Previous month:
December 2005
Next month:
February 2006

January 2006

Ezra Klein: Time for Another Panel on Weblogger Ethics!

Ezra Klein says it is time for another panel on weblogger ethics:

Ezra Klein: That Wasn't Quite My Point : My long quest to single-handedly lower the quality of public discourse has finally borne fruit -- in USA Today, no less (I know, lowering the public discourse in USA Today is kinda redundant)! Read down to the end. And then read my original post. That Tim Kaine is ugly wasn't quite my point, though, to be fair, it was certainly part of it.

Sigh. Somebody better convene a blogger ethics panel.


The Secret History of 1998

Kevin Drum writes:

The Washington Monthly : DELAY TO ABRAMOFF TO LIVINGSTON.... A DC TRIPLE PLAY?.... Via Josh, New York Post gossip maven Cindy Adams sez: "Jack Abramoff's partner Mike Scanlon admitted to digging up former Congressman Robert Livingston's private life. Set to become speaker, Livingston then got sidelined for Tom DeLay's man Denis Hastert. Prosecutors now checking if Abramoff and Scanlon took Livingston down at DeLay's behest." Like Josh, I also say "Hmmm."

Livingston was not the only Speaker of the House in DeLay's way in 1998. Newt Gingrich was axed earlier--because, we believe, his then-ongoing extra-marital affair with the third-Mrs.-Gingrich-to-be was inconsistent with the rectitude required of Republicans pushing for the impeachment of William jefferson Clinton.

Was Clinton really the target of Tom DeLay, Ken Starr, and the other Republicans pushing for impeachment in 1998? Or were the real targets Gingrich and Livingston? Who can tell us about the secret history of 1998?


Health Savings Accounts Once Again...

Peter Gosselin of the Lost Angeles Times writes about Health Savings Accounts. IMHO the Bush administration is excited about them because they are yet another excuse for a tax cut--and thus yet another excuse for destructive policies that make the chances of fiscal disaster in the long run higher.

Health Plan to Revive Debate - Los Angeles Times : President Bush is preparing to unveil a series of proposals intended to make the nation's healthcare system more efficient, but he is likely to revive a bitter debate... about how much of life's biggest risks Americans should bear on their own. Although many of the proposals... are ones the president has failed to get through Congress... new initiatives... additional tax breaks for the use of Health Savings Accounts, and making most out-of-pocket medical spending by individuals tax-deductible....

Just as with Bush's Social Security personal accounts proposal, the president would be seeking to persuade Americans to rely less on government-provided or employer-provided safety nets and more on themselves. He would also exhibit the kind of combativeness that has become a trademark of his time in Washington.... "The danger," Altman said, "is that this new arrangement could work out very well for some people, especially the young, the healthy and the affluent, but be very bad for the health system as a whole." The Health Savings Accounts, known as HSAs, are designed to encourage people to cover a substantial portion of their healthcare costs by opening tax-advantaged accounts from which they can pay routine medical expenses.... [T]he accounts will attract only the healthiest [and richest] Americans, leaving traditional employer-provided plans with people who have the highest health costs [and less wealth]....

Much of the president's recent thinking about healthcare appears to be influenced by former Reagan administration economist John F. Cogan, now at Stanford University, and former Bush chief economic advisor R. Glenn Hubbard....

Many analysts believe that the two big government [health] programs or something like them are needed because the elderly, poor and disabled who are covered by them have the most costly care -- and, especially in the case of Medicaid, are the least able to afford it. Hubbard said such problems can be handled by government subsidies.... Douglas Holtz-Eakin, a former Bush economic advisor and Republican-appointed director of the Congressional Budget Office, described the idea of tax deductions for people's out-of-pocket medical expenditures as "really bad tax policy." Holtz-Eakin, who is a fellow with the Council on Foreign Relations, warned that the deduction would tempt people to treat almost all of their spending as health-related and wreak havoc at the Internal Revenue Service. "I could make an argument that my running shoes are a health expense," he said. "They're preventive medicine."...

[I]f anything, people feel underinsured, and have little interest in adding to the financial risks they face. "The average American isn't interested in having more of his or her skin in the game," said Robert D. Reischauer, president of the Urban Institute, a centrist Washington think tank. "They already think they are paying plenty for healthcare and bearing enough of the risk as it is."... [M]any conservatives believe that the reason most Americans have too much employer-provided health insurance is that Washington lavishes too many tax breaks on companies to provide it. But instead of cutting back on the breaks offered employers, Bush proposes giving new breaks to individuals. In effect, he is leveling the tax playing field by raising the latter up, rather than cutting the former down. In an era of giant federal budget deficits, offering one set of tax breaks to counteract another might prove a hard sell.

Cogan and Hubbard acknowledged the problem but argued that proposals such as theirs were the only ones that could win congressional passage. "There's no question that the right answer is to repeal the tax exclusion for employer-provided health insurance," Hubbard said. "But there's no chance politically that that will happen."

I'd much rather have Glenn Hubbard and John Cogan talking about the necessity of tackling the budget deficit than proposing policies that make future budget deficits larger.


Strangers Converse in a Berkeley Elevator

Strangers Converse in a Berkeley Elevator:

Person #1: I'm getting into an elevator. I'm about to lose the connection...

Person #2: An elevator is an admirably effective Faraday cage.

Person #3: Somebody should make a cell phone that works inside a Faraday cage.

Person #1: But surely the laws of physics...

Person #4: It could work via gravitational radiation

Person #2: Two charged, mutually orbiting micro black holes within the cell phone casing...

Person #5: Surely the Hawking radiation would be too fierce?

Person #2: I dunno. How long is the lifespan of a 10 kg black hole, anyway?

Person #1: You'd carry around a 50 lb cell phone just so you could talk in elevators?


Imposter: How George W. Bush Bankrupted America...

James Wolcott praises Bruce Bartlett's book-to-be,Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy:

James Wolcott: Bartlett's Quotations: Compared to [George W.] Bush, [Clinton] looks like a competent, responsible, functioning adult. And I suspect that by 2008 a lot of Republicans are going to be secretly hankering for a Hillary presidency to put Bush's manifold wrongs right. As for the Bush Legacy, Bartlett speculates:

"I think [Republicans] will eventually think of Bush the way earlier Republicans thought of Nixon--as someone who severely undermined the party and its principles just to get reelected. Not only did Nixon come close to exterminating the Republican Party with Watergate, he put in place policies that continue to burden the economy to this day--all to win one lousy election in 1972. I think Bush and his congressional enablers basically did the same thing in 2004. Bush's motives may have been higher than Nixon's--Bush believes he is fighting a holy war against terrorism, whereas Nixon was simply selfish--but the results may be the same."

I think Wolcott pushes things to far: I certainly wouldn't call Clinton a "competent, responsible, functioning adult." In policy matters, yes. In personal matters... If Clinton comes within a hundred yards of my daughter, I'm getting out the shotgun.


Sociology of Journalism III

In comments, Robert Waldmann definitely does not agree with Jeff Leen:

Brad DeLong's Semi-Daily Journal: Sociology of Journalism II : [T]he links [Dennis] provides further undermine Leen's claim that Schmidt broke the story. He claims the Post connected the dots, but doesn't note any dots connected by Schmidt and not by Rosenbaum.... Dennis based his praise of Schmidt on the same evidence used by Leen, the response of the powerful John McCain... if a tree falls in the woods and all senators pretend they didn't hear it, it doesn't make a sound. The evidence of Schmitt's contribution presented so far by Dennis and Leen is a simple update and a choice made by John McCain.... I think [this] "speak power to truth" metric is interesting in itself and will speculate....

Abstract Journamalist... thinks he should not report his opinions... wants to praise the powerful to get access... is lazy... and he is bored [with complex policy issues] and would really rather watch the super bowl. Thus... journamalist writes about who is winning the political contest.. it's like watching sports. This seems to have gone so far that journalism is judged by its effect on the powerful. It is not possible that an article was under appreciated by the powerful, because there is no merit except as recognised by the powerful....

[I]n 2002 [McCain] was doing Iraq... the number $45 million... the name Scanlon was new to the story but not to McCain. Scanlon had been DeLay's spokesman. His involvement in filthy lobbying games tied them very close to DeLay.... My personal theory is that McCain learned that Reed was involved. Thus the hearings were a chance to destroy Reed. I would be very surprised in McCain would be able to pass up such a chance for the good of the party. No way I would, given what Reed did to McCain in 2000. None of [these] theories has much to do with the Post.


[I]t is simply absurd to claim that Schmidt broke [the Abramoff scandal] in 2004 (as Leen does).... Evidently, [Dennis,] you believe that Schmidt's story broke significant new ground.... [But] you discuss McCain's reaction... no evidence that it was Rosenbaum's fault or to Schmitt's credit that McCain didn't respond to his article and did respond to hers....

I think the reason is obvious. In 2002 McCain was too busy advocating an invasion of Iraq to bother doing one of his more boring jobs -- charing the Senate indian affairs committee. I must concede that Rosenbaum scooped me on that one, explaining in his article why it would be ignored...


Brad: Don't tell me that you know so little about the world that you think that people will "just do the math." Much of our political debate is based on the fact that most people won't "just do the math"...


Sorry for the multiple comments. The one I meant to write... is very much about the sociology of journalism. Leen argues... that the importance of an article is not... the facts which are reported but... the spin and political impact.... He argues that the true contribution of a journalist is to decide the spin on a story. It doesn't matter if a "puff piece" and some "hard-hitting investigative reporting" contain the same facts, it's the slant that matters.... Leen says that not only do journalists put spin on the news but that they should be judged on what spin they put on the news....

Of course, the claim that Rosenbaum's article is a puff piece while Schmidt's is not has been refuted by Brad by quoting them. The tone is as similar as the content.... Leen [appears concerned] not what you say or how you say it but how powerful people react. Abramoff was pleased by Rosenbaum's article so it is a puff piece. McCain was angered by Schmidt's article so it is hard hitting investigative journalism. I can't think of a better disqualification for being Washington Post Assistant Managing Editor, Investigative....

http://tinyurl.com/cbjxh Leen's motto is "Speak Power to Truth"...


Sociology of Journalism II

In comments, Dennis agrees with Jeff Leen:

Brad DeLong's Semi-Daily Journal: Sociology of Journalism : [David Rosenbaum's] April 3, 2002 [story] talked about the issue. So did a far superior piece by Jim VandeHei http://online.wsj.com/article/PA2VJBNA4R/SB962577108761800931-search.html (now part of the WP) in the Wall Street Journal on July 3, 2000. And if you want the first article that explained the Tribal scam you could dig up the 12-16-1995 article in The National Journal by Kirk Victor: "Rolling the Dice with Republicans" (not online, at least not that I can find).

The Abramoff Scandal has been hiding in plain sight for more than a decade. I started researching Abramoff back in 1999 because of his links to sweatshops on Saipan.... While the details have been reported, it was the Washington Post that connected the dots to the crimes that have been exposed. It was Susan Schmidt's Feb. 22, 2004 article "A Jackpot From Indian Gaming Tribes" on Jack's Tribal casino scam that led McCain to start his investigation...


Sociology of Journalism

Jeff Leen, assistant managing editor of the Washington Post investigative unit, says that the late David Rosenbaum's April 3, 2002 story on Jack Abramoff was "a puff piece," was "viewed by [Jack] Abramoff as positive." By contrast, he says, Susan Schmidt's February 22, 2004 piece was "hard-hitting investigative reporting." Rosenbaum's "did not generate a Senate Committee and a DOJ investigation." Susan Schmidt "put the pieces together" and "generated widespred outrage... [with the] $45 million number"--that is, Schmidt's reporting that Abramoff and Scanlon collected $45 million in fees over four years had a much greater impact than Rosenbaum's reporting that Abramoff has collected $1.8 million from one tribe in six months, even though one might think "half a dozen tribes times sixty months times a hundred thousand a month" and do the math.

Here are the opening paragraphs of Susan Schmidt's story:

A Jackpot From Indian Gaming Tribes: Lobbying, PR Firms Paid $45 Million Over 3 Years Feb 22, 2004 A.01: A powerful Washington lobbyist and a former aide to House Majority Leader Tom DeLay (R-Tex.) persuaded four newly wealthy Indian gaming tribes to pay their firms more than $45 million over the past three years for lobbying and public affairs work, a sum that rivals spending to influence public policy by some of the nation's biggest corporate interests. Touting his ties to conservatives in Congress and the White House, lobbyist Jack Abramoff persuaded the tribes to hire him and public relations executive Michael Scanlon to block powerful forces both at home and in Washington who have designs on their money, according to tribe members.

Under Abramoff's guidance, the four tribes -- Michigan's Saginaw Chippewas, the Agua Caliente of California, the Mississippi Choctaws and the Louisiana Coushattas -- have also become major political donors. They have loosened their traditional ties to the Democratic Party, giving Republicans two-thirds of the $2.9 million they have donated to federal candidates since 2001, records show. The payday for the GOP is small though, compared with the $15.1 million the tribes have paid Abramoff and his law firm, Greenberg Traurig, which has rocketed to the ranks of top lobbyists on the fees it has charged gaming tribes, lobbying records show. And those fees -- 10 or 20 times what the tribes paid their former lobbyists -- are about half of what Scanlon has taken in. Scanlon, 33, himself a former Greenberg lobbyist who was recommended by Abramoff, has been paid $31.1 million, according to documents and interviews with tribal members.

The fees are all the more remarkable because there are no major new issues for gaming tribes on the horizon, according to lobbyists and congressional staff. The tribes' payments for lobbying and public affairs work are comparable to what large corporations spend on lobbying in Washington: General Electric Co. paid more than two dozen lobbying firms $30.4 million over the same three-year period, according to federal records. The nation's top four pharmaceutical companies paid dozens of lobbying and law firms $34.8 million between mid-2002 and mid-2003, according to the records.

"Those fees would certainly stand out as greater in magnitude than what rank-and-file tribes pay," said Phil Hogen, chairman of the National Indian Gaming Commission, which regulates Indian gaming. "I guess they have been persuaded there is some value or return for that, but what that is, I'm not aware," Hogen said...

Here are the opening paragraphs of the late David Rosenbaum's story:

At $500 an Hour, Lobbyist's Influence Rises With G.O.P. - The Archive - The New York Times: April 3, 2002 A1: In the last six months of 2001, the Coushatta Indians, a tribe with 800 members and a large casino in southwest Louisiana, paid $1.76 million to the law firm of Jack Abramoff, a Republican lobbyist here. Last month, the Bush administration handed the tribe a big victory by blocking construction of a casino by a rival tribe that would have drained off much of the Coushattas' business. William Worfel, vice chairman of the Coushattas, views the administration's decision as a direct benefit of the eye-popping lobbying fees his tribe paid Mr. Abramoff, more money than many giant corporations like AOL Time Warner and American Airlines paid lobbyists in the same period. ''I call Jack Abramoff, and I get results,'' Mr. Worfel said. ''You get everything you pay for.''

In the seven years since Republicans gained control of the House of Representatives, Mr. Abramoff, 43, has used his close ties to Representative Tom DeLay of Texas, the Republican whip, and other conservatives in the House to become one of the most influential -- and, at $500 an hour, best compensated -- lobbyists in Washington. He is also an important Republican fund-raiser. Mr. Abramoff's recent success and importance in Republican circles is a reminder that even as much of official Washington has been focused on the war in Afghanistan, efforts to beef up national security after Sept. 11 and the crisis in the Middle East, the business of lobbying has been humming along quite nicely, more out of the spotlight than usual but more profitable than ever for those with the right connections.

Unlike many lobbyists who take almost any client who is willing to pay their fee, Mr. Abramoff says he represents only those who stand for conservative principles. They include three Indian tribes with big casinos and, until recently, the Northern Mariana Islands. ''All of my political work,'' he said, ''is driven by philosophical interests, not by a desire to gain wealth''...


Yet Another Panel on Internet Ethics!

The Washington Post is running a panel on internet ethics!

