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October 2005

A Case of the Vapours! A Pot Roast!

Kieran Healy leads us on a tour of the... "mind" of Leon Kass. It's really ugly in there: this is a guy who sees effective female contraception as the root of evil.

This is a guy whom George W. Bush goes to for moral philosophy and bioethics:

Ye Ladies of Easy Leisure: [V]ia Lawyers, Guns and Money here is Leon Kass—Addie Clark Harding Professor in the Committee on Social Thought and The College at the University of Chicago, and Chairman of the President’s Commission on Bioethics—in the first of a three-part series on what’s really wrong with America:

Today, there are no socially prescribed forms of conduct that help guide young men and women in the direction of matrimony... most young women strike me as sad, lonely, and confused.... Here is a (partial) list of the recent changes that hamper courtship and marriage: the sexual revolution, made possible especially by effective female contraception; the ideology of feminism and the changing educational and occupational status of women; the destigmatization of bastardy, divorce, infidelity, and abortion; the general erosion of shame and awe regarding sexual matters... widespread morally neutral sex education in schools; the explosive increase in the numbers of young people whose parents have been divorced... great increases in geographic mobility, with a resulting loosening of ties to place and extended family of origin...

Now that’s more like it. The end of bastardy! The rise of female contraception! Divorce! Sex education! Cars!... If you think society is being dragged to perdition by a bunch of car-owning, pill-popping, body-piercing, career-oriented, degree-granted, sexually confident, frequent-flyer, atheistic sluts then just come out and say it.

And the best part is, Leon is just warming up. He continues:

The change most immediately devastating for wooing is probably the sexual revolution. For why would a man court a woman for marriage when she may be sexually enjoyed, and regularly, without it?

Well, it’s not as if I’m going to make my own pot roast, now is it?

Many, perhaps even most, men in earlier times avidly sought sexual pleasure prior to and outside of marriage. But they usually distinguished, as did the culture generally, between women one fooled around with and women one married, between a woman of easy virtue and a woman of virtue simply. Only respectable women were respected; one no more wanted a loose woman for one’s partner than for one’s mother.

Those were the days. Men could be men, and women could be modest—except for the ladies of easy leisure, who were available for extramarital sex, backalley abortions, syphilis, etc.

The supreme virtue of the virtuous woman was modesty, a form of sexual self-control, manifested not only in chastity but in decorous dress and manner, speech and deed, and in reticence in the display of her well-banked affections. A virtue... a source of attraction and a spur to manly ardor, a guard against a woman’s own desires, as well as a defense against unworthy suitors. A fine woman understood that giving her body (in earlier times, even her kiss) meant giving her heart, which was too precious to be bestowed on anyone who would not... pledge himself in marriage.... Once female modesty became a first casualty of the sexual revolution, even women eager for marriage lost their greatest power to hold and to discipline their prospective mates.

Because of course being subordinated in this manner, and having all of the negative consequences of sexual activity fall entirely upon you, and living under an all-pervasive double standard is of course the greatest kind of power that anyone can have. It’s like, Inter-Continental Ballistic Modesty! Men wish they had that kind of power. But, alas, we are weak beings:

For it is a woman’s refusal of sexual importunings, coupled with hints or promises of later gratification, that is generally a necessary condition of transforming a man’s lust into love.

In fact, we are so weak that even our self-control is entirely your responsibility.

Women also lost the capacity to discover their own genuine longings and best interests.

See above re: pot roast. Also Valium.

Apparently this is the first of a three-part series. You know, the sad thing about this sort of thing is that the entry of women into college and the workforce since 1945, the sexual revolution, and the increase of geographical mobility really are huge social changes. They really have had tremendous consequences of all kinds for individuals, families and whole societies. Entire branches of social science are given over to trying to understand them. Leon Kass’s horror at the way the world has turned out is unsurprising. His desire to return to some kind of Victorian nightmare is just about understandable. But it’s bad sociology and it’s appalling moral philosophy as well.

Not to mention that reliable sources four doors to the west of my office assure me that, in addition to her many other excellences, Laurie makes a mean pot roast.

And I cannot help feeling saddest of all for Leon Kass's wife, Amy Apfel Kass: what can you say about a husband who tells the world: "No way I would have married her if she had 'come across' before the ceremony"?

For Harriet Miers

I'm going to come out in favor of the U.S. Senate advising and consenting to the nomination of Harriet Miers to be a Justice of the United States Supreme Court.

She is a hard working, intelligent, savvy lawyer with a strange fixation on George W. Bush. She has had the experience of making her way as a career woman in late-twentieth century America, which cannot help but have given her a considerable education in what's what and where's where. Back her up with good, moderate clerks and she will do fine.

She will be, I think, likely to be vastly better as a judge than the alternative--which is some "originalist" who doesn't get that James Madison wrote:

The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

because he didn't want any judges, ever, anywhere in the United States to argue: "You don't have that right because you can't show it to me written down in the Constitution."

Clone High!

My cousin Philip Lord's short-lived series, "Clone High", is currently #7 in DVDs with a five-star rating on Amazon-Canada (it's not released in the U.S. yet). It's become a cult classic! See

It has an extraordinary number of extremely funny and tasteless moments.

Plus, where else in the world can you watch Marilyn Manson sing about the importance of eating right and following the USDA food pyramid? And see photographs of Phil's and my grandfather--William Walcott Lord--batting for Harvard in the 1920s?

"Rumsfeld Is Quite Mad, and Cheney a Dangerous, Vindictive Monomaniac"

The "Republican Wisemen"--whoever they are, are shrill!

This is what Chris Nelson says the Republican wisemen think: they don't have "much trust or respect for Rice, and they share... the conviction that Rumsfeld is quite literally mad, and Cheney a dangerous, vindictive monomaniac."

The Washington Note Archives: The Nelson Report, 20 October 2005: POWELL AIDE NUKES CONDI/RUMMY/CHENEY: SPEAKING FOR POWELL? NOT EXACTLY. . .BUT. . . SUMMARY: Bearing in mind Oscar Wilde's advice that "revenge is a dish best eaten cold", how does one grasp the intention of former Colin Powell aide, Col. Lawrence Wilkerson's highly emotional, if fact-based and personal eye-witness account of the massive, collective failures and misdeeds of Condi Rice, Dick Cheney, Don Rumsfeld. . .and the current President Bush? (see link to full transcript below. . .)

Either first hand at The New America Foundation, or vicariously, courtesy of the Financial Times and IPS, Washington types watched this latest example of Republican auto-genocide with the delighted, if slightly stunned expressions of a pack of hyenas on the receiving end of fresh elephant, with no lions in sight. But what they wanted to know was "Is Wilkerson speaking directly for Powell and Armitage?"

The answer: not exactly. On the one hand, there is no question from private remarks and public grimaces, some reaching back to early 2001, neither Powell nor Armitage had or has much trust or respect for Rice, and they share with other senior Republican wisemen the conviction that Rumsfeld is quite literally mad, and Cheney a dangerous, vindictive monomaniac.

On the other hand, such views are normally dispensed as pearls before very closed groups of friends and retainers, often with the intent that rumors, if not full quotes, reach the ears of eager ink-stained wretches of the press, so that the Powell/Armitage reputation for speaking truth about power remains unsullied, and hopefully well-represented in the history books.

Just how brave they were up-front, in the face of the misdeeds of Rummy/Cheney/Rice being decried, is a question on which the history books may be slightly less generous than the daily press, but that's not our topic for tonight. . .except to note Wilkerson's stunning frankness in stressing the obstacles placed in the Powell/Armitage path directly by Rumsfeld/Cheney, or indirectly, through Rice's failure to perform the intended function of a National Security Advisor.

Implicitly, President Bush must be faulted for not seeing how he was being manipulated by Rumsfeld/Cheney. We noted in a Report several years ago an eye-witness account of Cabinet meetings discussing Iraq WMD which confirms the picture painted yesterday by Wilkerson: the gist of our quote was that "Rummy and Cheney spend their time spinning-up Bush, while Condi sits there saying nothing, leaving Powell totally isolated and ineffective." This was from a then-DOD source, we should add.

Back to Wilkerson: a careful read of the full transcript shows that he spent most of the time in a calm, if impassioned examination of how the national security function is supposed to work, both according to the 1947 law establishing the modern structures of power, and the practice of successful NSC's and good "foreign policy presidents".

Wilkerson and Powell worked for GHW Bush, and Wilkerson is unstinting in his praise of Poppa. And it must be noted that for all of his harsh words about the current President Bush's foreign policy operation, Wilkerson gives credit to Bush for taking a strong stand (by implication against Cheney and Rumsfeld) on not having a war with N. Korea. And he is complimentary of Rice as Secretary of State, crediting her successes to her strong personal relations with Bush. . . in fatal contrast to the Powell/Bush dysfunction.

But he blasts Bush for "cowboyism" for the disastrous treatment of Nobel Peace Prize winner Kim Dae-jung, when the then-president of South Korea was publicly humiliated by Bush in March, 2001, thus setting the stage for what became the current nuclear standoff with N. Korea.

Another topic of emotional importance in Wilkerson's talk, which clearly echoes Powell's personal concerns, was his denunciation of the "torture memo" and its effects, predicting "ten years from now, when we have the whole story, we are going to be ashamed."

What is he hinting? In some of the private chats noted above, Powell and Armitage have quoted President Bush, Rumsfeld and Cheney as leading a collective round of ridicule when Powell, at Cabinet meetings, and Armitage, at Subcabinet, sought to put limits on mistreatment of prisoners at Guantanamo. . . long before the cancer of Abu Ghraib. We reported on this at the time of last year's Senate hearings (the title of one was "A Fish Rots From The Head"). It will be interesting to find out if any of this was discussed with Special Prosecutor Fitzgerald, as he ponders conspiracy indictments. . .but that may be another story.

Our point in mentioning it tonight is that we think this casts light on Wilkerson's performance yesterday. . . it's hard to read between the lines and escape with anything less than his profound sense of shame and remorse that he and colleagues he so obviously considers authentic American heroes could have failed so badly to overcome the calculated, willful ignorance and mendacity of their opponents in the Bush Administration.

We cannot quote what Wilkerson actually said about DOD's Doug Feith, for example, because many of your spam-gards will block the words. Given the locale, it was quite astonishing, however accurate. Just cast your mind back to what the deposed Gen. Tommy Franks said about Feith. Wilkerson%u2019s point wasn't to show-off by being obscene. . .we think it was just one of many genuine cris de cour that came pouring out yesterday.

This leads to our final point for tonight. The Bush Administration may well be imploding before our eyes, with incalculable complexities for the country, as a leadership vacuum makes rational government even more difficult that it is already, and Democrats remain rudderless and devoid of a coherent idea. Yet the number of deeply patriotic, honest, self-less and effective men and women in this Administration is no less than any other, and a great deal more than some. It is literally heart-breaking to witness the death of a dream.... For a professional soldier like Wilkerson... betrayal. Men and women are being asked to lay down their lives for liars, incompetents. . . the Doug Feith's of this world. . . and the superiors who do no better. . . Cheney, Rumsfeld, Rice. . . and Bush.

No wonder Colin Powell looks ashamed as he talks about his pre-Iraq war WMD testimony to the UN. . . he was the witting tool of fools. What could be worse, for any patriot?

