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Thursday, April 30, 2009
Jennifer Rubin worries that we're headed for a "card check lite" compromise--i.e., dropping the most controversial provisions but still giving labor organizers a boost--and that the vaunted business lobby has no weapons on hand to combat it. She suggests some. ...P.S.: Certainly the post-Specter statement of "principles" from AFL-CIO legislative director Bill Samuel was compromise-ready:
The Employee Free Choice Act is built on three fundamental principles and we believe a bill that stays true to these will become law: Workers need to have a real choice to form a union and bargain for a better life, free from intimidation; We have to stop the endless delays (and) companies can't just stall to stop workers' choice, and; There have to be real penalties for violating the law," Samuel added.
...
Samuel doesn't mention either a) bypassing secret ballot elections or b) compulsory arbitration. ... P.P.S.: Part of the problem, of course, is that some anti-card-checkers (not me!) have pretended they don't oppose greater union power--they just object to eliminating the secret ballot, etc.. But now it's time for a debate on whether more (and more powerful) Wagner Act unions really are a good thing. If business can't yet make the case that they aren't--at a time when the unionized auto industry has collapsed under the weight of its own rules and the unionized urban public schools are flailing to reverse their contract-protected incompetence-- when can they make it? .... 5:14 P.M.
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You are my Journolist! Question of the Day: Is the UAW contract (aside from the already-approved concessions) protected in bankruptcy? Reading today's NYT, it looks like the answer is "no"--meaning Obama is maybe whistling past the graveyard in downplaying the significance of Chapter 11 and suggesting the bankruptcy will necessarily be “quick, official and controlled." From Micheline Maynard's trot:
Contracts covering members of the United Automobile Workers union and other unions will remain in force, until the company asks a judge to void them. U.A.W. members approved changes to their contract on Wednesday that presumably would mean the contract would stay in place.
But if the company asked for contracts to be terminated and replaced with terms it can more readily afford, the union would have a chance to respond in court. Negotiations would take place before any cuts were imposed. This process could take months. [E.A.]
An "administration official" says that "no judge is going to override" the contract, given all the concessions the UAW has made. Really? Concessions that don't involve a decrease in a very high base wage? ... But you tell me. ... Update: IBD suggests the administration's confidence masks at least some nervousness. ... Complication: Once the UAW owns 55% of the company, why would it let the company ask for the contracts to be voided? ... But UAW's president says he doesn't intend to hold that stake for very long. Once he sells ... More useful bankruptcy speculation here. ... In the end, if this whole thing is going to fly, doesn't somebody have to buy Chrysler's cars? Who is that going to be. ... 5:08 P.M.
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I can plug too: So how come Rush gets all the money? ... 5:06 P.M.
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kf hears: Bon Appetit and Gourmet are the next Conde Nast mags slated to die. ... Steve Rattner isn't nearly as key a player in the auto bailout as his media profile would suggest. Ron Bloom is doing the job lots of people think Rattner is doing. That might meant that Rattner--mired in a "pay to play" controversy--will be expendable when the dust settles. ... 5:05 P.M.
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Scariest thing I've heard about Obama: He reads Andrew Sullivan's blog. ... The Churchill/torture anecdote Obama told last night (from "an article I was reading") apparently came from Sullivan. Not surprisingly, the "facts had altered slightly" by the time they'd made their way through Andrew to Obama. ... Sometimes it's best to stay in the bubble!** ... Update: Relying on Sullivan, Obama left out the London Cage. ("Beatings, sleep deprivation and starvation used on SS and Gestapo men," reported The Guardian in 2005.) Michael Tomasky says "[T]he White House may have to walk that one back a bit ..." [Tks to reader M.] ...
**--Earlier version of this item said "cocoon," not "bubble." But Sullivan arguably is in Obama's cocoon on the issue of torture, no? Not sure about the issue of genital warts! ... Update: "Isn’t that kind of like Zac Efron reading Tiger Beat?" ... 5:04 P.M.
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Wednesday, April 29, 2009
Some conservatives are troubled that the UAW is getting a huge ownership share in GM (about 40%) and Chrysler (over 50%): For example, Larry Kudlow:
What is going on in this country? The government is about to take over GM in a plan that completely screws private bondholders and favors the unions. Get this: The GM bondholders own $27 billion and they're getting 10 percent of the common stock in an expected exchange. And the UAW owns $10 billion of the bonds and they're getting 40 percent of the stock. Huh? Did I miss something here?
The union's ownership so does not seem a problem. It seems a virtue. Let the UAW, as new owner of GM, pay the price for the overgrown work rules of its locals. Let the UAW demand above-market raises from itself. Let the UAW try to raise money from new lenders after the previous round of lenders has been royally screwed (thanks, in part, to the UAW). And then let the UAW try to sell the cars that result.
The most efficient way to balance competing interests, as Michael Kinsley noted years ago, isn't an adverserial system where various singleminded interests duke it out--either in court or on picket lines--but in the head of a decisionmaker who will feel the relevant consequences. As long as the government steps out of the financing picture, the UAW will feel the consequences of its own excesses. Just don't bail them out again! ...
P.S.: One sign that the WSJ's Holman Jenkins may actually be impressed with Obama's "apparent willingness to drive a hard bargain with the UAW" is that in order to attack the union Jenkins had to write a column about the government's hidden subsidies for Detroit in previous decades. ...
Update: The Cult of Bartley complains that
At the next labor contract bargaining session, the union would sit on both sides of the table.
And the problem with that is ...?
The otherwise estimable Paul Ingrassia applies a blanket condemnation of worker-ownership derived from his study of the University of Wisconsin student store. "There's an inherent conflict between the cost discipline required of owners and the understandable desire of employees to make more money for less work (hey, why not?)" There is. It's a conflict we freelancers face every day! Somehow we manage. A "clean and well-run union such as the UAW" should be able to do it too. ...10:26 P.M.
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I meant "benign" in a good way! Jeez, you call Atlantic owner David Bradley a "benign sucker" and all sorts of people want to rush to his defense! Here's what I meant: Practically every magazine I've ever written for has lost money.** That usually doesn't bother the owner, who is typically rich and willing to take a loss in exchange for the prestige or enjoyment of owning a magazine, or the access and influence it brings. It's an ancient and honorable arrangement. Hence "benign." But at various times, Bradley has sounded as if he actually intended to make The Atlantic and its website a going business concern (noises that are still being made). From a 2003 piece by David Carr:
["]There has been a 50-year tradition at the magazine of older male businessmen like myself managing The Atlantic as a philanthropy,'' Mr. Bradley said. ''It was largely subsidized and dependent on finding the next Mort Zuckerman. I think it's possible I may be the last member of that generation, and we have to find a way to make this wonderful magazine support itself.''
I suspect he is disappointed. Also, he's overpaying his writers.*** Hence, "sucker." I'm all for it. (I could use someone like that.) ...
**--Original text left out the "Practically." I forgot about Newsweek, which probably was making some money when I was there. But not a lot.
***--"as high as $350,000 ..." 10:14 P.M.
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John Judis predicts that Obama's stimulus and budget will "lift overall government spending from the 30s to well over 40 percent of GDP," maybe even to 45 % of GDP in 2009-- a percentage
more like that of France and Sweden, whose non-crisis budgets total over 45 percent of GDP.
Hmm. If you put it like that, doesn't the Obama presidency begin to look a bit like a ripoff? If we're going to spend 45% of GDP like Sweden, I want a cradle-to-grave welfare state! It doesn't seem like much of a bargain to spend Swedish-style tax dollars for what will remain at bottom an American style fend-for-yourself society (even one with guaranteed access to health care). ... 10:01 P.M.
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Tuesday, April 28, 2009
They Have a Sense of Humor:
"Senator Specter Increases Number of Democrats Opposing 'Forced' Choice Act"-- from the anti-"card check" Workforce Fairness Institute.
Meanwhile, Jennifer Rubin, giving advice to her enemies, thinks Big Labor would be crazy not to primary Specter. Is she being Machiavellian--i.e. if they run someone against him, he'll be annoyed and won't flip to endorse some form of "card check" as Peter Kirsanow fears? ... P.S.: Her commenters think she doesn't know Pennsylvania politics. ... Ambinder is ambivalent. ... P.P.S.: My guess is that there still aren't enough votes for a bill that includes a) a way for unions to avoid secret elections and b) mandatory arbitration--Specter has already given cover for moderate Dems to voice their doubts about those provisions. But who knows about a rewritten "compromise" bill? And I have been wrong before. ... 6:26 P.M.
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Gays in the military, Dems, GOPs reach foreign policy consensus, Meghan McCain "limiting herself to tweeting about visiting Girl Scout troops," no mention of immigration: Walter Shapiro makes McCain's "First 100 days" seem much better than they actually would have been. ... 6:24 P.M.
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Elizabeth Spiers on Portfolio's end, and its editor:
I thought the first issue was appallingly bad but sort of expected that someone there would realize that and make some changes.
That said, I didn't expect that person to be Joanne Lipmann. Conde Nast HR called me after I resigned from mediabistro and asked if I wanted to come in and talk about the new biz mag they were starting. (Or as it amusingly was put to me: "Don't you think it's about time you came in here?" Apparently one's failure to ever apply for a job at Conde Nast is automatically an egregious oversight.) ...I was already planning to launch [web site] Dealbreaker at that point, and I told them point blank that I had something in the works and even told Lipmann what it was. She replied that she "didn't really get the web." ...
