hit the middle class and below. That's true of the penny increase in the sales tax (which will now reach close to 10% in LA County) and it's true of this income tax increase. This is the conservative veto in action, folks. And it's not going to change until it's eliminated.

Gov. Jindal, I Believe Your Pants Are On Fire

The centerpiece of Kenneth from 30 Rock's Bobby Jindal's not-the-State of the Union rebuttal the other night was an anecdote about Hurricane Katrina. That a Republican would reference Katrina to say anything positive about their party is bad enough, but as it turns out, the story is not true, which was clear from the night he said it.

In the last few days, first Daily Kos, and then TPMmuckraker, raised serious questions about the story, based in part on the fact that no news reports we could find place Jindal in the affected area at the specific time at issue.

Jindal had described being in the office of Sheriff Harry Lee "during Katrina," and hearing him yelling into the phone at a government bureaucrat who was refusing to let him send volunteer boats out to rescue stranded storm victims, because they didn't have the necessary permits. Jindal said he told Lee, "that's ridiculous," prompting Lee to tell the bureaucrat that the rescue effort would go ahead and he or she could arrest both Lee and Jindal.

But now, a Jindal spokeswoman has admitted to Politico that in reality, Jindal overheard Lee talking about the episode to someone else by phone "days later." The spokeswoman said she thought Lee, who died in 2007, was being interviewed about the incident at the time.

This is no minor difference. Jindal's presence in Lee's office during the crisis itself was a key element of the story's intended appeal, putting him at the center of the action during the maelstrom. Just as important, Jindal implied that his support for the sheriff helped ensure the rescue went ahead. But it turns out Jindal wasn't there at the key moment, and played no role in making the rescue happen.

Boy, this rollout is making Sarah Palin look like George Washington, isn't it?

...here's some more lies, the "conservative Senator steers defense contracts to his home state to benefit personal real estate deals" edition...

Budget Odds And Ends

There are these little glories tucked into the budget outline, and they all seem to have the same trajectory - marvelous, progressive, and yet not quite good enough for what's needed.

For example, the ending of direct payments to Big Agriculture farmers. This has been sorely needed for years, and yet it's not going to radically alter our food policy, which many say is broken.

The good news (and better than I speculated at ObFo): Bam wants to eliminate direct payment for farmers with SALES greater than $500,000. That will affect a lot more farmers than using income as the basis for a limit. But before you start cheering, know that the administration fully expects the lost subsidy will be replaced by "alternate sources of income from emerging markets for environmental services, such as carbon sequestration, renewable energy production, and providing clean air, clean water, and wildlife habitat." So no worries, Big Ag! The money will continue to flow.

The same distorted crop subsidies will remain as well, making it a fairer system but still not a fixed one.

Then there are the energy cap and trade proceeds - noble, but insufficient (though the Administration could be fudging).

First, the projected revenue seems strikingly low. Partly this is a function of the fact that the targets themselves, particularly in the short term, are fairly weak -- 14 percent under 2005 levels by 2020, 83 percent by 2050. (Sane climate policy would reduce emissions 20 percent below 1990 levels by 2020, at least.)

Still, the proposal explicitly says that the administration expects 100 percent of the permits to be auctioned off. As Kate noted, the CBO estimated (PDF) that "the value of those allowances could total between $50 billion and $300 billion annually (in 2006 dollars) by 2020." The administration's estimate -- $83 billion a year by 2020 -- is well at the bottom end of those projections.

My guess -- apparently confirmed by "senior White House officials" who don't invite me to their conference calls -- is that this is simple conservatism. The inclusion of any carbon revenue at all is sure to spark controversy, so they're simply being cautious not to lay too ambitious a marker.

The bigger question is whether the $15 billion/year investment in clean energy will really tip the economy toward a paradigm shift.

Let me throw in one universally good element: the shuttering of Yucca Mountain.

Washington -- President Obama is taking the first step toward blocking a nuclear waste dump at Nevada's Yucca Mountain by slashing money for the program in his first budget, according to congressional sources.

Obama's budget, which is expected to be announced today, will eliminate nearly all funding for the Yucca project with the exception of money needed for license applications submitted last year to the Nuclear Regulatory Commission, said sources who asked not to be identified because the document has not been made public.

"The Yucca Mountain program will be scaled back to those costs necessary to answer inquiries from the Nuclear Regulatory Commission while the administration devises a new strategy toward nuclear-waste disposal," the Energy Department will say as part of the budget document, the sources said.

This will save close to $80 billion dollars as well as force better solutions to energy than nuclear.

I am genuinely happy with the budget, and in 1993 this would be an incredible document. The problems are just so big right now in 2009, that it may not be enough. But I'm pleased it's even gone this far.

More Revolt Of The Generals

The most significant part of President Obama's Iraq speech was that this was the first time, I guess, that he has specifically agreed to abide by the bilateral status of forces agreement.

But full withdrawal will follow within 18 months of the combat-brigades' departure. For the first time as president, Obama attempted to resolve ambiguities about a full withdrawal along the Dec. 2011 framework that the Iraqi government insisted upon in last year's Status of Forces Agreement, committing himself to its mechanisms. Some on the left have wondered warily why Obama hadn't made such a public commitment. Those worries will probably end with this line:

"Under the Status of Forces Agreement with the Iraqi government, I intend to remove all U.S. troops from Iraq by the end of 2011. We will complete this transition to Iraqi responsibility, and we will bring our troops home with the honor that they have earned."