I think Chris Nelson is calling for the impeachment of George W. Bush and Richard Cheney. I agree.

Pure Political Spin

Dog scientists at the Austin, TX Poor Man Institute for Freedom, Democracy, and Unlimited Numbers of Ponies for Them That Wants Them report the successful isolation by the Lab of pure political spin, unmixed with any facts or arguments.

The Lab first isolated, as it burbled up from the inky black deep of the River Styx, a William Kristol boson--the only active albeit ever-leaking ingredient in Dan Quayle's brain--to write that the deliberate revelation of Valerie Plame Wilson's identity as an undercover CIA operative was trivial and common, and so not worth a bucket of spit:

William Kristol: In today's Washington, as has been true for decades, classified information is leaked by many different players in any given policy fight in the government. The Bush administration has been replete with leaks of presumably classified information. Is the identity of Valerie Plame the most consequential leak of the last four years? Are Rove and Libby bigger leakers than, say, the CIA's George Tenet or Richard Armitage at the State Department? Do no employees of the Central Intelligence Agency (almost universally anti-Bush and anti-conservative) ever leak anything? If so, have they been indicted, or investigated by a special prosecutor? Any prosecutor?

The Lab also isolated, as it burbled up from the black inky Stygian depths, a Jacob Weisberg anti-boson--which, you will remember, is a highly-excited state of centrist contrarianism--to write that the deliberate revelation of Valerie Plame Wilson's identity as an undercover CIA operative would have been such an unthinkable and heinous crime that it could not have happened--it must have been an accident, and so not worth a bucket of spit:

Weisberg: No one disputes that Bush officials negligently and stupidly revealed Valerie Plame's undercover status. But after two years of digging, no evidence has emerged that anyone who worked for Bush and talked to reporters about Plame%u2014namely Rove or Scooter Libby, the vice president's chief of staff%u2014knew she was undercover. And as nasty as they might be, it's not really thinkable that they would have known. You need a pretty low opinion of people in the White House to imagine they would knowingly foster the possible assassination of CIA assets in other countries for the sake of retaliation against someone who wrote an op-ed they didn't like in the New York Times.

When these two particles collided, they annihilated each other, leaving behind nothing but pure political spin.

Hal Varian Is Smart

Hal Varian writes on affordable housing. There's a bubble element, yes. There's a congestion-because-of-the-filling-up-of-America (or at least of much of its coasts), yes. There's a richer country able to pay more for location, yes. In, California, there's yet another unpleasant legacy of Howard Jarvis--the fact that California levies a uniquely large "tax on moving" that makes lots of empty-nesters very slow to downsize. And there's also the transformation of America's local governments from cabals to enrich real estate developers to cabals to preserve and augment the values of voters' single-family homes.

Is Affordable Housing Becoming an Oxymoron? - New York Times: In the short run, the supply of housing in most areas is more or less fixed. Hence the price of housing is determined primarily by the demand side of the market - by how much people are willing to pay for housing. In the last few years, we have seen historically low mortgage rates, which feed directly into housing demand. In several locations, particularly on the East and West Coasts, where land-use restrictions make it difficult to increase the supply of housing, prices have been pushed up to unprecedented levels.

Whether these low mortgage rates have created a housing price bubble has been a matter of debate... the idea is that a significant part of the demand for housing is based on an expectation of future appreciation. The more prices go up, the more people want to buy so as to reap the gains from expected future price appreciation, pushing prices up even more. It is quite possible that there is some "froth" in the market, to use Alan Greenspan's term, particularly on the coasts. But even when the froth subsides, housing will remain quite expensive in those areas. Can anything be done?

Some municipalities have started subsidized housing programs that provide various types of assistance to new homeowners. Unfortunately, such programs just increase demand even more, pushing prices up. In fact, in an ideal market with a constant supply of housing, a 10 percent subsidy offered to a broad segment of the market would simply push housing prices up by 10 percent....

In California, tax policy has played a significant role in housing price dynamics. Proposition 13, passed in 1978, limited property tax increases to 2 percent a year for owner-occupied homes. But when the house is sold, the property tax assessment is based on the sale price. This means the new owner typically faces a significantly higher property tax bill than the old owner. Proposition 13 has been called a "tax on moving." Indeed it is, since a homeowner in California is much better off remodeling than moving. It is a lot cheaper to add a bedroom to a three-bedroom house than to buy a similar four-bedroom house because of the tax treatment of renovations as compared with new sales. For the same reason, empty-nesters have strong tax incentives to keep their houses, regardless of whether they need all that space. The result is that fewer houses come on the market than would otherwise be the case, pushing prices up even more for the limited stock of housing that is available....

So what is the answer to high home prices? Basic economics tells us that for housing prices to fall we have to see a reduction in demand or an increase in the supply of housing.... Ultimately, the only reliable way to make housing more affordable is to increase the supply. But a new house requires land zoned for housing. We cannot make more land, so we either have to use the land we have more intensively or we have to build houses farther from jobs. Both of these options are unattractive.

In urban California, traffic has become increasingly congested, putting a limit on how far away from their jobs people can live. Land use restrictions are tight in many desirable residential areas, and political forces are aligned against relaxing these restrictions. Imagine someone who scrimps and saves to buy his dream house in an area zoned for one-acre lots. The last thing he wants to see is his neighbor's lot being subdivided to build two or three new houses. Not only would it affect his quality of life, but, even more important, it would also affect the value of his house.

Zoning laws and land use restrictions are unpopular among those seeking less-costly housing since they push up the price. But by the same token, once a searcher becomes an owner, he often becomes a fervent supporter of such restrictions. As Pogo put it, "We have met the enemy and he is us."

Saddam Hussein's Nuclear Weapons

Daniel Drezner fails to make an important distinction. He writes: :: Daniel W. Drezner :: Blog: [Colonel Larry] Wilkerson also points out, however, that there was a stronger pre-war consensus on Iraqi WMD intellgence than many want to believe...

"WMD" means chemical, biological, and nuclear weapons. Nearly everybody in the intelligence community was confident that Saddam Hussein had chemical and biological weapons. But there was no consensus that Saddam Hussein had nuclear weapons, or an ongoing nuclear weapons program--as indeed he did not.

Nukes are the big deal. Nukes can justify an invasion. Chemical weapons--not.

Yet More Dingbat Kabuki!

This time from Kevin Delaney of the Wall Street Journal: - Google's Profit Jumps Sevenfold : Efficiency Improvements, Market-Share Gains Extend Company's Winning Streak. By KEVIN J. DELANEY. Staff Reporter of THE WALL STREET JOURNAL. October 21, 2005; Page A3: Google Inc. said third-quarter profit rose more than sevenfold and revenue roughly doubled, blowing past investor expectations and sending its shares surging more than 11% in morning trading Friday.... The third-quarter results extend the Web-search company's streak of stronger-than-expected quarterly performance since its initial public offering in August 2004, and underlined its continued success in gaining market share and improving the efficiency of its online advertising systems.

Google posted net income of $381 million, or $1.32 a share, up from $52 million, or 19 cents a share, a year earlier.

The 2004 third quarter included a $201 million expense related to the resolution of two disputes with rival Yahoo Inc.


So, excluding nonrecurring charges, Google earned $253 million in the third quarter of 2004? And so, excluding nonrecurring charges, Google's earnings have grown 50% in the past year--not the 600% headline number?

What function does the headliine and the claim of "seven-fold" serve, other than to mislead readers who simply scan the headliine and the first paragraph?

As one Washington hand told me last week: "I simply cannot afford to read the newspapers anymore. I might remember something they print, forget where it came from, and so believe it."

Walt Mossberg on Digital Rights Management

Walt Mossberg: - Personal Technology: In some quarters of the Internet, the three most hated letters of the alphabet are DRM. They stand for Digital Rights Management, a set of technologies for limiting how people can use the music and video files they've purchased from legal downloading services. DRM is even being used to limit what you can do with the music you buy on physical CDs, or the TV shows you record with a TiVo or other digital video recorder....

Some CD buyers are discovering to their dismay that new releases from certain record companies contain DRM code that makes it difficult to copy the songs to their computers, where millions prefer to keep their music. People who buy online music in Microsoft's Windows Media format too often run into the DRM error message "unable to obtain license" when trying to transfer the songs to a music player. Some TiVo owners have reported seeing messages on their TV screens, apparently triggered by error, that warn that if the copyright holder so chooses, TiVo recordings can be made to expire automatically after a certain period....

[T]he real issue isn't DRM itself -- it's the manner in which DRM is used by copyright holders. Companies have a right to protect their property, and DRM is one means to do so. But treating all consumers as potential criminals by using DRM to overly limit their activities is just plain wrong.... I believe that consumers should have broad leeway to use legally purchased music and video for personal, noncommercial purposes in any way they want -- as long as they don't engage in mass distribution. They should be able to copy it to as many personal digital devices as they own, convert it to any format those devices require, and play it in whatever locations, at whatever times, they choose.

The beauty of digital media is the flexibility, and that flexibility shouldn't be destroyed for honest consumers just because the companies that sell them have a theft problem caused by a minority of people.... I believe Congress should rewrite the copyright laws to carve out a broad exemption for personal, noncommercial use by consumers, including sharing small numbers of copies among families.

Until then, I suggest that consumers avoid stealing music and videos, but also boycott products like copy-protected CDs that overly limit usage and treat everyone like a criminal. That would send the industry a message to use DRM more judiciously.

Jackie Calmes's Retrospective on the Bush Social Security Campaign

Jackie Calmes has a long and good but radically incomplete article about the politics of Social Security. It omits a very important side to the story.

Calmes should not allow White House aide Allan Hubbard to claim that "it just didn't seem appropriate for the president to be talking [to Democrats] without some firm proposal from the other side" without pointing out that there was never any firm proposal from the Bush side to begin with: the Bushies proposed (a) private accounts and (b) progressive price indexing, without saying what the rest of the package would be and without having done the staffwork to understand how (a) and (b) interacted with each other. Whenever I would talk to people in the Bush administration, I would come away convinced that Democratic ex-Stiglitz aide Jason Fuhrman knew much more about the Bushies' proposals and what they would do than anybody in the administration did.

With the Bush administration unable to even announce a proposal that added up, what reason was there for anybody to ever support it?

Certainly there was no reason for any Democrat to support it. It brought no new resources to Social Security. It didn't solve Social Security's long-term funding program. The private accounts it proposed stood a reasonably large chance of being losers for a substantial fraction of beneficiaries. What's to like?

It's hard to be a salesman when what you have to sell is crap. That fact doesn't make it into Calmes's story. And it should--up high.

How a Victorious Bush Fumbled Plan to Revamp Social Security: By JACKIE CALMES Staff Reporter of THE WALL STREET JOURNAL. October 20, 2005; Page A1: Through two campaigns, George W. Bush vowed to fix and partially privatize Social Security, the nation's most popular government program. This year, claiming a re-election mandate and enjoying a Congress controlled by his party, the president finally made his move. Yet now even the president has acknowledged Social Security is dead for this year, his biggest domestic defeat to date. How could it have gone so wrong?...

As a candidate, Mr. Bush had never spelled out his Social Security plans, except to suggest that carving out private accounts would solve the program's looming financial woes. When he acknowledged this year that they wouldn't, and that future benefits would need to be reduced, both the public and lawmakers recoiled....