Anyway, The details are not particularly interesting, but that's the only interview I've walked out of in ten years thinking, I could never, ever work for this person.
Another writer I respect had a similar reaction to Lipmann. ... Meanwhile, Tina Brown follows conventional etiquette and is as nice as possible to Lipmann. But she's more critical of Conde Nast king Si Newhouse (the man who picked her):
[T]here has been a lurching inconsistency to the way he closed down clever, promising Domino (and then, I am told, experienced regret when he read its glowing obituaries) and cut back Portfolio's excellent Web site while vowing to keep the magazine alive-only to close it anyway.
Brown also buries the lede in her last sentence, hinting at the possible closure of ... The New Yorker. ... But what would she know about The New Yorker? ...
P.S.: Meanwhile, everybody's being very nice to David Bradley, the last benign sucker willing to lose millions overpaying journalists for the right to distribute their prose on glossy paper. ...
P.P.S.: Somewhere, Jim Impoco is smiling. ... 12:24 P.M.
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Monday, April 27, 2009
One of Robert Reich's answers to The Economist makes the strategy behind the proposed card check ("Employee Free Choice") bill clearer in a way I hadn't completely understood before (though I should have):
DIA: You have said that America needs unions "to restore prosperity to the middle class". But traditional union bastions like manufacturing are disappearing; the cost of pensions and health care are rising; more and more jobs are freelance, and more and more businesses are non-union. Have we seen the end of unions in America? If not, what form will they take in the future?
Mr Reich: We'll see more unionisation in the personal service sector of the economy -- especially in big-box retailers, restaurant chains, major hotels, and hospitals. Jobs in this sector don't compete with lower-cost imports. And because they require that people do them, they're not easily supplanted by computerised machines. Most of these jobs pay very low wages and offer minimal benefits. Unions would help give these workers the bargaining leverage they need. [E.A.]
OK, so the idea is to target unskilled workers who do work that can't be outsourced, and who work for large institutions. Questions:
a) Is this an admission that traditional power of unions--to go on strike--is no longer a very effective weapon? So unions have to rely on corporate campaigns--which work best against big, respectable institutions--and mandatory arbitration? A union card no longer becomes a way to engage in a (sometimes risky) "economic contest" with management through walkouts and picketing. It's a ticket that lets you summon a federal mediator who will raise your wage, whether or not your union has any strike power. Labor must think these chain retailers are sitting ducks. After all, why not sign the card and get the government to award you a raise?
b) Are there really enough workers in these service jobs to "rebuild the middle class," even if they all get 50% raises?
c) How is Obama going to "bend the curve" of health care costs downwards if all the hospitals get unionized?
d) If these non-outsourceable low skilled jobs are the key to raising incomes at the bottom, how does it make sense to allow a continued "insourcing" of unskilled illegal immigrants to bid down wages in these jobs (which happens even if the immigrants work for competing small-box service providers)? The retail jobs don't compete with cheaper foreign workers--until the cheaper foreign workers come here. Does Robert Reich really think the Democrats proposed legalization plan will stop the future flow of the undocumented unskilled (as opposed to establishing a precedent that will attract more of them)? Are American labor leaders that naive? Or is the idea that once the nontradable chain retail sector is organized, unions will reverse their current support for legalization and become restrictionists?
e) It sounds as if the "big box" middle-class-rebuilding strategy is based on a model of the economy in which the main activity is consuming (and providing services to people who are in the process of consuming) things that are produced elsewhere. But doesn't Obama talk about a future economy based less on private consumption--in which Best Buy, Cheesecake Factory and the Ritz Carlton have a much smaller role? I sense a contradiction.
f) Of course, if unions do for Best Buy what they did for Chrysler, they'll shrink the sector quite effectively. But they won't rebuild the middle class. ...
1:10 A.M.
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Another illustration of the 27th Law of Journalism, which says: When a reporter gives an example of something that is supposed to be funny it won't be funny. Even if the story is about someone who is usually funny. From The Week's discussion of Twitter:
The English comedian Stephen Fry keeps his nearly 200,000 followers amused with such wry tweets as this one, sent while stuck in an elevator: “Hell’s teeth. We could be here for hours. Arse, poo, and widdle.”
So wry! ...1:08 A.M.
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Memo to the visionary Jon Klein: Several people have told me they found the recent TV confrontations between Lawrence O'Donnell and Pat Buchanan to be compelling and illuminating viewing. Here's an idea: Why not make these confrontations a regular feature of CNN? You could have Buchanan "on the right," and someone like O'Donnell "on the left"! To spice it up, you could let them each invite maybe one guest a night to help them defend their side. Make a whole half-hour show of it. Appointment TV! Perfectly suited to the new ideological cable environment in which nonpartisan CNN is losing out. ... P.S.: I'm trying to come up with a name for this new show. Maybe "Cross Currents"? .. "Shootout"? ... "Ready, Aim, Fire"? ... "Fire When Ready"? ... I just know there's a good one along those lines! Help me out here. ... 12:58 A.M.
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The bipartisan "comprehensive immigration reform" plan that today's Democratic establishment would like you to ignore. .. 12:51 A.M.
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Friday, April 24, 2009
Plot Holes: In their New Republic cover story divining Obama's "new theory of the state"--which turns out to be "Nudge-o-cracy," or having the state "monkey around with the choices people face, seeking to influence decision-making rather than mandate decisions"--Franklin Foer and Noam Scheiber declare that:
Obama has set out to synthesize the New Democratic faith in the utility of markets with the Old Democratic emphasis on reducing inequality. [E.A.]
They go on to describe Obama policymakers' shift in attitude since the Clinton administration:
In recent months, several of the architects of Clintonomics--Larry Summers, Gene Sperling, Rahm Emanuel--have reassembled to take another crack at creating broad-based prosperity. What's striking is the change in their thinking about how to pull it off.
In fact, the center-left had revised its economic theories while the bubble was still inflating. Beginning in 2004, the data gradually began to undermine the Clintonites' central assumption: that the benefits of growth would accrue to the poor and middle class. Their policies, it turns out, had only temporarily tamped down the income inequality that had been rising since the 1970s. Workers' wages had once tracked productivity growth. Now workers were producing more, but only the wealthy were reaping the rewards; everyone else's income had basically flattened out.[E.A.]
But Foer and Scheiber's description of Obama's attempt, in the face of these realities, to restore "the old Democratic emphasis" on reducing income inequality never gets around to giving us Obama's nudge-o-cracy plan for reducing income inequality. Just thought I would point that out! I suspect it's because there is no Obama nudge-o-cracy plan for reducing income inequality--which, I suspect, is because there is no conceivable nudge-o-cracy plan that could reduce income inequality in the face of the global economic forces of trade and increasing returns to skilled labor.
Obama at least claims to have a non-nudgeocratic plan, based on restoring the power of labor unions through the Employee Free Choice Act ("card check"). But a) the Employee Free Choice Act is dead in the water, for now, b) Obama doesn't seem to be pushing it very hard; c) the idea that signing up more workers in labor unions will reverse growing inequality (at least while maintaining prosperity) is wishful thinking untested. The backup EFCA mechanism for propping up middle class incomes--mandatory arbitration--is pretty much the opposite of mere "nudging." It's the direct mandating of wages by federal mediators. ... 4:08 P.M.
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Do the Federal Reserve and Treasury Department really think they can keep the results of the "stress tests"--i.e. which banks are in trouble and which aren't--secret until May 4? With no flurry of trading on insider knowledge? (Or is the idea that there will be so many flurries of insider trading that they will cancel each other out--i.e., nobody will know what to believe?) ... 12:08 P.M
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The best book review I've ever read, Mary McCarthy's amazing figuring-out of Pale Fire, is now online at New Republic ... 12:01 P.M.
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From the New York Times' non-probing April 5 story on Steven Rattner's ascension to auto czarito:
[I]n 2000, after a power struggle at Lazard, Mr. Rattner co-founded an investment firm, Quadrangle Capital, specializing in private equity investing focused on communications media. ... Quadrangle's funds have performed well, on average ... [snip]
One thing that is clear: Mr. Rattner knows how to make money. Not only has he stockpiled a personal fortune, but Quadrangle’s two private equity funds have performed well, despite some soured investments.
The first Quadrangle fund returned 15 to 20 percent, according to one investor. The second, which has yet to use all its capital to complete its investment portfolio, is already showing single-digit gains. ... [Emphasis added.]
Not so fast says author William D. Cohan, who claims to be an investor in Quadrangle's first fund. Writing in Fortune, Cohan notes that while the Wall Street Journal reported that the fund "fund delivered 'net annualized returns of 10.7%' to investors as of the end of 2008" (while the NYT had its "15 to 20 percent" gain) "It is very hard for Quadrangle's investors to see where the 10.7% IRR number comes from because it is based upon in part Quadrangle's subjective valuation of unrealized gains."
The key to understanding how the firm calculated the 10.7% IRR for the first fund rests with its fully audited valuation of the firm's unrealized investments. Some of these investments - such as those in NTELOS, Cinemark, a movie theatre operator, and Protection One, a home security-alarm company - are in the equity of publicly traded companies. Together these three companies alone represent 59% of the first fund's unrealized value as of December 31. The problem for investors in that fund - and the IRR calculation - is that in the first quarter of 2009, NTELOS' stock has fallen 32%, Protection One's stock has fallen 35% while Cinemark's stock has increased around 27%. The rest of the unrealized investments are in private companies that are valued through a series of generally accepted but purely subjective methodologies.