As Chris Bowers notes, breaking this agreement would mean extending the occupation into 2012, in an election year, at which point the antiwar movement would have good reason to howl in protest. The Iraqis secured a hard withdrawal date, the timing of which compels the President to stick with it.

However, NBC's Jim Miklaszeswki reported before the Obama speech that the Pentagon would prefer to break this agreement and continue the occupation (h/t).

Miklaszeswki: Secretary Gates, as early as 18 months to 2 years ago, was saying "look, everyone understands that we're going to have to start withdrawing from Iraq." But at the same time, Gates adds this caveat that he believes significant numbers of troops will remain in Iraq for years to come.

And in fact military commanders, despite this Status of Forces Agreement with the Iraqi government that all US forces would be out by the end of 2011, are already making plans for a significant number of American troops to remain in Iraq beyond that 2011 deadline, assuming that Status of Forces Agreement agreement would be renegotiated.

And one senior military commander told us that he expects large numbers of American troops to be in Iraq for the next 15 to 20 years, David.

Gregory: 15 to 20 years, I think that takes a moment to really sink in. With a mission that is primarily what over that kind of time horizon, Mik?

Miklaszeswki: Again it would evolve from a day-to-day combat mission, to more of an oversight mission. We mustn't forget the US is providing nearly 100% of all combat air support over Iraq, and the Iraqi military is not going to be ready to assume that mission within the next 18 months to 2 years, it's going to be impossible.

And there are some discussions, I know Richard Engel mentioned the area of Kirkuk up in the north recently, there are some discussions among Iraqis and I know some military commanders to establish what could end up as a permanent air base, US air base, in Kirkuk.

The military commanders already mau-mau'ed their way into a three-month extension of the withdrawal of combat troops. Adding 15-20 years of troop deployments to Iraq would mean that babies born during the war would be spending tours of duty there. If they continue in violation of the bilateral agreement, they will be nothing but targets.

It seems to me that the commanders pushing this may not have much of a problem with the President taking political heat in 2012 for the decision. The officer class doesn't cotton to taking orders from Democrats, anyway. Watch for this move to undermine him over the next couple years.

The Fairness Doctrine

I was on Bill Scher's Liberal Oasis radio show this morning (it airs tomorrow - you can get the podcast on iTunes here) talking about the federal budget, and if there's one word I can use to describe it, I'd pick "fairness". Peter Orszag is simply soft-selling the implications. The budget returns us to an era of tax fairness where everyone in society invests according to their means for the greater good. There are certainly some on the right who would call that socialism - I hope they have no use for the police, fire department, libraries, post offices, or roads. The fact is that there are public goods that we all must contribute to because only government can provide them, and with this budget, we begin to engaging the whole country in that project once again.

Paul Krugman is pleased that progressive priorities on health care and the environment are pushed forward in this budget and will be paid for.

This budget allocates $634 billion over the next decade for health reform. That’s not enough to pay for universal coverage, but it’s an impressive start. And Mr. Obama plans to pay for health reform, not just with higher taxes on the affluent, but by putting a halt to the creeping privatization of Medicare, eliminating overpayments to insurance companies.

On another front, it’s also heartening to see that the budget projects $645 billion in revenues from the sale of emission allowances. After years of denial and delay by its predecessor, the Obama administration is signaling that it’s ready to take on climate change.

And these new priorities are laid out in a document whose clarity and plausibility seem almost incredible to those of us who grew accustomed to reading Bush-era budgets, which insulted our intelligence on every page. This is budgeting we can believe in.

Krugman believes that eventually, taxes may have to be raised more broadly to deal with long-term budget snags, perhaps with a value-added tax. But for now, Obama is boldly creating a fairer vision for who pays in society.

The budget that President Obama proposed on Thursday is nothing less than an attempt to end a three-decade era of economic policy dominated by the ideas of Ronald Reagan and his supporters.

The Obama budget — a bold, even radical departure from recent history, wrapped in bureaucratic formality and statistical tables — would sharply raise taxes on the rich, beyond where Bill Clinton had raised them. It would reduce taxes for everyone else, to a lower point than they were under either Mr. Clinton or George W. Bush. And it would lay the groundwork for sweeping changes in health care and education, among other areas.

More than anything else, the proposals seek to reverse the rapid increase in economic inequality over the last 30 years. They do so first by rewriting the tax code and, over the longer term, by trying to solve some big causes of the middle-class income slowdown, like high medical costs and slowing educational gains.

Reducing inequality is a major goal of this budget, and the right way to re-create a broad middle class to spur sustainable economic growth. In a tremendous post, Charles Lemos discusses how inequality has crushed us economically and why this budget is so hopeful.