Panel: Ethics & Interactivity Jim Brady, Jeff Jarvis, Jane Hamsher, Jay Rosen, Glenn Reynolds

Wednesday, January 25, 2006; 1:00 PM: Last Thursday, washingtonpost.com turned off the reader comments feature on post.blog... after several comments containing personal attacks, profanity and hate speech were posted on an item about Washington Post ombudsman Deborah Howell's recent column about the Abramoff scandal.... To open the discourse about how reader-submitted comments should be handled, washingtonpost.com has invited several prominent bloggers to join us... to discuss the evolving nature of Internet commentary and ethics.

I have a question for Mr Brady:

I have read David Rosenbaum's big April 2002 front-page New York Times article about Jack Abramoff: "[Abramoff] is, by his own description, a committed ideologue.... tries hard to persuade his fellow Washington lobbyists to give more generously to the Republican Party... expects to raise as much as $5 million this year..." And I have read Susan Schmidt's first article written 22 months later--the one that David Leen says broke the Abramoff scandal--"Under Abramoff's guidance, the four tribes... have loosened their traditional ties to the Democratic Party, giving Republicans two-thirds of the $2.9 million they have donated.... The payday for the GOP is small though, compared with the $15.1 million the tribes have paid Abramoff and his law firm..."

Why in the Holy Name of the Lord would anybody think it is appropriate to characterize this--as Deborah Howell continues to characterize it--as "[Abramoff] directed his client Indian tribes to make campaign contributions to members of Congress from both parties"? What even semi-rational thought process could lead anyone to think that Howell's is a fair characterization of Schmidt's "loosened... ties to the Democratic Party" and of Rosenbaum's "committed ideologue.... tries hard to persuade... [others] to give more generously to the Republican Party... expects to raise as much as $5 million"?

Thus my question for Mr. Brady: what does he believe is the appropriate role of readers when confronted by someone like Deborah Howell who appears to have taken leave of her senses and abandoned the reality-based community? Should we write letters to the ombudsman?

We'll see if the Post views this question as adding to the discourse.

:-)


Hello. My Name Is Ezra Klein. You Insulted My Magazine. Prepare to Die!

Ezra Klein dons the shoes--the high heels--of Ana Marie Cox, puts on her lipstick, and draws his rapier to wreak vengeance on The New Republic:

Wonkette: My honor has been impinged, my magazine’s good name scurrilously impugned. I refer you, good sirs, to The New Republic’s promotional e-mail:

Dear Reader, You may want clear opinions from The New Republic or from any magazine of political commentary. But you certainly don’t want predictable opinions or simple opinions, which, alas, is what you get from The Nation and the National Review, The Weekly Standard or The American Prospect. Why, I bet that you could write their articles in advance. No challenge, no mystery, no surprise, no puzzling through of argument. Not like The New Republic. Subscribe today for as little as $9.97 to read all of our unconventional wisdom.

The next sentence?

In this week’s issue, we say “NO” to Samuel Alito—in two articles actually.

Pretty awesomely unconventional if you ask me. I mean, I would’ve expected one article saying “no” to Sam Alito, but two? And in all caps!? That’s the sort of liberal apostasy you can only get from TNR.

Other unpredictable items from this week’s New Republic include Jon Cohn on why Lyndon Johnson’s Medicare rollout was smoother than George W. Bush’s, Frank Foer on more reasons that Jack Abramoff is sucky, and a satire of suicide bomber rhetoric implying that Western values are superior to the ethos of terrorists. For a left-of-center magazine, these truly are bold and unpredictable stances, and I applaud The New Republic for taking them. The only question is whether they’re willing to survive the inevitable counterattack from the called-out coalition of Mike Tomasky, Katrina Vanden Huevel, Bill Kristol, and Rich Lowry. And what’s Paul Glastris? Chopped liver?


Rasky-DeLong "Covering the Economy": Discussion Notes: Week of January 24

Rasky-DeLong "Covering the Economy": Discussion Notes: Week of January 24

Seven background graphs on employment statistics:

Payroll Survey Employment Growth since 1994
Long-Term Unemployment
Unemployment and Underemployment
The Employment-to-Population Ratio
Thirty Years of the Unemployment Rate
Three Years of the Unemployment Rate
Unemployment: The Importance of Seasonal Adjustment

New claims for unemployment insurance emerge every Thursday...

Monthly Employment Report released by the Bureau of Labor Statistics every month, at 8:30 AM on the first Friday:

Statement by Commissioner of Labor Statistics Kathy Utgoff.
The January 6, 2006 Employment Report itself.

  • Household survey: the CPS or Current Population Survey:
    • Unemployment rate
      • Underemployment rates
      • Long-term unemployment rate
    • Employment-to-population rate
      • Female labor force participation
      • What is the participation trend?
        • Why are the unemployment rate and the employment-to-population ratio telling different stories since 2000?
  • Payroll survey of businesses
    • Watched by Wall Street
      • As an indicator of economic activity
      • As an input into the Federal Reserve's decision-making policy
        • Federal Reserve sets interest rates
        • Federal Reserve wants to keep inflation low
        • If inflation is low, Federal Reserve would like employment to be as high as possible
    • Since 2000, the payroll and household surveys have been telling different stories...
    • Benchmark for payroll survey: 140,000 per month as neutral result
    • Payroll survey also contains workweek data and wage data--but save that for next week

Now let's look at some stories:

January 6, 2006: Reuters: Reuters's initial story on the January 6, 2006 BLS Employment Report: "Job growth below expectations in December" Fri Jan 6, 2006 9:20 AM ET: By Glenn Somerville..."
January 6, 2006: Economist Forecasters' Immediate Reactions to the Employment Report release.
January 7, 2006: Greg Ip: writes about Friday's employment report for the weekend edition of the Wall Street Journal
January 7, 2006: Edmund Andrews's next-day article on the January 6, 2006 Employment Report.

Broader Perspectives:

January 6, 2006: Tim Duy Looks at the Fed: and guesses what the Federal Reserve's reaction will be to the January 6, 2006 Employment Report.
Mark Thoma of the University of Oregon tries to provide perspective on the January 6, 2006 Employment Report.
Kash Mansouri of Colby College on the January 6, 2006 Employment Report: "the US economy continues to disappoint when it comes to the creation of new private-sector jobs."
The Heritage Foundation's Tim Kane.

The impact story: for bond traders. The opinion-sample story--the WSJ has it up by 10:02 AM! Greg Ip's story: state of the economy in a broader perspective Edmund Andrews's story: political context and consequences of employment report.

Four webloggers: Tim Duy, Mark Thoma, Kash Mansouri, Tim Kane.


Rasky-DeLong "Covering the Economy": Discussion Notes: Week of January 17

Covering the Economy: Week of January 17: Discussion Notes:

We thought about Robert Pear:

"Senate Passes Budget With Benefit Cuts and Oil Drilling." By ROBERT PEAR; CARL HULSE CONTRIBUTED REPORTING FOR THIS ARTICLE. November 4, 2005 http://select.nytimes.com/search/restricted/article?res=F00B11FB3C5A0C778CDDA80994DD404482

The Senate on Thursday narrowly approved a sweeping five-year plan to trim a variety of federal benefit programs and to allow drilling for oil and natural gas in a wilderness area of Alaska, increasing the chances that the energy industry and Alaska officials will achieve a long-sought goal. The budget bill, the most ambitious effort to curb federal spending in eight years, was approved by a vote of 52 to 47. Five Republicans opposed the measure; two Democrats voted for it. Senator Judd Gregg, Republican of New Hampshire, the chairman of the Senate Budget Committee, said, "This bill is a reflection of the Republican Congress's commitment to pursue a path of fiscal responsibility." It will, Mr. Gregg said, reduce the deficit and save roughly $35 billion over the next five years...

Susan Rasky calls this an excellent example of a standard New York Times lead. There is a lot of information in here. There is no excessive jargon. There is nothing that is not true.

Brad DeLong says: not so.

First, the lead lacks scale variables. Is it more important to know that the plan saves $35 billion, or that the plan saves 0.3% of federal spending, or that the plan saves 0.06% of GDP? Is it more important to know that the plan saves $35 billion, or that it saves $27 per person per year in the context of the federal government's spending $9,000 per person per year?

There is also the question: "What's the narrative?" The narrative that Pear's lead supports is:

  • Judd Gregg works very hard, and passes through the Senate a seeping, ambitious effort to curb federal spending (and open the Alaska NWR to drilling) that demonstrates the Republican Congress's commitment to fiscal responsibility.

But ten years ago--when the economy was half its size--five-year deficit reduction packages had numbers like $500 billion attached to them. Relative to the size of the economy, Judd Gregg's effort is only 1/30 as large as the deficit-reduction measures of 1993 or 1990. And Judd Gregg's $35 billion spending cut was to be followed a week or so later by a $70 billion tax cut. In a normal year the two bills would be combined into one. This year the Reconciliation Bill was divided into two by the Republican leadership in the hope that passing the spending cuts first would get, well, would get stories like Robert Pear's that got Republicans credit for fiscal responsibility.

The narrative that Pear's lead support is--no ifs and buts about it--false. Here are three alternative true narratives:

  • Nothing happens as a result of the Reconciliation process this year: spending cuts of $27 per capita per year and tax cuts of $54 per capita per year in the context of a federal government that spends $9,000 per capita per year and taxes $7,500 per capita per year.
  • Republicans pull a procedural trick to try to fool reporters into writing stories that give them credit for fiscal responsibility--and it works.
  • Judd Gregg labors like a mountain to convince his fellow Republicans to reduce the deficit, but when the dust clears the mountain has birthed a mouse: the "sweeping five-year plan," the "most ambitious effort... in eight years," is of a trivial and insignificant magnitude.

Robert Pear is an excellent reporter--as Dan Froomkin points out in email, not even the crankiest and pickiest economist has complaints about the substance of his coverage of health care issues, which are his home base. So why does he write a story whose lead leaves Brad DeLong frothing at the mouth when he writes about the budget?

Possible answers:

  • If Robert Pear is going to cover the federal budget in the long-run--cover this beat--he needs to keep Senate Budget Chair Judd Gregg happy. Beat reporters have to be polite. (But is it really the case that Robert Pear needs Judd Gregg more than Judd Gregg needs Robert Pear?
  • Robert Pear doesn't cover the federal budget on a regular enough basis for his sources to fear him, so they tell him pleasing lies: the Republicans that this is significant progress on deficit reduction; the Democrats that the Medicaid benefit cuts are horrifying large and truly devastating.
  • The New York Times doesn't have a big enough budget bench--if Robert Pear were writing for the Wall Street Journal news pages, he would have an enormous amount of backup and institutional memory at his disposal. At the New York Times he doesn't--after all the New York Times reporter who covered the Reagan budgets is... sitting right here.
  • Robert Pear hasn't taken Stan Collender http://nationaljournal.com/members/buzz/2006/budget/ out to lunch enough times. Two lunches with Stan Collender at Signatures, and Pear would have nothing to fear when he is handed a budget story to write.

Next time: sources of data and information; how journalists can arm themselves against writing stories whose leads carry untrue narratives. Things to read:


Daniel Drezner Intervenes Intellectually Outside His Home Area of Expertise

Daniel Drezner writes:

danieldrezner.com :: Daniel W. Drezner :: Bill Clinton is responsible for the Iran mess>: So I see Brad DeLong is intervening intellectually outside his home area of expertise, [writing]...

George H. W. Bush and his advisors worked like dogs to establish two principles: 1. Aggression and conquest across national borders would be rolled back by the world community. 2. Superpowers would not intervene militarily outside their home regions without the blessing and support of the entire U.N. Security Council. With these two principles in place, there was sound hope--well, some hope--that nonproliferation policy would succeed

Let's clear some brush here: 1) DeLong's principle number 2 has not and likely never will be a cardinal element of American foreign policy, and anyone who tells you differently is selling you something...

Well then, I guess George H.W. Bush and Brent Scowcroft are selling you something. They explicitly write that--since the Security Council mandate given the U.S. and the coalition in 1991 was to liberate Kuwait--crossing the border to Iraq to overthrow Saddam Hussein and "unilaterally exceeding the United Nations' mandate, would have destroyed the precedent of international response to aggression that we hoped to establish." On the one hand, Dan Drezner's opinions about the foreign policy of the George Bush I administration. On the other hand, George H. W. Bush's and Brent Scowcroft's opinions. Whose do you think are more reliable?

Viz:

George H.W. Bush and Brent Scowcroft (1998), A World Transformed, pp. 489-90: Trying to eliminate Saddam [Hussein in 1991], extending the ground war into an occupation of Iraq, would have violated our guideline about not changing objectives in midstream, engaging in 'mission creep,' and would have incurred incalculable human and political costs.... We would have been forced to... rule Iraq. The coalition would instantly have collapsed, the Arabs deserting it in anger and other allies pulling out as well. Under those circumstances, there was no viable "exit strategy".... Furthermore, we had been self-consciously trying to set a pattern for handling aggression in the post-Cold War world. Going in and occupying Iraq, thus unilaterally exceeding the United Nations' mandate, would have destroyed the precedent of international response to aggression that we hoped to establish...

Shouldn't Dan Drezner stick to his home area of expertise--not intervene intellectually in areas, like modern American diplomatic history, where he appears so out of his depth?

:-)


UPDATE: Dan Drezner responds:

look at p. 356, Brad!!: "We would ask the [Security] Council to act only if we knew in advance we had the backing of most of the Arab bloc and we were fairly certain we had the necessary votes. If at any point it became clear we could not succeed, we would back away from a UN mandate and cobble together a independent multinational effort built on friendly Arab and allied participation. The grounds for this would be the initial UN resolution condemning Iraq, the subsequent resolutions, and Article 51, along with a request from the Emir of Kuwait. In the end, if sanctions failed and it came to using force, [Richard] Haass and [Bob] Kimmitt reminded us that our ability to rally the necessary political support, with or without UN endorsement, would be enhanced significantly if we were seen to have tried hard to make diplomacy work [with Hussein]..."

To which I say, touche...

:-)


Fareed Zakaria Gets One Wrong...

The highly intelligent and thoughtful Fareed Zakaria gets one wrong when he writes:

Time to Face Reality on Iran - Newsweek: International Editions - MSNBC.com : American policy toward Iran... [has] a worthy goal: trying to stop Tehran from building nuclear weapons. We have gone about this in a sensible way, using allies, multilateral organizations and international agreements to pressure Tehran. But the policy simply isn't going to work. Washington and its allies need to come to grips with reality and switch course, coming up with a new set of goals and a path to attain them. Otherwise we risk not just failure, but a very public humiliation and the further erosion of our limited credibility--in Washington, the "West" and the "international community." The United States should begin the construction of an alliance to contain Iran. Our goals should be to prevent or massively slow down the weaponization of Iran's nuclear program, and to frustrate its meddling in the region, support for terrorism and opposition to a peaceful settlement of the Israeli-Palestinian conflict...

Trying to keep Iran from building nuclear weapons is a worthy goal, yes. Building an alliance to contain Iran is a good idea, yes. Zakaria is right to condemn the false belief that airstrikes on Iran's nuclear program will help matters, yes.But Fareed's declaration that the Bush administration has gone about nonproliferation policy with respect to Iran "in a sensible way"? Wrong, completely wrong.

Back in the George H.W. Bush administration the end of the Cold War broke the mold of world politics, and made new modes and orders of world affairs possible. George H. W. Bush and his advisors worked like dogs to establish two principles:

  1. Aggression and conquest across national borders would be rolled back by the world community.
  2. Superpowers would not intervene militarily outside their home regions without the blessing and support of the entire U.N. Security Council.

With these two principles in place, there was sound hope--well, some hope--that nonproliferation policy would succeed: diplomats could point out to countries thinking of developing nuclear programs that such programs (a) were expensive, (b) increased the chances that their citizens and cities would suffer thermonuclear death (are Pakistani and Indian citizens safer now that both have nuclear weapons? I do not think so), and (c) did not add to their national security--unless their government thought that it was so despicable and tyrannical that the entire Security Council would agree on its overthrow.