For instance, Quadrangle valued its equity investment in ONO, the Spanish media company, at $49.8 million as of the end of 2008, even though the senior debt of ONO trades at around 25 cents on the dollar, implying that investors don't think that loan will be repaid. To value the ONO equity then at anything above zero is a bit of an investment-banking dream. If the unrealized investments in Quadrangle's first fund are excluded from the IRR calculation - implying a valuation of zero for them - then the fund has returned to its investors (including me) on an annualized basis very little indeed: $1.294 billion of gross returns - before fees, expenses and carry, on invested capital of $1.079 billion. The fees and carry alone reduce that $215 million to close to nothing. Meanwhile, Quadrangle's partners and employees have taken out from the first fund alone $94 million in management fees and millions more in carried interest. Quadrangle declined to comment for this article. [Emphasis added]
Maybe a return of zero is an achievement in the market of 2008. And I still think Rattner may be just the man to help wring enough concessions from the UAW to prevent General Motors from requiring a permanent Treasury transfusion. But the gap between the legend and the reality seems to be growing. ... 1:25 A.M.
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Thursday, April 23, 2009
Embarking on a monumental task that some say is doomed to fail, Los Angeles Unified school officials are taking aim at state laws that make it virtually impossible to fire teachers.
You might think that the school district, which is in the process of laying off 3,500 teachers, could at least use that as an excuse to lose the bad ones and keep the good ones. You would of course be wrong. Laid off teachers--and administrators--with seniority have the right to "bump" lower-seniority teachers, creating "a domino effect that leads to the loss of new, nontenured teachers" at the bottom of the pyramid.
The L.A. school board wants to change these rules (by providing, for example, that teachers who get two consecutive poor performance reviews be automatically dismissed).. Even Mayor Antonio Villaraigosa, a former teachers' union official, seems to support some "bumping" changes. ("I believe in seniority, but you can take things to a point where it becomes unfair to other people too.") Unfortunately: a) The district can't reform the rules itself--they are written into state law and it will take a new state law to amend them; b) The district has missed the deadline for introducing new state laws in 2009. Nothing can happen until 2010; c) Even in 2010, nothing will happen. "It has no chance of passing," says one expert, thanks to opposition from the California Teachers Association and the United Teachers of Los Angeles.
At least with General Motors--which arguably makes much better cars than the L.A. Unified School District makes schools--there is the possibility of bankruptcy to force changes in excessively protective union rules. In public education, there's only the hope that charter schools will eventually expand so rapidly that they displace conventional schools governed by the UTLA (before they succumb to union pressure themselves). Go Steve Barr! ....
P.S.: At this point in an L.A. press item I usually contrast the sensible, lively coverage of the
Daily News with the stuffy, PC coverage of the dying
L.A. Times. But the
Times has actually been highly
skeptical of the UTLA in recent years, and
supportive of
charters. The teachers' unions have lost the MSM. They may not care, though. They still have the pols. ...
10:38 P.M.
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Stop Him Before He Kills Again: Michael Wolff, as a friend of mine once argued, is a Topic-Killer. He has a talent for figuring out what everyone would want to talk about, and then he writes a quick, mediocre piece on the subject that doesn't do it justice or that takes an extreme position for effect--but that says just enough to kill off the interest of other, better journalists in tackling the issue. ... The social problem we now face is that Wolff has started a web site, which he has to promote--meaning he now kills a promising topic every day. Today, it's Drudge. ... [You just killed the topic of Michael Wolff's topic-killing--ed. I have that power? No. I can't even stop myself from re-doing the same item over and over] ... 2:55 A.M.
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Wednesday, April 22, 2009
Paragraph #8 in WaPo's account of Freddie Mac acting CFO David Kellerman's suicide:
He and a group of company lawyers tussled with the company's regulator in early March as the firm prepared to file its quarterly disclosure. The group insisted that Freddie Mac disclose the $30 billion cost to the company of carrying out the Obama administration's housing recovery plan, but the regulator urged the company not to do so.
Freddie Mac employees argued they had a legal obligation to disclose the information and would have to get the Securities and Exchange Commission, which oversees such disclosures, to sign off if they didn't. The regulator backed down.
Alert reader J. says, "[A]n odd story, isn't it? The regulator says don't disclose the cost of this government program? Why would he say that?" ... There's an obvious overarching reason--it would be embarrassing to the Obama administration. But why? Isn't the administration usually boasting about how much it's spending for struggling homeowners? ...
Update: Politico's Josh Gerstein offers some informed speculation:
In the end, FHFA [the regulator] reportedly retreated and Freddie formally disclosed that the Obama anti-foreclosure plan could force the firm, which is in a federal government conservatorship, to take a pre-tax charge of $30 billion.
While the Obama administration might not want to have the pricetag for its foreclosure efforts look too big, the reason regulators may have pressured Fannie to understate the cost of the program is pretty simple: both Obama and Geithner said publicly that it wouldn't have a material financial impact on Fannie or Freddie.
Why would Obama and Geithner make such an estimate? Because they were publicly buying into the Juiceboxy free-lunchish, counterintuitive** notion that if only lenders were made to offer more lenient terms to homebuyers, the lenders would make more money! (Obama: "While Fannie and Freddie would receive less money in payments, this would be balanced out by a reduction in defaults and foreclosures.") Looks like those numbers don't add up--though you can expect the free-lunch argument to crop up again in the current effort to get credit card companies to offer less harsh terms (i.e., as if that will let banks pay off their bailout loans quicker). ...
P.S.: Gerstein does raise the issue of why the "FHFA would feel obligated to carry water for the Obama administration," given that FHFA Director James Lockhart was originally a Bush appointee. ...
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**--The intuitive notion would be that if there's one thing rapacious lenders know how to do, it's make money. If setting more relaxed terms would maximize their profits, they'd do it. ... 4:34 P.M.
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Guess this feud is over: Nancy Pelosi speaks out in defense of Jane Harman!
"I have great confidence in Jane Harman," Pelosi said. "She's a patriotic American. She would never do anything to hurt her country."
Thanks, Nancy ... for, you know, emphasizing the whole unpatriotic, betray-your country issue. ... P.S.: I used to work for Harman and like her. Maybe I'm biased. But I don't completely understand what all the fuss is about. So someone convinces her that this prosecution is unfair and she says she'll probably lobby against it. And then this person puts in a good word for her with Pelosi about committee assignments. If this person is also (unbeknownst to Harman) a spy what does that change? Is that different than if they were an ambassador, or foreign leader, or foreign pundit, or New Republic editor? Or president of a respected non-profit? Seems like everyday politics. No secrets were leaked to anyone, as far as I know. Whether it's corrupt or not depends on whether Harman genuinely thought the prosecution was unfair, which in turn depends at least in part on whether it really was unfair, no? But maybe I'm missing something. ... 4:33 P.M.
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Andres Martinez writes, of the U.S.-Mexican relationship:
Partly because half of what used to be Mexico now lies north of the border, Mexicans underestimate the ability of the United States to bumble.
You can say that Martinez shows no desire to restore Mexico's historic claim, and you'd be right (though he seems slightly annoyed). You can say there's no significant popular movement in that direction, and you'd be right. What you can't say is that the relationship of Mexico and Mexican immigrants to the Unites States is the same as the relationship of, say, Italians and Italian immigrants to the United States, or Koreans and Korean immigrants., etc.. When Italians came here they weren't coming into land that used to be "half of" Italy. ... 2:55 A.M.
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"Mr. Rattner, It's Time to Go" "New York's $122 Billion Quagmire" Shockingly, the New York Times editorial board fails to call for auto czarito Steven Rattner's resignation in light of his involvement in the "widening" pension "pay for play" scandal. After all, the problem is so much larger than one man!
Mr. Rattner showed some bad judgment in the "Chooch" deal, and the public has a right to expect more of him in his new, highly sensitive position.
But in the end, Mr. Rattner played a minute role in the Albany mess.
Also the Albuquerque mess! And New York City mess! ... Shouldn't the Times ed board have disclosed that Rattner is one of Times Publisher Arthur Sulzberger, Jr.'s best friends? ... 2:39 A.M.
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The Awl Debuts: First day verdict: Too much Gawk, not enough Balk! But it's getting better already. ... P.S.: The site's co-founder Choire Sicha, who says "we just don't really want any stupid people reading it," once wrote a crap defense of the LAT's attempt to stop its bloggers from commenting on the developing John Edwards scandal. It would be petty of me to remember something like that. ... 2:37 A.M.
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Tuesday, April 21, 2009
You know those figures that Hillary Clinton strategist Mark Penn used in his WSJ column, the ones that seemed like BS?