Just how far have we fallen during that three-decade era of economic policy dominated by the ideas of Ronald Reagan and his supporters? Well, a UN report last year on urban poverty found that out of the world's 120 major cities New York was found to be the ninth most unequal in the world and Atlanta, New Orleans, Washington, and Miami had similar inequality levels to those of Nairobi, Kenya and Abidjan, Côte d'Ivoire. In western New York state nearly 40% of the black, Hispanic and mixed-race households earned less than $15,000 compared with 15% of white households. The life expectancy of African-Americans in the US is about the same as that of people living in China and some states of India, despite the fact that the US is far richer than the other two countries. Is this right? Is this America? It is the America that Reagan has wrought and that President Obama seeks to undo. Undoing Reagan, how sweet the sound.

Unequal societies have throughout history been prone not just to social upheaval but also to economic turmoil. Beginning in the 1970s and accelerating after 1980, the US began undoing a series of policies that dated to FDR led to what historians call the "Great Compression" a flattening of income so that by 1964 the ratio of CEO pay to average worker pay was 24:1, the narrowest in the nation's history. Before the financial meltdown the ratio was around 400:1, or back to levels last seen in the late 1920s. And this is actually down from a high of 525:1 in 2000 (the reason is that executive compensation is largely paid in stock). In 1970, the top 1% of Americans controlled 8% of the nation's wealth, by 2000 they controlled 15%. In 1973, the income of the top 20 percent of American families was 7.5 times that of the bottom 20 percent. By 1996, it was 13 times. By 2006, it was 18 times.

The last 30 years have ushered in a New Gilded Age, with all the trappings of the robber barons prevalent at the outset of the last Depression. The moral as well as economic implications of this have been tragic. Just as the reinvention of the middle class with shrinking inequality drove the tremendous expansion of the post-war era, so can too the radical change Obama is proposing here.

So of course, Republicans and so-called Democrats are blasting it, and using the same small-bore nonsense of twisting the meaning of a program to make it sound crazy ($200,000 for tattoo removal, when it's an anti-crime program), as well as the persistent lie that taxes on the rich hurt small businesses, which will never get old for them and also never be true.

bama is proposing to raise taxes on households earning over $250,000 by increasing the rate on the top two tax brackets and limiting deductions, starting in 2011.

Republicans and other critics, knowing they will get little mileage from defending the rich, instead are casting the plan as a tax hit on people who run industrious little companies driving job growth.

That's not likely, according to one in-depth analysis, which found that more than 95 percent of small business owners would be off the hook.

Then there are clueless Blue Dogs like Gene Taylor, who returns to his tried and true hobby horse of fiscal responsibility - but see if you can find the incongruity:

(CNN) – Mississippi Democratic Rep. Gene Taylor blasted the budget outline President Obama submitted to Capitol Hill today, saying “I don’t like it…change is not running up even bigger deficits that George Bush did.”

“That’s what George Bush did very well. Apparently that’s what President Obama is doing.”

Taylor, a conservative “blue dog” who voted against the stimulus bill, noted he was still reviewing the plan but was troubled by the additional amount of spending for many government programs on top of the recent increased funding many agencies received in the economic stimulus bill.

As a member of the Armed Service Committee, Taylor noted the budget only gives the Defense Department a “small increase,” which he said would barely cover the cost of living adjustments for the military.

Get that? Obama's running up huge deficits, but he deserves a scolding for only giving the Defense Department a "small increase." Because military spending is magic spending, the largest expenditure in the federal budget but one that somehow never hits the bottom line.

I don't want to paint too rosy a picture. The economy is in big trouble and we're probably going to have to go back for another round of stimulus. But the principles of this budget - with a focus on the middle class, and tax fairness, and investment in national priorities - is what will eventually lead us back to prosperity.

Grassroots Success On Coal Plants

The Capitol has a power plant that heats and cools all federal buildings in Washington. And it is a carbon-spewing, dirty-energy, coal-fired power plant. On Monday, there will be a mass civil disobedience action in Washington, with over 2,500 protesters descending on the Capitol Power Plant for a nonviolent sit-in. Prior to that, the top two Congressional leaders called for a 100% shift to natural gas at the power plant by the end of the year.

Today, Speaker of the House Nancy Pelosi and Senate Leader Harry Reid released a letter asking the Capitol Architect to switch the Capitol Power Plant from coal to 100 percent natural gas by the end of 2009. Pelosi and Reid’s call comes just three days before more than 2,500 people from across the country are coming to converge at the power plant for the biggest civil disobedience on climate issues in U.S. history. Prior to the announcement of the Capitol Climate Action, pro-coal legislators had been able to prevent the switch from coal to natural gas.

“Speaker Pelosi and Leader Reid’s dramatic action shows that Congress can act quickly on global warming when the public demands it,” said Greenpeace Deputy Campaigns Director Carroll Muffett. “This move demonstrates that they recognize the urgency of the climate crisis and the need for a switch to cleaner energy sources.”

In other words, Congressional leaders were pushed by a grassroots action to call for sweeping change.

Coal makes people sick and this country can't afford more coal burned into the atmosphere, from an environmental and a public health standpoint. Oscar-winning directors Joel and Ethan Coen have released a new satirical video aimed at the coal industry's deceptions on "clean coal."



Pass it around and maybe before long, your local or federal representatives will start calling on switching power plants near you away from coal. Industry and their PR spinners will never stop trying to keep the old, dirty energy structures in place. We can't stop either.

