Kevin Drum

There Are Limits to Hardball

| Sat Jan. 19, 2013 8:26 AM PST

House Republicans have apparently agreed to raise the debt ceiling for three months, and liberals are widely declaring victory. I'd advise caution on two grounds. First, we haven't yet seen the actual proposal, so we don't know if they're offering a clean bill or one with obnoxious conditions. Second, is three months really that big a victory? Jaime Fuller, echoing many others, writes:

There's a lesson for the White House: Hardball works. Unlike in previous crises, President Obama didn't try to make a bunch of pre-concessions in the hope that Republicans would moderate their position. He simply told them that the debt ceiling wasn't up for negotiation. It just had to be raised, and that was all there was to it. And what do you know, he won. For three months at least. Then we get to do it all over again.

I don't entirely disagree with this, and I'm certainly in favor of Obama adopting a more tough-minded negotiating posture. Still I'm not sure that "hardball works" is really the lesson to be learned here. I think the lesson is that hardball works if your opponents have a weak hand. In the case of the fiscal cliff, taxes were going to go up automatically if Republicans refused to make a deal. Their hand was disastrously weak. In the case of the debt ceiling, the business community told them in no uncertain terms that playing games with the full faith and credit of the United States government would be catastrophic. Republicans knew this was true, and they knew they'd be blamed for it. They had no way out.

In both cases, Obama could have blown it. He could have failed to recognize the strength of his own position and made preemptive compromises. It's to his credit that he didn't. Still, to say that hardball won these arguments misses a big piece of the story. Whether it works in the future will depend a lot on how weak the Republican position is. It's not a cure-all.

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Friday Cat Blogging - 18 January 2013

—By Kevin Drum

| Fri Jan. 18, 2013 11:53 AM PST

This week's set decoration idea comes from my sister (aka Inkblot's Aunt, in comments). Get a box, she said, put a quilt in the box, and then put the cat in the box. Or, better yet, just wait for the cat to hop into the box on her own. After all, a cat in a box is a timeless theme of catblogging, no?

We did this outdoors because our recent cold snap turned into a warm spell this week, so Domino was already outside sunning herself when I hauled out my camera. Besides, the light is better. This week features a second iteration of the Yellow Brick Road quilt design, which you can compare to last week's version here. It's machine pieced and machine quilted.

The Case Against (Temporarily) Abolishing Taxes

—By Kevin Drum

| Fri Jan. 18, 2013 11:06 AM PST

Matt Yglesias argues that since the federal government can borrow money at negative interest rates, it should borrow instead of taxing:

You're the mayor of a city. A storm strikes and ruins a whole bunch of your police cars. Now you need to buy new ones. You have two options for paying for the cars—you can borrow the money and pay the bill ten years from now, or you can raise taxes and pay right now. The case for paying later is pretty clear. In ten years' time your city's overall economic output will be higher so the burden of paying off the loan then will be lessened. On the other hand, the case for paying now is also pretty clear—lenders generally expect interest payments in exchange for their loans so the total cost of the debt option is higher. But wait! The city's accountants show up and point out that it's currently possible for the city to borrow at a negative real rate. Suddenly the interest costs are off the table as a reason to prefer paying sooner.

So what's left? Nothing. The city will be richer in ten years, so pay then. The logic becomes especially compelling when you recognize that the city's income will grow more rapidly under the lower-tax regime that encourages more investment in residential and commercial property and more business activity.

This is true. We should be borrowing more now, when interest rates are negative, and taxing less, since that slows down an already fragile economy.

However, this was written in the context of replying to a critic who thought it was crazy to suggest that we simply not tax at all. But the critic is right. The financial case for borrowing 100% of our budget might be sound, but the political economy case isn't.

One of the fundamental reasons for taxation is that it provides a constraint on democratic governments. If you want to appropriate a certain amount of the productive capacity of the country, you need to get permission from the citizens of the country, and you need to make that permission painful in some way. Otherwise the government will seize an ever bigger portion of the economy essentially by stealth. This is bad juju.

Borrowing is simply too easy. Politicians will always be attracted to it, because the money doesn't have to paid back until they're long out of office. This is one reason that so many states have burgeoning pension problems: politicians would rather hand out pension increases than pay increases, because the pension increases don't come due until they're long gone. Pay hikes, by contrast, require them to either raise taxes or else cut back on other spending.