The idea of letting workers divert some Social Security payroll taxes to personal retirement accounts is central to Mr. Bush's notion.... But Democrats, many Republicans and organizations such as the giant seniors group AARP adamantly oppose such accounts as a risk to Social Security, to the government's fiscal health, and to future retirees who could become victims of market downturns.

The White House insists its Social Security strategy was correct.... Nearly a year ago, the president surprised friends and foes by a pronouncement at his first postelection news conference. "We'll start on Social Security now," he said. The problem was stark: As the ranks of retirees grow, proportionately fewer workers are contributing the payroll taxes that fund Social Security benefits. By 2017, the government projects, the program will begin running annual deficits....

Sen. Lindsey Graham of South Carolina, a key Republican advocate of private accounts, despaired. Mr. Bush "jumped out with a very big idea that he ran on, but he didn't lay the political groundwork in the Senate or the House," Mr. Graham recalls. "He ran on it. We didn't. He's not up for election again. We are." Former Rep. Tim Penny, a conservative Democrat who had served on Mr. Bush's 2001 Social Security commission, heard the news on television in Waseca, Minn. Pro-account groups like his For Our Grandchildren would have liked "a little heads-up" to mobilize.... Meanwhile, Sen. Harry Reid of Nevada, the new leader of the Senate Democrats, created a Capitol "war room" unlike any his party had mounted against Mr. Bush. Staffers coordinated with friends at Americans United. Whenever Mr. Bush spoke, Democrats had a response, and wherever he went, protestors were there.

In early December, the president invited both parties' congressional leaders -- 16 lawmakers, with staff -- to the White House. The real talks presumably would come later, with fewer people, in private. But this meeting didn't go well. There would be no others. Mr. Bush said he hoped to work with them on a bipartisan solution. But the senior Democrat on the House Ways and Means Committee, New York Rep. Charles Rangel, said Democrats wouldn't discuss a solution to Social Security's looming financial woes as long as private accounts were on the table. Mr. Bush objected and said his 2001 commission had recommended such accounts, according to several participants. "It wasn't a real commission," replied Montana Sen. Max Baucus. Mr. Bush had named only pro-accounts people to his panel. The opposition of Mr. Baucus... was a bad sign.... Days later he called to ask White House Chief of Staff Andrew Card to arrange a private chat with the president. Mr. Card refused -- "huffily," Mr. Baucus says. Mr. Card didn't respond to requests for comment....

Support from the 36-million-member AARP had been crucial to Mr. Bush's 2003 achievement of a Medicare law adding prescription-drug benefits. The White House thought it had the group's agreement to a similar alliance on Social Security.... Days after Mr. Bush's inauguration, the dispute exploded.... One nationally televised ad showed a house being bulldozed to fix a broken sink, as a voice asked, "Why dismantle Social Security when it can be fixed with just a few moderate changes?" Republicans who went home a few weeks later for constituents' meetings were confronted by protestors from AARP and liberal groups such as

Instead of privately wooing centrist Democrats whose support he badly needed, Mr. Bush appealed straight to their red-state constituents.... [I]t wasn't until April 20... that... Senator [Conrad] was invited to meet with Mr. Bush.... [H]e told others afterward, "It was almost as if someone told him to do it, and he was just going through the motions." The president isn't known to have spoken or met privately with any other Democrat....

Sens. Nelson and Conrad were among several Democrats who privately met with Sen. Graham and a few Republicans, starting in January, in talks that gave the White House some hope of a bipartisan breakthrough. Finally, at an impasse, Mr. Nelson suggested a get-together with the president. Sen. Graham called Mr. Hubbard to propose an informal dinner, but the Bush adviser said it couldn't be arranged. "It just didn't seem appropriate for the president to be talking without some firm proposal from the other side," Mr. Hubbard says....

"They demagogued the issue as opposed to looking for solutions for the American people," Mr. Hubbard says. "And that was, to be perfectly honest, a shock." Many Republicans say it shouldn't have been.... Liberals opposed any tampering with Social Security; centrist Democrats couldn't abide the massive borrowing needed to start the private accounts. Democratic leaders insisted they were willing to negotiate benefit and tax changes to keep Social Security solvent, if he'd just drop private accounts. Mr. Bush, wedded to his proposal, declined to call their bluff....

A bigger problem for the president was his own party.

Republicans were hopelessly divided. Mr. Bush led the so-called pain caucus, which favored both private accounts and, to keep Social Security solvent, future benefit reductions. "Free lunch" conservatives wanted larger private accounts, and deeper borrowing to cover the multitrillion-dollar costs for creating them, and they opposed any benefit reductions or payroll-tax increases. Some moderate Republicans opposed private accounts altogether. Then there was the do-nothing camp, which included most House leaders, worried about losing their majority.

The White House looked to the Senate Finance Committee chairman to get the issue rolling. Yet with all nine Democrats on his panel opposed to private accounts, Mr. Grassley needed all 11 Republicans' support. Instead they embodied the party's divisions...

George Will in the Gamma Quadrant (Why Oh Why Can't We Have a Better Press Corps?)

It's sad that George Will is still writing. In fact, it's sad that George Will was ever writing. Matthew Yglesias snarks away:

TPMCafe || Health Care With Your Hyundai?: By Matthew Yglesias: George Will explains the world:

Miller bluntly says that the social contract written after 1945 is being -- must be -- repealed because, given globalization, unskilled manual labor cannot be paid $65 an hour, with the cost passed on to consumers.... Herb Stein, the University of Chicago economist who served as chairman of President Richard Nixon's Council of Economic Advisers, famously said: If something cannot go on forever, it won't. Delphi's resort to bankruptcy and GM's attempt, with the cooperation of the UAW, to avoid, for now, doing that, suggest that America's welfare state -- its private sector as well as its public-sector components -- is reaching its Herb Stein Moment.

...[I]f you think about the world's major car companies, they're not located in India. Instead, your primary automakers are in the US, Germany, or Japan. Germany, as you may have noticed, is not exactly well-known for its lack of a welfare state. In Japan, too, the people who work for car companies get health care. But Will clever avoids Germany or Japan. Instead we hear about Hyundai.... So what's the deal with South Korea? Lets take a look:

The South Korean government committed itself to making medical security (medical insurance and medical aid) available to virtually the entire population by 1991... the Ministry of Health and Social Affairs coordinated its efforts with those of employers and private insurance firms to achieve this goal. Two programs were established in 1977: the Free and Subsidized Medical Aid Program for people whose income was below a certain level, and a medical insurance program that provided coverage for individuals and their immediate families working in enterprises of 500 people or more. Expenses were shared equally by employers and workers. In 1979 coverage was expanded to enterprises comprising 300 or more people, as well as to civil servants and teachers in private schools. In 1981 coverage was extended to enterprises employing 100 or more people and in 1984 to firms with as few as 16 employees. In that year, 16.7 million persons, or 41.3 percent of the population, had medical insurance. By 1988 the government had expanded medical insurance coverage in rural areas to almost 7.5 million people. As of the end of 1988, approximately 33.1 million people, or almost 79 percent of the population, received medical insurance benefits. At that time, the number of those not receiving medical insurance benefits totaled almost 9 million people, mostly independent small business owners in urban areas. In July 1989, however, Seoul extended medical insurance to cover these self-employed urbanites....


In every major car-making country, auto workers get health care. The difference is that in every major car-making country besides the United States there's a systematic government policy in place trying to make sure that everyone gets health care. This is good policy.... America's private sector welfare state is, indeed, breaking down. But our public sector one isn't breaking down. It's being bankrupted as a matter of deliberate public policy by officials who want to wreck it in order to better afford tax cuts for extremely wealthy individuals.... [T]o pretend that nefarious "globalization" is responsible for it all is absurd. Universal health care is a staple of much more trade-dependent countries than the United States. Nothing is stopping us from doing it except the George Wills of the world.

Why Oh Why Are We Ruled by These Idiots (Col. Wilkerson Edition)

Here is the video of Colonel Wilkerson's shrill speech at the New America Foundation. Here is the full transcript.

One sample:

"On Condi Rice's new flexibility: I have a Rasputin version, a cynical version, and I think a more realistic version. One, she's more intimate with the president. Unquestionably. Two, the administration finds itself in some desperate straits.... A *wide* gap between the State Department and the White House.... Because of her intimacy... desperate straits... unwillingness to take on anything new... haven't heard anyone say they want a war in North Korea recently.... Public Diplomacy: broken.... As an Egyptian friend told me, 'It's hard to sell shit.'"

The New Deal and the Problem of Idiocy

Right-wing folklore, the Great Depression, and the New Deal. Let's give the mike to Lance Mannion:

Lance Mannion: Conservative folklore: Can't remember now whether it was in high school or sometime in my first couple years of college when I first heard the argument that the New Deal didn't end the Depression. It was a long time ago, whenever it was, but that first time I heard it was far from the last. It was dismaying then that so many years after FDR there were people who could seriously argue the point and it's even more dismaying now that they're still arguing the point.

But then there are people who still argue that slavery wasn't so bad.

And anyway the South wasn't fighting to protect slavery, it was fighting for States' Rights. Which rights? Well, um, the right to permit slavery...

The the New Deal didn't work argument went---goes---Since at some unspecificed point a few years into FDR's first or second term the United States hadn't returned to the level of prosperity it supposedly enjoyed in 1928, nothing Roosevelt did had any real effect.

This comes out of an idea that has been a fundamental of conservative thought forever: Since there is no heaven on earth and no human endeavor is perfect and therefore Utopia is impossible, we might as well not bother trying to solve any problems, particularly if trying means having to spend my tax dollars.

At any rate, whenever I'd make the case that the point from which to begin measuring Roosevelt's success or failure should be 1931 or so, and if you do that you see that things are an awful lot better, on the whole, by 1938.

Yes, would come the insistent rebuttal, but he didn't end the Depression.

The problem I had and anyone with a real knowledge of history has with this argument is that it's true. Roosevelt didn't end the Depression. We don't believe that he did. He saved us from the worst of it, turned the economy around, and set us on a road that led to the great prosperity and stability of the 1950s. It took years for the country to recover. But what you're faced with here is the grade school text book version of history---the Happy Days Are Here Again three paragraph summation of the 1930s and 40s. Roosevelt ended the Depression and won World War II.

So here you've got to be careful. It's very easy to fall victim to the It's all or nothing ploy favored by second rate thinkers and crafty debate club debaters.

I found that the way to get around this was to seem to concede point.

If the New Deal didn't end the Depression, what did?

Always, always, the person I was arguing with came back with: World War II.

World War II?

World War II.

Not the New Deal?


So all the massive government spending programs and job programs didn't work?


But World War II did?



By revitalizing American industries and putting everybody back to work!

Uh huh. And what was it, specifically, that revitalized those industries?

Orders for guns and planes and tanks and battleships, of course. There was a war on, duh!

I see. And who was the main customer for all the guns and planes and tanks and battleships?

Um, the Government.

And where did all those people go to work?

Um, the military.

Which means who paid their salaries?

The Government.

So massive Goverment spending and job programs didn't work but then a massive government spending and jobs program did?

Well, yeah. But it was different!

How so?

It just was!

Give me one way.

Well, we needed all that stuff during the war.

The guns and tanks and planes and battleships?