Combat Withdrawal By August 2010

At a speech today at Camp Lejune, the President announced his intentions to remove combat troops from Iraq by the end of August 2010, with the residual forces leaving by the end of 2011 (here's a transcript). That second part is important - a short-term residual force with a clear end date is far more desirable than an open commitment to de facto permanent bases.

Between 35,000 to 50,000 troops will remain in Iraq, he said. They would be withdrawn gradually until all U.S. forces are out of Iraq by December 31, 2011 — the deadline set under an agreement the Bush administration signed with the Iraqi government last year.

"Let me say this as plainly as I can: By August 31, 2010, our combat mission in Iraq will end," Obama said in a speech at Camp Lejeune, North Carolina.

"By any measure, this has already been a long war," Obama said. It is time to "bring our troops home with the honor they have earned."

Apparently John McCain supports the plan, saying that it is "far different" from the one Obama pushed during the campaign. Except it isn't. It delays the withdrawal of combat troops by three months, and keeps the same manner of residual force, although it's perhaps slightly bigger than expected (it was never clear what the size of the residual force would be). This is only a difference from the wildly false scenarios McCain and the Republicans were pushing last fall. I think McCain is jumping aboard because the train is leaving. He has consistently shifted his position on Iraq depending on the political winds, and there's no major difference here. Also, there's a certain benefit to claiming that Obama changed his position, it undermines him a bit.

What may have changed is the commitment to leaving large numbers of forces in the country through the December elections.

According to the Times, the Obama administration has decided to "maintain relatively high troop levels through Iraq’s parliamentary elections, to be held in December [2009]" and only then draw down to hit the August 2010 deadline. That would be a shame -- if it turns out to be the actual plan as opposed to one last public salvo in the ongoing internal deliberations and arguments. Those of us pleased with the original report may be much less supportive of a plan which would leave the vast majority of U.S. troops in Iraq for the next year, and put the commitment to withdrawal on the proposed timeline in real question.

I won't recount the arguments on this score since I've made them repeatedly. But I will say that such a plan could dangerously muddle what needs to be a clear signal of a commitment to withdrawal and probably not work the way it's been presented.

Just look at the calender. Iraq's Parliamentary elections have not yet been scheduled and don't even have an electoral law, and according to a number of senior Iraqi politicians probably will not be held until March 2010 (not December 2009). That would then give the U.S. about five months to withdraw the bulk of the dozen combat brigades which would reportedly remain. And then, keep in mind that U.S. officials generally agree (correctly) that the most dangerous period of elections is actually in their aftermath, when disgruntled losers might turn to violence or other destabilizing measures. So the following month will likely not seem a good time either. So that would leave four months to move, what -- 9 brigades? Did someone say precipitous? Good luck with that. And that's assuming, of course, that nothing else risky or destabilizing comes up in April or May 2010 (Kirkuk?) which would make a drawdown at that moment appear risky.

So which is it? "Combat brigades out by August 2010" or "Most combat brigades there until spring 2010 at which point we can have another big debate about how fragile the situation is and how unrealistic it would be to move all those troops in half a year"? Not exactly the same.

Though it's unclear whether or not this is the proposal, that would be a very bad sign, and ought to be considered by antiwar groups who want to push Obama on this from the left. For his part, Obama was very firm on the commitment to having combat troops out by August 2010, and I appreciated this paragraph:

What we will not do is let the pursuit of the perfect stand in the way of achievable goals. We cannot rid Iraq of all who oppose America or sympathize with our adversaries. We cannot police Iraq’s streets until they are completely safe, nor stay until Iraq’s union is perfected. We cannot sustain indefinitely a commitment that has put a strain on our military, and will cost the American people nearly a trillion dollars. America’s men and women in uniform have fought block by block, province by province, year after year, to give the Iraqis this chance to choose a better future. Now, we must ask the Iraqi people to seize it.

Friday Blues

This is worse than expected.

The U.S. economy was hitting on almost no cylinders in the fourth quarter, as gross domestic product fell at the fastest pace since 1982 on sharp declines in consumer spending, investment and exports, the government said Friday. GDP fell at a 6.2% seasonally adjusted annualized pace in the final three months of 2008, revised from the initial estimate of a 3.8% drop, the Commerce Department reported. It was the worst decline in GDP since a 6.4% decrease in the first quarter of 1982. Economists surveyed by MarketWatch had expected a revision to a 5.5% decline.

If you just look at the job market, the 1st quarter of this year will be just as bad. New jobless claims yesterday rose to a new record of 667,000, also the highest since 1982.

And considering that we're in a more globalized economy than we were back then, the potential for worldwide unrest and resource wars is great.

As people lose confidence in the ability of markets and governments to solve the global crisis, they are likely to erupt into violent protests or to assault others they deem responsible for their plight, including government officials, plant managers, landlords, immigrants and ethnic minorities. (The list could, in the future, prove long and unnerving.) If the present economic disaster turns into what President Obama has referred to as a "lost decade," the result could be a global landscape filled with economically fueled upheavals.