The George W. Bush administration broke principle number 2. It declared that there were three governments--Iraq's, Iran's, and North Korea's--that constituted an "axis of evil." North Korea's government claimed to have a nuclear deterrent and has survived. Iraq's government could not claim to have a nuclear deterrent and was overthrown. And Iran's government--and every other government--has drawn the natural conclusion: the threat of nuclear retaliation is the only protection against being overthrown by a U.S. president.

If this is going about nonproliferation policy "in a sensible way," I am Marie of Roumania.


Barry Eichengreen's Economics 210b

Barry Eichengreen's Economics 210b:

Topics in European Economic History:

Monday 12-2, Evans 608-7
Department of Economics
University of California
Berkeley, CA 94720-3880

Economics 210b is being taught this spring by Barry Eichengreen in collaboration with Professor Ian McLean, who is visiting the Economics Department from the University of Adelaide. Professor Eichengreen's office hours in Evans 605 are Tuesdays 12:00 PM to 2:00 PM. Professor McLean's office hours in Evans 607 are [TBA]. Appointments (Professor Eichengreen) can be made in advance by contacting aali@econ.berkeley.edu.

This course is for graduate students who have taken Economics 210a (Introduction to Economic History). It is devoted to a critical analysis of important recent books in European economic history. Course requirements are three. First, attending course meetings and contributing to the discussion. Second, leading the discussion of a week's topic (introducing the reading and moderating the subsequent conversation). Third, submitting a term paper, on a topic previously agreed to with the instructors, due during exam week.

January 23. Introductory Meeting

January 30. Gregory Clark, The Conquest of Nature (Princeton University Press, 2005) http://www.econ.ucdavis.edu/faculty/gclark/GlobalHistory/Conquesthome.html

February 6. Philip T. Hoffman, Growth in a Traditional Society: The French Countryside, 1450-1815 (Princeton University Press 1998)

February 13. Joel Mokyr, The Gifts of Athena: Historical Origins of the Knowledge Economy (Princeton University Press, 2004)

February 20. Robert Fogel, The Escape from Hunger and Premature Death, 1700- 2100: Europe, America and the Third World (Cambridge University Press, 2004)

February 27. No meeting

March 6. Giovanni Federico, Feeding the World: An Economic History of Agriculture 1800-2000 (Princeton University Press, 2005)

March 13. Jan Luiten van Zanden and Arthur van Riel, The Strictures of Inheritance: The Dutch Economy in the Nineteenth Century (Princeton: Princeton University Press, 2000)

March 20. Paulo Mauro, Nathan Sussman and Yishay Yafeh, Emerging Markets and Financial Globalization (Oxford University Press, forthcoming) http://economics.huji.ac.il/facultye/sussman/MSY%20Book%20proofs.PDF

April 3. Daniel Verdier, Moving Money: Banking and Finance in the Industrialized World (Cambridge University Press, 2004)

April 10. Caroline Fohlin, Financial Institutions and Corporate Governance: German Experience Before 1913 (Cambridge University Press, forthcoming). [add web link]

April 17. Niall Ferguson, The Pity of War (Basic Books, 1999)

April 24. Kathleen Thelen, How Institutions Evolve: The Political Economy of Skills in Germany, Britain, the United States, and Japan (Cambridge University Press, 2004)

May 1. Barry Eichengreen, The European Economy: Coordinated Capitalism since World War II (Princeton University Press, forthcoming)


England Is an Island (Japan too)

I won't have time to read, let alone think about, Nick Szabo today, but and neither does Tyler Cowen, but Alex Tabarrok does:

Marginal Revolution: The security and productivity of farms : Nick Szabo has a superb post about the interaction between historical agricultural productivity and security. Most obviously, security increases the incentive to invest so agricultural productivity will increase with security. But what determines security? Geographic factors are one possibility:

...two large islands which have been largely or entirely protected from invasion for hundreds of years, Japan and Britain, also had among the highest agricultural productivities per acre during that period as well as the greatest cultivation of even marginal arable lands.... Contrariwise, this theory predicts agricultural productivity will be lowest in unprotected continental regions. Indeed, interior continental regions easily reached by horse tended to be given over to much less productive nomadic grazing. Security constraints were probably what prevented any sort of crop from being grown.

Security issues influence and can be influenced by a wide variety of other choices and institutions. Some crops will recover from a razing quicker than others, for example, so crop choice will be influenced by security. Primogeniture may have been an optimal institution to maintain economies of scale in land defense, as Adam Smith first discussed.

Read the whole thing there is a dissertation or two here.


George Packer on Inept Iraq Viceroy L. Paul Bremer

George Packer, author of The Assassins' Gate, on L. Paul Bremer:

The Viceroy : About some things, Bremer was more far-sighted and right than... Washington. He knew... that... Moqtada Sadr... would establish a reign of terror in the Shiite south if they weren't checked by force... Washington, especially the Pentagon... kept losing its nerve.... Bremer understood the importance of the interim constitution known as the Transitional Administrative Law.... [H]e also worried early on that there were not enough U.S. troops.... [But] instead of saying publicly that the troop levels were inadequate, he always parroted an administration line that he knew to be wrong. With American and Iraqi lives at stake... this kind of loyalty was a hollow virtue.

Bremer... passes silently over... problems.... In the memoir, he and Lt. Gen. Ricardo Sanchez... are in broad, if laconic, agreement.... In reality, they despised each other.... Bremer resisted almost any encroachment on his decision-making power.... A number of administration officials felt that Bremer's Authority had become... unaccountable... and there were fitful efforts by headquarters to rein [him] in.... None of these struggles comes in for any analysis or acknowledgment....

Bremer does have two antagonists in this book.... Donald Rumsfeld, grew impatient with the U.S. presence in Iraq... never wanted to commit his military... [did] as much as any individual to doom the effort.... Grand Ayatollah Ali Sistani... Bremer failed to see... that nothing truly important could be done by the CPA without his consent... an unelected holy man was not going to tell him how to run Iraq; Sistani's stubbornness and hard bargains filled Bremer with impatience and a trace of condescension. In the year-long contest of wills between these two men, Bremer's limitations are on full display....

As I write this in Baghdad, the lights are out across the city, and the Black Hawk helicopters rumble overhead. The sense of possibility in Bremer's subtitle has been largely extinguished.... There is a tragedy in [Bremer's] story that someone else will have to write, for Bremer's failings as a man and writer are also America's failure in Iraq...

Impeach George W. Bush. Impeach Richard Cheney. Do it now.


The Late David Rosenbaum on Jack Abramoff

The late David Rosenbaum, the very well-regarded New York Times reporter who was murdered early this month near his home in Upper Northwest, wrote an excellent page A1 story about Jack Abramoff almost four years ago: back on April 3, 2002:

http://select.nytimes.com/search/restricted/article?res=F50B17FD3B5E0C708CDDAD0894DA404482 "At $500 an Hour, Lobbyist's Influence Rises With G.O.P." By DAVID E. ROSENBAUM (NYT) 1807 words Published: April 3, 2002: WASHINGTON, April 2 - In the last six months of 2001, the Coushatta Indians, a tribe with 800 members and a large casino in southwest Louisiana, paid $1.76 million to the law firm of Jack Abramoff, a Republican lobbyist here. Last month, the Bush administration handed the tribe a big victory by blocking construction of a casino by a rival tribe that would have drained off much of the Coushattas' business.

William Worfel, vice chairman of the Coushattas, views the administration's decision as a direct benefit of the eye-popping lobbying fees his tribe paid Mr. Abramoff, more money than many giant corporations like AOL Time Warner and American Airlines paid lobbyists in the same period. ''I call Jack Abramoff, and I get results,'' Mr. Worfel said. ''You get everything you pay for.'' In the seven years since Republicans gained control of the House of Representatives, Mr. Abramoff, 43, has used his close ties to Representative Tom DeLay of Texas, the Republican whip, and other conservatives in the House to become one of the most influential -- and, at $500 an hour, best compensated -- lobbyists in Washington. He is also an important Republican fund-raiser.

Mr. Abramoff's recent success and importance in Republican circles is a reminder that even as much of official Washington has been focused on the war in Afghanistan, efforts to beef up national security after Sept. 11 and the crisis in the Middle East, the business of lobbying has been humming along quite nicely, more out of the spotlight than usual but more profitable than ever for those with the right connections. Unlike many lobbyists who take almost any client who is willing to pay their fee, Mr. Abramoff says he represents only those who stand for conservative principles. They include three Indian tribes with big casinos and, until recently, the Northern Mariana Islands.

''All of my political work,'' he said, ''is driven by philosophical interests, not by a desire to gain wealth.'' Mr. Abramoff argues that Indian reservations and the island territory, which is exempt from United States labor laws, are ''just what conservatives have always wanted, which is enterprise zones -- tax-free, regulation-free zones where with the right motivation, great industry could take place and spill out into the general communities.'' His success in making this case to Republicans in the House has paid off handsomely. At the beginning of last year, Mr. Abramoff left Preston Gates Ellis & Rouvelas Meeds, the law firm where he had worked since he became a lobbyist in 1995, and joined the Washington office of Greenberg Traurig, a firm based in Miami. Mostly as a consequence, Greenberg Traurig, which received only $1.7 million in lobbying fees during the first half of 2000, had $8.7 million in the first half of 2001, fifth most of any firm in Washington, according to rankings by National Journal. Preston Gates, which had been ranked fifth, saw its lobbying fees cut in half and fell out of the magazine's top 10.

As is often true of the work of lobbyists, it is hard to tell how much influence Mr. Abramoff really has over government decisions, and his recent victory for the Coushattas is a case in point. Indian reservations are not covered by state laws regulating gambling. The Bureau of Indian Affairs in the Interior Department has the final say on whether casinos can be built on reservations, and the decisions have not always been free from political influence. Mr. Abramoff did not even directly approach the Interior Department himself, but instead organized a group of lawmakers and other Indian tribes with gambling interests to express to the department their opposition to the new casino.

For lobbyists, perception of influence can often be as valuable as actual influence. Mr. Worfel, the vice chairman of the Coushattas, said he was delighted with Mr. Abramoff's representation and happy to pay his firm's retainer of nearly $300,000 a month. Mr. Abramoff's fee of $500 an hour is matched by few if any other lobbyists in Washington.

Mr. Abramoff's background and personality hardly fit the mold of the typical Washington lobbyist. He is an Orthodox Jew who says that even more than politics, his religion is a central element of his life. He is a teetotaler with a soft voice and a gentle manner who once held a high school weight-lifting record in California. He spent several years in Hollywood producing movies -- ''Red Scorpion,'' an anticommunist thriller, was the most successful -- before becoming a lobbyist.

Most unusual, he is, by his own description, a committed ideologue. In the early 1980's, Mr. Abramoff was chairman of the College Republican National Committee, where he made important contacts. Among those on his staff were Grover Norquist, now a leading conservative strategist here and president of Americans for Tax Reform, and Ralph Reed, the former director of the Christian Coalition, who is a prominent Republican political consultant. Mr. Abramoff tries hard to persuade his fellow Washington lobbyists to give more generously to the Republican Party, its candidates and conservative organizations. He expects to raise as much as $5 million this year, he said, and plans to donate as much as $250,000 personally.

Mr. Abramoff's rising influence is also illustrative of another trend in lobbying: success can be built on a strong relationship between a lobbyist and a single, powerful lawmaker. His interest in raising money for Republicans and conservative causes is the foundation of Mr. Abramoff's relationship with Mr. DeLay, who is determined to meld the lobbyists on K Street here into the Republican Party's political, legislative and fund-raising operations. Mr. Abramoff described the bond this way: ''We are the same politically and philosophically. Tom's goal is specific -- to keep Republicans in power and advance the conservative movement. I have Tom's goal precisely.'' Mr. Norquist, who is friendly with both men, said of Mr. Abramoff, ''He walks in to see DeLay and DeLay knows that he is representing clients whose views are in sync with DeLay's views.''

It is difficult to gauge the importance of this relationship to Mr. Abramoff's success. Some of his clients said in interviews that Mr. Abramoff did not mention the relationship when he was seeking their business and that it was not the reason they retained him. ''Everybody is important in Congress, not just DeLay,'' said Philip Martin, chief of the Mississippi Band of Choctaw Indians. The tribe, which runs a large casino and resort, was one of Mr. Abramoff's first clients and is still one of the most lucrative. The Mississippi Choctaws paid Greenberg Traurig more than $1 million in the last half of 2001. ''Definitely we get our money's worth, or we wouldn't be doing it,'' Mr. Martin said.

Mr. DeLay did help put Mr. Abramoff on the lobbying map, assisting his clients on two sensitive matters in 1995, the first year Mr. DeLay was whip and Mr. Abramoff's first year as a lobbyist. But it is not clear that the whip was any more active on these measures than he was on other bills before the House that year. One of Mr. Abramoff's issues was his opposition to a federal tax on Indian gambling revenues. The tax was included in the nonbinding budget resolution the House approved. But on behalf of the Mississippi Choctaws, Mr. Abramoff said he went to Mr. DeLay and other Republican leaders and explained, ''Regardless of what you feel about gaming, what you are creating here is a tax on these people, and conservatives should never be in favor of new taxes.'' The proposed tax was killed, Mr. Abramoff said, ''once they discerned a conservative principle.''

The other big issue for Mr. Abramoff in 1995 that promoted his career was a bill passed by the Senate that would have stripped the Northern Mariana Islands of their exemption from the United States minimum wage and immigration laws. The main industry in the Marianas is textiles. Inexpensive clothes are made there, mostly by immigrant Chinese women who work for low wages in substandard conditions, and the garments are shipped duty-free to the United States with a ''Made in the U.S.A.'' label. With Mr. DeLay's help, Mr. Abramoff managed to get the legislation defeated in the House, using the argument that the Marianas represented low taxes and free enterprise and should be left alone.

Representative George Miller, a California Democrat who sponsored the legislation in the House, is still furious about Mr. Abramoff's action. In a recent interview, Mr. Miller said, ''He spent a lot of time, effort and money to protect a system that was a growth industry for sex shops, prostitution, abuse of women, slavery, illegal immigration, worker exploitation and narcotics, and he did it all in the name of freedom.'' Asked about this, Mr. Abramoff replied: ''Congressman Miller has an agenda, and he wants the facts to fit his thesis. No lobbyist could have convinced Congress to support the system he describes.'' After the bill was defeated, Mr. Abramoff took 150 lawmakers and staff members to the Northern Marianas, 200 miles north of Guam, and Mr. DeLay came back enthralled.

Unfortunately for Mr. Abramoff, turning the islands' economy into an ideological cause has come back to haunt him. In last November's election for governor, he supported the candidate of the garment industry, Benigno Fitial, against the Republican candidate, Juan Babauta. Mr. Babauta won and soon after he took office in January, he canceled the government's $100,000 per month contract with Mr. Abramoff. ''The U.S. territories have traditionally been handled in Washington in a bipartisan manner,'' an associate of the new governor said. ''Abramoff marked an end to that approach. So in a change of government, it was only natural that he be dropped.''


Photo: Jack Abramoff, one of Washington's highest-paid lobbyists. (Susana Raab for The New York Times)(pg. A17)


Chart: ''IN BRIEF: A Lobbyist's Clientele''

Some of the main clients of Jack Abramoff, a Washington lobbyist, in the last six months of 2001, and the fees each paid to his law firm, Greenberg Traurig:

Chitimacha Tribe of Louisiana: $60,000
Commonwealth of the Northern Mariana Islands: United States territory exempt from wage and immigration laws: $600,000
Coushatta Tribe of Louisiana: $1,760,000
Hopi Tribe: $60,000
Mississippi Band of Choctaw Indians: $1,040,000
Primedia Inc.: Corporate parent of Channel One: $440,000
Saginaw Chippewa Indian Tribe: $150,000
Saipan Garment Manufacturers Association: Textile trade association in Northern Mariana Islands: $160,000
Voor Huisen Project Management: Secondary mortgage project in Russia: $300,000

(Source: Senate Office of Public Records)(pg. A17)


I can find no journalist via Google News or Nexis who has referred to Rosenbaum's--excellent, early--story about the Abramoff scandal-to-be.