The best studies we can find say we are a nation of over 20 million bloggers, with 1.7 million profiting from the work, and 452,000 of those using blogging as their primary source of income. That's almost 2 million Americans getting paid by the word, the post, or the click
Well, they were BS! Room 8 notes that Penn a) assumed that all bloggers saying they'd like to make money are actually making money. And b) recast bloggers who said blogging was "a" primary source of income into bloggers having blogging as "their primary" source of income. ... I would add that Penn's statement claiming
It takes about 100,000 unique visitors a month to generate an income of $75,000 a year
is fantastically bogus and clueless. It all depends on your niche, of course, but a blogger with only 100,000 uniques would be very lucky to make half that amount, I would think. Penn's own post--publication mop up attempt makes the methodology of his hype clear:
The question of how much traffic it takes to make a living also comes from the Technorati report. We say it takes "about 100,000 unique visitors a month to generate an income of $75,000 a year" and Technorati states those who had 100,000 or more unique visitors the average income is $75,000.
But Technorati emphasizes that the $75,000 average is pulled up by a few highly successful bloggers who have way more than 100,000 unique visitors. This doesn't mean that if you have only 100,000 you generate $75,000. It sort of means the opposite--that 100,000 won't get you anywhere near the "average." Penn himself mentions, in his follow-up, that the $75,000 is "not the median." In fact, the median was only $22,000 (and even that probably wouldn't apply to the mere 100,000-visitor sites, since they are the low end of the sample and presumably making less than the median). Faced with a choice between an absurd $75,000 claim and a still-inflated $22,000 claim, Penn went with the $75,000.
Don't worry Hillary! The delegates will be there for you. ....
P.S.: You might think that Penn's bogus factoid was a Robert Reich-style bogus factoid--that is, it's not true today but it will be true tomorrow! That's part of Penn's defense ("We can quibble about how easy it is to make this kind of money -- but the point is, the huge potential is there.") But it's actually a huge open question whether blogging will get more or less lucrative: Will ad rates go up or down? Will the proliferation of blogs bid down the price faster than the migration of eyeballs online builds an audience? Etc. ... It might be true that two years from now a site attracting 100,000 uniques will be lucky to make $5,000. The "huge potential"--at least the huge moneymaking potential--isn't necessarily there at all.
This is an issue of some importance to me! Like Hillary in 2008, I hope Penn is right. ...
Backfill: Scott Rosenberg's discussion is more thorough. ... 6:10 P.M.
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Monday, April 20, 2009
Ezra Klein, Cheap Date: Head Juiceboxer Ezra Klein
climbs on the Spitzer Rehab wagon, finding a muddled 2004 attack on "predatory lending" in the
New Republic "pretty prescient stuff." Sample prescience:
Unfortunately, our belief in the importance of equal opportunity and nondiscrimination is too often forgotten when it comes to the debate over whether and how to police the market for home mortgages. In poor and working-class communities across the nation, predatory mortgage lending has become a new scourge. Predatory lending is the practice of imposing inflated interest rates, fees, charges, and other onerous terms on home mortgage loans--not because the imperatives of the market require them, but because the lender has found a way to get away with them. These loans (which are often sold as refinance or home improvement mechanisms) are foisted on borrowers who have no realistic ability to repay them and who face the loss of their hard-won home equity when the all-but-inevitable default and foreclosure occurs. ...[snip]
In these circumstances, government must step in to curb predatory lending and encourage the flow of fairly priced capital to sectors where it is needed and will be well-used. Filling a gap left by federal inaction, state enforcement efforts in this arena have centered on identifying the valid economic criteria considered in mortgage underwriting and compelling lenders to focus on those factors--not on preconceptions, prejudices, or predatory instincts--in determining how to price home mortgage loans. The point is not to protect people from their own bad decisions or, conversely, to guarantee that mortgages be granted to specific persons or groups on specific terms--that would violate the principle of market freedom. The point is to support equal opportunity and to ensure that borrowers are charged rates and fees based upon their status and qualifications as economic actors in the mortgage market, not upon their diminished access or market savvy or their race.
You make the call ... but I say Klein's easily impressed. What's Spitzer saying here? Is he saying the lenders shouldn't make these loans or that they should make these loans on more favorable terms--in which case the loans would have been even bigger money losers, leading to a bigger meltdown, no? Spitzer invokes the threat of action against "race" discrimination without any sense that official pressure toward affirmative-action style lending would help cause the subsequent mortgage collapse....
P.S.: I'm not saying Spitzer shouldn't have an official, public role. Prosecuting bailed out Wall Streeters who take more money than they're entitled and won't give up their fancy cars would be a good fit, for example--Spitzer's
bitter resentment, his self-promoting, accusatory, legalistic bent and his antipathy toward New York financiers would work in the public interest. But Klein seems to be suggesting New York take him back as a general political leader-- e.g., mayor, governor. It's not as if Spitzer's tenure as governor
before Ashley Dupre was a huge success--unless you count as a success almost derailing b
oth Dem frontrunners for president with an ill-conceived plan to give drivers' licenses to illegal immigrants. ...
7:10 P.M.
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"We need President Obama and his auto task force to stand up for the interest of workers and retirees in these restructuring negotiations," according to the message, posted on uaw.org. [link added]
Translation: Bail us out again, please! ...
Also: Maybe this means Obama really is seeking significant bankruptcy-style sacrifices from the UAW. Or maybe this is just a campaign the UAW was always planning to stage at crunch time. ...
P.S.: Why are the labor concession negotiations focused on reducing payments to the health care fund that pays for UAW retirees' medical needs? Isn't it fairer to save money by cutting the base wage of those still working (currently
about $29/hour)? The retirees are hapless sitting ducks who arguably have earned their benefits. UAW members still working, on the other hand, have at least
some ability to adjust to lower wages over time--by seeking other work, once the economy recovers, or working more hours, or building better products, etc. ...
Update: Of course, it's possible that the goal is to ultimately stick the government with the bill for the health benefits--as suggested by Peter Boyer's
evocative-but-inconclusive New Yorker piece. That would explain why the union would prefer to tap that form of "savings" first. ...
More: Boyer also suggests vaguely that Obama's task force wanted to dismiss the UAW's Ron Gettelfinger but "believed it didn't have the option of firing" him. ... The UAW may not quite have lost the
New Yorker, yet, but
they've lost Tina Brown's Daily Beast aggregators ("How the Unions Killed Detroit") ...
7:08 P.M.
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Jorge's Razor: Former Mexican foreign minister (and
Slate contributor) Jorge Castaneda's recent
Newsweek piece-- claiming that two officials removed by Raul Castro "were apparently involved in a conspiracy, betrayal, coup ...to overthrow or displace Raul"--was
met with widespread skepticism, to say the least. Castaneda bolstered his case by saying
"I have no way to substantiate any of this ... I have no evidence of it."
But Castaneda challenged his critics to "offer a better explanation." ... How about that Raul was, in the manner of strongmen everywhwere, simply removing two popular officials who might pose a threat to his power? ... 7:03 P.M.
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Saturday, April 18, 2009
Vote of confidence: Auto czarito Rattner "not likely" to face charges, says Obama spokesman. ...
Update: Henry Blodget calls Rattner's payment to a "placement agent" a non-issue, because of the "additional information" that Rattner made the payment to the agent before meeting with the state official who could steer pension money to him, rather than after the meeting:
Quadrangle retained the placement agent who received the $1.1 million finders fee prior to the first meeting with the state official. The SEC complaint says that the finder's fee was negotiated after the original meeting. This difference is important. The SEC's version of the story makes it sound like an after-the-fact, pay-to-play deal. If Quadrangle actually retained the placement agent prior to meeting the state official for the first time, this is more likely a case in which the firm employed multiple placement agents. The latter is a common practice in the industry, and it would not be a concern here. [Emphasis not added.]
Huh? Blodget seems impressively clueless at best here. The "placement agent" in question was Hank Morris, political consultant for now-disgraced N.Y. State Controller Alan Hevesi, whose office controlled the pension funds. If the allegations against Morris are true--that private equity firms in effect had to pay Morris to get access to the pension money--why does it make a difference whether Rattner took care of Morris before or after he met with the relevant "state official"? It's not as if Rattner would have hired Morris and then happily discovered, hey, he's the guy you have to pay to get N.Y. pension money! What luck! Rattner knew who Morris was. Of course, even if the full acccusations are true none of this may amount to a crime, on either Morris' or Rattner's part. But it still stinks. If Rattner weren't at this very moment deciding the fate of the American auto industry, he'd be under intense pressure to quit, no? ... P.S.: I'd just as soon Rattner got to finish the GM and Chrysler restructuring. Then he can quit--and become a columnist for Slate! If current columnist and former N.Y. governor Eliot Spitzer moves on, the Slate rehab slot would be open. It's worked for Spitzer, and it can work for Rattner! Ask Henry Blodget. ...
More: You knew Bill Richardson's New Mexico couldn't be far behind. A private invesment firm (not Rattner's) appears to have been suspended by that state for doing essentially what Rattner's firm is accused of doing.. ... WSJ mostly exonerates Rattner on the grounds that this was a "shake down." But there are those who have shaking down thrust upon them and those who seek shaking down (perhaps because paying someone off is easier and cheaper than competing in the regular application process). It's not clear that this latter group of shakees is clean. [via Insta]...
Bonus Question: How plausible is the following, regarding the efforts of Rattner's firm, Quadrangle, to get New Mexico business?
A Quadrangle spokesman said the company worked with Morris’s firm, Searle & Co., but said there was no payment.
See also. ... 3:18 P.M.