Indeed, if you want to be grimly impressed, hang a world map on your wall and start inserting red pins where violent episodes have already occurred. Athens (Greece), Longnan (China), Port-au-Prince (Haiti), Riga (Latvia), Santa Cruz (Bolivia), Sofia (Bulgaria), Vilnius (Lithuania) and Vladivostok (Russia) would be a start. Many other cities from Reykjavik, Paris, Rome and Zaragoza to Moscow and Dublin have witnessed huge protests over rising unemployment and falling wages that remained orderly thanks in part to the presence of vast numbers of riot police. If you inserted orange pins at these locations -- none as yet in the United States -- your map would already look aflame with activity. And if you're a gambling man or woman, it's a safe bet that this map will soon be far better populated with red and orange pins.

For the most part, such upheavals, even when violent, are likely to remain localized in nature, and disorganized enough that government forces will be able to bring them under control within days or weeks, even if -- as with Athens for six days last December -- urban paralysis sets in due to rioting, tear gas and police cordons. That, at least, has been the case so far. It is entirely possible, however, that, as the economic crisis worsens, some of these incidents will metastasize into far more intense and long-lasting events: armed rebellions, military takeovers, civil conflicts, even economically fueled wars between states.

Have a happy Friday!

Don't Make Bagram Guantanamo II

Today the Justice Department announced that Ali al-Marri, the last enemy combatant held inside the United States, would be charged and tried in a federal court in Illinois. This is a major victory for the rule of law. Instead of being held indefinitely without due process or habeas corpus, al-Marri will be given charges and prosecuted in an American courtroom, not a military commission. All Guantanamo prisoners deserve the same courtesy - either be tried, or released. In addition, we will probably get a ruling on al-Marri's detention anyway, which would be positive to set the precedent:

The Supreme Court already agreed to consider a challenge to the constitutionality of al-Marri’s detention, and the ACLU is asking the Court still to consider that case. According to Al-Marri’s attorney, the ACLU’s Jonathan Hafetz, “it is vital that the Supreme Court case go forward because it must be made clear once and for all that indefinite military detention of persons arrested in the U.S. is illegal and that this will never happen again.”

There is another group of detainees that should be extended the rights of being tried or released - those at Bagram Air Force Base in Afghanistan who were transferred there from around the world. The expansion of Bagram has raised fears that Obama may use it the way George Bush used Guantanamo.

Now, human rights groups say they are becoming increasingly concerned that the use of extra-judicial methods in Afghanistan could be extended rather than curtailed under the new U.S. administration. The air base is about to undergo a $60 million expansion that will double its size, meaning it can house five times as many prisoners as remain at Guantanamo.

Apart from staff at the International Red Cross, human rights groups and journalists have been barred from Bagram, where former prisoners say they were tortured by being shackled to the ceiling of isolation cells and deprived of sleep.

The base became notorious when two Afghan inmates died after the use of such techniques in 2002, and although treatment and conditions have been improved since then, the Red Cross issued a formal complaint to the U.S. government in 2007 about harsh treatment of some prisoners held in isolation for months.

While the majority of the estimated 600 prisoners are believed to be Afghan, an unknown number -- perhaps several dozen -- have been picked up from other countries.

Hilzoy had a great piece about this, showing the genuinely conflicting issues at play here. But one thing seems fairly obvious - if we are going to restore our moral authority around the world, we need to have the same standard for those detainees at Bagram not detained in the course of military conflict as we ought to have for those at Guantanamo. That's not just true of the Muslim world, where support for Al Qaeda itself is mixed, but strongly in favor of their efforts to drive the United States off their land, through force if necessary. It's also true of our allies in Europe, who will not work with us on key issues if we just rebuild Guantanamo at Bagram.

In one of his first acts in office, President Barack Obama ordered the closure within one year of Guantanamo Bay, where about 245 people are still detained and which has been widely viewed as a stain on the U.S. human rights record.

But Obama has yet to decide what to do about the jail at Bagram, where more than 600 prisoners are held, or whether to continue work on a $60 million prison complex there.

Washington wants the EU to help it close Guantanamo by agreeing to accept discharged prisoners who cannot be returned to their own countries for fear of torture.

But a confidential EU policy paper, obtained by Reuters, said such help would depend on Washington's overall anti-terrorism policies, including assurances that Bagram or other camps would not become new Guantanamos.

"I would find it very surprising, if the (U.S.) policy remained the same while Guantanamo was closed, to see the EU mobilize itself," EU anti-terrorism coordinator Gilles de Kerchove told Reuters.

The EU policy paper said: "It would not be in conformity with EU fundamental rights policies to simply transfer Guantanamo elsewhere (i.e. in Bagram) without solving the underlying question of the detention of terror suspects for indefinite time and without trial."

This is going to undermine our efforts at global cooperation if it is allowed to fester. Obama's honeymoon around the world will quickly come to an end. We will have lost a great opportunity to push the reset button.

No More Taxation Without Representation?

The DC Voting Rights Act passed today in the Senate by a vote of 61-37. It moves to the House, where it will be virtually assured of passage, and then in all likelihood to the US Supreme Court, where a ruling will be made on the constitutionality of offering voting rights to a member of Congress who is not from a state. Jonathan Turley says it's plainly unconstitutional, but others differ:

Judge Kenneth Starr, during congressional testimony in 2004, asserted the constitutionality of Congress using the District Clause to confer voting representation:

"The use of the word ‘state’ [in the Constitution] cannot bar Congress from exercising its plenary authority [under the District Clause] to extend the franchise to District residents."