But that kind of pain is useful. Societies do have to make tradeoffs, and human nature being what it is, those tradeoffs will only be made if the costs are fairly clear and fairly sharp. That's why maintaining the discipline of taxation is important even when borrowing costs are low.

Let's Get One Thing Straight: It's Republicans Who Are Picking Fights, Not President Obama

—By Kevin Drum

| Fri Jan. 18, 2013 9:45 AM PST

David Brooks is worried that Democrats, sensing weakness, will spend the next four years trying to divide and destroy the Republican Party:

He’s already started with a perfectly designed gun control package, inviting a long battle with the N.R.A. over background checks and magazine clips. That will divide the gun lobby from suburbanites. Then he can re-introduce Bush’s comprehensive immigration reform. That will divide the anti-immigration groups from the business groups (conventional wisdom underestimates how hard it is going to be for Republicans to back comprehensive reforms).

Then he could invite a series of confrontations with Republicans over things like the debt ceiling — make them look like wackos willing to endanger the entire global economy. Along the way, he could highlight women’s issues, social mobility issues (student loans, community college funding) and pick fights on compassion issues, (hurricane relief) — promoting any small, popular spending programs that Republicans will oppose.

Politics is everywhere, and I don't doubt that Democrats would like to take advantage of Republican divisions. What party wouldn't? But look: if one party is dominated by a bunch of loons who make every political skirmish into a sign of the apocalypse, you really can't blame the other side for exposing this. What choice do they have?

Take cabinet appointments, for example. President Obama obviously wanted Susan Rice to be his secretary of state, and spent several weeks in an effort to win over Republicans. But it was impossible. She was a perfectly mainstream choice, but for obviously crackpot reasons Republicans insisted that if she were nominated they'd turn the confirmation process into a scorched-earth battle. And in the end they got their scalp: Obama backed down and nominated John Kerry instead.

And what did that get him? Nada. The fight immediately turned to Chuck Hagel and then Jack Lew. These are both pretty standard mainstream candidates too, but we were nonetheless told repeatedly that Obama knew they were plainly unacceptable and was just trying to pick a fight.

So what's he supposed to do? After winning reelection handily, is he supposed to agree that he won't nominate anyone to serve in his cabinet who isn't pre-approved by the most hardcore members of the opposition party? Of course not. That's crazy. Hagel and Lew are perfectly ordinary nominees, and Obama wasn't picking a fight with anyone by selecting them. He was just nominating people who agree with his policy positions. It was Republicans who insisted on turning this into a mortal insult.

The same is true for Brooks's examples. It's Republicans who picked a fight over the debt ceiling that makes them look like wackos. It's Republicans who picked a fight over hurricane relief, earning the ire of Chris Christie and other members of their own party. (What was Obama supposed to do? Not propose any hurricane relief?) Ditto for gun regulations, where it's the NRA taking an absolutist position, not the president. Obama is plainly willing to compromise here, just as he's plainly willing to compromise over the budget. It's Republicans who aren't.

Brooks thinks Democrats should skip this stuff entirely. Not propose any significant legislation at all. Hell, the GOP is apparently so fragile that he's not even supposed to propose small stuff that might be popular (!) because it would do damage to a Republican party held hostage by—what was Michael Gerson's phrase? Oh yes: the "momentum of their ideology," which, like the law of gravity, literally forces Republicans to oppose even small, sensible spending programs.

This is crazy. You can't expect a president to back down on everything simply because the opposition party is in thrall to a bunch of fanatics who will interpret any action at all as a step on the road to tyranny or financial ruin. You have to try to get things done anyway. And along the way, if that exposes the fanatic faction as a millstone that needs to be dealt with, isn't that all to the good? After all, Brooks plainly has no sympathy for the tea party wing of the GOP. How else does he expect their influence to wane except by exposing their crackpottery to public view?

UPDATE: Jon Chait writes pretty much the same thing here, but better than me.

My Modest Proposal to Solve the Debt Ceiling Fight

—By Kevin Drum

| Fri Jan. 18, 2013 8:07 AM PST

National Journal reports:

Republicans appear to be willing to avoid a showdown over the debt limit and instead use the sequester as their main negotiating lever in upcoming fiscal fights with the White House and Senate Democrats.