Tim Duy: The Fed Is Likely to Keep Raising Interest Rates for a Little While More

Tim Duy watches the Fed, and forecasts a yield curve inversion:

Economist's View: Fed Watch: Ready to Invert: I had previously believed that the Fed would not purposefully invert the yield curve (in this case, the spread between the 10 year and the Fed Funds rates). I had thought that whatever economic environment would drive tighter Fed policy would drive long rates higher. But it looks like inversion day is coming, barring some near term changes in the bond market. Moreover, the Fed looks to be sending a very specific signal: Even if we do pause at the March meeting, our bias remains tilted toward [fighting] inflation. A solid economy and rising energy prices means it is too early to call off the dogs. In my opinion, policymakers... are signaling that without a more dramatic change in the economic environment, the odds remain tilted toward more tightening in the post-Greenspan era....

The Beige Book was, in my opinion, somewhat hard to get a handle on. Mixed messages were common, leaving open the possibility of cherry picking little bits and pieces to support whatever story you want to tell. With that in mind, I concluded that the anecdotal message was that despite some cooling in housing and consumer spending, economic activity continued its solid expansion. And while prices pressures remain contained, there are enough signals of potential inflationary pressures to keep policymakers on their toes.... What about the labor side of the equation? Here it is worth repeating the relevant section from the Beige Book overview:

Most Districts reported signs of continued, if generally moderate, increases in employment. Cleveland, Minneapolis, and Richmond all cited moderate employment gains, with Richmond noting that its rate represented a slowdown. New York, Atlanta, Kansas City, and Dallas reported evidence of stronger employment growth. However, Boston noted that output growth had generally not translated into higher employment, while St. Louis reported a widely mixed pattern of layoffs and hiring. Hiring at financial and legal services firms is boosting the New York District's employment growth, although New York also reported some hiring in manufacturing. Atlanta reported strong demand for both skilled and unskilled labor, in part boosted by storm-recovery efforts. Atlanta reported several locations with tight labor market conditions, while Boston, New York, Philadelphia, Chicago, Kansas City, Dallas, and San Francisco all reported specific occupations in which jobs have been difficult to fill. Several of these Districts cited trucking jobs. Skilled construction workers are relatively sought after in Dallas and San Francisco, and skilled manufacturing jobs were mentioned by Boston, Chicago, and Dallas. Atlanta listed a variety of specialties in "extreme shortage." New York and San Francisco noted that finance-industry labor markets were relatively tight. Despite reports of labor market tightness, Boston, Philadelphia, Minneapolis, Kansas City, and San Francisco all noted that wage increases have been generally moderate. However, New York, Chicago, and Dallas all reported some acceleration in compensation.

Mixed messages here....

On, then, to the inflation story. Note that the report on trucking and shipping has the feel of emerging transportation bottlenecks....

Macroblog's [market-derived interest rate] probabilities are pretty accurate (traditionally, we get a new reading on Mondays). Next week another hike [in the Federal Funds rate] looks like a lock, and with policymakers holding the view that the economic is solid and inflation somewhat more likely than not, the risk remains better than even that Bernanke & Cos. first move is another hike. At a minimum, the Fed wants market participants to believe that even if the first Bernanke move is a pause, don't be surprise if a hike does occur at a later meeting. From their perspective, they are not yet seeing conditions that justify sending an all's clear signal. ]


And Ramesh Ponnuru Flames Rod Dreher

Dreher's crime? Worrying about the interaction of industrial air pollution with his kid's asthma. Real Republicans, you see, don't have kids with asthma--or, if they do, live full-time year-round in places with pristine air like Jackson Hole or Aspen.

Nice friends you have, Rod:

The Corner: OH, COME ON [Ramesh Ponnuru]: Right, that's what I'm saying: Voters' concerns about their kids don't matter. To heck with the kids! And from now on, let's only say things on the Corner that focus-group well! I'd be embarrassed to post an email on my side of this debate that was so silly. Posted at 06:18 PM

RE: POLLUTION CONTD [Rod Dreher]: Good grief. This is the last post I'll make on this matter, but here’s something a Cornerite wrote to me within the hour: "As a Californian I am all too aware that in choosing a Republican I am also choosing someone who will make the environment worse, and I suspect if the Democrats cleaned up their own act it wouldn't take me much because of this to switch parties. A cogent environmentalism almost certainly would help revitalize the party in my state, and yet they refuse to do so, to the harm of us all. Indeed, Mr. Ponnuru seems to miss your point entirely. You are bringing your son into this debate because that's what voters do. We vote according to our interests, and for Mr. Ponnuru to say, "leave your son out of the debate" he is basically saying to all of us what we care about does not matter. He may win the logical argument on such points, but the Republicans will lose elections if they keep such up, just as they have lost so much in California." Posted at 06:13 PM

POLLUTION, CTD. [Ramesh Ponnuru]: Alright, Rod, I'm disqualified from commenting further on this issue. I don't have a child with asthma, which I guess confers automatic expertise on environmental policies. And I'm not an expert, as your correspondent suggests, on the topography or air flow of Dallas, on the manufacture of cement, etc. I guess that you are an expert on these things? I'm sorry I wasn't able to glean that from your posts. Posted at 05:34 PM

I HATE TO PILE ON [Jonah Goldberg]: But aren't all politics local? Actually, I don't think all politics are local. But I do think all local politics are local. I don't know squat about the cement factories south of Dallas. But, is it really so absurd to imagine that if there was a Democrat running whatever committee Joe Barton runs or holding whatever seat he holds that maybe those cement factories would still be there? Maybe those cement factories have been there a long time? Even when Democrats controlled the state or that seat? I'm just at a loss as to how this so obviously translates into a national "good" Republican versus "bad" Republican issue, let alone a sweeping insight into national governing ideologies. Aren't there smokestacks in some Democratic districts too? Maybe it's because I'm in the Beltway bubble. Actually, my bubble is much smaller and in fact resides within the Beltway bubble. It's kind of cool-looking. Posted at 05:24 PM

RE: POLLUTION [Rod Dreher]: Ramesh, I live with an asthmatic child, so this is not an abstract situation for me. Which is the point I was trying to make: there is a direct connection between my sick child and polluting industries located south of my city, industries whose practices are staunchly defended by a Republican congressman. There are a lot of sick kids (and adults) in north Texas, which suffers from a high rate of respiratory disease. GOP candidates can mouth boilerplate all they want, but we need Republicans like Judge Keliher and other local GOP officials here in Dallas County who are actually doing something about the problem. Here's an e-mail I just got from a veteran NRO-nik who is a Texan and a conservative: "It seems to me that Ramesh is, like many, talking in generalities. Does he know anything about the Dallas area's topography? Air flow? Does he know anything about the manufacture of cement, particularly the particulates it releases? Does he know anything about the burning of hazardous waste as fuel in a facility not really intended to control it?

"Does Iain Murray really suggest that no restrictions at all is the magic silver bullet to this problem? That TXI and friends will really just fix all their problems if we just get government off their backs? There are several conservative solutions to this problem, including saleable credits for pollution. Let TXI buy other companies' unused credits, at market value, or simply require fewer of them.

"Incidentally, I'm not sure whether you were aware of the monstrous tire fire that happened several years (maybe even a decade) ago in Midlothian. Thousands and thousands of tires, all burning for 22 days, releasing tons of particulates and toxic material into the Dallas atmosphere. What came of those who let such a disaster happen? Is it really a Republican position that this is somehow "good for business"? "Good for America"?

"The reality is that I have a coworker in [north Dallas], a Baby Boomer with insanely liberal political tendencies. He has made a crack on more than one occasion that Joe Barton won't rest until every child in Tarrant, Dallas, Denton, and Collin counties has asthma. If there is no Republican to stand up and agree that the cement plants and tire-burning operations south of Dallas (in Ellis county, mostly)are bad --- environmentally and politically --- then the Democrats will eventually win on this." Posted at 04:21 PM

IT TAKES A CEMENT COMPANY TO GIVE KIDS ASTHMA? [John Podhoretz]: Then why are kids in The Bronx suffering asthma at record rates, Rod? There's almost no industrial pollution of any kind in New York City. In fact, I believe the rise in diagnosed asthma cases is a nationwide phenomenon of the past three or four decades, and nobody knows the cause. Except, it appears, a few judges in Texas, who got it all figgered out. I wasn't aware that degrees in epidemiology, cardiology, and pulmonology accompanied election to judgeships around Dallas, but now that I know, I'll be sure to consult your new friends about these matters. Posted at 04:11 PM

POLLUTION [Ramesh Ponnuru]: That bit about the "Beltway bubble" would be a low blow, Rod, but it's too cliched to land. Do Republicans need to do a better job in devising conservative environmental policies? Sure. But the research on pollution and asthma rates doesn't bear out the tight relationship you're claiming; the lessons you suggest that Republicans could learn from your new hero are banalities uttered by every single Republican politician in the country; and dragging your son into our debate doesn't really help matters. Posted at 03:40 PM

RE: GOP GREEN [Rod Dreher]: Come on, Ramesh, get outside the Beltway bubble and try to understand what Republican politics are like elsewhere. Here in Dallas, there are lots of Republicans who see Rep. Joe Barton, the powerful Republican Congressman who represents the district south of Dallas where these cement plants are located, as a major part of the problem. You can snicker all you want about the apparent obviousness of the issue, but the plain fact is those cement plants would have been forced to clean up their act if Rep. Barton weren't so obstructionist on the issue and dedicated to protecting that polluting industry--an industry that has a lot to do with the fact that so many people here in north Texas, including my son, suffer from respiratory disease. The childhood asthma problem here is incredible.

Where I live, there are plenty of summer days when authorities warn parents to keep their kids inside because of all the junk in the air. As Judge Keliher told me yesterday, Dallas wasn't like that when she grew up. Her predecessor as Dallas County Judge, a Republican named Lee Jackson, reportedly woke up to the importance of this issue when he saw girls' soccer teams here having to run to the sidelines to use their inhalers. I don't want my kids to grow up breathing this stuff. If Republicans in general--as distinct from local pols like Judge Keliher--are talking about clean air and water as a conservative issue, I'm not hearing them. And that's too bad. Posted at 03:27 PM

RE: GOP GREEN [Ramesh Ponnuru]: I completely agree with Dreher. Republicans should not sing the praises of air pollution. Instead, they should oppose it. They should point out that clean air is better than dirty air. Excellent ideas all; my guess is that some Republicans will see their political value. Posted at 12:45 PM

GOP GREEN [Rod Dreher]: Yesterday here at the Dallas Morning News, we met with a group of local folks that included Margaret Keliher, the Dallas County Judge (which means she's the top county executive in the Texas system). Keliher is a Republican, and she's also taken the lead in fighting for cleaner air in north Texas. Dallas has filthy air, in part because of cement plants just south of the city, and we're under federal government sanction to clean it up. In north Texas, the environment is not really a liberal vs. conservative issue, but a civic issue. I asked Judge Keliher yesterday why she, as a conservative Republican, has gotten active to fight industry for cleaner air. Now, Judge Keliher is very far from the kind of goo-goo Republican you find in--how to put this?--wetter climes. She replied that for one thing, it's about health, and health-care costs. For another, it's about creating a good business climate--companies don't want to move to a region that's got bad air and the health problems that go with it. And then there's the family values thing--Judge Keliher said that she's tired of seeing little children around here having to run to the sidelines during soccer games to use their inhalers. All of these are ways to think about the environment that resonate with conservative Republican voters. If I were sitting at the RNC in Washington right now, thinking about this fall's election, I'd spend a half hour on the phone with Judge Keliher and talk about this stuff. It's foolish to let the Democrats have this issue all to themselves--and by the way, enlightened environmentalists are starting to realize how foolish they've been to put all their hopes on the Democratic Party, and are now reaching out to conservatives. All to the good, say I. Posted at 12:09 PM


David Sirota Flames Joe Klein (Why Oh Why Can't We Have a Better Press Corps?)

David Sirota flames Joe Klein:

Sirotablog: Joe Klein is "all opinion and very little information" : Time Magazine's Joe Klein appeared on CNN last night and said "I bow to nobody in, in my disdain for bloggers. They're all opinions and very little information." What a truly incredible statement from person like Klein - one of America's foremost fact-averse pundits...

It is true that Joe Klein pledged on his journalistic integrity that he was not the author of Primary Colors. And it is true that Klein's "marketing campaign" for Primary Colors was an extraordinarily unethical and fraudulent case of bait-and-switch--pretend, you see, that the novel is by an insider close to Clinton, and only after the first printing reveal that it's by some jackass of a reporter.

But Sirota focuses on Klein's eagerness to, chameleonlike, change his colors--or, to put it politely, his inability to remember what he writes from one day to the next.

As Atrios sets it out, last year Klein wrote:

Joe Klein 2005 : The Schiavo case has provoked a passionate American conversation, which is taking place on a more profound level than the simple yes and no answers of the polls.... What would you do if Terri Schiavo were your daughter? Why couldn't Michael Schiavo just give custody over to the parents? What do we do about custody in a society where the parent-child bond is more durable than many marriages? The President's solution, to "err on the side of life," seems the only humane answer--if there is a dispute between parents and spouse, and the disabled person has left no clear instruction...

While this year Klein writes:

Joe Klein 2006: In fact, liberal Democrats are about as far from the American mainstream on these issues as Republicans were when they invaded the privacy of Terri Schiavo's family in the right-to-die case last year...


Clown Show Cage Match: Deborah Howell and Jim Brady vs. Susan Schmidt (Yet Another Why Oh Why Can't We Have a Better Press Corps? Washington Post Edition)

I can't resist one more snapshot from the Washington Post clown show:

Susan Schimdt, February 22, 2004:

A Jackpot From Indian Gaming Tribes : Under Abramoff's guidance, the four tribes -- Michigan's Saginaw Chippewas, the Agua Caliente of California, the Mississippi Choctaws and the Louisiana Coushattas -- have also become major political donors. They have loosened their traditional ties to the Democratic Party, giving Republicans two-thirds of the $2.9 million they have donated to federal candidates since 2001, records show...

Sure doesn't sound like Susan Schmidt thinks that Abramoff "directed his client Indian tribes to make campaign contributions to members... from both parties," does it? Yet that's what Deborah Howell and Jim Brady claim:

Deborah Howell, January 22, 2006:

The Firestorm Over My Column : I wrote that he gave campaign money to both parties and their members of Congress. He didn't. I should have said he directed his client Indian tribes to make campaign contributions to members of Congress from both parties.... [T]here is no doubt about the campaign contributions that were directed to lawmakers of both parties.

Jim Brady, January 20, 2006:

firedoglake : Well, they... they objected originally to the fact that [Deborah Howell]... that when she stated it, she made it seem as if [Abramoff] personally was donating to Democrats. But what she meant to say was that he was directing [his clients to give] money to Democrats, which as I said, is beyond any kind of argument...

But Brady's and Howell's conclusion is not the conclusion that anyone but a right-wing loony would get from Susan Schmidt's article, is it? Susan Schmidt thinks Abramoff was directing his clients to give less money to Democrats than they had in the past--"loosen their traditional ties to the Democratic Party"--and more to Republicans, doesn't she?

Remember: As even right-wing ex-Pioneer Press editor and current Washington Post ombudsman Deborah Howell admits: the Abramoff scandal is not a bipartisan scandal, but a Republican scandal.


Things Get Even Funnier (Why Oh Why Can't We Have a Better Press Corps? Department)

Washington Post ombudsman Deborah Howell says "Uncle."

She changes her line on why no Democrats are in the first tier being investigated in the Abramoff scandal from "stay tuned" to "it's not a bipartisan scandal; it's a Republican scandal."