Professor Viet Dinh concluded in a 2004 memorandum that the framers of the Constitution did not intend to deprive citizens of the most basic right of democracy – the right to have a voting representative in Congress:

“There are no indications, textual or otherwise, to suggest that the framers intended that Congressional authority under the District Clause, extraordinary and plenary in all other respects, would not extend also to grant District residents representation in Congress.”

In a letter to the House Judiciary Committee this month, the American Bar Association concurred with the analysis of Starr and Dinh:

“Enactment of the proposed [bill] would be an exercise of this constitutional authority conferred by the “District Clause”.... Not only is there a moral obligation for Congress to restore such rights, there is also a constitutional obligation for Congress to ensure the right of D.C. residents to the equal protection of the laws...”

Ultimately, the arguments don't matter as much as the numbers on the Supreme Court, and once again Anthony Kennedy will be the likely swing vote. Even if the court battle fails, however, Jerome Armstrong sees a road to statehood for the District:

"We will certainly be celebrating once the DC Voting Rights Act is passed," Zherka emphasized. "It will be a momentous win. But then, it's on to the business of defending any legal challenges to the legislation and looking towards future victories such as Senate representation and broader, local autonomy for the District."

The 'solution' is sorta a cut-the-baby-in-half one. DC gets a single Rep in the House, and one more is added, which goes to Utah and the GOP. But the issue of whether this is constitutional is a pretty big one-- since when do places that are not states have Congressional representation?

It will go to the courts, and I would not be shocked to see it reversed; because its not really that great of a precedent, and it doesn't really entirely solve the problem. If that happens, then it will go back to Congress, and force the issue of statehood-- which it should.

That's down the road. For the moment, 500,00 American citizens are closer to representation in their government.

...Also, the Senate had to take away the rights of the district to set their own gun control laws as a condition of representation, which sure sounds like the conservative mantra of "local control" to me! The Ensign Amendment passed (I'm not sure why it needed to, after Heller). Here's Clay Risen:

And Republicans wonder why D.C. votes overwhelmingly Democratic. Maybe it's because for all their talk of states' rights and federalism, when it comes to Washington the GOP is aggressively paternalistic, to the point where a senator from Nevada can, with a straight face, presume to tell Washingtonians the best way to run their city.

Steele Curtain

Michael Steele is having a great first month. Aside from creating an "off the hook" party message to appeal to the hip-hop generation, and aside from cooperating with the FBI, his latest public appearances have gotten him in trouble with people he must have figured weren't listening.

First, Steele answered a question on civil unions from right-wing loon Mike Gallagher this way:

GALLAGHER: Is this a time when Republicans ought to consider some sort of alternative to redefining marriage and maybe in the road, down the road to civil unions. Do you favor civil unions?

STEELE: No, no no. What would we do that for? What are you, crazy? No. Why would we backslide on a core, founding value of this country? I mean this isn’t something that you just kind of like, “Oh well, today I feel, you know, loosey-goosey on marriage.” […]

GALLAGHER: So no room even for a conversation about civil unions in your mind?

STEELE: What’s the difference?

Weeks before, Steele said he would reach out to gay people and woo them to the Republican Party. I guess through telling them they are second-class citizens. I mean, even George W. Bush supported civil unions.

Then, on Fox News, Steele signaled his support for primary challenges and blocking campaign funds for the three GOP Senators who supported the stimulus package. Unaware that those GOP Senators might actually hear him, he got an earful from them and their allies. He has since backtracked, but only when he's not talking to a member of the conservative establishment, when he intimates all over again.

Steele must think that any interview he gives is only a conversation between him and a host, that nobody else can hear. He must think it's a pre-broadcasting era.

I seem to remember that it was Howard Dean who was going to provide journalists with endless copy for his vituperative comments and slips of the tongue. Haven't seen that article about Steele. Hm.

Economists For A Stronger Economy

In addition to ensuring that homeowners facing foreclosure can't have the same tools in a bankruptcy court that the obscenely wealthy can, Blue Dogs think fair union organizing is "a piece of junk." The argument goes that the Employee Free Choice Act would cripple businesses with burdensome labor costs. Square that with these economic leaders arguing that the Employee Free Choice Act would strengthen both our economy and our democracy:

Although its collapse has dominated recent media coverage, the financial sector is not the only segment of the U.S. economy running into serious trouble. The institutions that govern the labor market have also failed, producing the unusual and unhealthy situation in which hourly compensation for American workers has stagnated even as their productivity soared.

Indeed, from 2000 to 2007, the income of the median working-age household fell by $2,000 – an unprecedented decline. In that time, virtually all of the nation’s economic growth went to a small number of wealthy Americans. An important reason for the shift from broadly-shared prosperity to growing inequality is the erosion of workers’ ability to form unions and bargain collectively.