House Budget Committee Chairman Paul Ryan, R-Wis., said Republicans at a closed-door retreat in Williamsburg were weighing a short-term increase in the country’s borrowing limit, giving all sides time to work on a broader fiscal plan in March that would include substantial spending cuts.

I'm not a conservative, so I can't pretend to have their best interests at heart. But it sure seems to me that their best bet right now is to unpaint themselves from their corner and make sure they never go back. The last thing they should do is approve a short-term increase in the debt ceiling and then have this same, self-defeating argument all over again in March.

Here's my suggestion: pass a law that gives the president the ability to raise the debt ceiling on his own, but put some limits on it. Every month the Treasury has to release a statement showing how much we've spent, how much tax revenue we took in, projected bond sales over the next month, and the amount the debt ceiling needs to be increased. The statement has to be signed by the president of the United States.

This gets Republicans off the hook from ever having to play a hostage game they can't win, but it forces the president to put his name to a monthly statement showing just how rapidly he's building up debt and turning America into the next Greece. It would be harmless campaign fodder for 2014 (good for Republicans), and would also prevent any further market-panicking showdowns (also good for Republicans). As a bonus, it would also be good for the country. What's not to like?

I Think the Media Gets a Pass on the Manti Te'o Hoax

—By Kevin Drum

| Thu Jan. 17, 2013 3:47 PM PST

The sports world is all atwitter over the revelation that Manti Te'o's girlfriend, Lennay Kekua, has turned out to be a hoax. The two didn't meet after Notre Dame lost to Stanford in 2009, they didn't get together occasionally when Kekua visited Hawaii, and Kekua didn't die of leukemia the same week as Te'o's grandmother. She never even existed.

There are, needless to say, questions galore about this, and I look forward to the media frenzy over it. But this I don't really get:

The revelation that Kekua had never actually lived, let alone died, has stunned a nation and a sporting press that had blithely reported details of their relationship for months on end. Many are now angry at the media. "Nobody asked: who is she? Where did she live? Not one reporter dug deep. The lack of legwork is a total surprise to me," said Frank Shorr, a sports and journalism expert at Boston University.

Well....OK. But come on. Reporters don't go into cynical investigative mode when a football player tells sappy stories about his girlfriend. Why would they? Not only would it be kind of creepy, but there's simply no reason to suspect any kind of foul play. I mean, who lies about stuff like this? Nobody. So why would anyone ever be skeptical enough to start digging into it? This is a football player's girlfriend, not the president of the United States saying he had nothing to do with that botched burglary over at the Watergate.

I think the press gets a pass on this. You'd have to be a little deranged to think about investigating something like this. It's not even slightly surprising to me that no one ever did.

UPDATE: Hmmm. More here from SI's Pete Thamel, who wrote a cover story about Te'o on short deadline a few months ago. I'm not sure whether this changes my mind or confirms it. Either way, this is one damn peculiar story.

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Gun Owners Can't Handle the Truth

—By Kevin Drum

| Thu Jan. 17, 2013 10:30 AM PST

There's only one reason to fight the very idea of doing research in a particular field: because you're afraid of what the truth might turn out to be. Brad Plumer has more.

Aaron Swartz Case Is About a Lot More Than Just Aaron Swartz

—By Kevin Drum

| Thu Jan. 17, 2013 9:34 AM PST

I haven't said anything yet about the Aaron Swartz case because I wasn't sure I had anything much to say that hadn't already been said better by others. But Orin Kerr has written a couple of lengthy posts about the case over at the Volokh Conspiracy, and I think he makes an important point about the accusation that federal prosecutors basically hounded Swartz to his death:

I think it’s important to realize that what happened in the Swartz case happens in lots and lots of federal criminal cases. Yes, the prosecutors tried to force a plea deal by scaring the defendant with arguments that he would be locked away for a long time if he was convicted at trial. Yes, the prosecutors filed a superseding indictment designed to scare Swartz evem more in to pleading guilty (it actually had no effect on the likely sentence, but it’s a powerful scare tactic). Yes, the prosecutors insisted on jail time and a felony conviction as part of a plea.
But it is not particularly surprising for federal prosecutors to use those tactics. What’s unusual about the Swartz case is that it involved a highly charismatic defendant with very powerful friends in a position to object to these common practices. That’s not to excuse what happened, but rather to direct the energy that is angry about what happened. If you want to end these tactics, don’t just complain about the Swartz case. Don’t just complain when the defendant happens to be a brilliant guy who went to Stanford and hangs out with Larry Lessig. Instead, complain that this is business as usual in federal criminal cases around the country — mostly with defendants who no one has ever heard of and who get locked up for years without anyone else much caring.