And we didn't need the roads and the schools and new post offices and dams and electrification programs?

Sputter. Sputter.

Here I would helpfully provide my opponent with the point that the good thing about planes, tanks, and battleships is that they get shot down, blown up, and sunk and have to be constantly replaced. You build a school and 30, 40, and even 50 years can by before you have to build another one.

That's right!

Then we'd shake hands and part ways and I'd stroll off whistling, chuckling to myself as I imagined my opponent going off to argue with someone else that blown up tanks and their dead crews were better for the economy than new schools.

A sophomoric exercise, but I was quite literally sophomoric.

But I wondered then and I wondered for a long time afterwards, where did they get the idea that the New Deal hadn't worked? There were no such things as blogs back then, we were spared the ubiquity of Right Wing radio, and the only people I knew who read the National Review and, in the early days, The American Spectator were other Liberals who thought it was good to know what tune the devil was playing. I wasn't constantly bumping into small guerrilla bands of conservative intellectuals. These were just kids from the Key Club, the frats and sororities, small town kids in my dorm and classes I got to talking with in the cafeteria or the student union or the lounge or arguing with in classes they were usually taking to fulfill a requirement not because history was their major. I couldn't figure out, since the simple grade school text book version was FDR ended the Depression and won World War II and the college text book version was, with many qualifications and asides, footnotes and outside reading, pretty much the same thing, where did they get the opposite idea?

I concluded that there was a conservative folk culture at work. Kids would rush home from school and tell their parents, Guess what we learned in school today? Franklin Roosevelt was the greatest President since Abraham Lincoln!

And their parents would sit them on their knee and patiently explain to them the truth as grandpa had taught it to them.

Child, listen up. Your teacher's full of shit! That goddamn class traitor Roosenfeld goddamn near ruined this country!

Later, those kids would tell each other the old stories at keggers and in the country club locker rooms and this way the true history would be passed down from generation to generation and never be lost.

Except that oral traditions can be lost. They can be polluted, diverted, superseded. Even now, with that oral tradition daily repeated and reinforced by blogs and on the radio, there's a chance of corruption. Facts might sneak in. What's needed is a written history. Magazines and newspapers aren't enough. We need actual history books that say what we want them to say.

The day may be coming. But first all the details of the Right Wing version of American History have to be worked out. FDR and the New Deal is an easy one. But what next? The problem is that the whole history of America from the Mayflower Compact on is a record of Liberal victory over the stubborn forces of conservativism, privilege, and reaction, so where do you start? There's almost too much to choose from.

Erik Loomis of Alterdestiny identifies a period of history currently being revised in their favor by Right Wing intellectuals.

The Gilded Age.

They're out to rehabilitate the Robber Barons.

Beyond Nationalism

Saheli Datta finds a nice quote:

Saheli*: Musings and Observations: Brilliant Line of the Day

Part of the project of overturning nationalism should involve moving away from 'national histories' told from the point of view of a single nation-state protagonist. Going from "this had nothing to do with us," to "this was a tremendous tragedy for us" takes an important step: it broadens the meaning of us.

-- Saurabh at Rhinocrisy, at the end of a meditation on the histories of the Japanese-Chinese conflicts of World War II.

"Crises" Come and Go...

Matthew Yglesias writes:

TPMCafe || Crisis Averted: Remember the Social Security crisis? Isn't it a bit, um, interesting that the president suddeny stopped thinking it was critical to do something about the program once it became clear that his preferred changes weren't going to be adopted?... What happened to all the media hecklers? You know the ones. The ones slamming the Democrats for "irresponsibly" refusing to negotiate with Bush unless he took privatization off the table. That was, supposedy, irresponsible because of the looming crisis. Well, if it ever existed it's got to still be looming. So isn't it irresponsible of the administration to have suddenly dropped the topic? Shouldn't they give up on privatization and appoint a real bipartisan commission to come up with small-scale adjustments?

Funny how not only Bush, but huge swathes of the press, suddenly lose interest in this purported crisis if it can't be "solved" in a way that redistributes wealth upward. I'm just saying.

Department of "Huh"?

Josh Micah Marshall is flabbergasted by the Bushies' eagerness to suggest that George W. Bush has been for two years part of a conspiracy to obstruct justice:

Talking Points Memo: by Joshua Micah Marshall: October 16, 2005 - October 22, 2005 Archives: So many leaks are coming fast and furious now in the Plame/Fitzgerald case that it's hard to know sometimes where they're coming from or what the leakers were trying to achieve. Perhaps the best example of this was yesterday's Daily News story by Tom DeFrank, which provided the first clear evidence that President Bush has known who the culprits were from the beginning and possibly failed to disclose that to Patrick Fitzgerald in their interview last year.

Why would White House officials sell the president out like that? The question becomes more pointed when you note that DeFrank, as we discussed yesterday, has long been close to people in the Bush world.... According to knowledgeable sources, those White House officials behind that story were trying to help the president, not hurt him.... [T]he first thing you have to say on this is that there are some folks in the White House who are pretty stupid. Even a cursory knowledge of where the live wires lay in this story would tell you that those bits of information would lead to someone getting a very big shock.... I suspect that what we're seeing here is an example of various players in the White House trying to manage damage control without central direction, perhaps without the requisite experience in some cases and even more likely without all the key facts at hand...

What to Do in New Orleans?

Writing in our (mine, Aaron Edlin's, and Joe Stiglitz's) The Economists' Voice, the extremely wise Ed Glaeser worries about whether rebuilding all of New Orleans makes sense. It may well cost hundreds of thousands of per New Orleans family to rebuild and protect from future hurricanes. Wouldn't it be better to rebuild fewer sub-sea level houses and build more above sea-level houses along, say, the road between New Orleans and Baton Rouge? Or to simply give people the money and let them choose whether to spend it rebuilding in New Orleans or keeping it as a nest egg and moving to Phoenix, San Jose, or Anchorage?

There are a bunch of non-convexities here: the cost of protecting future New Orleans from future hurricanes is not proportional to how many people live in the city itself. And there are very good reasons to have a City of New Orleans: the entertainment and historic district of the French Quarter, the great transshipment between river barges and ocean-going container ships, and the administration of the Gulf oil and gas industry. But are there good reasons to have a lot of people living below water level in the shadow of Lake Pontchartrain?

More Dingbat Kabuki! (Yet Another New York Times Edition)

Daniel Gross finds yet more Dingbat Kabuki

Daniel Gross: October 16, 2005 - October 22, 2005 Archives : BABBLING BROOKS: Erstwhile smart social critic turned apparatchik David Brooks is excited at doings in Washington. On page A27 of today's New York Times, he writes:

"On the G.O.P. side, this is a moment of Republican glasnost. After years of following the leaders, Republicans are suddently rebelling and innovating on all fronts. Conservatives like Mike Pence and moderates like Mark Kirk are joining forces to battle the DeLay institutionalists to actually cut spending, including cuts in defense and veterans affairs."

Here's the headline from page A18 of the same paper: "House Republicans Put off Vote on Cuts." Carl Hulse reports: "Acknowledging that they were short of the necessary support, House Republican leaders Wednesday abruptly put off a vote on their plan to cut federal spending.... The leadership's inability to round up the votes for its initial plan to raise the broad target for spending cuts to $50 billion from $35 billion showed how difficult the specific cuts will be to achieve...."

By the way... the $50 billion in question is over five years, or $10 billion a year. In the fiscal year just concluded, total federal expenditures were $2.47 trillion. So these bold and highly divisive cuts, which the Republicans can't even bring to a vote, constitute four tenths of one percent of last year's spending.

Glasnost? Nyet.

More Dingbat Kabuki! (Why Oh Why Can't We Have a Better Press Corps? New York Times Edition)

Carl Hulse of the New York Times is not nearly as bad a reporter as Jonathan Weisman of the Washington Post, but Hulse too leads with a claim that the House leadership deficit reduction plan is to "cut federal spending by $50 billion" without finding space in his first paragraph to say that the $50 billion number is (a) only a $15 billion increase over previous plans and (b) applies to five fiscal years--i.e., that the plan is to cut spending by about $3 billion in each year.

House Republicans Put Off Vote on Cuts - New York Times : WASHINGTON, Oct. 19 - Acknowledging that they were short of the necessary support, House Republican leaders Wednesday abruptly put off a vote on their plan to cut federal spending by $50 billion and said they would go back to the drawing board to draft a fuller proposal that could win majority backing.

No reason to write "cut federal spending by $50 billion" instead of "increase their planned reductions over five years in federal spending from $35 billion to $50 billion." No reason at all--save that the politicians on the Hill want the number to sound *big*, and are more friendly to complaisant journalists than to critical ones.

Hulse does, however, manage to squeeze in a mention that this is a five-year number in paragraph three. And he does manage to say that it is an increase from a previous $35 billion plan in paragraph five.

Mark Thoma Summarizes Tim Geithner

He writes:

Economist's View: New York Fed President Geithner on Global Imbalances: Geithner:

sees substantial risks due to global imbalances, risks that are not fully understood.

is insistent that fiscal authorities need to regain control of the budget and says "Improving our fiscal position is the most effective means we have available to reduce our vulnerability during this prolonged period of adjustment."

in equally insistent that fixed exchange rate regimes must allow more flexibility.

worries that increases in demand growth in the foreign sector needed to offset a decline in U.S. consumption and increase in U.S. saving will have to overcome difficult political hurdles.

says smooth adjustment requires, in addition to improved fiscal management, a strong and flexible financial system and open and free trade.

says that avoiding protectionism calls for "improving educational opportunity and achievement in this country, and perhaps also in improving the design of the temporary assistance we provide individuals who bear the brunt of the adjustment costs than come with greater global economic integration."

We are, I think, very fortunate to have Tim on our side.

The Cheney-Rumsfeld Cabal

Colonel Lawrence Wilkerson, Colin Powell's Chief-of-Staff, is the shrillest creature on the planet earth: / World - Transcript: Colonel Lawrence Wilkerson: transcript of talk given by Colonel Lawrence Wilkerson, chief of staff to Mr Powell until last January.

I want to thank Steve [Clemons] and the American Foundation for giving me this opportunity and thank some of my friends for turning out. I see an assistant secretary over here, I think he's left that post now, who used to spend some time in my office. And I see others around the room. I see some journalists in here who have been trying religiously to get me over the last 3 or 4 months. You finally got me....

[I]n a very intimate way, I saw the George W. Bush administration from 2001 to early 2005.... I don't think even his critics would have argued that FDR wasn't a brilliant politician and a brilliant leader. But... how often does America get brilliant leaders?... I can count them myself on one hand.... So we need a system of checks and balances and institutional fabric that can withstand anybody, or at least nearly so. You laugh, but I'm not trying to solicit your laughter.... It's the old business of checks and balances....

Decisions that send men and women to die, decisions that have the potential to send men and women to die, decisions that confront situations like natural disasters and cause needless death or cause people to suffer misery that they shouldn't have to suffer, domestic and international decisions, should not be made in a secret way.... [F]undamental decisions about foreign policy should not be made in secret.... I would say that we have courted disaster, in Iraq, in North Korea, in Iran, generally with regard to domestic crises like Katrina, Rita and I could go on back, we haven't done very well on anything like that in a long time. And if something comes along that is truly serious, truly serious, something like a nuclear weapon going off in a major American city, or something like a major pandemic, you are going to see the ineptitude of this government in a way that will take you back to the Declaration of Independence....