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Friday, April 17, 2009
Democratic blogger Ezra Klein appears to be positioning Dem health care reforms as a way to cut costs, on the grounds that a reformed system will be able to make "hard choices" and "rational" coverage decisions, by which Klein seems to mean "not providing" treatments that are unproven or too expensive--when "a person's life, or health, is not worth the price." Matthew Yglesias' recent post seems to be saying the same thing, though clarity isn't its strong suit. (He must have left it on Journolist.)
Isn't it an epic mistake to try to sell Democratic health care reform on this basis? Possible sales pitch: "Our plan will deny you unnecessary treatments!" Or maybe just "Republicans say 'yes.' Democrats say 'no'!" Is that really why the middle class will sign on to a revolutionary multi-trillion dollar shift in spending--so the government can decide their life or health "is not worth the price"? I mean, how could it lose?
The "rational," cost-cutting, "hard-choices" pitch isn't just awful marketing--I don't even think it's accurate. Put it this way: I'm for universal health care in large part precisely because I think the government will be less tough-minded and cost-conscious when it comes to the inevitable rationing of care than for-profit insurance companies will be. Take Arnold Kling's example of a young patient with cancer, where "the best hope is a treatment that costs $100,000 and offers a chance of success of 1 in 200." No "rational bureaucracy" would spend $20 million to save a life, Kling argues. I doubt any private insurance company is going to write a policy that spends $20 million to save a life. But I think the government--faced with demands from patient groups and disease lobbies and treatment providers and Oprah and run, ultimately, by politicians as terrified of being held responsible for denying treatment as they are quick to pander to the public's sentimental bias toward life--is less likely to be "rational" than the private sector.
That is to say, the government's more likely to pay for the treatment (assuming a doctor recommends it). So it's government for me.
Now, I understand that President Obama has chosen to sell his health care plan in the current budget as a way to control costs. How else to even colorably bill it as a policy response to the immediate economic crisis? That it won't control costs seemed, initially, to be merely disingenuous--and what's a little deception if that's what it takes to get a good universal health care law passed? But on second thought, Obama's strategy isn't just disingenuous. In the not-so-long run it's ineffective, a political loser.
Didn't universal health coverage gain traction during the anti-HMO era, when voters began to see private-sector cost-cutting bureaucrats override the decisions of doctors to provide drugs and treatments to their patients? The evil HMOs tried to kick new mothers out of the hospital after a day! Politicians responded with laws mandating treatment, with a "patients' bill of rights," etc. But now, through a heroic, concerted effort at self-congratulatory Obamaist groupthink, the Dems are about to cast the government in the cost-cutting, treatment denying role and put themselves on the side of the heartless bureaucratic bean counters.
More broadly, haven't liberals historically prospered when they promised and delivered more for the average American (more Social Security, health security, prosperity, clean air) in exchange for increased spending? Why not try the same with health care? Give pandering a chance. ... 2:49 A.M.
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90% BS: Obama's claim that
"more than 90 percent of the guns recovered in Mexico come from the United States, many from gun shops that lay in our shared border"
appears to be deceptively hyped, at best. (The 90% figure only covers the guns that are sent to the U.S. Bureau of Alcohol, Tobacco and Fireams for testing. There seems little reason to assume it is a representative sample of all the "guns recovered in Mexico"). But is the suspect factoid really designed to "weaken the Second Amendment" and promote gun control, as the NRA charges? Or is it just convenient diplomatic BS because it allows the United States to be partly blamed for Mexico's embarrassing inability to control its violent drug cartels? (True, you'd think it would be unnecessary, since the U.S., as the consumer of the illegal drugs the cartels sell, is already partly to blame.) ...
Update: Obama's stat has now received the Official Annenberg Seal of B.S. from FactCheck.Org, which notes:
the guns that ATF is given to trace are far from a random sample of all guns recovered. Indeed, it omits those that Mexican officials have reason to believe come from elsewhere, and includes only those guns with a good chance of being traced to U.S. sources.
FactCheck's seemingly thorough analysis concludes an accurate estimate would be "probably less than half of the 90 percent claimed by the president and others in his administration." But then we'd have less to apologize for! ... [via Insta via Andrew Malcolm] 1:06 A.M.
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Thursday, April 16, 2009
Screwing the Chooch: Did auto czarito Steven Rattner pay to play at his investment fund?... With the GM and Chrysler auto negotiations at their current critical stage, isn't he too big to fail--the Geithner Put? ... P.S.: In what may be an admirable display of independence, the NYT's story makes Rattner--a former Times reporter and buddy of Times CEO Pinch Sulzberger--seem more potentially culpable than the WSJ's story does. Formally, if the accusations are true, Rattner would merely be the shakedownee in the pension fund deal in question. But the Times makes it seem as if he aggressively plunged ahead in what was allegedly a seamy business. [More 'allegedly's?-ed. Think I'm OK] ... Bonus Question: How many vetting problems make a "handful"? ... P.P.S.: How bad is "Chooch," the 2003 film Rattner's firm (allegedly) indirectly bought as part of the complicated financial machinations? Pretty bad, said the NYT. But according to the Village Voice it "charms with its p.c. portrayal of Italian Americans" and "rebuilds cultural bridges." So there. ...
Update: One of Rattner's "handful" of vetting problems was his conflict of interest due to previous dealings with Chrysler's owner, Cerberus. Jane Hamsher says
Rattner's Quadrangle has a financial relationship with Cerberus, having loaned them $125 million to buy the Maxim and Blender magazine parent two years ago (Cerberus is currently in default).
That's wrong. But close! It's Cerberus that loaned the money to Rattner's firm, not the other way around (see link). Hamsher's error is repeated and amplified by TPM's Moe Tkacik. (Journolist synergy?) If Hamsher, who's well-connected with the labor movement, and Tkacik have it in for Rattner, maybe he really is the right guy for the auto bailout job--i.e. the guy who might force the UAW, as well as Detroit's bondholder's, back to reality. (Contra Hamsher, it's not "a national moral outrage that [UAW members] should expect to make $33 an hour in this day and age." The problem is expecting to keep making $33 when your firm has effectively gone bankrupt.) ... 10:34 P.M.
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It's looking like I was
very wrong about the extremely close Murphy-Tedisco congressional in New York's 20th district. Absentee ballots, even from the military,
have not put the Republican in the lead. I'm flabbergasted. But still wrong. ...
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Yesterday's Lede: Far from being a man competent enough to run the fight against Taliban extremists, Pakistan's President Asif Ali Zardari is "not the man [you want] to run the meal at your home in the evening," said former U.S. Trade Representative Mickey Kantor at a conference on the Obama presidency at USC yesterday. Kantor suggested that the best thing would be for Pakistan's military to "reassert" control. ... #2 Lede from the conference: Conservatives with money are talking about starting a right wing imitation of Huffington Post. ... 1:53 A.M.
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Wednesday, April 15, 2009
Defending Robert Samuelson's attack on Dem health care plan and Obama's "post-material" economy, blogger D.A. argues that it's only "an aspirational preference" for "everyone to be insured." In other words, it's not a preference people would make spending "their own money in the absence of compulsion by the government." ... I think I like aspirational preferences. "All men are created equal" seems like an aspirational preference. Can't buy it at the mall. It seems like it would be hard to achieve any desirable form of equality--equality before the law, equality of opportunity, or social equality--simply by aggregating the choices of individuals spending their own money. ... 1:08 A.M.
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Did John McTiernan Make the Wrong Self-Serving Paranoid Conspiracy Film? Die Hard director John McTiernan, who pled guilty, withdrew his plea, and is now awaiting potential indictment in the Anthony Pellicano scandal, has apparently made a film blaming Karl Rove for pursuing Pellicano. The theory? According to the NYT, McTiernan sees
the Pellicano prosecution as having stemmed from a pre-emptive strike against a Hillary Rodham Clinton presidential candidacy.
Mrs. Clinton, the film says, was widely reported to have had help from Mr. Pellicano when her husband was accused in 1992 of having had an affair with Gennifer Flowers.
According to an elaborate turn of events asserted in the documentary, the Pellicano prosecution was intended to churn up dirt that was then folded into an anti-Clinton campaign video that was planned for use if she were nominated as the Democratic presidential candidate.
I'd say McTiernan's thinking too small! If I were making a paranoid conspiracy documentary about Rove and Pellicano, I wouldn't focus on Hillary. I'd focus generally on the "thousands of hours of encoded tapes from wiretaps" the FBI supposedly found when they raided Pellicano's office. Who knows who is on those tapes? Lots of Hollywood bigshots, presumably. Whoever has those tapes might, in this conspiracy theory, be able to blackmail half the big showbiz donors to the Democratic party--donors to Hillary and Obama. Of course, the tapes were in the possession of government law enforcement officals--not Bush operatives. But, hey, would that have stopped Richard Nixon or John Mitchell? We're making a crazy film here! ... I know when I heard about the stash of tapes, I began to drool (figuratively). And I'm not Karl Rove. ... 12:20 A.M
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Headline in WSJ: "Emanuel Now a Backer of Immigration Action" The evidence?
For his part, Mr. [Rahm] Emanuel said his views haven't changed, though people may be viewing him in a new light now. In any case, he said, his job now was to represent the president's views.
"It doesn't matter what Rahm thinks," he said in an interview. "It matters what President Obama thinks." [E.A.]
Yes, sounds like he's had a total change of heart! ... 12:18 A.M.