Deborah Howell, January 15, 2006:

Getting the Story on Jack Abramoff : Schmidt started checking Federal Election Commission records.... Schmidt quickly found that Abramoff was getting 10 to 20 times as much from Indian tribes as they had paid other lobbyists. And he had made substantial campaign contributions to both major parties. "It was enough to get me interested," Schmidt said.... Republicans... say The Post purposely hasn't nailed any Democrats [in the Abramoff scandal]. Several stories... have mentioned that a number of Democrats, including Senate Majority Leader Harry Reid (Nev.) and Sen. Byron Dorgan (N.D.), have gotten Abramoff campaign money. So far, Schmidt and Grimaldi say their reporting on the investigations hasn't put Democrats in the first tier of people being investigated. But stay tuned...

Washington Post ombudsman Deborah Howell, January 22, 2006:

The Firestorm Over My Column : I wrote that he gave campaign money to both parties and their members of Congress. He didn't.... My mistake set off a firestorm. I heard that I was lying, that Democrats never got a penny of Abramoff-tainted money, that I was trying to say it was a bipartisan scandal, as some Republicans claim. I didn't say that. It's not a bipartisan scandal; it's a Republican scandal, and that's why the Republicans are scurrying around trying to enact lobbying reforms...

I would like to know why Deborah Howell thinks various Indian tribes' contributions to Sen. Harry Reid (D-Nev) and Sen. Byron Dorgan (D-ND) are "Abramoff-tainted" or "Abramoff campaign money." And I would like to know how to interpret "stay tuned" other than a a claim that the Abramoff scandal is a bipartisan scandal. But I'm happy that she's changed her line on why Democrats aren't in the first tier of people being investigated from "stay tuned" to "it's not a bipartisan scandal; it's a Republican scandal."


Bo's BBQ

Bo's BBQ. I'm sure there's better BBQ somewhere in San Francisco proper, but I don't know where.

They say that the Grgich Hills merlot goes particularly well with the short-end ribs, made from Niman Ranch pork. And the pecan pie is made with organic pecans and real Karo.

You know, it's a tribute to our endocrine systems that any of us East African Plains Apes can eat pecan pie without profound metabolic distress.


A George W. Bush Misadventure...

Fafblog has competition. *Serious* competition. That's all I'm sayin'.

From Defective Yeti:

Iraqi Invasion: A Text Misadventure :

Oval Office
You are standing inside a White House, having just been elected to the presidency of the United States. You knew Scalia would pull through for you. There is a large desk here, along with a few chairs and couches. The presidential seal is in the middle of the room and there is a full-length mirror upon the wall.

What do you want to do now?

: INVADE IRAQ
You are not able to do that, yet.

: LOOK MIRROR
Self-reflection is not your strong suit.

: PET SEAL
It's not that kind of seal.

: EXAMINE CHAIRS
They are two several chairs arranged around the center of the room, along with two couches. Under one couch you find Clinton's shoes.

: FILL SHOES
You are unable to fill Clinton's shoes.

: EXAMINE DESK
It is a large, oak desk, with several drawers. In one drawer you find a bag of pretzels.

: EAT PRETZEL
I don't think the pretzel would agree with you.

: INVADE IRAQ
You are not able to do that, yet.

: INVADE IRAQ
You are not able to do that, yet.

: GO RIGHT
Far-Right
You are on the far right of the political spectrum. Jesse Helms is here. John Ashcroft is here.

: GO RIGHT
Radical Right You are on the extreme right of the political spectrum. Dick Cheney is here. Pat Robertson is here.

: INVADE IRAQ
You are not able to do that, yet.

: TAKE VACATION
Taken.

: INVADE IRAQ
You are not able to do that, yet.

: SCORE
Your favorablity rating is 58% out of a possible 100%.

: GO PHOTOOP
Photo Op You are at a the Emma T. Booker Elementary School, along with a gaggle of obsequious members of the mainstream media. There is a book here. There are some children here.

: READ BOOK
You read "My Pet Goat." In the distance, terrorists attack the United States.

: READ BOOK
You continue to read "My Pet Goat."

: READ BOOK
You continue to read "My Pet Goat."

: READ BOOK
You continue to read "My Pet Goat."

: GO HOME
You fly around aimlessly for a while, then return to the White House.

Oval Office

: GIVE SPEECH
Who do you want to give the speech to?

: AMERICAN PEOPLE
You give the speech to the American people.

: DIAGNOSIS
Your favorablity rating is 84% out of a possible 100%.

: INVADE IRAQ
You are not able to do that, yet.

: INVADE AFGHANISTAN
Afghanistan You have invaded the nation of Afghanistan, bombing the Taliban nearly out of existence. Osama Bin Laden, mastermind of the 9/11 attacks, is here.

: INVADE IRAQ
(Leaving Afghanistan first.) You are not able to do that, yet.

: INVADE IRAQ
You are not able to do that, yet.

: F---
Such language in a high-class establishment like this!

: HYPE THREAT
"The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa."

: MONGER FEAR
"Facing clear evidence of peril, we cannot wait for the final proof -- the smoking gun -- that could come in the form of a mushroom cloud ..."

: MUDDY WATER
"We know that Iraq and the al Qaeda terrorist network share a common enemy -- the United States of America. We know that Iraq and al Qaeda have had high-level contacts that go back a decade. And we know that after September the 11th, Saddam Hussein's regime gleefully celebrated the terrorist attacks on America ..."

: PUNISH CRITICS
"Wilson never worked for the CIA, but his wife, Valerie Plame, is an Agency operative on weapons of mass destruction ... "

: RAILROAD CONGRESS
You schedule a vote on the Iraq invasion for just before the 2002 midterm elections. As usual, spineless democrats roll over like an SUV taking a sharp corner. Your plan to invade Iraq now has the backing of the American people and Congress.

: INVADE IRAQ
Baghdad You enter the Iraqi capital of Bagdad, having toppled the government and captured the nation's key cities in only 21 days. You can't seem to find the promised throngs of citizens greeting you as liberators, but the footage of the Saddam statue being pulled down looks great on Fox!

: GIVE CONTRACTS
Who do you want to give the contracts to?

: HALLIBURTON
What kind of contracts do you wish to give to Halliburton?

: NO-BID
You give the no-bid contracts to Halliburton.

: STAY COURSE
The situation in Iraq remains unchanged.

: STAY COURSE
The situation in Iraq remains unchanged.

: WEAR FLIGHTSUIT
You put on the flightsuit.

: SAY "MISSION ACCOMPLISHED"
"Mission accomplished."

: EXAMINE MISSION
The mission is not accomplished.

: STAY COURSE
The situation in Iraq remains unchanged. Some insurgents arrive.

: STAY COURSE
The situation in Iraq deteriorates.

: STAY COURSE
The situation in Iraq deteriorates. Some insurgents arrive. There is a small number of insurgents here.


Jonathan Cohn on Medicare Part D: The Prescription Drug Benefit

The mess was, he says, predictable--and predicted:

The Plank : THE PREDICTABLE--AND PREDICTED--MEDICARE MESS: So the General Accounting Office report warned that the transition to the new Medicare drug plan might not go too well. Still, that report was issued in December 2005. And by that time, most likely, it was too late to put in place systems and/or programs that could have eased the transition to Medicare Part D. Right?

Well, sure. But it's not like that was the first time warnings had been sounded. For some time, experts have warned that the "dual eligibles"--people who qualify for both Medicare and Medicaid---would have the most trouble with the switch to a new system.... [T]hey are generally very poor and very sick... were automatically going to lose their prescription drug coverage, which Medicaid had provided previously.... [T]he most vulnerable people were going to have to undergo the most dramatic transformation. You didn't have to have fortune-telling powers to see that, without a lot of very intensive planning and hand-holding, this wasn't going to work out too well.... Here's what Jeffrey Crowley... told the Senate Select Committee on Aging in June:

However, given that the most vulnerable segment of the Medicare population is being moved into the Part D prescription drug program first, with not a single day of overlapping drug coverage by Medicaid and Medicare, it strains plausibility to believe that this transition can be perfectly seamless. There is an urgent need for Congress, prior to January 1, 2006, to establish a short-term, onetime transition period so that individuals can continue to rely on Medicaid if they are unable to access appropriate drug coverage through Medicare....

Dr. Carl Clark, CEO of the Mental Health Center of Denver, made the same essential point in March of 2005:

[W]e're concerned about the required transition of dual eligibles to the new part D, drug benefit and here's why.... [A]lmost 40 percent of the 6.5 million dual eligibles have cognitive impairments and mental illnesses. Dual eligibles are twice as likely as others to have Alzheimer's disease... lack the capacity to manage the automatic enrollment process....

And then there was this warning, issued all the way back in January of 2005, via an issue paper by the Henry J. Kaiser Family Foundation:

The transition of prescription drug coverage for dual eligibles from Medicaid to Medicare represents a major shift in care for a particularly vulnerable population... poorer health status and heavier reliance on prescription drugs... consequences of gaps in coverage and missed medications can be severe for this group... maintaining Medicaid as a backup source of coverage on a temporary basis or devising special outreach and education efforts...

The administration didn't completely ignore such advice. There was some outreach, some of it apparently well conceived (like enlisting local groups with multilingual speakers to reach immigrant communities). Still, it obviously wasn't enough.... Can't imagine government having such foresight or being so pro-active? Believe it or not, once upon a time it was ...

UPDATE: Senator Jay Rockefeller, Democrat of West Virginia, has just introduced a bill to help senior citizens struggling with the new Medicare drug benefit. Talk about grandstanding! Where was he last year, when there was time to fix the problem before it happened? Why didn't he propose something then? Oh, wait, he did ...


Why There's No Money In Monetary Policy

Macroblog directs us to Mark Hulbert on why money stock measures are no longer closely watched. For the amount of variation in money stock growth seen in the U.S. today, shifts in money growth have effects on prices and incomes that are swamped by those of other factors:

macroblog: Why There's No Money In Monetary Policy : Here's a pretty good explanation, from Mark Hulbert at MarketWatch:

Money may indeed make the world go 'round, as many on Wall Street are fond of saying. But even among advisers who think that it does, there is little agreement on whether the supply of money is growing or contracting, much less what such trends might mean for the stock market. This was brought home to me over the past week as I read different investment newsletter editors' reactions to the money supply data that the Federal Reserve periodically releases. One veteran newsletter editor, for example, wrote this past week that "the Fed is creating liquidity at a pace that I don't think I've ever seen before." Yet another prominent newsletter editor, reviewing the same data, concluded that the Fed's growth of the money supply has been "stingy" over the past year.

How can there be such a wide disagreement? Part of the reason is that there are so many different definitions of money. And for each of the major definitions, furthermore, the Fed reports the data on both an unadjusted as well as a seasonally adjusted basis. Add to that the volatility of the data, and you have a situation in which you can find data to support almost any preordained conclusion....

I have been unable to find any statistically meaningful correlation between the growth rate of the money supply and the stock market's subsequent performance.... [Madeline Schnapp, Director of Macroeconomic Research at TrimTabs Investment Research] told me that she and her fellow researchers at TrimTabs have explored the econometric relationships between the money supply data and the stock market "every which way from Sunday" -- and that they have found no straightforward correlation...


Why Oh Why Are Our Rulers so Corrupt? (Medicare Part D Edition)

Paul Krugman explains why Medicare Part D isn't working: because it was written for lobbyists:

The K Street Prescription - New York Times : The new prescription drug benefit is off to a catastrophic start.... At first, federal officials were oblivious.... [G]overnment works when it's run by people who take public policy seriously. As Jonathan Cohn points out in The New Republic, when Medicare began 40 years ago, things went remarkably smoothly from the start. But this time the people putting together a new federal program had one foot out the revolving door: this was a drug bill written by and for lobbyists. Consider the career trajectories of the two men who played the most important role in putting together the Medicare legislation.

[Bush's choice] Thomas Scully was a hospital industry lobbyist before President Bush appointed him to run Medicare. In that job, Mr. Scully famously threatened to fire his chief actuary if he told Congress the truth about cost projections for the Medicare drug program.... He had received a special ethics waiver from his superiors allowing him to negotiate for future jobs with lobbying and investment firms - firms that had a strong financial stake in the form of the bill - while still in public office.... Billy Tauzin, the bill's point man on Capitol Hill, quickly left Congress once the bill was passed to become president of Pharmaceutical Research and Manufacturers of America, the powerful drug industry lobby. Surely both men's decisions while in office were influenced by the desire to please their potential future employers. And that undue influence explains why the drug legislation is such a mess.

The most important problem with the drug bill is that it doesn't offer direct coverage from Medicare. Instead, people must sign up with private plans offered by insurance companies. This has three bad effects. First, the elderly face wildly confusing choices. Second, costs are high, because the bill creates an extra, unnecessary layer of bureaucracy. Finally, the fragmentation into private plans prevents Medicare from using bulk purchasing to reduce drug prices. It's all bad, from the public's point of view. But it's good for insurance companies, which get extra business even though they serve no useful function, and it's even better for drug companies, which are able to charge premium prices. So whose interests do you think Mr. Scully and Mr. Tauzin represented?

And Paul Krugman wonders why America's press corps has spent so little space on the K Street Project:

Which brings us to the larger question of cronyism and corruption. Thanks to Jack Abramoff, the K Street project orchestrated by Tom DeLay is finally getting some serious attention in the news media. Mr. DeLay and his allies have sought, with great success, to ensure that lobbying firms hire only Republicans. But most reports on the project still miss the main point by emphasizing the effect on campaign contributions.

The more important effect of the K Street project is that it allows the party machine to offer lavish personal rewards to the faithful. For a congressman, toeing the line on legislation brought free meals in Jack Abramoff's restaurant, invitations to his sky box, golf trips to Scotland, cushy jobs for family members and a lavish salary after leaving office. The same kinds of rewards are there for loyal members of the administration, especially given the Bush administration's practice of appointing lobbyists to key positions.

I don't want to overstate Mr. Abramoff's role: although he was an important player in this system, he wasn't the only one. In particular, he doesn't seem to have been involved in the Medicare drug deal. It's interesting, though, that Scott McClellan has announced that the White House, contrary to earlier promises, won't provide any specific information about contacts between Mr. Abramoff and staff members.

So I have a question for my colleagues in the news media: Why isn't the decision by the White House to stonewall on the largest corruption scandal since Warren Harding considered major news?


This Is Funny

I put these two questions:

Should the Washington Post have a "World Columnist" who does not know that it is Canberra, not Sydney, that is the capital of Australia?

Should a man who thinks that the capital of Australia is Sydney be pontificating about foreign affairs in any forum?

Still the Colossus: Robert Kagan: In East Asia, meanwhile, U.S. relations with Japan grow ever closer as the Japanese become increasingly concerned about China and a nuclear-armed North Korea. China's (and Malaysia's) attempt to exclude Australia from a prominent regional role at the recent East Asian summit has reinforced Sydney's desire for closer ties.


"Directed" Contributions

T. Slothrop writes:

All Intensive Purposes: Deborah Howell is still at it. : It's not clear to me that Howell's response is much better. She continues:

Lobbyists, seeking influence in Congress, often advise clients on campaign contributions. While Abramoff, a Republican, gave personal contributions only to Republicans, he directed his Indian tribal clients to make millions of dollars in campaign contributions to members of Congress from both parties.

Records from the Federal Elections Commission and the Center for Public Integrity show that Abramoff%u2019s Indian clients contributed between 1999 and 2004 to 195 Republicans and 88 Democrats. The Post has copies of lists sent to tribes by Abramoff with specific directions on what members of Congress were to receive specific amounts. One of those lists can be viewed in this online graphic, while a graphical summary of giving by Abramoff, his tribal clients and associated lobbyists can be viewed here. The latest developments in the Abramoff investigation are available in this Special Report.