Now, let me get a little more specific.... Almost everyone since the 1947 act, with the exception, I think, of Eisenhower, has in some way or another, perterbated, flummoxed, twisted, drew evolutionary trends with, whatever, the national security decision-making process.... John Kennedy trusted his brother... far more than he should have. Richard Nixon, oh my God.... Jimmy Carter allowed Brezinski to essentially negate his Secretary of State.... [W]hat Sandy Berger did to Madeline Albright.... But no one... has so flummoxed the process as the present administration. What do I mean by that? Remember what I said about the bureaucracy: if it's going to implement your decisions it has to participate in those decisions.... The complexity of the crises that confront governments today are just unprecedented.... [Y]our bureaucracy has got to be staffed with good people and they've got to work together... under leadership they trust....

That is not the case today....

[T]he case that I saw for 4 plus years was a case that I have never seen in my studies of aberration, bastardizations, changes to the national security process. What I saw was a cabal between the Vice President of the United States, Richard Cheney, and the Secretary of Defense... that made decisions that the bureaucracy did not know were being made.... Read George Packer's book The Assassin's Gate.... And I wish... I had been able to help George Packer write that book. In some places I could have given him a hell of a lot more specifics.... But if you want to read how the Cheney-Rumsfeld cabal flummoxed the process, read that book. And, of course, there are other names in there, Under Secretary of Defense Doug Feith, whom most of you probably know Tommy Frank said was the "stupidest blankety blank man in the world." He was. Let me testify to that. He was. Seldom in my life have I met a dumber man. And yet, and yet, after the Secretary of State agrees to a $400 billion department, rather than a $30 billion department, having control, at least in the immediate post-war period in Iraq, this man is put in charge. Not only is he put in charge, he is given carte blanche to tell the State Department to go screw themselves in a closet somewhere. That's not making excuses for the State Department. That's telling you how decisions were made and telling you how things got accomplished. Read George's book.

In so many ways I wanted to believe for 4 years that what I was seeing... was an extremely weak national security advisor [Condi Rice]... an extremely powerful Vice President... an extremely powerful... Secretary of Defense, remember a Vice President who's been Secretary of Defense... and also is a member of what Dwight Eisenhower... called in his farewell address the military industrial complex and don't you think they aren't....

So you've got this collegiality there between the Secretary of Defense and the Vice President. And then you've got a President who is not versed in international relations. And not too much interested in them either. And so it's not too difficult to make decisions in this... Oval Office cabal... that are the opposite of what you thought were made in the formal process.... And to myself I said, okay, put on your academic hat. Who's causing this? Well, the national security advisor. Even if the framers didn't envision that position, even if it's not subject to confirmation by the Senate, the national security advisor should be doing a better job. Now, I've come to a different conclusion.

Astrology, Here We Come!

Abola Lapite notes that "intelligent design's" defenders regard themselves as peers of astrology:

Foreign Dispatches: Astrology, Intelligent Design and Other Sciences: Take a look at this revealing courtroom admission by Michael Behe, Lehigh University biochemist and Intelligent Design proponent.

Astrology would be considered a scientific theory if judged by the same criteria used by a well-known advocate of Intelligent Design to justify his claim that ID is science, a landmark US trial heard on Tuesday.

Under cross examination, ID proponent Michael Behe, a biochemist at Lehigh University in Bethlehem, Pennsylvania, admitted his definition of %u201Ctheory%u201D was so broad it would also include astrology.One wonders what exactly wouldn't fall under the label "theory" under Behe's definition. Phrenology? Phlogiston? Invisible pink unicorns on Saturn? How about intelligent falling?

The Discovery Institute people must be kicking themselves tonight on hearing of Behe's admission, but I'll give the man this much - at least he's honest, even if being under oath in a court of law does constrain one's scope for dishonesty somewhat.

There Are, You See, Few Right-Wing Think Tanks that Dare Hold George W. Bush's Feet to the Fire...

Andrew Samwick hopes that Bruce Bartlett will land at the New America Foundation:

Vox Baby: Bruce Bartlett--Liberated: Via Dan Drezner, I learn that the New York Times has written about Bruce Bartlett's dismissal from the National Center for Policy Analysis. Last December, I wrote of my admiration for Bruce's writing:

In truth, he's more like a blogger than he is a reporter, but perhaps more accurately he is the rare columnist who is the best of both worlds rather than the worst.


But note that he's an independent thinker--he would very likely offend people across the political spectrum with that one.

I started reading Bruce's columns when I worked at the CEA last year. He's been out in front of the MSM on so many issues--the Medicare bill, outsourcing, tax policy, and others. I wish I had been reading him earlier. His online archive stretches back to 2000. For those of you who arrived here by some way other than Bruce, bookmark the page. Skim it, read it, and enjoy it.

I think that's still good advice and that we should view what has transpired as Bruce being liberated. I hope his newfound freedom from the NCPA will lead to a better placement. I would suggest the New America Foundation, which I think is the most interesting policy think tank in Washington for people with interesting ideas and an ability to write an op-ed. If I had the right zip code and the requisite talent, that's where I would want to be.

Tax Reform

Go to the Tax Policy Center to learn about the Bush tax reform proposals:

Tax Policy Center | News & Events: ON OCTOBER 18, 2005, the President's tax reform panel released recommendations eliminating a host of special tax breaks and streamlining the filing process. Tax Policy Center scholars have played a fundamental role in guiding the panel's tax reform recommendations, including testifying before the panel on return-free tax systems, fair reform for families, reforming the individual Alternative Minimum Tax, and issues resulting from a consumption tax base. Additionally, the Tax Policy Center has conducted extensive research on many of the options considered by the panel...

And go to the Carpetbagger Report to see some fur fly:

The Carpetbagger Report
: 'Tax reform' may be even less popular than 'Social Security reform': Geography is but one of many problems for this would-be proposal. Kevin did an excellent job summarizing (with a nice table) who's likely to benefit most from all this restructuring and "simplification." I don't want to spoil the surprise, but I'll give you a hint: it's not middle- or lower-income families.... On the left, we have folks like Sen. Chuck Schumer (D-N.Y.), among others, calling it a "dagger to the heart." But that's nothing compared to what the right has been saying.

  • Phil Kerpen, policy director of the Free Enterprise Fund, said, "The panel, in its primary focus, seems headed away from its mission to develop a plan for fundamental tax reform." He accused the panel of "a series of tax hikes on the U.S. middle class to balance out relief for upper-income elites."
  • Leo Linbeck, who wants a federal retail sales tax, called Bush's commission a "fraudulent political theater designed to protect the corrupt tax code and those who profit from its manipulation."
  • Larry Hunter, chief economist for the Free Enterprise Fund, said, "If George Bush thinks he has problems with Harriet Miers, wait until it dawns on people that his tax-reform panel is recommending a huge tax cut for rich people in blue states and a huge tax increase for middle-class folks in the red states."

...The last time such sweeping changes were made in tax law was in 1986. Enactment of that measure required the unqualified commitment of President Ronald Reagan, then at the peak of his popularity; the political mastery of his Treasury secretary, James A. Baker III; the work of a bipartisan coalition in Congress that included many of the most influential senators and representatives; and two years of intensive maneuvering and horse trading.

Favorite National Hurricane Center Forecasters

Michael Froomkin is distressed that he has a favorite NHC forecaster: Wilma and Franklin Are Funny In Different Ways: [T]hree things are clear:

  1. They don't really have much confidence what this storm is actually going to do. A 1650 nautical mile gap in the five-day forecast is indeed rather heroic. [A nautical mile is 6080 feet or about 1853m.]
  2. Forecaster Franklin really does have a wry sense of humor. He's much more fun to read than the other forecasters.
  3. Things have come to a pretty pass when one has a favorite National Hurricane Center forecaster.

The Job Is Demanding!

Wonkette finds another less-than-well-regarded Bush administration appointee: Porter Goss:

Keeping Porter Down on the Farm - Wonkette: The WaPo's Dafna Linzer examines Porter Goss's troubled one-year reign as CIA director, which has seen a steady stream of high-level resignations among veteran analysts and officers. It seems Goss, himself a 1960s agency operative and a fierce critic while in Congress of George Tenet's handling of terror intelligence, has a rather, uhm, idiosyncratic view of the job's demands.

In March, Goss complained during a speech that his job was overwhelming and that he was surprised by the number of hours it demanded. "The White House wasn't amused by that," one intelligence community official said. Then in June, Goss told Time magazine that he had "an excellent idea" where Osama bin Laden was but that the United States could not get him because of diplomatic sensitivities. This time, the White House and the State Department publicly disputed the remarks.

In a now-infamous e-mail to overseas station chiefs, Goss said appointments with visiting intelligence chiefs should be arranged for Tuesdays or Thursdays. The memo was apparently meant to assure station chiefs that he was setting aside extra time for important visits, but it bewildered officers in the field.

What's so bewildering? The guy needs Mondays, Wednesdays and Fridays free to continue dogging bin Laden! Our favorite detail, though, is this:

A work trip to picturesque Slovenia . . . raised eyebrows, from the spy division to the legal department, officials said, because Goss, an avid organic farmer, arranged for one meeting to take place at a local organic farm.

That's right--an "avid organic farmer" is now in charge of monitoring the most sensitive information affecting American global interests...

For not taking care that the laws be faithfully executed, impeach George W. Bush. Impeach him now.


Kevin Drum and Matthew Yglesias watch Jacob Weisberg: a 9.4, 9.3, 8.8, and a 3.1 from the East German judge:

Kevin: Jacob Weisberg's bizarre Slate thumbsucker in which he preemptively suggests there's no evidence of wrongdoing in the Plame case simply because Patrick Fitzgerald hasn't released any of his evidence yet.

Matthew: I'm not sure I really understand Jacob Weisberg's contrarian take on the Plame case:

No one disputes that Bush officials negligently and stupidly revealed Valerie Plame's undercover status. But after two years of digging, no evidence has emerged that anyone who worked for Bush and talked to reporters about Plame... knew she was undercover. And as nasty as they might be, it's not really thinkable that they would have known....

Evidence hasn't emerged because Patrick Fitzgerald hasn't made any charges public or revealed what evidence he may or may not have to support those charges. It would convenient for us in the commentariat if he'd been running a sloppy investigation full of grand jury leaks giving us more juicy nuggets to chew over, but the Ken Starr precedent aside that's not what prosecutors are supposed to do. If Fitzgerald's charges, when they emerge, prove to be trumped-up, overblown, or unsupported by the evidence then naturally it would make sense to start condemning him. But concluding that his case is bogus before we see his evidence because we haven't seen his evidence would be bizarre.

Marginal Revolution Loses a Bet

Railway shares:

Marginal Revolution: The Undercover Economist, part II : I once made the mistake of entering into a sportsman's bet with the economist John Kay. He wondered what would have happened if you had bought shares in the Great Western Railway, the most famous of all the rail companies in Britain, the birthplace of train travel. He speculated that even had you bought them on the first day they were available, and held them for the long term, your returns would have been quite modest, say, less than 10 percent a year. I couldn't conceive that one of the most successful companies of the railroad revolution could have possibly returned such a modest sum to shareholders. Off I went to flick through dusty nineteenth-century editions of The Economist and find out the answer. Of course, Kay was right. Not long after the Great Western Railway shares were put on sale for 100 pounds a share in 1835, there was a tremendous burst of speculation in rail shares. Great Western shares peaked at 224 pounds in 1845, ten years after the company was formed. Then they crashed and never reached that level again in the century-long life of the company. The long-term investor would have received dividend payments and would have made a respectable but unremarkable 5 percent annual return...