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Tuesday, April 14, 2009
My colleague Timothy Noah argues that a) Congress "must" enact health care reform because "health care costs have spiraled out of control," and b) the "consensus" (that is, insurer-endorsed) cost saving solutions are inadequate:
Some of these (more electronic recordkeeping, more preventive care, tighter restrictions on malpractice litigation) would be worthwhile even if they didn't save money. Others methods [such as "best practices" protocols] risk creating more problems than they solve. But the bottom line is that the insurers' basket of proposals would not, even by their own reckoning, cut health care costs; instead, they would cut the rate of growth in health care spending by 6 percent to 7 percent.
Therefore, c)
If you really want to rein in health care costs, then consensus reform options like creating a comparative effectiveness board won't get you very far. For the true spending hawk, I see no practical alternative to the "socialist" public option.
First, just because rising health care costs have eaten up all of the average American's wage increases, it does not necessarily follow that either this rise was unwarranted or that health care costs need to be controlled. Maybe Americans, like richer people everywhere, want to spend more money on health care (as opposed to, say, newspapers) and advances in health care have given them more valuable services to purchase (or have their employers purchase for them). That's probably not true--and almost certainly not 100% true--but you can't tell it just by looking at Noah's big graph. (Nor do I understand Robert Samuelson's column, which seems to argue that because health care is not "material" it isn't a valuable service and can't be the basis for capitalistic economic growth.) If the graph showed that rising expenditures on computer technology had eaten up all the increase in Americans' paychecks, would we immediately declare a "computer cost crisis" and demand that rising laptop expenditures be constrained? Or would we say, "Hey, people are spending a lot more on computers these days"?
Second, the savings you get from the "public option"--savings on marketing and administrative costs, ability to use the massive purchasing power of the government to bid down prices--seem like one-shot propositions. We switch to a public plan, we save our 20-30 percent on administration and bargaining, and then the rise in health care costs resumes, thanks to ever-fancier technology and complex treatments (that actually are effective--just expensive). Soon costs have eaten up the 20-30 percent and are back on a rising path to consume a growing share of GDP, no?
The lesson I would draw isn't that we shouldn't try to reform health care, or that we shouldn't try to reduce costs. It's that we shouldn't reform health care in order to reduce costs, and that we shouldn't expect health care reform to in itself control the health care entitlement problem that's scheduled to devour the budget. We should reform health care to provide long life, security and peace of mind to Americans, while we resign ourselves to the likelihood that this will consume an ever-larger portion of our economy. 1:44 A.M.
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Brendan Loy:
Does Mickey Kaus really think that low-wage workers in Mexico and Central America play this much attention to... [the progress of amnesty plans in Washington]
Um ... yeah! That is, they hear the news, perhaps false news, that legalization is or is not in the offing. Why wouldn't they pay more attention than the average American? The news affects them more directly, no? (If you look at Spanish-language papers in the U.S, certainly, you'll notice a rather intense focus on immigration-related developments, especially the possibility of legalization.) ... 1:42 A.M.
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Paranoid's Corner--Come and Be Counted! Why Obama might want to reverse the Gran Salida: Why might the Obama administration want to raise the topic of possible immigrant mass legalization even if it's not going to happen this year? Even if you assume such talk encourages more people to come here illegally--in the hope of qualifying for the amnesty--or at least discourages illegals currently in the country from going home during the recession, what good would that do Democrats? Illegal immigrants can't vote. ... It's not as if there is a once-every-10-years Census starting up in which areas with more illegals will get more money and representation! ... From CNS:
The Census is used to apportion the seats in the U.S. House of Representatives. There are 435 House seats that are divided among the states in proportion to their population, which is determined by the decennial census. States with more people get more seats in the U.S. House.
This means that a state harboring more illegal aliens can gain more House seats as long as the Census Bureau finds the illegal aliens and counts them. This also means that the illegal alien population resident in the United States during a census year has the potential to alter the regional and philosophical balance of power in Congress.
P.S.: Note that it doesn't matter, for this purpose, if press secretary Robert Gibbs knocks down aide Cecilia Munoz's talk of impending amnesty--as long as Munoz's message gets out to the "undocumented" immigrant community (and the potential undocumented immigrant community in Latin America and elsewhere). ... 1:33 A.M.
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Three obvious problems with Ramesh Ponnuru's op-ed making an argument against universal health coverage:
1)
For people with pre-existing health problems, for example, direct subsidies would probably be more efficient than rigging insurance markets to make sure they are covered ...
So for every potential illness, the government has to determine the amount of subsidy required. As you get older and acquire more illnesses, you acquire more and more subsidies, like barnacles. But why should someone with mild heart trouble get the same subsidy as someone with severe heart trouble? Won't insurers make money by figuring out ways to subtly discourage potential customers with the worse versions of subsidized illnesses? It seems simpler and less bureaucratic just to cover everyone, stick in a decent co-pay, and then pay the bills.
But Ponnuru has a second solution for "preexisting conditions:"
[I]n the long run, the option to buy renewable policies that people could take from job to job would keep most people from needing to face this problem.
A renewable policy the insurer couldn't cancel even if you got an expensive disease? That would be a policy you'd have to hold on to. It sounds like Ponnuru has solved the problem of employees locked into their jobs and replaced it with the problem of employees locked into their insurance companies. If you're stuck with one company, that would seem to defeat the purpose of private sector "competition." If, on the other hand, other companies have to cover you at a rate that ignores your "pre-existing condition," that would reintroduce all the market-distorting cost-shifting Ponnuru is trying to avoid, no? Maybe I'm missing something.
2)
An alternative approach would be to make it easier for people to buy insurance that isn’t tied to their employment. The existing tax break for employer-provided insurance could be replaced with a tax credit that applies to insurance purchased either inside or outside the workplace. At the same time, state mandates that require insurers to cover certain conditions, which make it expensive to offer individual policies, could be removed.
These two reforms would address most people’s anxieties about the health care system.
Not mine! My biggest anxiety is that when I need insurance I'll discover that my private insurance company has stuck in some fine print that cleverly gets them off the hook for paying to treat whatever condition I have. Ponnuru's system seems designed to maximize this anxiety, not eliminate it (since he specifically rejects the idea that the "government specify what constitutes adequate coverage.")
3)
The third complaint against free-market health insurance is that it wouldn’t cover absolutely everyone, because it would neither force people to buy insurance nor require the government to provide it. ... [snip]
For most people, though, especially those in the middle class, it would mean paying less for health insurance. Some people, of course, would still choose to go without it. But that would be their call, as it should be in a free country.
Their call? If they make their "call" against being covered, we aren't going to leave them bleeding on the sidewalk because they don't have insurance. We are going to give them medical care and pay for it ... somehow. Maybe, as Ponnuru claims, this "free rider" problem isn't as large in dollar terms as is generally assumed. But using the bracing language of liberty and individual responsibility seems inappropriate when the "choice" is really a choice to foist society with the cost. ... 1:33 A.M.
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All those broken windows were kind of cool ... The NYT celebrates the "golden, assaultive years" of subway graffiti. ... Doesn't the Times know that graffiti artists are "the performing spray can monkeys for gentrification?" ... 12:56 A.M.
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Fire Mickey Kaus misses joke! Hahahaha! Mickey Kaus one step ahead of Fire Mickey Kaus! Fire Fire Mickey Kaus! ... 12:43 A.M.
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Friday, April 10, 2009
Will Obama's New Legalization Push Screw American Workers? Or Has It Already Screwed Them? Both supporters and opponents of illegal immigrant legalization think trying to pass it "while the U.S. economy is mired in economic turmoil" might be difficult. The fear/expectation is that Americans will see the new law as a plan to allow foreigners who aren't supposed to be here to compete for the few jobs that are left, bidding down wages in the process. But here's the thing: Just by re-opening the legalization issue, without passing any new law, Obama has already encouraged foreigners who aren't supposed to be here to come and compete for the few jobs that are left, bidding down wages in the process. What better way to encourage more illegal immigration than by promising a possible amnesty in the next few years?
This incentive is especially strong, actually, if immigrants (not unreasonably) think it really will take years to write and enact a legalization bill. Suppose, for example, that Congress passes a bill in the late summer of 2010. There will be a cutoff, of course--if you entered the country illegally after a certain date, you wouldn't qualify for the amnesty. But what date? It if the bill doesn't pass until mid- 2010 there's a good chance that the cutoff date will be sometime around the end of 2009, if not later. (The last legalization plan, the "Z-Visa" debated in May of 2007, had a cutoff of January 1, 2007.). That means if you are now in Mexico or Central America and you can make it across the border in the next few months, you're likely to qualify for legalization. The longer Congress takes, of course, and the sooner you come, the better the chance you'll have of beating the cutoff. Obama might as well print up leaflets that say
LEGALIZATION IS COMING. GET ACROSS THE RIO GRANDE NOW IF YOU WANT TO TAKE ADVANTAGE OF THIS OFFER!
It's hard to believe Obama adviser Cecilia Munoz doesn't realize reopening the amnesty issue could have this effect.
In any case, low-wage American workers don't have to worry that Obama's immigration proposals might make it harder for them to feed their families. Obama already made it a bit harder to feed their families, yesterday, just by letting Munoz and others bring up the subject. The damage--at least some of it--has been done. The lowest-paid Americans can now expect more low-wage jobs to go to illegal immigrant workers attracted by the very prospect that illegal immigrant legalization will succeed. ...