But take a look at her evidence. That "online graphic" is a short excerpt (apparently only the Bu - Da portion of an alphabetically organized list) of entities to whom Abramoff told the Louisiana Coushatta tribe to give money in 2002. I count 3 Democrats on the list, and 9 GOP/conservatives. Abramoff apparently recommended contributions of $2000 each to 2 of the Democrats (if you can read the figure for Sen. Daschle, you have a better computer than mine). For the GOP/conservatives, I see $155,000 in suggested contributions. That Howell could look at the gigantic disparity in the recommended contributions on this graphic and think that it supports some sort of claim of equivalence is astounding. On one side is a mountain, and on the other a molehill.... Nor does this graphic establish Howell's claim that Abramoff "directed" contributions to both parties, unless you assume that the Coushatta tribe was simply an unwitting pawn, incapable of acting on its own in ways like, oh, donating money to politicians. (Would journalists be so quick to ignore the client's agency here if it were not an Indian tribe? I wonder.)

No, to show Abramoff's hand here, you need to establish two more things: first, that the tribe acted on his advice -- something not shown here but that I assume the Post's reporters have tracked down -- and, second, that in doing so it wasn't doing what it would have done anyway. Indian tribes donated money to Washington politicians before Jack Abramoff was on the scene, and they will keep doing so after he is a guest of the federal correctional system. To claim that Abramoff "directed" these contributions, you need to show that the Coushatta tribe would not have otherwise donated, e.g., a few thousand dollars to a few Democratic politicans. It's not at all clear to me that the Washington Post has thought about this problem, or wants to think of it, but it's not that hard. The information is out there for those who care to look for it.... All of it just goes to show that it takes an awful lot of work to sustain the illusion that Abramoff was corrupt in a bipartisan sort of way, but that Deborah Howell and The Washington Post are up to the challenge.


Negative Journalistic Credibility (Yes, Yet Another Washington Post Edition)

A Why Oh Why Can't We Have a Better Press Corps Update: A correspondent points out that when Deborah Howell writes:

washingtonpost.blog - The Editors Talk About Site Policies, Design and Goals : 11:30 AM ET, 01/19/2006 Deborah Howell Responds: I've heard from lots of angry readers about the remark in my column Sunday that lobbyist Jack Abramoff gave money to both parties. A better way to have said it would be that Abramoff "directed" contributions to both parties.... The Post has copies of lists sent to tribes by Abramoff with specific directions on what members of Congress were to receive specific amounts. One of those lists can be viewed in this online graphic...

In the readable parts of the document to which she links, Abramoff appears to "direct" $220,000 of contributions to Republicans, and $4,000 of contributions to Democrats.

At this point, I'd regard even a half-truth from the Washington Post as *big* progress.

And Deborah Howell is still the only person I have called at the Washington Post or at washingtonpost.com who has not returned my phone calls: 925-708-0467.


On One Level, This Is Pretty Funny...

On one level, this is pretty funny: From "washingtonpost.blog - - The Editors Talk About Site Policies, Design and Goals":

washingtonpost.blog - The Editors Talk About Site Policies, Design and Goals : Posted at 06:32 PM ET, 01/20/2006 Some Comments Returned Some previously posted comments have been returned to post.blog. Specifically, all comments that meet washingtonpost.com's standards for community interaction have been returned to the post "Deborah Howell Responds." For a fuller discussion about why the comments were orginally removed, read the Q&A transcript of the Friday live discussion with Executive Editor Jim Brady. -- Liz Kelly Editor, Interactivity & Opinions....

Posted at 04:22 PM ET, 01/19/2006 Comments Turned Off As of 4:15 p.m. ET today, we have shut off comments on this blog indefinitely. At its inception, the purpose of this blog was to open a dialogue about this site, the events of the day, the journalism of The Washington Post Company and other related issues. Among the things that we knew would be part of that discussion would be the news and opinion coming from the pages of The Washington Post and washingtonpost.com. We knew a lot of that discussion would be critical in nature. And we were fine with that. Great journalism companies need feedback from readers to stay sharp. But there are things that we said we would not allow, including personal attacks, the use of profanity and hate speech. Because a significant number of folks who have posted in this blog have refused to follow any of those relatively simple rules, we've decided not to allow comments for the time being. It's a shame that it's come to this. Transparency and reasoned debate are crucial parts of the Web culture... Jim Brady Executive Editor, washingtonpost.com

UPDATE, 7 p.m.: As you might expect, we're getting a ton of e-mail on this, and while I can't answer those e-mails individually, I'll address the two main points being made, that 1) we're afraid of being criticized and, 2) that were no personal attacks, profanity or hate speech in any of the comments.... What we're not willing to do is allow the comments area to turn into a place where it's OK to unleash vicious, name-calling attacks on anyone, whether they are Post reporters, public figures or other commenters. And that's exactly what was happening. That leads into the second complaint. The reason that people were not routinely seeing the problematic posts I mentioned were that we were trying to remove them as fast as we could....

Posted at 11:30 AM ET, 01/19/2006 Deborah Howell Responds I've heard from lots of angry readers about the remark in my column Sunday that lobbyist Jack Abramoff gave money to both parties. A better way to have said it would be that Abramoff "directed" contributions to both parties. Lobbyists, seeking influence in Congress, often advise clients on campaign contributions. While Abramoff, a Republican, gave personal contributions only to Republicans, he directed his Indian tribal clients to make millions of dollars in campaign contributions to members of Congress from both parties. Records from the Federal Elections Commission and the Center for Public Integrity show that Abramoff’s Indian clients contributed between 1999 and 2004 to 195 Republicans and 88 Democrats....

On another level, it's quite sad.

If Washington Post ombudsman Deborah Howell were a real reporter, she would know how many of the Indian tribes' relationships with members of congress antedated the arrival on the scene of Jack Abramoff, and would not be talking about "195 Republicans and 88 Democrats" to whom Abramoff had "directed" Indian tribes' contributions. She would be talking about three different sets of money flows: Abramoff's $130,000 of direct campaign contributions to Republicans, the money given as campaign contributions by Abramoff's clients, and the $80 million or so that was paid to Abramoff and company for access to Republicans leaders--$25,000 for setting up a meeting with George W. Bush, et cetera.

With respect to the third money flow, she would write that some portion of it (the guesses I am hearing is about a quarter) flowed through to politicians (and overwhelmingly Republican politicians) as "lifestyle enhancements"--luxury vacation trips paid for by Abramoff's credit card, and so forth.

With respect to the second money flow--money donated by Indian tribes that had hired Abramoff--she would write that some of them were expenditures directed by Abramoff, and some of which were expenditures that the clients would have made in any case. For example, Bloomberg reports that the Saginaw Chippewa gave $279,000 to Democrats over 1997-2000, and $277,000 over 2001-2004, after they had gotten into bed with Abramoff. It is a safe bet that little or none of those contributions to Democrats were "directed" by Abramoff. The Saginaw Chippewa gave $158,000 to Republicans in 1997-2000, and $500,000 to Republicans in 2001-2004, after they had gotten into bed with Abramoff. It is a safe bet that much of this extra $340,000 of contributions to Republicans were "directed" by Abramoff.

With respect to the first money flow, she would write that Abramoff was a Republican giving campaign contributions to Republicans and only Republicans.

But these aren't stories you read in the Post, are they? To get these stories you have to read something like Bloomberg.

UPDATE: A correspondent points out that when Howell writes:

The Post has copies of lists sent to tribes by Abramoff with specific directions on what members of Congress were to receive specific amounts. One of those lists can be viewed in this online graphic...

The document to which she links appears to "direct" $220,000 of contributions to Republicans, and $4,000 of contributions to Democrats.


With Great Power Comes Great Responsibility

Henry Farrell tells Danny Glover that Max Sawicky and I had an influence on last year's Social Security debate. Let me be more skeptical. The Bush administration did the heavy lifting, through failing to come up with a Social Security plan that anybody liked. You can get Congressmen to vote for tax cuts for the rich because the rich like tax cuts--and give campaign contributions. But who liked Bush's never-spelled-out Social Security plan? There is something to the idea that weblogs are contributing to the creation of a public sphere of debate and discussion at a more elevated level than the somewhat stylized, hieratic, and chronically-underbriefed-on-matters-of-policy-substance traditional media and opinionate. But there is not very much.

Still, since to be perceived to have power is to have power, I'll take what I can get:

Beltway Blogroll: The Rise Of Blogs : With such active readers, it made sense for bloggers to turn their attention to Washington -- and for more people inside the Beltway to awaken both to the influence of bloggers and the potential of blogging technology. That is exactly what happened after the 2004 election.Issues such as Social Security reform drove the interest in blogging and demonstrated the technology's power. George Washington University's Farrell said that blogs were very effective at "creating outrage and creating a groundswell" against Bush's plans for Social Security. Experts -- such as economics professor Brad DeLong of the University of California (Berkeley) and Max Sawicky, an economist at the Economic Policy Institute -- used their blogs to create a "testing bed for interesting arguments," Farrell said.

"We began to see those arguments being taken up by op-ed people ... and change the conventional wisdom in the media" about the Bush plan, Farrell said. Although the blogosphere alone did not push Social Security off the short-term agenda, it was a factor, he contended...


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

We all remember when Sebastian Mallaby wrote an editorial for the Washington Post saying that anyone who valued the World Bank as an institution should shut up and stop complaining about Bush's nomination of Wolfowitz to be its president, don't we?

Well now Steve Clemons says that the word is that Paul Wolfowitz is as lousy as president of the World Bank as he was a deputy secretary of Defense:

The Washington Note : Paul Wolfowitz, architect of America's failing foray into Iraq as Rumsfeld's former Deputy at the Pentagon, now heads the World Bank and finally seems like his true self is coming out of the closet. In recent months, picking up steam in recent weeks, there has been a massive exodus of top talent from the World Bank. According to reports, the senior Ethics Officer at the Bank has departed. Also on the exit roster are the Vice President for East Asia & Pacific, the Chief Legal Counsel, the Bank's top Managing Director, the Director of Institutional Integrity (which monitors internal and external corruption), the Vice President for Environmentally and Socially Sustainable Development, and the head of ISG (Information Solutions Group).

According to one senior insider who feels as if Wolfowitz is gut-punching the most talented teams at the bank and indicated that morale is plummeting...


Clay Chandler and What Is Wrong with the Culture of the Washington Post (Why Oh Why Can't We Have a Better Press Corps?)

I had a thoughtful email from Ruth Marcus of the print Washington Post, asking why I don't presume that Post reporters are "trying, hard, to do their jobs and, perhaps on deadline, [fall] short of the idea."

Here is what I answered. It goes, I think, to the culture that print Washington Post reporters absorb as they sit in that newsroom and try to maneuver in the Washington snakepit:


Dear Ms. Marcus:

Thanks for your thoughtful and intelligent email, with its question of why, given that "we all write and say and even blog things that we could have done better... you seem always to leap to the assumption that the people making these errors are lazy 'idiots,' to use your favorite term, rather than individuals who are trying, hard, to do their jobs and, perhaps on deadline, fell short of the ideal." It's a good question.

Let me give one of eight or so examples of my personal experiences with *Washington Post* reporters in which I found it impossible to believe that they were "trying, hard, to do their jobs." It is a March 2, 1995 *Washington Post* article by Clay Chandler, "Treasury Aides' Memos Warned of Peso Plunge," about the 1994-1995 Mexican financial crisis, which in the version in the *Post* archives reads:

Treasury Undersecretary Lawrence H. Summers... was warned of potential economic problems in Mexico in at least three separate memos during the eight months before the peso's collapse, according to sources familiar with the documents.... Two of the memos from Summers's subordinates -- one written in April and the other in September -- recommended he pay careful attention to papers written by Rudiger Dornbusch, a Massachusetts Institute of Technology economist widely respected for his expertise on developing Latin American economies.... A third memo, passed from staff to Summers through Deputy Assistant Treasury Secretary Timothy F. Geithner in late November, warned that the Mexican economy had seriously deteriorated and recommended the Treasury Department begin "contingency planning" in anticipation of a possible financial slump in the Latin nation.

These documents, whose authenticity was not disputed by Treasury Department officials, could bolster critics of the administration's handling of the Mexican crisis who charge that officials missed warnings of trouble. Treasury Department spokesman Howard Schloss said the memos buttressed the administration's argument that officials were on top of events.... Senate Banking Committee Chairman Alfonse M. D'Amato (R-N.Y.), who plans hearings on the administration's handling of the Mexican bailout [said]... "We're getting the runaround.... This is absolute and total nonsense.... I know darn well that the administration received information that should have alerted any prudent person that there were problems with the Mexican economy and then ignored it and withheld it from the Congress."...

A earlier version of the article--the one that made it into the Treasury Department's daily clips--included a short quote from one of the three memos that D'Amato leaked to Chandler: "bottom line: peso overvalued." It's those four words that make me believe that I was the author of the April memo. And the "bottom line: peso overvalued" quote was ripped from context: that wasn't my bottom line, but Rudi Dornbusch's bottom line. My assessment was that Rudi was very smart and thoughtful but wrong, and that the magnitude of capital inflows to Mexico was likely to be large enough to make yet another peso crisis highly unlikely. Would that we in the Treasury staff had been smart enough to warn Larry Summers in April (or even September) 1994 that a peso crisis was likely or even moderately probable rather than, in April, an unlikely possibility and, in September, a possibility. We weren't.

When we went to talk to D'Amato's staff about this, we were told: Save your breath. It's politics. D'Amato doesn't think that staff warned Larry and that he ignored staff. Dole wants to be in a good political position if this Mexico thing goes south in a serious way. I asked the Treasury public relations staff if I should go talk to Chandler, and they said: No. Chandler knew that the "papers" by Rudi Dornbusch weren't private documents written for the Treasury and withheld from Congress, but rather things that the Brookings Institution printed up in editions of 7000 and had prominently discussed in its conference room. Chandler knew that the documents D'Amato leaked to him had no passages that supported D'Amato's "theory" that Larry and Lloyd Bentsen had refused to heed our warnings--if they had such passages, after all, Chandler would have quoted them in his story.

So what was Chandler doing? The assessment of the Treasury public relations staff was that Chandler thought that he had not been getting enough private advance leaks from the Treasury, and was sending us a message: "Nice little Treasury Department you have there. Wouldn't it be a shame if anything happened to it? I'm the Washington Post's chief economics correspondent. I deserve more private leaks. Or I can hurt you: I'll become D'Amato's partisan mouthpiece."

I could multiply examples. Take, oh, the *Washington Post* on February 8, 2005, with Jonathan Weisman's claim that there is "a heated debate among economists... [over whether] stock market... [returns can] meet the president's expectations [of an average return of 6.5% per year]..." Out of all those Weisman talked to the "heated debate" turns out to be (a) me, Dean Baker, Paul Krugman, Doug Fore, Richard Jackson, Ed Keon, Jeremy Siegel, various unnamed economists at the Mannheim Research Institute, Kevin Hassett, and Donald Luskin on the side that the forecast is too optimistic--that stock returns are likely to be lower or economic growth faster than the forecast, or both--(b) Bush's Council of Economic Advisers in the middle, refusing to say that they forecast stock returns to average 6.5% per year if the long-run economic growth rate is 1.9% per year, but saying only that stock returns will be "healthy"; and (c) as defenders of the Bush position only Steve Goss of Social Security (a good guy trapped in an impossible position) and an anonymous "White House economist" who doesn't want to take the reputational hit of having his name revealed.

If there really were a "heated debate among economists," shouldn't Weisman have been able to find one person *outside* the administration--hell, one person *inside* the administration besides Steve Goss--willing to go on the record saying that they endorse the long-run forecast of 1.9% per year real GDP growth and 6.5% per year stock returns? While Weisman is writing his story, I'm getting phone calls from Bush's Council of Economic Advisers asking me to please not say that they made Steve Goss's forecast. They accept it, the CEA says, because it's Steve Goss's bureaucratic role as Chief Social Security Actuary to make the forecast. They do not endorse it.