A natural response of workers unable to improve their economic situation is to form unions to negotiate a fair share of the
economy, and that desire is borne out by recent surveys. Millions of American workers – more than half of non-managers – have said they want a union at their work place. Yet only 7.5% of private sector workers are now represented by a union. And in all of 2007, fewer than 60,000 workers won union status through government-sanctioned elections. What explains this disconnect?

The problem is that the election process overseen by the National Labor Relations Board has become drawn out and acrimonious, with management campaigning fiercely to deter unionization, sometimes to the extent of violating labor laws. Union sympathizers are routinely threatened or even fired, and they have little effective recourse under the law. Even when workers overcome this pressure and vote for a union, they are unable to obtain contracts one-third of the time due to management resistance.

To remedy this situation, the Congress is considering the Employee Free Choice Act. This act would accomplish three things:
It would give workers the choice of using majority sign-up-- a simple, established procedure in which workers sign cards to indicate their support for a union – or staging an NLRB election; it triples damages for employers who fire union supporters or break other labor laws; and it creates a process to ensure that newly unionized employees have a fair shot at obtaining a first contract by calling for arbitration after 120 days of unsuccessful bargaining [...]

The Employee Free Choice Act is not a panacea, but it would restore some balance to our labor markets. As economists, we believe this is a critically important step in rebuilding our economy and strengthening our democracy by enhancing the voice of working people in the workplace.

As Matt Yglesias notes, there are a wide cross-section of economists who signed on to this letter, including at least one conservative. The argument that excessive unionization will wreck the economy is bogus. Indeed it will help save the economy by raising wages and increasing the purchasing power of workers.

Support the Employee Free Choice Act and tell your Blue Dog Congressmen to do the same.

Deeply Unpopular Legislature Stumps For Their Unpopular Budget

The latest poll numbers for the Governor and the legislature are pitiful, although clearly the electorate has hit Schwarzenegger more over the recent budget crisis.

Overall, just 33% of California adults give Schwarzenegger a positive job rating, barely above the record low of 32% that he hit in 2005 after pushing a package of failed ballot measures in a special election. As recently as January, Schwarzenegger's favorable job rating was at 40%.

Faring worse is the state Legislature: Its 21% approval rating matches the record low it set in several previous polls.

There are a number of other questions in the poll regarding the right to choose and birth control, which you can see here (Short version: Californians still support the right to choose, though parental notification gets narrow support. I would imagine that how the question is asked accounts for that, although this will probably give hope to the forces that have lost parental notification on the ballot three times in a row to try yet again).

What I want to focus on for the moment is those appalling numbers for our political leaders. Given that, as well as the public tendency to vote down ballot initiatives, you'd think the last thing they'd want to do is put the public faces of lawmakers on the budget items in the May 19 special election. You'd be wrong.

Gov. Arnold Schwarznegger, Senate President Pro Tem Darrell Steinberg and ex-Senate leader Dave Cogdill will join hands today for the first campaign event before the upcoming budget special election.

The trio -- alongside other advocates for the package -- will host a press conference this afternoon at a Sacramento-area child development center.

Now, maybe Darrell Steinberg has some grand design where the limits in the spending cap part of the package can be overcome. Or maybe he's perfectly content with ratcheting down spending and making it impossible to revive it no matter what the economic situation. Whatever the reason, it seems like terrible strategy as well as bad policy.

On the flip side, SEIU editorializes against the spending cap in Capitol Weekly:

One of the most troubling aspects of the budget deal to us is the budget cap, which promises to make the cuts permanent by making it virtually impossible to restore them in better times. For SEIU members that translates into year after year of higher caseloads for social workers who help children endangered by neglect or abuse; ongoing cuts to healthcare for families struggling with unemployment or low-wage work; a future of shrinking support for families who have children with autism or cerebral palsy; ongoing cuts to hundreds of state services from parks to oversight of hospitals and nursing homes, and ongoing cuts to home care, higher education, K-12 schools, and other vital public services.

We know that we are not alone in our concerns. In fact, Californians do not support the inevitable result of a budget cap - each of these cuts is deeply unpopular; yet legislators have already voted for the cap without a single hearing on the cap’s effects, without explaining its effects to their constituents, and without asking for detailed analysis from the Controller, the Treasurer, or independent outside experts.

This is not the way such a serious measure should have been considered or passed. It reflects poorly on the Legislature as a deliberative and transparent body.

With the Governor trying to get in on the Constitutional convention, and offering a vision of reform that trades majority vote for the spending cap, essentially one horrible outcome for another, it's beyond clear that, if the spending cap passes, it will be locked in for a very long time no matter what other reforms are undertaken, and with a baseline spending level "established during one of the, if not the, worst budget crisis in the state’s history," as the author writes. This would cripple the state in a fundamental way.

Bad Stuff

I you just read President Obama's budget and the surrounding documents, you would say as a progressive that the Administration has the exact right priorities, that they have identified the problem, will seek to make the tax code more fair and work rewarded rather than wealth, and will invest in the fundamental elements like health care, energy and education that will make this nation prosperous for decades to come. But if you read the financial sections, you are looking on in absolute horror. We are turning on an endless spigot to the very banksters who got us in this mess.

Taking the wraps off its much anticipated bank-rescue plan, the Obama administration on Wednesday announced that it will provide a virtually unlimited solvency guarantee to the nation's 19 largest banks [...]