I don't know what the answer is here. I think a lot of us have an intuition that hardball tactics are probably defensible when you're dealing with Tony Soprano, but not so much when you're dealing with a guy whose only crime was to download a bunch of academic research as an act of civil disobedience. But how do you make that distinction in a way that's workable, and in a way that's enforceable?

I'll leave that to others, for now, because I simply don't have the legal chops to address it. But I agree with Kerr: the problem here isn't Aaron Swartz. The problem is with all the other people you've never heard of because they aren't Aaron Swartz.

Why Climate Change Legislation Failed -- And What to Do About It

—By Kevin Drum

| Thu Jan. 17, 2013 9:15 AM PST

Theda Skocpol has written an immense study of why the 2010 climate bill failed. I haven't read it yet, but Brad Plumer talked to her yesterday and got the nutshell version: climate hawks had a really bad legislative strategy:

BP: So around 2007, Republicans were becoming more skeptical of climate policy. Yet the main climate strategy in D.C. was to craft a complex cap-and-trade bill amenable to businesses like BP and DuPont in the hopes that those companies would bring in Republican votes.
TS: I think a lot of environmental groups were under the impression that the Republican Party is a creature of business, and that if you can make business allies, you can get Republicans to do something. But I don’t think the Republican Party right now is mainly influenced by business. In the House in particular, ideological groups and grassroots pressure are much more influential. And in the research we’ve done, the two big issues that really revved up primary voters were immigration and the EPA.
BP: So environmental groups weren't quite ready for Republican resistance. But then why did health care succeed when cap-and-trade failed? What was the difference?
TS: The two groups had slightly different strategies going into 2009. Health care reformers were thinking about how to build support among Democrats while many environmentalists were focused on reaching out to Republicans.

I think everyone agrees that there were lots of reasons that cap-and-trade failed. Still, I'd say the basic reason is the most fundamental one: the votes just weren't there, and nothing could have changed that. Sure, reaching out to Republicans was probably a doomed strategy, but what choice was there? You need at least a few Republican votes to break a filibuster in the Senate. Likewise, maybe Obama could have handled things better, but what did he have to offer skeptical senators in return for their votes? Not much. Unlike healthcare reform, where you could essentially buy off the opposition, there are big costs to cap-and-trade for certain states and senators simply aren't going to ignore that.

All this is pretty obvious, but I'd add one more thing: Democrats have been trying to pass some form of national healthcare for nearly a century. They failed half a dozen times before finally passing Obamacare by the skin of their teeth. Deep in their bones, they knew how hard it was to pass something like this; they knew how badly they wanted it; and they knew they wouldn't get another chance for a very long time. So, finally, after a hundred years, they stuck together just long enough to pass a bill.

Climate change doesn't have that history. It hasn't yet been bred into Democratic DNA and it hasn't yet failed enough times to make it clear to everyone just how hard it is and just what kind of infuriating compromises it takes to finally pass something. The unfortunate truth is that for something this big, you have to fail a few times before you can succeed.

The problem, of course, is that we don't have time for several decades of failure before finally doing something serious about climate change. This means that the usual legislative process might simply be unworkable as a way of limiting carbon emissions. The climate community may have to get a bit more direct about things if they want to make progress before the planet gets baked to a cinder.

Quote of the Day: Bill? What Bill?

—By Kevin Drum

| Thu Jan. 17, 2013 7:52 AM PST

From Florida governor Rick Scott, explaining the virgin birth of the law that turned Election Day into chaos in his state:

It was not my bill....I didn't have anything to do with passing it.

It's true that Scott signed the bill mighty quietly, but sign the bill he did. And he defended it tooth and nail after that. But I guess sometimes the buck doesn't stop at the top after all.