P.S.: CNN reports--after taking to "two senior administration officials"--that
the Obama administration wants to remove incentives to enter the U.S. illegally
Um, the easiest way to do that would have been to not put out yesterday's story. ...
P.P.S.: Gibbs vs. Munoz ...
At Thursday's White House briefing, Press Secretary Robert Gibbs suggested the front-page Times story was a bit overplayed. "Most of what I read today one could have written a year or so ago, based on what he said on the campaign trail. He told groups through 2007 and 2008 that the process on immigration reform would begin during his first year in office," Gibbs said. "I don’t think that he expects that it’ll be done this year. ..."
[Thanks to alert reader P.]
Update: I'm not saying there's not a good chance of some form of legalization passing fairly soon. Sen. McCaskill of Missouri, previously a tough-on-immigration Dem, just announced she'd now "probably" vote for the so-called "DREAM Act," which would legalize illegals who entered the country before their 16th birthday and would have the effect of legalizing "25% of our total undocumented population," according to some proponents. (Do you think the government is going to deport the undocumented parents of the newly-legalized DREAM immigrants?) By some estimates, McCaskill could be the crucial 60th senator in favor of DREAM. ... The DREAM Act (2007 version, 2009 version) required that "the alien has been physically present in the United States for a continuous period of not less than 5 years immediately preceding the date of enactment"--a cutoff that would, in theory, eliminate the incentive of potential illegals to cross the border now with their children in order to have those children qualify (assuming it didn't take Congress five years to pass the law). But the prospect of DREAM's passage would discourage some illegal immigrants from returning home (which would breach the "continuous" presence requirement). Plus, there's always the possibility of the next DREAM Act, or DREAM Act extension, that would advance the cutoff date--why make a kid who's been here for only 4 years 'live in the shadows,' etc.. ... In any case, current administration talk hasn't been about the DREAM Act, but rather about a broader legalization program. ...[Correction: I've removed a sentence that ignored DREAM's five year cutoff.] ... [Thanks to reader J.].
Backfill: On the issue of whether talk of amnesty encourages more illegals to come, or to not leave, see this testimony and this report from the anti-legalization Center for Immigration Studies:
[T]he illegal immigrant population seems to have ticked up, grown somewhat if you will, during the debate over legalization or amnesty last year. And the figures show that after the amnesty failed, the numbers begin to fall pretty quickly.
1:42 A.M.
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Wednesday, April 8, 2009
Bwa-Ha ... Hmm. If shooting particles in the air can semipermanently change the climate of the entire planet ... well, in the hands of well-meaning people it would be a risky, last-ditch policy to combat global warming. In the hands of less benevolent people it could become a heavy duty terrorist weapon, no? ... If you have the missiles, is it that much easier to develop nukes? ... Backfill: The WSJ, which used Dr. Evil to illustrate its February piece on geoengineering, relies on a Foreign Affairs article ("Geoengineering is an option at the disposal of any reasonably advanced nation. A single country could deploy geoengineering systems from its own territory without consulting the rest of the planet ..."). ... Rand Simberg says you wouldn't use missiles. But of course if you can't wreak havoc with a single discrete act like a missile launch, the terrorism would seem difficult to pull off. If it takes a flotilla of planes operating around the clock for weeks, that operation could presumably be interrupted by military action. ...[Thanks to reader M.] 8:46 P.M.
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Why would you leave a recurring part on a hit TV show--a job you "loved" --to become a mid-level liaison official in the White House? Either you are crazy or you have huge political ambitions. Or both. ... 8:42 P.M.
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We Want Our Blogola And We Want It Now! According to Greg Sargent,
leading liberal bloggers are privately furious with the major progressive groups — and in some cases, the Democratic Party committees — for failing to spend money advertising on their sites, even as these groups constantly ask the bloggers for free assistance in driving their message.
Peter Bart of Variety had a solution for this problem! ... Update: It works for blogs too! ... 8:39 P.M.
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39,000 New Pentagon Civil Servants are to be hired in the next five years, according to Defense Sec. Gates' plan. Many would replace private contractors overseeing military acquisitions--allegedly on the theory that this will help prevent over-budget, under-performing weapons systems. But not all the new full-time civil servants will be in acquisitions. Reports WaPo:
Of the 13,000 private contractors to be replaced in the coming year, 2,500 of them would be in the acquisition workforce.
What about the other 10,500? ... Contractors can be fired, remember. Full-time civil servants are forever. Yet replacing the former with the latter seems to be a consistent theme of the new administration. Is this really Gates talking? Or is it Obama talking through Gates? Or is it AFSCME** talking through Obama through Gates? ... P.S.: The Post's ed board says "Democrats who say they support the president's expensive health-care and education programs" should support cuts in weapons systems that would free up money to pay for those programs. But, on the same grounds, shouldn't they also oppose permanent Pentagon bloat? ...
**--Or, when it comes to Pentagon workers, AFGE. ...12:42 A.M.
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The rehabilitation of Andrew Cuomo has been a heavy price to pay for the return of a few AIG bonuses. HuffPo's Thomas Edsall and Robert Dowling do their best to cut him back down, suggesting Cuomo may have tacitly approved, or at least enabled, the bonuses he later dramatically got returned. ... 12:24 A.M.
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'Employee Free Choice' Still on the Move! Yet another Democratic Senator, Michael Bennet of Colorado, declares "card check" unpassable. He also calls it an impediment to enacting health care reform--a potentially convenient "frame" for other wobbly Dems, Greg Sargent notes. ... P.S.: At some point doesn't the near-stampede of moderate Democrats to renounce the unions' top agenda item cut into labor's leverage when it comes to negotiating a compromise? Just asking! These Dems are defying labor. Are they paying a big price for it, or do they know labor needs them as much as they need labor? Lesson learned? ... P.P.S.: Didn't Robert Reich try to warn Andy Stern that this would happen? ... P.P.P.S.: Or is labor angling for a pity vote--they're about to be so humiliated, Dems will have to do something to help them? ... Update: Udall and Warner (!) seem to say they will vote for cloture. Of course, that's a bit of a 'free' vote now since cloture on the full-strength bill seems unlikely to get the necessary 60 votes (or even come up). Still, it makes it less of a stampede. ... Campaign Diaries' headcount seems a bit Ambinderesque--that is, optimistic, from labor's point of view. If they can get Feinstein and Bennet on cloture, then they only need two out of five other senators who "oppose the current version but haven't closed the door to compromise." Why would a senator 'close the door to compromise'? The question's still "which compromise?" ... 12:03 A.M.
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Tuesday, April 7, 2009
60 in two? Really? Jennifer Rubin (citing Jay Newton-Small): Are we sure 2010 is a year for Dem Senate pickups? ... 11:40 P.M.
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Variety Was His Blog: Amy Wallace, whose 2001 profile of Peter Bart in Los Angeles Magazine became the sort of "industry" sensation the L.A. Times seems to never achieve, jumps in on Bart's upstairs-kicking with a juicy lunch anecdote (see end of page 1) that demonstrates why Bart had no business running Variety.. ... P.S.: It's another question whether a man who's a bag of conflicts and biases--and who gives them free range in his writing--should be covering anything anywhere. The answer is of course he should. But those ethics aren't the ethics of a man running a large conventional reporting staff. They're the ethics of a blogger. In the coming days it will probably become a cliche to suggest that Bart's Variety was been done in by lone Web operators like Nikki Finke. But Bart actually had more in common with Finke (who also doesn't seem to keep her ad hominem impulses from shaping her reporting) than you might think. ... [Via L.A. Observed] 11:38 P.M.
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Monday, April 6, 2009
Are Cuba's Communist leaders eager to see the U.S. embargo end (as Marc Thiessen suggests) or terrified at the prospect (because it would unleash forces they can't control)? In 2003, Ann Louise Bardach noted that every time relations with Cuba seemed to be easing, Fidel Castro did something calculated to ratchet the tension back up:
Consider what happened in 1996, after the Clinton administration and Cuba had settled on migration and drug interdiction accords.
Castro (after months of warnings) shot down two planes operated by the exile group Brothers to the Rescue, killing four people.
The upshot was the signing of the Helms-Burton Act, which significantly tightened the embargo and codified it into U.S. law.
Did Castro know this would be the result? Of course he did.
In 1980, president Jimmy Carter re-opened the U.S. Interests Sections in Havana as a de facto embassy. Castro responded by sending 125,000 refugees to Florida in the Mariel boatlift.
In the mid-1970s, in a remarkable and audacious act of diplomacy, then-state secretary Henry Kissinger and his assistant, William Rogers, conducted secret negotiations with the Cuban government on ending the embargo. Just as they believed they were closing in on a deal, Castro sent troops into Angola - scuttling the talks.
And gee, now that President Obama is preparing to lift family travel and remittance restrictions--and there's talk of lifting the entire travel ban--we hear about plans for Cuba to host Russian bombers, while Raul Castro conducts a dramatic, power-centralizing purge. But those surprises don't seem to have derailed the anti-embargo plans. If Bardach's theory holds, then, shouldn't we expect something even worse from Raul, and soon, no? .... 8:33 P.M.