The plan works like this: Through the end of April, federal regulators will pore over the books of the 19 largest banks — such as Citigroup, Bank of America, Wells Fargo and others. They'll be looking at conventional measures such as the composition of a bank's cash on hand, and at unconventional ones, such as how financial firms are valuing complex and opaque investments that are often shorthanded as toxic assets.

The idea behind the so-called stress tests is to gauge if the banks have enough capital to cope with a more severe downturn than even today's — one in which the economy contracts by 3.3 percent and the unemployment rate tops 10 percent. That's far from the worst-case scenarios that some of the gloomier forecasters predict.

At the end of the exercise, if it's determined that banks lack enough capital to weather such a storm, they'll be given six months to raise more capital from private investors or to ask for a capital buffer from the government.

If a bank is unable to raise private capital and needs to get capital from the federal government, it would do it in exchange for "convertible mandatory preferred shares." They could be converted into common stock on an as-needed basis, which would inject new capital into the bank. The government would become a shareholder in the company through its ownership of common stock.

Banks don't have to complete the stress test to apply for this capital buffer. Citigroup is expected to get a fresh injection of capital through this program in coming days. In exchange, the government is expected to take a stake as high as 40 percent.

Calculated Risk has the full terms. This is just going to cost a fuck-ton of money. Obama's team is planning to prop up zombie banks forever. And it will be forever, or at least for as long as most of us will be comfortable with. There is no way Congress will be able to allocate the money for such a maneuver - the anger over the banks will be overwhelming - so Obama wrote it into his budget. He basically made room for up to $750 billion more in banking aid, while calling it a $250 billion dollar expenditure - 8% of total federal spending in the budget - because of a presumption that we will get some of that money back. So the cash is already earmarked.

And it will all be used. The idea that firms will be able to find capital in six months, or will even try to if they know the government will come in with a handout afterwards, is absurd. Here's Yves Smith:

If anyone really believed these banks' capital was adequate, would we have this never-ending parade of special facilities, rate cuts to near zero levels, and programs to rescue stressed borrowers? All the interventions say loud and clear that most if not all of the big banks are in parlous shape, but the Administration keeps repeating the canard that the banks have more capital than needed "to be considered well capitalized." Well, either the standards for capital adequacy are rubbish or all the weekend specials and Congressional high stakes poker have been a complete waste of taxpayer money. You can't have it both ways, and you reduce your credibility by peddling this sort of thing. And this isn't just my reaction; readers who have seen this sort of formulation (it has shown up before) find it either comic or pathetic.

Anyone with a passing familiarity with the banks suspected of being in most urgent need of new funding, Citigroup and Bank of America, knows that their stock prices have fallen to levels that suggest serious doubts about their survival. Meredith Whitney, the bank stock analyst whose forecasts have been most accurate, said her best idea was to short Ciitgroup, last week, even at super depressed levels [...]

What Ben Bernanke does not say but clearly suggests is that asset prices are being depressed artificially by ‘irrational despondence.’ Stepping in to offer a bid to these assets will lift them — at which point the despondence will go away and all will be fine with the world.

This view is misguided because many asset prices are still above their long-term trend. This is certainly the case with house prices, where renting is still significantly cheaper than purchasing in many locales.

What is amazing is the degree to which Bernanke has been unable to process what has happened over the last year and a half. It isn't simply that he is trying to restore status quo ante; he seems to see the only possible operative paradigm as the status quo ante. Worse, he has a romanticized view of it too.

Even the stress tests seem to be envisioning a world where the "bottom" of the recession is substantially higher than what most economists would predict in their most pessimistic scenario (which is the point of the stress test). This would paint a rosier scenario for the banks than should be assumed, and would allow the Administration to continue to claim that nationalization is not the answer.

Timothy Geithner's main concern seems to be bailing out his friends and sparing no expense in doing so. All those late-night phone calls must have convinced him. He may also think, and has convinced Obama, that this is the only way to restore functioning credit markets. But that neglects both economic and political reality:

If the banks are owned by the same people who own them now, and managed by the same people who manage them now, then it’s going to be extraordinarily difficult to persuade the congress and the public that we ought to make enormous transfers of funds from the taxpayers to those owners and managers. What’s more, the banks will continue to be managed by the same bad managers who got us into the current situation. As a result, we’re going to wind up giving the banks less money than they really need to take off. And they’ll continue to be managed poorly. So they’ll continue to be wards of the state. And no private investors are going to want to give smaller, healthier banks the capital they would need to expand and thrive. Consequently, our economy will continue to be dominated by large, semi-dead financial institutions that hamper growth.

Paul Krugman nails it:

What they’re actually doing is underestimating the problem, doing too little too late, and not being open and honest in trying to assess the true cost. The actual plan seems to be to keep the banks semi-alive by implicitly guaranteeing their liabilities and dribbling in money as necessary, all the while proclaiming that they’re adequately capitalized — and hope that things turn up. It’s Japan all over again.

"Japan" refers to their decade of zero growth as a result of propping up zombie banks instead of taking the necessary steps of temporary takeover, wiping out the shareholders and starting over. It's basically throwing money down a black hole. And that's the path we're headed down.

Very scary.