Let Us Now Praise Famous Knight-Ridder Reporters


Let us now praise famous men, and our fathers that begat us. The Lord hath wrought great glory by them through his great power from the beginning. Such as did bear rule in their kingdoms, men renowned for their power, giving counsel by their understanding, and declaring prophecies: Leaders of the people by their counsels, and by their knowledge of learning meet for the people, wise and eloquent are their instructions...

Among those who are leaders of their people by their counsels--famous men worthy of praise--are Knight-Ridder reporters Jonathan Landay and Warren Strobel.

The Poor Man Institute for Freedom and Democracy and Unlimited Numbers of Ponies for All Whlo Want Them: As my good friend Neil Cavuto has argued, it’s a lot easier to make headlines for doing something bad than for doing your job right. Maybe, in order to balance out the liberal media’s unfair obsession with the Judith Miller kerfuffle, Mr. Cavuto could do a balancing piece on Knight-Ridder reporters Jonathan Landay and Warren Strobel, who did their f---ing jobs. I’m sure FOX’s viewers would be heartened to know that American journalists were correctly reporting in 2001 and 2002 that Saddam was not tied in any significant way to international terrorists, that his WMD program was likely not as advanced as the White House was claiming, and that Bush made his final decision about war with Iraq in February 2002 at the latest.

How did they accomplish this miracle? Jonathan Landay explains:

We may have asked questions other journalists failed to ask. In addition, high-level sources on whom other journalists depended were pushing the agenda for war. Many of our sources were “working stiffs” in defense, intelligence and diplomacy, people who were not invested in the political agenda.

A technique reminiscent of Sy Hersh, who has gotten one or two stories right over the years. But I’m sure he doesn’t get to summer with Lil’ Russ on Martha’s Vineyard, either.

But one does get praised as a famous man by whom the Lord hath wrought great glory...

DeLong Smackdown Watch!

Robert Waldmann--who knows about biochemistry and medicine--wields the bludgeon:

Robert's Stochastic thoughts: Dean Baker asks:

Just for the record, the U.S. government already spends $30 billion a year on biomedical research.... Why shouldn't we believe that if we doubled this appropriation, to replace the $25 billion that the drug industry claims to spend on drug research?...

Brad DeLong applauds Baker and (but) replies:

The answer is that we don't trust the NIH to be able to set up procedures that cover all the bases in drug research. Low-probability but high-payoff projects are likely to be underfunded by the government--but properly funded by private companies willing to roll the dice.

I think Brad is totally wrong. The idea is that the private sector is willing to take risks for huge potential profits. This is very true of startups where decision makers are effectively protected by bankruptcy law. [But] the patent holders in the pharmaceutical industry are huge corporations which will not benefit from the services of a bankruptcy court. Decisions are made by people who will do very well if they just keep on keeping on. A sporty business compared to retailing, but not one that requires particular daring.

In contrast, the US Federal Government is willing to shoot for the moon (literally) spending huge amounts of money for purely speculative possible advantages. It is just a fact that the most daring research and development is publicly financed mostly by the US DOD. A closer look at what big Pharma and the NIH do with their money makes this very clear. Big pharma takes chances with drugs which might be valueless because of side effects or something. They bet with a worse than 50 % of a big payoff. The NIH bets with a miniscule chance of a huge payoff, as is typical of public sector research.

The Federal government has very deep pockets. It should have huge risk tolerance compared to well anything else.... It's just not true that public research is more cautious and short term. Quite the opposite. The private firms often come in when the basic concept is proven and details need to be fixed, roughly the development stage not the research stage. A pharmaceutical company issue is making a drug so that we don't digest it in our stomach, piss it away immediately or metabolise it (pharmacokinetics). While outstanding original path breaking research has been done by drug companies, they generally come in at the relatively low risk close to market phase. In fact, the advantage of the big drug companies is the advantage of a large firm whih can coordinate a huge team. Thus agents developed by say biotech startups are brought to market by big pharma.

Oddly NIH employees interact with big pharma roughly the same was biotech start ups do. The NIH is huge, but to avoid bureauschlerosis it is organised in an immense number of tiny fiefdoms with senior investigators who can't be fired and do what they want (think full professors but there are many more of them proportionally). The NIH budget is spent on an absolutely immense number of tiny organisations (think of an NSF grant and that's like an NIH grant except there are many fewer NSF grants). Often the principal investigators have no reason to fear risk, can shoot for the moon and do.

So why is it that the federal bureaucracy is better than the private sector at daring original high risk research and worse at anything requiring organisation ? Well I think one big factor is ideology. The NIH is in the USA and for it to develop drugs and bring them to market would be socialism. Can't have that even if it works (see general debate about health care). Another is that too much freedom is licence.... NIH funded researchers study things which are interesting scientifically. Congress tries to push them towards more applied work (failing to calculate the return so far on pure and applied work which shows that more bang has consistently been obtained for the pure research buck). The boring work of improving a molecule and testing and testing and testing it (after applying and applying and applying to the FDA for permission to do so) is something few people will do without pressure indirectly from shareholders via ruthless managers.

You could ask how many principal investigators at the NIH have ever received FDA approval for an IND (Investigative New Drug), a necessary step in the drug development process. Now if you suggest that they and they alone get to divy up the 20 billion a year, then I'm all for it. Conflict of interest disclaimer. I only know of one such person, and he is my father.

Too Much Linear Algebra

You know too much linear algebra when...

You look at the long row of creamer pitchers at Peet's--soy, skim, low-fat, whole, and half-and-half--and think: "Why so many? Aren't soy, skim, and half-and-half a basis?"


The National Center for Policy Analysis in Dallas has fired Bruce Bartlett, havingdecided that it is not a think tank for conservative ideas but rather in the tank for the Bush family. I wonder who the NCPA thinks will pay any attention to what it produces in the future?

Wonkette observes:

Righty Fratricide: No One Gets Away Clean - Wonkette: The first thing we do is kill all the better-qualified lawyers. Then we sack the think-tankers. Bruce Bartlett of the Dallas-based conservative brains trust, the National Center for Policy Analysis, has been axed from his position there as a senior research fellow. Now, we're not saying it's because he recently scribbled this:

"[The nomination] of a patently unqualified crony for a critical position on the Supreme Court was the final straw..."

Or because he has a book coming out called this: The Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy.

Or because, in a column entitled "Bless the Blogs," he cited Andrew Sullivan as his favorite post-and-linker, characterizing him (correctly) as a "gay British conservative with a Ph.D. from Harvard," and then characterizing him (incorrectly) as a former lefty with a therefore keener insight into that particular ideological affliction. (To keep one creed's a task grown quite Herculean, / Is it not so, my Tory ultra-Julian?)

David Frum moving the family to Fort Sumter by nightfall.

And Matthew Yglesias writes:

TPMCafe || The Purge: Bruce Bartlett, rapidly becoming every liberal's favorite rightwing economist, has been fired from the National Center for Policy Analysis for insufficient loyalty to Team Bush. Via Marshall Whittman we see that was no coincidence:

Bush's friends contend that it is the conservative élite, not the President, who miscalculated and that self-righteous right-wingers stand to lose their seats at the table of power for the next three years. "They're crazy to take him on this frontally," said a former West Wing official. "Not many people have done that with George Bush and lived to tell about it." If a Justice Miers eventually takes her seat on the court, vocal critics can only hope the Bush Administration handles the punishment of the treasonous as poorly as it is currently promoting one of its most loyal subjects.

Sad to say, I think Bush's friends may well be right about this. Despite the tumult in the punditsphere, the latest Gallup poll shows Bush's approval rating still sinking, but not sinking among conservatives. Instead, he's managed to grow even more unpopular with Democrats and Independents. Not only is the rank-and-file still loyal to Bush, but dare I say that the pundits who matter are. Fox News and the talk radio hosts with big audiences are still in his corner. I work professionally in the exciting worlds of small magazines and new media, but the broadcast bohemoths are still the really influential segment of the press.

If Rupert Murdoch decides to turn on the GOP leadership someday, then that would spell huge trouble for them, but there's no indication that's happening.

The remarkable thing, IMHO, is not that Bush is losing his right-wing supporters but that he ever had any. Bush believes in:

  1. Appointing cronies--qualified or unqualified--to high federal office.
  2. Making snap decisions without understanding the issues at hand, and then refusing to revisit them.
  3. Having the federal government do lots of stuff--take on an expanded role in education, buy drugs for the elderly, invade and then engage in long-term occupations of countries.
  4. Cutting taxes on the rich.

An amusing parlor game--amusing for those people with my sick, twisted, perverted sense of humor that is--is to sit prominent Bush-supporting economists down on a couch and ask which they hate more: Bush's Medicare Part D drug benefit, which gives the pharmaceutical companies the ability to charge essentially whatever they want for the medicines Medicare buys, and thus mandates either mammoth tax increases or hyperinflation in our future; or the alternative Democratic Medicare Part D drug benefit, which gives HHS the power to "negotiate" drug prices with pharmaceutical crises, and thus essentially imposes a set of government-chosen price controls on the industry.

This is not a right-wing administration. This is an incompetent administration.

Impeach George W. Bush. Impeach him now.

The Nine... Well, the Four...

Now that it is starting to look as though Patrick Fitzgerald might indict somebody, the effort to blacken his reputation has begun. It's being led by Richard Cohen, Victoria Toensing, Mary Matalin, and William Kristol, all of whom appear to think that now is the time to be sock puppets for Karl Rove and company.

Here's firedoglake:

firedoglake: A Little Soft Shoe to Start?: And so it begins. The pushback at Patrick Fitzgerald has already started, before charges have even materialized for anyone involved in the Traitorgate mess. A little softshoe, testing the waters to see what works, what grabs hold and resonates, what will be a good set of repeated catch-phrases and talking points for the Rush crowd and dittoheads.It started with a little testing of the waters by Victoria Toensing, Mary Matalin and hack-columnist Richard Cohen last week, a little hint here, a little dig there.

"He's lost his mind," Toensing tossed out on Hardball.

"He should go back to Chicago and not bother with petty criminal charges like lying to investigators or lying under oath," Cohen said....

[T]his post... on Bullmoose....

What is more sad though: that the attack dogs will not attack the charges based on their merit... that the first reaction is always, always to go after the prosecutor personally.... It isn't surprising, after all, that this would be the means used by Karl Rove and his buddies. We saw this very sort of smear in South Carolina in 2000, after all, when John McCain trounced W in New Hampshire's primary.... His response was not to fight it out on the merits, on the ideas, on the things that actually make a difference to the American people and their day to day lives. No, his response was to wallow in the gutter -- to begin a whisper campaign that McCain had fathered an illegitimate mixed-race child, when, in fact, McCain and his wife had adopted a Bangladeshi orphan.

What sort of person tries to smear a man with his act of decency? Ask Rove. It's been his MO since he cut his teeth in politics...