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Huh? Ruben Navarette, explaining why "comprehensive immigration reform" failed, goes for the symmetrical condemnation prized by editorialists:
We learned that immigrant advocacy groups wanted an unconditional path to legalization for the undocumented, but that law and order conservatives would object to what they call amnesty. Although we need a new round of tougher and easier-to-enforce employer sanctions, it seems only right that they be accompanied by a tamper-proof identification card so employers know who is legally eligible to work. Conservatives fought the sanctions while liberals fought the ID card. In the end, we were back at square one.
Conservatives fought the sanctions? Not the conservatives I'm aware of. Certainly not the "law and order" conservatives who opposed "what they call amnesty." ... 7:43 P.M.
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"Employee Free Choice On the Move" Part XVIII! Democratic Sen. Blanche Lincoln comes out against cloture for card check "in its current form." ... Again, it's not clear that "card check" has even 50 Senate votes at this point, let alone 60. ... 7:41 P.M.
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Left out of the Tom Braden obits: Braden was a California newspaper editor when (according to Braden) future Senator Alan Cranston personally showed him compromising photos of an opponent. "I thought it was pretty shoddy business. It certainly changed my opinion of [Cranston]," Braden said (as first reported by Carl Cannon). Cranston denied the charge. I believe Braden. ... 1:25 A.M.
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First Thought Not Best Thought: "Sniggered"? You make the call! One virtue of bloggingheads is that you are often relaxed enough to think out loud. The problem is that you are often relaxed enough to think out loud. I apologize to Althouse. But I do think I would have said the same dumb thing about a man. ... 1:10 A.M.
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kf Goes Green: The Obama aide disclosure that shocked me wasn't Lawrence Summers making $5 million at a hedge fund, but Tom Donilon "earning $3.9 million as a partner at the Washington law firm O’Melveny & Myers." ... Summers is a big-time economist, advising people with lots of money at stake on questions that involve, you know, equations. He had to "solve math puzzles" to get hired! I'd expect him to be expensive. But Donilon's just a political Washington lawyer. He makes almost $4M? Wow. I didn't know I'd fallen so far behind. Somebody really ought to do something about the growing income inequality in our society. 12:07 A.M.
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Sunday, April 5, 2009
Selena Zito argues "[c]ard-check is dead"--at least for now--but points to the much-discussed "Plan B" compromise that would drop the two most significant parts of the "card check" bill (circumventing secret ballots, mandatory arbitration) and focus on
tougher penalties on businesses for unfair or punitive labor practices, a quicker way to enforce those, and equal access to all employees during non-working hours for campaigning purposes.
OK. But what's in it for the GOP and business? Well, if the Democrats get more Senate seats in 2010 they might be able to pass the undiluted, original "card check" law. Zito says the anti-card check forces
may - and this is a big "may" - want to try to secure some reasonable compromise while they still have some leverage.
Jennifer Rubin notes the conspicuous fatal flaw in this line of analysis--as if labor is going to pass up the chance to enact full-strength card check in 2011 if they have the votes. There's nothing in a "Plan B" compromise for business. The problem is that there might be something in it for a couple of Republican Senators. Politicians don't like to leave any big interest group such as labor completely emptyhanded (and therefore angry). If 60 senators go for Plan B, it's on, whether business likes it or not.
What anti-card check lobby (including but not limited to business) badly needs now, you'd think, is an offensive weapon or two. What reforms might they want? Tougher investigtations of union corruption? Or a "level playing field" that would allow employers to contact workers outside of work (if unions are to get 'equal access" at work)? Or an "free employer speech" clause that would let managment frankly warn that if a given plant is unionized it might be shut down--as long as the warning is truthful? Or a provision that allows management to give raises--rebuild the middle class!--in the runup to a unionization vote? Business could present these changes--Plan C--in a calm, even-handed manner--e.g., "If there are bad actors that fire union organizers and stall elections, we're willing to increase penalties. At the same time, let's give employers the same rights as union organizers when it comes to making their case. And let's let workers extract higher wages without the bureaucracy and inflexible legalism of Detroit-style union rules--that's the best of both worlds. As for corrupt labor officials ..." The idea would be to avoid coming across as anti-union, while at the same time threatening to rob labor of all the net advantages a "Plan B" compromise might bring. That's leverage. .. 12:07 A.M.
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Friday, April 3, 2009
Undernews Alert: Big-Story-If-True Division: 1) The NYT-ACORN "game changer" story [Now on O'Reilly-ed And even Hot Air isn't quite convinced. Update: More here.]. ... I note that the reasons reporters give to sources for killing a story sometimes play to the sources' preexisting beliefs about press bias, and those reasons are sometimes not the real reasons the story was dropped. (It's easier to say "my editors are such Democrats" than "I'm not sure I believe you"). But would I be shocked if the Times chose not to pursue a story that might have damaged Obama? No. The allegation resonates with the Raines/Torricelli spike incident. ... 2) Are there "side letters" proving "that AIG never intended to pay out on any of its [credit default swap] contracts"? ... 2:34 P.M.
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When will elite right-wing opposition to the war in Afghanistan emerge in public? It's out there. ... Watch for the 'Bush avoided escalating this war because he knew it was a quagmire' meme. ... 2:33 P.M.
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Thursday, April 2, 2009
Alert emailer J. makes a basic point about JournoList much more clearly than I did:
I also have a vague dislike for the practice you describe. But my problem is that I also have a vague feeling that I can identify what about it really gets you down even though I don't think you have said this yourself ... [snip] ... Here goes:
1. A problem with the MSM is that they are innately compromised by being large organizations. A stock character in literature is the newspaper reporter who can't print all that he knows because the publisher owes things to advertisers, it's bad politics, there's a risk of vehement complaints from the public, etc. Moreover, we have all met reporters who fascinated us by saying things like, "Here's how it really is . . . ," and if you ask why they don't say that in print, they give a lot of answers that are not satisfying. Now the excuse for this always was that a successful newspaper or radio or TV network of necessity had to be a large organization, simply to get heard. A guy with a mimeograph machine in his bedroom can't do that, (except that I. F. Stone did it). This led to a widespread feeling that what a consumer of news got was a sort of second-order reality, the filtered and compromised version. The better the news organization, one hoped, the less the filtering or compromise, but there was no way to eliminate it. This was evil but a necessary evil.
2. That led to the feeling, too, that there was a first order of reality, which was what the reporters said among themselves. But only the informed elite had access to that.
3. Where this is going is obvious. With the Internet, we have thought, it is possible to get an audience without the gargantuan investment in printing presses, broadcast licenses or equipment, or the need to hire a large reporting staff so you can cover the broad range of topics necessary to sell a news product, attract advertisers, and so on. You just need a computer and time. This means no compromises in what is said, no filtering into a second order of reality, and direct address to the readership: exactly what you, the blogger, think is what I, the reader, get. This is not to say you have all the advantages of a newspaper, because you don't. But you can address the public without having the newspaper's disadvantages.
4. Against this background, JournoList is a very disappointing and sort of unsettling development. Just the existence of the list and the fact that broadscale discussions go on inside it suggests that these liberal voices are deliberately and unnecessarily recreating one of the chief disadvantages of the MSM. The suggestion that they have things to discuss privately about what they are doing (I assume they are using the list to discuss "journalism", not which movies to see, books to read, or recipes to cook), re-creates the idea that that, rather than what their consumers see, is the first order of reality. This seems to break one of the promises of, or hopes for, the Internet. It also suggests that these journalists rather liked the cage that their MSM ilk used to be in, because these present day guys are recreating that for themselves. That's a very disappointing discovery also because it diminishes them as people.
5. Robert Wright was correct to say that this sort of thing has been going on for a long time, but the response to that is that this time it was supposed to be different -- and that, indeed, Bloggingheads is supposed to be as close as you can get to being admitted into Frankfurter's[**] living room . ... There is also nothing whatever wrong with meeting in secret in some instances -- it is highly unlikely that we would have a Constitution resembling the masterwork we have if the boys had had to meet in public, and there are plenty of other examples. But because the whole point of journalism is to inform people, the suggestion that its substance ought to be dealt with in sessions that exclude those to be informed is by its nature troubling.
**--I had compared JournoList to the young Felix Frankfurter's "House of Truth"--a good career move for Frankfurter.
Last word on JList? Chris Lehmann ... 12:40 A.M.
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Wednesday, April 1, 2009
Making this obvious joke (about how to balance the budget) ...In the future, everyone will be secretary of Health and Human Services for 15 minutes. ... 6:15 P.M..
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Pointing out that Homeland Security secretary Janet Napolitano has made the sort of mindless PC-trumps-common sense statement that gives Democrats a bad name--calling for "parity" in security on the Mexican and Canadian borders:
"We shouldn't go light on one and heavy on the other," she said of the Canadian and Mexican borders.
"This is one NAFTA, one area, one continent, and there should be parity there."
That's because of the vicious Canadian drug gangs now threatening to take over Vancouver. ... Or is it bootleg CuddleCore CDs? ... Update: An alert reader emails to note that drug-gang violence is erupting in Vancouver, although on nothing like Mexico's scale. ... 6:08 P.M.
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Tedisco--the Republican--will win that New York special election on the absentee vote, no? Nate Silver is ducking .... Maybe there'll be a write-in surge for Taraji P. Henson! Ha ha ha ha. ...6:02 P.M.
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