Now most of my experiences with *Post* reporters have been very pleasant, and most of the time the story that emerges--at least my part of the story--seems fair. But there is a difference between the experiences I have had with a subset of *Post* reporters, like Clay Chandler and company, and the reporters I deal with from the news pages of the *Wall Street Journal,* the *Financial Times,* or the *Economist*--who are genuinely trying their best.

So what am I to conclude when I run into Susan Schmidt and James Grimaldi, who on October 18 write:

...Abramoff, whom DeLay once described as "one of my closest and dearest friends"...

and who last week write:

...DeLay, a Christian conservative, did not quite know what to make of Abramoff, who wore a beard and a yarmulke. They forged political ties, but the two men never became personally close...

?

Either the first story *requires* an in-line fact-check like "(of course, it is the business of politicians to have hundreds if not thousands of closest and dearest friends)"; or the second *requires* an in-line fact check like "(even though DeLay once described Abramoff as one of his closest and dearest friends)." Without those in-line fact-checks, at least one of the two is highly mendacious. In fact, both probably are: real reporters would include both in-line fact checks.

The accepted narrative among participants at Grover Norquist's weekly breakfast Republican strategy meetings--at least those that I talk to--is that until recently Abramoff has been trying to cling as close to DeLay as possible and has been searching for *complaisant* reporters to help him do so; while DeLay is trying to maximize the distance between him and Abramoff (by, for example, getting Grimaldi to print the false claim that DeLay had broken off all relations with Abramoff in February 2001); but that the truth is that DeLay spent a lot of time with Abramoff and enjoyed it (especially when it involved what Wall Street calls "soft dollar compensation" paid for on Abramoff's credit card), and that Abramoff at the very least found it very useful to convincingly pretend to be close personal friends with DeLay.

If that is the real story--and by now Susan Schmidt and James Grimaldi certainly knows better than I what the real story is--don't they have an obligation to print that? How can I to conclude anything other than that they are writing one thing pleasing to one source in October and another thing pleasing to a different source in December?

Yours,

Brad DeLong


Are Business Cycles Fluctuations Around Trend or Not?

If business cycles are simply fluctuations around the economy's long-run growth trend--with production being sometimes above and sometimes below its sustainable level--then it is hard to get too worried about them. What you lose in this recession you gain back in the next boom. By contrast, if business cycles consist of falls below the sustainable long-run trend followed by recoveries to that trend, then one should be very worried about them indeed:

Here Mark Thoma gives an overview of one model of the second type of cycles: Milton Friedman's "plucking" model:

Economist's View: New Support for Friedman's Plucking Model : Milton Friedman's "plucking model" has always been an interesting alternative to the natural rate view of the world. The typical view of business cycles is one where the economy varies around a trend.... In Friedman's model, output moves along a ceiling value, the full employment value, and is occasionally plucked downward through a negative demand shock. Quoting from the article below:

In 1964, Milton Friedman first suggested his “plucking model” (reprinted in 1969; revisited in 1993) as an asymmetric alternative to the self-generating, symmetric cyclical process often used to explain contractions and subsequent revivals. Friedman describes the plucking model of output as a string attached to a tilted, irregular board. When the string follows along the board it is at the ceiling of maximum feasible output, but the string is occasionally plucked down by a cyclical contraction.

Friedman found evidence for the Plucking Model of aggregate fluctuations in a 1993 paper in Economic Inquiry. One reason I've always liked this paper is that Friedman first wrote it in 1964. He then waited for almost twenty years for new data to arrive and retested his model using only the new data. In macroeconomics, we often encounter a problem in testing theoretical models. We know what the data look like and what facts need to be explained by our models. Is it sensible to build a model to fit the data and then use that data to test it to see if it fits? Of course the model will fit the data, it was built to do so. Friedman avoided that problem since he had no way of knowing if the next twenty years of data would fit the model or not. It did. I was at an SF Fed Conference when he gave the 1993 paper and it was a fun and convincing presentation.

Here's a recent paper on this topic that supports the plucking framework (thanks Paul):

Asymmetry in the Business Cycle: New Support for Friedman's Plucking Model, Tara M. Sinclair, George Washington University, December 16, 2005, SSRN: Abstract This paper presents an asymmetric correlated unobserved components model of US GDP. The asymmetry is captured using a version of Friedman's plucking model that suggests that output may be occasionally "plucked" away from a ceiling of maximum feasible output by temporary asymmetric shocks. The estimates suggest that US GDP can be usefully decomposed into a permanent component, a symmetric transitory component, and an additional occasional asymmetric transitory shock. The innovations to the permanent component and the symmetric transitory component are found to be significantly negatively correlated, but the occasional asymmetric transitory shock appears to be uncorrelated with the permanent and symmetric transitory innovations. These results are robust to including a structural break to capture the productivity slowdown of 1973 and to changes in the time frame under analysis. The results suggest that both permanent movements and occasional exogenous asymmetric transitory shocks are important for explaining post-war recessions in the US.

...Notice that the size of the downturn from the ceiling... [helps predict] the size of the upturn... that follows (taking account of the slope of the trend.)... In a natural rate model, there is no reason to expect such a correlation...


I Want Douglas Holtz-Eakin Back in Government

A surprisingly large number of people are really pissed off at the Council on Foreign Relations for plucking Douglas Holtz-Eakin out of the Congressional Budget Office.

Here David Wessel compares Doug to Jeremiah:

WSJ.com - Capital : To a Seer, It's Clear: Budget Will Buckle Under Health Costs: Like the prophets of the Old Testament, directors of the Congressional Budget Office tell unpleasant truths that Americans and their leaders don't always want to hear. After two years in the Bush White House and three as CBO director, economist Douglas Holtz-Eakin is now freshly out of government and perched at the Council on Foreign Relations. As the annual federal-budget drama opens in the U.S. -- with its political posturing, mind-numbing arguments and bickering over million-dollar fish in a trillion-dollar sea -- a conversation with the plain-spoken Mr. Holtz-Eakin seems timely.

Despite what you may hear in the weeks ahead, the important fiscal issues aren't how much the government will spend next year or how big the deficit will be the year after, he says. "Beyond five years, no matter what choices you make in the interim, you face Social Security, Medicare, retirement income, medical care and long-term care. More generically, how will we support the old-age needs of retirement income, medical care and long-term care? We're going to have a whole bunch more old people. And current programs aren't sustainable. The long-term issue is reimagining and reinventing our programs for older people so that they don't kill us. And then, putting in place a real tax system that will support the government once it makes those decisions. It really has to be done in order."

That's not news to budget geeks, but politicians act like they don't get it, perhaps because the public doesn't believe it. Americans do care about this, says Mr. Holtz-Eakin, who has spent a lot of time speaking to Rotary Clubs and the like. "But they don't have a whole lot of time to sit and study these things, so there's a fairly limited sophistication. I'd go out and say things that I think are sort of obvious and they look at me like I'm nuts."

Like what? "The thing that I found most amazing is everybody thought the war in Iraq was a much bigger expenditure than the [Medicare] drug benefit. How could you possibly believe that? The war in Iraq, $6 [billion] to $7 billion a month, maybe $70 billion, $75 billion, a year, something like that. And the drug benefit is forever."

So how did he describe it so citizens would get it? "The demography is pretty predictable," he says. "People get older one year at a time. Then you layer on historical trends in health-care spending. If you just take demography plus history as your guide, Medicaid and Medicare are as big in 2050 as the entire federal government is today. And then you say, 'Oh, my God, that just can't be.' So either we're going to have a really big government, and you have to have a tax system that can support a big government. Or, no, we need to have a smaller government, and we're going to make those programs support the right people at the right levels."

"I think this is self-evident," says Mr. Holtz-Eakin, chuckling. "But I realize now this is the price of being too close to the process. I wake up every morning saying it doesn't matter what happens in the next five years, and people say I am really weird."

Of course, CBO directors have been preaching this message since the agency was founded in 1974, and they've occasionally seen results. But the political system appears paralyzed today. "I understand people who think: The political system doesn't reward painful choices. We'll never do this, and we're toast. And you try to reconcile that with a history where in fact we have done these things," Mr. Holtz-Eakin says. "I don't have a defining vision of how it happens. I just know that it does sometimes."

Even though he no longer has to answer to political masters, Mr. Holtz-Eakin won't join those who argue the Bush tax cuts were a mistake, or at least were too big. But forget the notion that somehow the U.S. economy will grow fast enough so we don't have to wrestle with health-care and retirement-spending trends. "I don't know how to quantify how implausible I think that is," Mr. Holtz-Eakin says.

So how and when does something happen? "One theory is that it takes a crisis," he says. "A second way to do it is ingenious political leadership. That's what we're waiting for. There's a point where, for some politician, it will be better to fix it than to let it happen. I don't know when that is. But given how fast health-care costs are going up, that phenomenon will be the driving one."

Heed the prophet.


Ex-Navy Secretary James Webb Is an Honorable Gentleman

And Howard Kurtz and Shallagh Murray are not. The Washington Post's credibility as an objective reporter of news continues to drop, and is now less than zero.

From Whatever Already:

Whatever Already: The Washington Post this morning gives major play this morning to an attack of Rep. John Murtha (D-Pa.) on the website of the (until now) obscure Cybercast News Service. It accuses Murtha--who won a Silver Star and three Bronze Stars in Vietnam-- of purportedly saying that he had not deserved to win two Purple Hearts also awarded him for his service during the Vietnam war.

The Post story, by reporters Howard Kurtz and Shallagh Murray, quotes extensively David Thibault, the editor in chief of the (who ever heard of them before the Washington Post decided to give them such prominence?) Cybercast News Service.... But the article tells us very little about Thibault himself... [does not describe] Thibault... as a "senior producer for a televised news magazine" broadcast and sponsored by the Republican National Committee. I dunno, but I for one, would have wanted to know that. Thibault's background and those engaging in the Swiftboating of Murtha would be relevant to any news story on this issue, I would think. And so would some independent examination by the Post as to whether there is even any veracity to the charges....

Update: 5:20 P.M., Saturday night: The Post article in amplifying the allegations of the Cybercast News Service... included a 1996 quote from Harry Fox, who worked for former represenative John Saylor (R-Pa.), teling a local newspapaer that Murtha was "pretending to be a big war hero."... What the Post leaves out... is that Saylor is deceased, and well, has been for some time now. (Saylor died way back in 1973.)... [T]he Washington Post is relying on something said by a person with an axe to grind (Fox), who is quoting someone who is deceased (but who the newspaper forgot to tell you is deceased.)... Makes you want to drop a dime to Howie Kurtz! But alas, Kurtz wrote the story. Oh well.

And Reaganite ex-Navy Secretary James Webb says:

firedoglake : In today's NYTimes, James Webb, former Secretary of the Navy in the Reagan Administration and former Marine platoon and company commander in Vietnam, calls the attacks on Jack Murtha for what they are: a baseless political smear, coordinated by a group with deep ties to the far right of the GOP. And he calls those behind the attacks for what they are as well:

The political tactic of playing up the soldiers on the battlefield while tearing down the reputations of veterans who oppose them could eventually cost the Republicans dearly. It may be one reason that a preponderance of the Iraq war veterans who thus far have decided to run for office are doing so as Democrats. A young American now serving in Iraq might rightly wonder whether his or her service will be deliberately misconstrued 20 years from now, in the next rendition of politically motivated spinmeisters who never had the courage to step forward and put their own lives on the line....

Kudos to James Webb for calling it like it is.

Those who shamefully "play up the soldiers on the battlefield while tearing down the reputations of veterans who oppose them" include not only Republican operative-hacks like David Thibault, but their journalistic megaphones like Shallagh Murray and Howard Kurtz.

If the Washington Post cared about its reputation as an objective news reporter, it would fire Murray and Kurtz today. Those print Washington Post reporters who care seriously about their own reputations are now writing memos to their bosses about how stories like this Kurtz-Murray one impact their own reputations as well.


Barkley Rosser on Iran

Last week Barkley Rosser emailed me that he disagreed with pieces of Dariush Zahedi's analysis of Iran. I asked him what he disagreed with, exactly. I don't see anything in my email inbox, but there is this:

IRAN: THE FIRST ISLAMIC NEW TRADITIONAL ECONOMY : [T]here is a global movement to "re-embed" modern, technologically advanced economies (such as ones pursuing nuclear power for peaceful or other purposes) back into a traditonal socio-political framework, following the categories of Karl Polanyi as discussed in his _The Great Transformation_. The most common candidate for such a framework is a great world religion, and we noted such movements occurring within Hinduism, Confucianism, and several other religions. However, the movement has been most developed within Islam.... [T]he first nation to attempt to implement a new traditional economy: Iran... which has been struggling to adopt an Islamic econmic system since the Islamic revolution of 1979.

We identify five stages in the post-revolutionary political-economic development of Iran, with a sixth stage clearly now in progress.... 1979-81 was the First Radical Phase, dominated by Islamic socialism that draws on the works of the Iranian ayatollah, Taliqani.... [N]ationalizations and a huge increase in income equality.... [The] Second Radical Phase (1982-84) came in a struggle over an effort to nationalize land and international trade, which was blocked by the Council of Guardians... the most serious implementation of more strictly Islamic elements.... Then came the First Pragmatic Phase (1985-89)... opening to the world economy to obtain weapons to fight Iraq.... The Second Pragmatic Phase (1989-97) followed the end of the war, the death of Khomeini, and coincided with the presidency of Hojjat-el-Islam Hashemi Rafsanjani... opening [to trade] and a move towards some marketization and privatization.... The Social Reform Phase (1997-2005) followed during the presidency of Mohammed Khatami, who loosened many social controls on women and political discussions.... The new president has been elected on a simultaneous platform of undoing social reforms and a populist appeal to help the poor....

Persian political developments [in the twentieth century] largely followed those in Turkey.... The westernizing Reza Pahlavi Shah overthrew the Qajars in 1925 and followed a path similar to that of Ataturk. He introduced indicative central planning in 1941 and oversaw development of industry half-owned by the state. He was removed by the British, Soviets, and Americans during WW II for his de facto alliance with Germany, and was replaced by his son, Mohammed, who would rule until 1979, except for a brief period in the early 1950s, when Mohammed Mossadegh (and Taliqani), a veteran of the Constitutonalists, removed him and nationalized oil production. Mossadegh was removed in the US-British "Project Ajax" coup.... In 1963, Shah Pahlavi... introduced the secularizing "White Revolution", which guaranteed equal rights for women. These were undone after 1979.

Today, the Iranian economy is dominated by oil... a $40 billion reserve... nuclear program... very popular in Iran.... [O]il provides over 90% of export industries, and its dominance makes it hard to develop other industries. Poverty and inequality have spread. Unemployment is running around 12% and inflation around 15%, with these problems worse for the young and the poor. This is the backdrop of the election of Ahmadinejad.

If asked I shall comment more on the significance of the dominance of Shi'ism in Iran and some other matters. However, I think this will provide a basic backdrop for a more informed discussion of matters in Iran. I will note only that Shi'ism is more inclined to have clerics actually holding office, although the new president is the first since 1979 not to be an actual cleric, despite the apparent religious radicalism of his ideology. Sunni fundamentalists are perfectly happy to have a non-cleric in charge, as long as he implements and enforces a shari'a law code.


More Signs of Weak Aggregate Demand

Kashyip Mansouri points out that low non-energy inflation is a sign of weak demand relative to the economy's productive potential:

Angry Bear : Where is the non-Energy Inflation? "The Producer Price Index for Finished Goods rose 0.9 percent in December, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 0.7-percent decline in November and a 0.7-percent gain in October. Prices for finished goods other than foods and energy advanced 0.1 percent in December, the same rate as in November....From December 2004 to December 2005, finished goods prices rose 5.4 percent, following a 4.2-percent increase in 2004. The index for finished energy goods climbed 23.9 percent in 2005, after moving up 13.4 percent in the preceding calendar year. Conversely, prices for finished goods other than foods and energy rose 1.7 percent in 2005, following a 2.3-percent gain in 2004."