But why this focus on Rove? The first cause is not Rove, but Bush. The cossacks work for the Czar.

Thinking About Economic Security

PGL at Angry Bear reads about economic security:

Angry Bear: Economic Security: A Couple of Good Op-eds: The funds for retirement for many workers will come from a variety of sources including Social Security (a publicly run defined benefits plan), private defined benefits plans, defined contribution plans, and even bank accounts. Just as FDIC and FSLIC were designed to provide insurance for bank accounts, PBGC was designed to provide insurance for private defined benefits plans. The National Review ran a very good discussion of the problems facing PBGC by John Boehner. I wish we had more principled conservatives in Congress such as Mr. Boehner.

On the general issue of economic security and how some in the GOP are proposing ways to undermine the protections of Social Security, see Jonathan Cohn who echoes some of the wisdom on these issues that have been provided by Mark Thoma.

Alas, the National Review had to run a weak attempt to rebut Mr. Cohn from Michael Cannon:

Which would you rather have, freedom or security? … Social Security privatization, school vouchers, and deregulating healthcare would expand the menu of choices available to ordinary people.... From whom would you rather buy bread: a government monopoly, a private monopoly, or one of a number of competing grocery stores? It's really not much of a contest. The government and private monopolies would have consumers right where they want them.... In essence, health-insurance regulation is a product.

Insurance is not the product, it’s the means to pay for the product. The health care debate is complicated and not all liberals are advocating socialization of prescription drugs and doctors. But it would be hard to argue that the current market system in the U.S. provides health care efficiently... [or] address[es] the health care needs of the poor....

The government monopoly canard belongs to George Will.... What this crew fails to appreciate is that households can already pursue higher expected returns in their private defined contribution plans to combine with the low risk, modest returns from bonds held in the public defined benefits plan we call Social Security. Of course, Mark Thoma would remind us of longevity risks, which are one of the reasons why putting some of one’s retirement savings into a defined benefits plan might be optimal. In theory, the private sector could provide such mechanisms, but for some reason – private markets have not done so.

Well, where is the company today that is big and stable enough to credibly offer a defined benefit plan to 25 year olds? I've swung around to the view that only the federal government is big enough to do so--and it is an important thing that people value dearly, hence an appropriate mission for the government.

Let me, however, make a small minor dissent from PGL: the poorer half of America's population is effectively excluded from investing in the stock market by a variety of "transactions costs." Having them put some of their Social Security money in the stock market would be a good thing (albeit not the way that the Bush administration structured it).

A Justice Should Know That This Is a Free Country

Ah. Very bad news about Harriet Miers:

Think Progress: Sen. Chuck Schumer said yesterday that Harriet Miers told him she was "not ready to give an answer" on whether the 1965 Griswold v Connecticut case was "settled law."... Griswold struck down a law that criminalized the use of contraceptives by married couples. Coupled with her previous support for a constitutional ban on abortion, Miers's silence on the matter is notable.... John Roberts, who refused to discuss his position on virtually any past cases during his hearings, did state his support for Griswold...

The most important thing a Supreme Court Justice needs to know is that the United States is a free country. This doesn't seem to be something that Harriet Miers knows.

GM and the Macro Outlook

General Motors amazes Jim Hamilton:

Econbrowser: GM losses and other economic news: No matter how amazing your accomplishments, it's always nice to try to set your goals even higher. I was pretty impressed when General Motors managed to lose $1.2 billion on its North American operations in the second quarter of this year. But yesterday GM announced it had outdone even this, losing $1.6 billion on its North American operations in the third quarter.... For those of us who have worried about the short-run macroeconomic implications of developments in the auto industry, yesterday's news adds to the concerns, even if the market has hopes that over the long run, GM can dig out of the hole it's in right now.

What picture is emerging elsewhere in the economy? Calculated Risk, who follows housing more closely than anybody, expects the housing decline to begin shortly.... Macroblog sees last week's news of 0.2% gains in retail sales in September (1.1% ex-autos) as a positive, but is worried by the 1.3% drop in industrial production. Altig also reports that the fed funds futures reflect a market expectation of 25-basis-point rate hikes at each of the next three FOMC meetings, which would leave us at 4.50% by January. Prospects for relief from that dimmed even further with today's release of the producer price index, whose 1.9% rise in September was the fastest growth in 15 years.

Oh, and by the way, there's a new possibility of yet another hurricane that could threaten the Gulf.

Other than that, the news is great.

MSN Search as Algebra Homework Helper

Will my grandchildren ever have to remember the quadratic formula?

MSN Search Solves Equations: For those tackling math equations, MSN Search has a nice feature: it solves them. Try [((122.78+(x^2))/190)=.93] and the direct answer (as taken from MSN Encarta) will read:

((122.78+( x^2))/190)=.93 = x=7.343024 x=-7.343024

And that's a feature not even the Google Calculator has.

Now I can procrastinate by feeding it equations, hoping to find one that will break it...

Hooray for Google Print!

Eric Schmidt talks about Google Print--a magnificent endeavor:

Books of Revelation, by Eric Schmidt: Imagine sitting at your computer and, in less than a second, searching the full text of every book ever written. Imagine an historian being able to instantly find every book that mentions the Battle of Algiers. Imagine a high school student in Bangladesh discovering an out-of-print author held only in a library in Ann Arbor. Imagine one giant electronic card catalog that makes all the world's books discoverable with just a few keystrokes by anyone, anywhere, anytime. That's the vision behind Google Print, a program we introduced last fall....

Google's job is to help people find information. Google Print's job is to make it easier for people to find books.... For many books, these results will, like an ordinary card catalog, contain basic bibliographic information and, at most, a few lines of text where your search terms appear. We show more than this basic information only if a book is in the public domain, or if the copyright owner has explicitly allowed it by adding this title to the Publisher Program... Any copyright holder can easily exclude their titles from Google Print -- no lawsuit is required....

Just as any Web site owner who doesn't want to be included in our main search index is welcome to exclude pages from his site, copyright-holders are free to send us a list of titles that they don't want included in the Google Print index. For some, this isn't enough.... [W]e believe... that the use we make of books we scan... is consistent with the Copyright Act, whose "fair use"... allows a wide range of activity... all without copyright-holder permission.... The aim of the Copyright Act is to protect and enhance the value of creative works in order to encourage more of them... We find it difficult to believe that authors will stop writing books because Google Print makes them easier to find, or that publishers will stop selling books because Google Print might increase their sales....

Imagine the cultural impact of putting tens of millions of previously inaccessible volumes into one vast index... searchable by anyone, rich and poor, urban and rural, First World and Third, en toute langue ... entirely for free. How many users will find, and then buy, books they never could have discovered any other way? How many out-of-print and backlist titles will find new and renewed sales life? How many future authors will make a living... solely because the Internet has made it so much easier for a scattered audience to find them? This egalitarianism of information dispersal is precisely what the Web is best at; precisely what leads to powerful new business models for the creative community; precisely what copyright law is ultimately intended to support; and, together with our partners, precisely what we hope, and expect, to accomplish with Google Print.

Why Oh Why Can't We Have a Better Press Corps? (Yet Another Washington Post Edition)

"Retire" Richard Cohen. "Retire" Richard Cohen now.


Miers: Faithful to Whom? : A clarification: A number of readers, some of them formerly of the CIA, got the impression from my last column that I don't consider the outing of a covert employee a serious matter. I do.

Last week:

Let This Leak Go : The best thing Patrick Fitzgerald could do for his country is get out of Washington, return to Chicago and prosecute some real criminals.... Go home, Pat. The alleged crime involves the outing of Valerie Plame, a CIA operative.... Not nice, but it was what Washington does day in and day out.... This is rarely considered a crime. In the Plame case, it might technically be one...

Nationalize Tamiflu Now!

Dean Baker writes some very good sense about Tamiflu and compulsory licensing:

MaxSpeak, You Listen!: BIRD FLU, BIRD BRAINS, AND ECONOMISTS : Those of you who like to prepare for potential crises in advance, rather than waiting until after the fact (i.e. not FEMA), may have been following the debate over dealing with a potential outbreak of the Avian Flu.... One of the key issues is whether the government should be stockpiling large quantities of Tamiflu.... The major obstacle to large-scale stockpiling is that the drug is under patent by Roche, the Swiss pharmaceutical company. Roche has limited manufacturing capacity for Tamiflu, and would charge a high price in any case.... [T]he claim of manufacturing complexity is not accurate. The Indian drug manufacturer, Cipla, determined how to reverse engineer the drug in two weeks and is now prepared to begin making a generic version of the drug available in January....

The most extreme case is the one that Roche may find itself in. It may have monopoly rights to a drug that could literally mean the difference between life and death to tens of millions of people in the rich countries. This could be REALLY big money. If the government takes away the potential for this incredible windfall, by requiring that the drug be licensed so that it can be mass produced, then it does reduce the expected return on future investment. To put it simply, if there is a 1 in 10,000 chance that a drug company's new drug will be the next Tamiflu, but the company knows that it will then be required to license this drug rather than making $200 billion in profit, it will reduce its expected profits on its new drugs by $20 million ($200 billion/10,000).

While we cry over this loss of expected profits, let%u2019s ask why are we in this mess to begin with? In other words, why are we relying on patent monopolies to finance drug research? The Holy Grail in economics is that price should equal marginal cost. Yet, drug patents lead to situations where prices are hugely out of line with marginal cost, in some cases by a factor of 100 or more. Drugs are almost invariably cheap to produce; they are only expensive to consumers because of patent monopolies.

Of course patent monopolies in prescription drugs lead to all the bad things that economists warn about when prices diverge from marginal cost. The most immediate effect is the deadweight loss that results from people not getting drugs that they could afford at the competitive market price, but not at the patent protected price. And, this is not just poor people in Sub-Saharan Africa, there are tens of millions of people in the United States who do not take the optimal drug or the optimal dosage because patent protection makes it too costly. Monopoly profits give drug companies incentives to undertake expensive and often deceptive marketing campaigns.... Patent monopolies also provide incentives to research copycat drugs.... Patent monopolies also encourage drug companies to conceal negative research findings.... [P]atent monopolies encourage drug companies to spend large amounts of money on lawyers, lobbyists, and propaganda to protect and extend their monopolies.

The $220 billion question (current U.S. spending on prescription drugs) is where are the economists? Remember, economists are people that get high blood pressure from 10 percent tariffs on shoes or pants. When Bush put a temporary tariff on steel imports that maxed out at 30 percent, economists all over the country became apoplectic. So why is the economics profession overwhelmingly silent about drug patents, which are the equivalent of tariffs of 300 percent on average, and affect a product that is much more important to our economy and our health?

We recognize that patents are a way to provide incentives for research, but where is the economic research that shows that they are the most efficient way? You won't find it, because economists have mostly chosen to ignore the issue.

Just for the record, the U.S. government already spends $30 billion a year on biomedical research.... Why shouldn't we believe that if we doubled this appropriation, to replace the $25 billion that the drug industry claims to spend on drug research?...

Given the enormity of the stakes, you would think that there was a major debate within the economics profession about the best method of financing drug research. While there has been a limited amount of writing devoted to the topic, most economists are too busy dealing with tariffs on pants and other crucial items. Maybe mass deaths from a flu pandemic will help to reorient priorities in the profession.