It continues to be the case that dramatically higher energy costs are not feeding through into higher costs of other goods and services.... Unlike during earlier energy shocks, when increases in the price of oil typically led to inflation in other types of goods and services, this time the increase in the price of oil has led only to a change in the relative price between energy and non-energy products. Why haven't firms passed on their higher energy costs? Presumably it's because they haven't been able to charge higher prices, not because they haven't wanted to. This could be the case if the demand for non-energy products by firms has fallen a bit as firms have had to spend more of their budgets on energy products. In other words, firms are simply shifting the allocation of their spending away from non-energy products and toward energy products.

One interpretation of this phenomenon is that it is a symptom of weak aggregate demand. If aggregate demand were higher, then firms would be in a better position to pass on their higher energy costs. The fact that the discrepancy between energy costs and non-energy costs has persisted and even widened in recent months may therefore be a sign of a slowing economy.


A Good Story on Abramoff from Bloomberg

There are three money flows here. First, there is Abramoff's $130,000 of direct campaign contributions. Second, there is the money given as campaign contributions by Abramoff's clients--some of which were expenditures directed by Abramoff, and some of which were expenditures that the clients would have made in any case. For example, the Saginaw Chippewa gave $279,000 to Democrats over 1997-2000, and $277,000 over 2001-2004, after they had gotten into bed with Abramoff. It is a safe bet that *none* of those contributions to Democrats were "directed" by Abramoff. The Saginaw Chippewa gave $158,000 to Republicans in 1997-2000, and $500,000 to Republicans in 2001-2004, after they had gotten into bed with Abramoff. It is a safe bet that $340,000 of those contributions to Republicans were "directed" by Abramoff.

The third money flow is the $80 million or so that was paid to Abramoff and company for access to Republicans leaders--$25,000 for setting up a meeting with George W. Bush, et cetera. Some portion of that money flow (the guesses I am hearing is about a quarter) flowed through to politicians (and overwhelmingly Republican politicians) as "lifestyle enhancements"--luxury vacation trips paid for by Abramoff's credit card, and so forth.

All this is by way leading up to this story from Bloomberg News. This is how a story on Abramoff-connected money should be written. Organizations like the Washington Post now have negative credibility as objective news reporters. But--as there ability to report stories honestly indicates--for organizations like Bloomberg, there is still a presumption that their word is good:

Bloomberg.com:: Abramoff's `Equal Money' Went Mostly to Republicans (Update1) Dec. 21 (Bloomberg) -- U.S. President George W. Bush calls indicted lobbyist Jack Abramoff ``an equal money dispenser'' who helped politicians of both parties. Campaign donation records show Republicans were a lot more equal than Democrats. Between 2001 and 2004, Abramoff gave more than $127,000 to Republican candidates and committees and nothing to Democrats.... [H]is Indian clients were the only ones among the top 10 tribal donors in the U.S. to donate more money to Republicans than Democrats.... Larry Noble... who directs the Washington-based Center for Responsive Politics [says]. ``It is somewhat unusual in that most lobbyists try to work with both Republicans and Democrats, but we're already seeing that Jack Abramoff doesn't seem to be a usual lobbyist,'' Noble said. Abramoff, 46, is under investigation....

Between 2001 and 2004, Abramoff joined with his former partner, Michael Scanlon, and tribal clients to give money to a third of the members of Congress, including former House Majority Leader Tom DeLay, according to records of the Federal Election Commission and Internal Revenue Service. At least 171 lawmakers got $1.4 million in campaign donations from the group. Republicans took in most of the money, with 110 lawmakers getting $942,275, or 66 percent of the total. Of the top 10 political donors among Indian tribes... three are former clients of Abramoff and Scanlon.... All three gave most of their donations to Republicans -- by margins of 30 percentage points or more -- while the rest favored Democrats....


More Signs of Weak Aggregate Demand

Kashyip Mansouri points out that low non-energy inflation is a sign of weak demand relative to the economy's productive potential:

Angry Bear : Where is the non-Energy Inflation? "The Producer Price Index for Finished Goods rose 0.9 percent in December, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 0.7-percent decline in November and a 0.7-percent gain in October. Prices for finished goods other than foods and energy advanced 0.1 percent in December, the same rate as in November....From December 2004 to December 2005, finished goods prices rose 5.4 percent, following a 4.2-percent increase in 2004. The index for finished energy goods climbed 23.9 percent in 2005, after moving up 13.4 percent in the preceding calendar year. Conversely, prices for finished goods other than foods and energy rose 1.7 percent in 2005, following a 2.3-percent gain in 2004."

It continues to be the case that dramatically higher energy costs are not feeding through into higher costs of other goods and services.... Unlike during earlier energy shocks, when increases in the price of oil typically led to inflation in other types of goods and services, this time the increase in the price of oil has led only to a change in the relative price between energy and non-energy products. Why haven't firms passed on their higher energy costs? Presumably it's because they haven't been able to charge higher prices, not because they haven't wanted to. This could be the case if the demand for non-energy products by firms has fallen a bit as firms have had to spend more of their budgets on energy products. In other words, firms are simply shifting the allocation of their spending away from non-energy products and toward energy products.

One interpretation of this phenomenon is that it is a symptom of weak aggregate demand. If aggregate demand were higher, then firms would be in a better position to pass on their higher energy costs. The fact that the discrepancy between energy costs and non-energy costs has persisted and even widened in recent months may therefore be a sign of a slowing economy.


Waging a Living

Covering the unskilled working class:

They work hard (too hard) for the money: - Mick LaSalle, Chronicle Movie Critic: Waging a Living: Documentary. With Jean Reynolds, Jerry Longoria, Barbara Brooks and Mary Venittelli. Directed by Roger Weisberg. (Unrated. 85 minutes. At Bay Area theaters.)

"Waging a Living" is a documentary about the working poor in America, people who have full-time jobs and can't get by on their low-paying or minimum wage salaries. Directed by Roger Weisberg, the film is without narration but occasionally drops a statistic onto the screen that relates the specific case histories to a general problem -- for example that housing costs have tripled since 1979, while wages for the bottom 20 percent of the work force have remained stagnant.

Weisberg follows [four] people over the course of several years: Jean Reynolds, a nursing assistant supporting three kids and seven grandchildren on 11 dollars an hour; Barbara Brooks, who's supporting three kids as a counselor, while going to school for her associate's degree; Mary Venittelli, a woman with three kids, who drops from comfort into poverty following a divorce; and the lone West Coast entry, Jerry Longoria, a security guard in San Francisco. The four subjects are engaging and intelligent, fighting long odds and working extra hours, living without health care and having no time for rest and little for sleep. The struggle is unrelenting, the stories poignant. Among the many revelations in "Waging a Living" is the surprising fact that those security guards, working the desks in the lobbies of Market Street's most opulent office buildings, are making 10 and 11 bucks an hour -- in San Francisco.

The intent of "Waging a Living" is to inspire outrage, and to an extent it succeeds. But in every country, somebody's going to be broke, and the film sometimes overestimates the shock we should feel that people with no education or skills and lots of kids should be feeling the squeeze. After all, it's hardly esoteric information that dropping out of school and having children early is a recipe for poverty. A viewer could easily come away, in fact, consoled that there are so many programs to help people who find themselves at a disadvantage. Likewise, though the government's efforts to wean people off of the system sometimes results in dispiriting situations like Barbara Brooks' (she gets a $450 raise and loses $600 in aid), it's not unreasonable that there should be incentives for people to get off assistance.

However, the film makes two points so persuasively as to seem beyond dispute. The first is that fathers are getting away scot free, that there's no system for tracking down deadbeat dads and that court-ordered child support is often treated as something optional. The second is that people who work hard should be able to get ahead, that it's unfair and un-American that, in a nation founded on the idea of the second chance, people can't climb their way out of poverty.

That's the point of the film -- people who work hard should have a decent life -- and it's hardly unreasonable. It's the way it used to be, after all. Sixty-five years ago even the soda jerk in "Meet John Doe" got to live in a house.

Actually it isn't the way it used to be. Fifty years ago absolute material poverty was far deeper than it is today. Of course, absolute material poverty is only one dimension of real poverty.


Why Oh Why Are We Ruled by These Fools? (Your President Speaks! Edition)

Bad prose style from George W. Bush

First Draft - Your President Speaks! : Ostensibly to talk up the economy, but he was really all over the map.

So the death tax was put on its way to extinction. I said, put on its way to distinction. The problem is the way the law was written. It's coming back to life in 2011, which is going to make some interesting estate issues, particularly in 2010.

First. "Distinction" and "extinction" are two distinct words. The difference between them has not become extinct.

Second, his unnecessary and inappropriate use of the passive voice makes George W. Bush's prose weak and cowardly. Consider the following two sentences: "The problem is the way the law was written." "The problem is the way I and the Republican Congressional leaders wrote the law back in 2001." See how much stronger, more effective, and more confident the second sentence is? The first sentence could only be uttered by somebody whom California governor Arnold Schwarzenegger would call a "girlie man": someone who can only say weak words; can only drink weak tea; is afraid to take responsibility for his actions. If George W. Bush were George Washington, he would say: "Father, the problem is that the cherry tree was chopped down."


Deborah Howell Tells Us the Washington Post Should Fire Herself

Atrios finds Deborah Howell advising us that the Washington Post should fire herself for getting the facts wrong:

GRADUATION: Bureau chief gives grads Top 10 list : 10. Accuracy is not just the most important thing; it%u2019s the only thing. The American Society of Newspaper Editors recently did an excellent study on the credibility problems of American newspapers. The No. 1 complaint is that newspapers just don't get facts right. Misspelled names and words; wrong addresses; wrong times. Simple stuff. This is not rocket science. When a job seeker writes me a letter and misspells my name or has my title wrong or a misspelled word or a grammar error, I either ashcan the letter or write and tell them to get a new trade.

Ah. But that was then. Now things are very different. Now Deborah Howell says:

washingtonpost.blog - The Editors Talk About Site Policies, Design and Goals : I've heard from lots of angry readers about the remark in my column Sunday that lobbyist Jack Abramoff gave money to both parties. A better way to have said it would be that Abramoff "directed" contributions to both parties.


Good for Senator Leahy

Good for Senator Leahy, who announces he will vote against the confirmation of Alito:

Leahy Says He'll Vote Against Alito: Senator Patrick J. Leahy of Vermont today became the first Democrat on the committee to declare his intention to vote against him. Mr. Leahy told an audience at the Georgetown Law School that he did not believe Judge Alito would provide the necessary checks and balances to an executive branch that might exceed its powers. "I cannot vote for this nomination," Mr. Leahy said. "I will not vote for this nomination." Mr. Leahy, the ranking Democrat on the committee, said he was disturbed by Judge Alito's responses during the committee hearings last week on the issues of privacy and conflicts between government and individuals. He also said he believed Judge Alito, who has spent his entire legal career working for the government, would be too deferential to what the senator called his "patrons." "At a time when the president is seizing unprecedented power, the Supreme Court needs to be a check and balance," he said. "I have no confidence that Judge Alito will provide that check and balance."

Indeed. The threshold question is: "Is Alito one of the five hundred or so people who would best improve the judgments of the Supreme Court?" I have heard lots of arguments that say he is not one of the five hundred. I have heard no arguments that he is.

I question why any Senator is even thinking of voting for him, or why any newspaper is supporting him.


Weighing the True Costs and Benefits in a Matter of Life and Death

Robert Frank--Ben Bernanke' coauthor on their Principles of Economics book--has a nice response to one of the pieces of immoral toxic swill that periodically emerge from Slate:

Weighing the True Costs and Benefits in a Matter of Life and Death - New York Times : Slate this month.... The subtitle says: "A woman who couldn't pay her bills is unplugged from her ventilator and dies. Is this wrong?"... the answer is "no."...

[T]his argument as morally preposterous. Well, yes. But it is also economically preposterous... some details.... The patient was Tirhas Habtegiris, a 27-year-old legal immigrant being kept alive by a ventilator as she lay dying of cancer last month in the Baylor Regional Medical Center in Plano, Tex. Physicians offered no prospect for her recovery. She was hoping, however, to hang on until her East African mother could reach her bedside.

Ms. Habtegiris had little money and no health insurance. On Dec. 1, hospital authorities notified her brother that unless another hospital could be found to treat his sister, Baylor would be forced to discontinue care after 10 days.... Baylor disconnected her ventilator on Dec. 12, invoking a law signed in 1999 by George W. Bush, then governor of Texas.... Unlike the comatose Terri Schiavo, Ms. Habtegiris was fully conscious and responsive when she was disconnected, according to her brother. She wanted to continue breathing. Her brother and several other family members have described the agonizing spectacle of her death by suffocation over the next 16 minutes. Her mother never got there....

In Baylor's defense, Mr. Landsburg argues that Ms. Habtegiris's treatment would have failed the economist's basic cost-benefit test, which says that an action should be taken only if its benefit exceeds its cost. The cost of care is relatively easy to calculate, but measuring its benefit is more difficult, and it is here that Mr. Landsburg stumbles.... He is mistaken for multiple reasons... he ignores the economically compelling reasons for having social safety nets in the first place... most people favor collectively financed rescue efforts. That a poor person would not, or could not, buy private insurance against such contingencies is entirely beside the point.

Even more troubling, Mr. Landsburg completely ignores moral emotions like sympathy and empathy. As economists since Adam Smith have recognized, economic judgments are often tempered by these emotions.... [L]arge numbers of people benefit when a patient in imminent mortal danger receives treatment. Had the opportunity presented itself, many would have eagerly contributed to Ms. Habtegiris's care. But organizing an endless series of individual private fund-raisers for such cases is impractical. So, we empower government to step in when the need arises.

Mr. Landsburg's argument finesses the important distinction between a "statistical life" and an "identified life"... introduced by the economist Thomas C. Schelling.... It is one thing to risk one's own life in an unlikely automobile accident, but quite another to abandon a known victim in distress.

By offering a transparently unsound economic argument in defense of the Habtegiris decision, Mr. Landsburg unwittingly empowers those who wrongly insist that costs and benefits have no legitimate role in policy decisions about health and safety. Reducing the small risks we face every day is expensive. The same money could be spent instead on other pressing needs. We cannot think intelligently about these decisions without weighing the relevant costs and benefits. But using cost-benefit analysis does not make one a moral monster.

In the wealthiest nation on earth, a genuine cost-benefit test would never dictate unplugging a fully conscious, responsive patient from life support against her objections. Mr. Landsburg's argument to the contrary is wrongheaded, not just morally, but also economically.


150? How About 4500?

Off by a factor of 30:

Daily Health Policy Report: HHS Secretary Mike Leavitt on Tuesday in a conference call with reporters said the department is working to address problems with the new Medicare prescription drug benefit, including increasing the number of telephone operators to assist pharmacies working with Medicare beneficiaries from 150 on Jan. 1 to 4,500, the Detroit News reports (Herrndobler, Detroit News, 1/18). He also reiterated that the government has instructed insurers to cover a 30-day supply of drugs, regardless if the medications are on the plan's formulary, and to limit copayments. He added that, as a last resort, beneficiaries could be enrolled in a default prescription drug plan while at a pharmacy. He said, "Our message [to beneficiaries] is, 'Don't leave the pharmacy without your drugs'" (Schuler/Reichard, CQ HealthBeat, 1/17). He added, "There is no reason for you to go without your medicines ... or for you to have to pay more than you owe" (Appleby/Wolf, USA Today, 1/18). Leavitt added, "When there's change, there's an opportunity for things to go wrong. We are fixing them one pharmacy, one beneficiary at a time" (Pear, New York Times, 1/18). Leavitt and CMS Administrator Mark McClellan said "tens of thousands" of low-income beneficiaries have experienced problems obtaining drugs (USA Today, 1/18).... The federal government will not reimburse states that are covering the cost of prescription drugs for Medicare beneficiaries who are unable to obtain medications under the new drug benefit, McClellan said Tuesday...