The answer is that we don't trust the NIH to be able to set up procedures that cover all the bases in drug research. Low-probability but high-payoff projects are likely to be underfunded by the government--but properly funded by private companies willing to roll the dice.

However, these ex ante considerations vanish ex post when an epidemic threatens: nationalize Tamiflu now!

Pourquoi Mourir pour Ibrahim Al-Jaafari?

Morton Halperin writes: Training Whom For What: The debate over Iraq is at one level a debate about what the true lessons of Vietnam were. Former Secretary of Defense Melvin Laird has weighed in with the Kissinger version of Vietnam -- by a combination of a carefully phased withdrawal, matched by training of the Vietnamese and threats of further escalation, we had won the war, only to see victory taken away by the American people who removed the threat of escalation and cut aid to our allies. The fatal flaw in that argument is what I want to discuss, because it goes to the heart of the question of how well we are doing in training the Iraqi army and when that will enable us to leave. We tried to do the same in Vietnam and there is much that we should learn from that effort.

First we need to ask who we are recruiting... to whom he (or she) gives loyalty. In Vietnam we learned after it was over that about one third of those we armed and trained were actually in the Viet Cong... one third of the trainees in the Republic of Vietnam's army (ARVN) would quickly take the weapons they were given and sell them on the black market. In Iraq we again see signs of the same thing with large desertion levels and US weapons showing up in insurgency hands. The remaining ARVN troops... were in it for the pay and for the prestige and the opportunity to plunder....

[W]e put much of our faith and our hope in the process of training the Iraqi Army. The unstated assumption is that Iraqi men do not know how to fight and if only exposed to western methods will be able to deal with the insurgency.... The unexamined but false assumptions behind this policy are monumental.... We need to consider who we are actually training

Willie Stark

Chris Lehmann does not like All the King's Men:

"Why Americans can't write political fiction." by Christopher Lehmann :

In most respects, Warren's novel has aged poorly. Its Faulknerian prose manages to be both purple and flat while its political reflections are just banal. ("Man is conceived in sin and born of corruption," runs Willie Stark's oft-quoted motto, "and he passes from the stink of the didie to the stench of the shroud"--a nugget of wisdom as hard-won as it is subtly voiced.) At the simple level of characterization, Jack Burden's odyssey is unpersuasive--his alleged innocence is more a product of tedious grad school soliloquizing than any discernible virtue. Likewise, Willie Stark's temptation of Burden into the lurid exercise of demagogic power is pasteboard populism, an opportunity to score cheap points against a discredited leader like Long--and the grievously distorted political persuasion he represented--on behalf of what is ultimately an aristocratic conception of Old South noblesse oblige. Yet Warren's overheated language of sin and corruption does hearken back to the odd moral fastidiousness that shapes so much of the obdurate badness of American political fiction...

I did not read All the King's Men as scoring cheap points against Huey Long at all...

Shows how reading is an activity that takes place between the ears, and how your mileage may vary.

Dingbat Kabuki! (Yet Another Why-Oh-Why Can't We Have a Better Press Corps? Edition)

Jonathan Weisman of the Washington Post is on the front page getting the story... umm... not quite right:

House GOP Leaders Set to Cut Spending: Leadership Shake-Up Spurred Policy Shift. By Jonathan Weisman: House Republican leaders have moved from balking at big cuts in Medicaid and other programs to embracing them, driven by pent-up anger from fiscal conservatives concerned about runaway spending and the leadership's own weakening hold on power. Beginning this week, the House GOP lawmakers will take steps to cut as much as $50 billion from the fiscal 2006 budget for health care for the poor, food stamps and farm supports, as well as considering across-the-board cuts in other programs...

But if you read to the end of the article--and if you understand budget concepts and reporting conventions--you can see that Weisman's announcement that the House Leadership has changed course and wants a new "cut... $50 billion from the fiscal 2006 budget" is... strange. It seems that Speaker "Hastert... announce[d] that... cuts to entitlement programs such as Medicaid, food stamps and farm supports would be raised from $35 billion to $50 billion." So its a $15 billion change in direction--not $50. And it's not in the fiscal year 2006 budget. The original $35 that has been topped-off to $50 are cumulative "entitlement cuts over five years"--originally $7 and now $10 in each of the next five years.

So we're not talking about a $50 billion cut relative to baseline in entitlement spending for fiscal year 2006. We're talking about a $3 billion cut.

But everyone--well, everyone except those of us who actually care about responsible fiscal policy--happy to sell this a $50 billion cut?

Five reasons:

  1. The Republican House leadership wants this to seem like a big deal. They want to appear fiscally responsible. They want the base not to be made at them. They will be grateful if Jonathan reports it as $50 billion in FY 2006 rather than $3 billion.
  2. The conservative Republican House members who believe in smaller government want this to seem like a big deal: they have been powerless, and think that if they can appear powerful they will become powerful. They too will be grateful if Jonathan reports that they were able to pressure Hastert and company into a $50 billion change-of-direction in 2006 rather than a $3 billion change-of-direction.
  3. The Democrats will be happy too: a $50 billion cut in food stamps and Medicaid in FY 2006 is a very effective base-energizing talking point.
  4. It's hard to convince one's editors that a $3-billion-in-FY-2006 change-of-direction is worth putting on the front page. It's much easier to convince one's editors that a $50-billion-in-FY-2006 change-of-direction deserves placement on page 1.

And the readers of the Post? People who might care whether the number is $3 or $50 billion? People who might want to know what the relevant scale is--that $3 billion is 0.6% of the $500 billion annual deficit (excluding the Social Security surplus), is 0.04% of the $8 trillion gross federal debt? They're not in the picture.


Make no mistake: this is the kind of reporting that the Washington Post likes. Let's turn over the mike to its editors:

Jonathan Weisman Moves to National

After a terrific three-year run in Financial, Jonathan Weisman will join the National staff covering the House of Representatives. Jonathan's timing is perfect. He's inheriting a beat with so many great running story lines -- from the plight of Tom Delay to the frayed relations between the White House and congressional Republicans to the coming midterm elections -- that he should have little trouble making an early mark. Jonathan is a terrific, tireless reporter with a long history of bringing home scoops and setting the agenda on his beat, two traits he promises to bring to his new assignment.

He also comes with a deep familiarity of the Hill, earned from covering economic policy issues, from budgeting to taxation to Social Security and Medicare, for many years. Before joining The Post, Jonathan worked for USA Today, where he covered economic policy, then defense issues after Sept. 11. His reporting career has included coverage of the Clinton White House, the 2000 presidential campaign and major congressional issues for The Baltimore Sun, as well as more detailed tax, energy and transportation coverage for Congressional Quarterly. For five years, he wrote about science, energy and nuclear weapons issues for The Oakland Tribune in California.

Jonathan will move quickly into his new role, while helping us keep current on economic policy issues until Jill Dutt can find his replacement.

Readers of the Post beware...

Syllabus Part II: Economics 101b Fall 2005

Economics 101b Fall 2005

Syllabus Part II

October 14, 17: Japan's Decade-Long Slump

Readings: Paul Krugman, “Japan’s Liquidity Trap” <>
Paul Krugman, “Japan: Still Trapped”
Adam Posen, “Macroeconomic Mistake, Not Structural Stagnation”
Adam Posen, “Recognizing a Mistake: Not Blaming a Model”

October 19, 21, 24: Europe's High Unemployment

Readings: Olivier Blanchard and Lawrence Summers (1986), "Hysteresis and the European Unemployment Problem"
Olivier Blanchard and Justin Wolfers (1999), "Shocks and Institutions in European Unemployment"
Olivier Blanchard (2004), "The Economic Future of Europe"

October 26, 28, 31: America's "New Economy"

Readings: Alan Blinder and Janet Yellen (2001), The Fabulous Decade: Macroeconomic Lessons from the 1990s (New York: Century Foundation)
William Nordhaus (2004), "The Story of a Bubble"

November 2, (no class on the 4th), 7, 9: Emerging Market Financial Crises:

Readings: Michael Mussa (2002), Argentina and the Fund: From Triumph to Tragedy
Morris Goldstein (1998), The East Asian Financial Crisis

November 14, 16: America's Current Macroeconomic Dilemma

Readings: Lecture notes to be issued...

Daniel Gross Writes About the Class War

The class war by the rich against the non-rich, that is:

Daniel Gross: BUSH BOOM, CONT'D From an AFP story on today's inflation numbers, which showed the Consumer Price Index has risen 4.7 percent in the past 12 months, and 1.2 percent in September alone.

Dick Green at said he viewed the report as positive.

"Gasoline prices at the pump have declined since this survey, and global oil prices continue lower," he said. As energy prices in CPI flatten (or even drop) the next several months, the total index could post some very low numbers."

"It is amazing how much pessimism persists amidst such good news," Green added.

Well, one reason people could be pessimistic is that inflation is rising (which means things cost more) and wages are falling (which means people have less money to buy all that stuff that costs more.)

From the same article:

"Wage pressures were tame. In a separate report, the Labor Department said average weekly earnings fell 1.2 percent after adjusting for inflation. Real average hourly earnings are down 2.4 percent in the past year, while real average weekly earnings are down 2.7 percent, the biggest drop in 14 years."

At least that dreaded inflation in workers is under control.

Falling real wages are not a sign of an economy near full employment, but one that still has enormous amounts of slack in the labor market.

Our Revels Are Now Ended

Shakespeare in the Berkeley Hills at night on October 15.... Well, come to think of it, it's no colder than Shakespeare in Regent's Park in London in mid-June...

Ralph Waldo Emerson on Coal

From Barbara Freese (2003), Coal: A Human History (New York: Penguin: 0142000981):

In the late nineteenth and early twentieth century, all kinds of people--engineers, plant scientists, businessmen, and theologians--were inspired to write books and articles in which they waxed poetic about the glories of coal. Even transcendentalist philosophers... Ralph Waldo Emerson wrote this about coal:

Every basket is power and civilization. For coal is a portable climate It carries the heat of the tropics to Labrador and the polar circle; and it is the means of transporting itself whithersoever it is wanted. Watt and Stephenson whispered in the ear of mankind their secret, that a half-ounce of coal will draw two tons a mile, and coal carries coal, by rail and by boat, to make Canada as warm as Calcutta; and with its comfort brings industrial power.

Power, Knowledge

Aaron Swartz has decided that the extremely insightful Doug Henwood will have a weblog--whether he wants one or not:

Doug Henwood Talks : What's going on here? This is a weblog built from posts by Doug Henwood, editor of Left Business Observer and author of Wall Street and After The New Economy. This weblog is not affiliated with or endorsed by Doug Henwood or Left Business Observer. It is run by Aaron Swartz ([email protected]).

America's Silliest Dog Strikes Back

Reactions to America's Silliest DogTM, Rancho Laguna Park, October 15 AM. America's Silliest DogTM is five years and three months old:

4: What a cute Lab puppy!
3: How old is your Lab puppy?
3: Off. Off! Down!!
2: How do you get your dog to run like that? I wish my dog would run.
2: How did your dog get so muddy?
1: Where did she find that branch?
1: No jump! No jump!
1: It must be nice to have a puppy.
1: When she grows up, you should get her a companion dog to play with to keep her active.

UPDATE: For some reason, nobody said: "I see your dog likes to roll in horse urine-soaked hay."