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One line of argument (loosely speaking) that I’ve seen popping up around the Internet consists of supporters of ObamaCare accusing those who are currently insured in the individual market and are complaining about ObamaCare making their situations worse, of being selfish. Or, as one commenter at that recent Megan Mcardle post put it, we’re “hard hearted” for ignoring the “thousands - maybe hundreds of thousands - who can’t get health insurance preACA, who can now”.
It took a few iterations of this for me to realize that I was starting to feel defensive and guilty for wanting to buy what I prefer with my own money. Once I did realize it, I got exasperated with myself and wrote in response to that commenter:
I absolutely support doing something to help people who are too poor to afford health care. (Pre-existing conditions are a little trickier. In some circumstances, yes, I support providing help. However, if an adult who could have afforded health insurance decided to gamble and not get it, I don't think other policy holders should have to pay for her treatment when she gets sick and *then* decides she needs health insurance.) If you had asked me 3 years ago if I'd throw an extra $1000 in the pot every year to help poor people get health care, I would have said yes. But the ACA asks me and many more like me to throw extra money in the pot and get worse (for me) health insurance and have fewer choices in health insurance and pay a fine/tax if I don't want to spend the extra money for worse health insurance. Not being a saint, I'm angry about that. Not being a supporter of government coercion, I'm opposed to that.
I'm especially opposed to it because there are much better (and much simpler) ways to have helped the uninsured and the people who passed this bill decided against all of them and went the ACA route instead. I'm especially angry about it because a lot of the people who think I should be happily willing to get a worse deal to help others have employer-sponsored health insurance and, oddly, don't seem eager to opt out of that insurance and buy on the individual market in order to help with the helping out.
In retrospect, I would have left off the first three sentences. They’re everything up through "I would have said yes." That's absolutely true for me but they give it gives too much legitimacy to the idea that other people, who don’t want to spend money to help the poor buy health insurance, are, in fact, selfish or hard-hearted. They aren’t. They’re just people who would rather spend their money on something else and there’s nothing wrong with that. It’s their money, after all.
Also, after writing that comment, I realized that there was nothing stopping me three years ago - or 30 years ago - from putting together a group of like-minded people, having each of us throw $1000 in the pot each year, and helping poor people buy health insurance. That realization, and the fact that I did nothing of the kind, brought home to me just how much I tend to see government action as the appropriate way to handle issues like this - notwithstanding my shift from leaning Left to leaning Right.
It took the very personal fall-out from ObamaCare for me to truly understand how and why getting the government involved should always be a rare move of last resort rather than a default position. And for helping me generalize my difficulties with ObamaCare to the larger picture, I’m indebted to two men.
First, Grim for this comment to a post over at the Hall:
If it makes you feel any better, this stomping of the social contract in the name of "Progress!!!" isn't unique. It's a persistent feature of the project. Ask the people whose land is underneath TVA reservoirs. It didn't matter what they wanted, or that their ancestors' graves were laid there. It didn't matter that they'd be reduced from free farmers on their own land to some other way of life they had reason to hate. Their land was in the way of water and power, and whatever it cost them they'd have to move.
For that matter, ask the Apache. How do you live with these people again? I'm not sure they've figured it out yet.
Second, Kevin D. Williamson. I re-read his book, The End Is Near and It’s Going to Be Awesome, and realized I’d pretty much totally missed the point of the book the first time around. I originally read it thinking he had some interesting policy prescriptions. The second time, primed by my close encounter with ObamaCare, I realized he had some interesting ideas about what people might do as individuals or in groups if we are able to - or forced to - stop thinking in terms of government-imposed, fully-specified, one-size-fits-all policies.
Many years ago - 40 or more - I heard a news story about some poor Third World country. The government had decided it needed men to mine something or plant something or build a road or whatever. The government sent troops to a small village out in the middle of nowhere and scooped up all the men and boys who were the right age to do the work. The soldiers left with their captives and no one left in the village knew where the men and boys had been taken or if they would ever come home again.
I was horrified and heart-broken. That government, I was sure, was made up of cruel men who cared nothing for their fellow citizens. It never occurred to me that those men undoubtedly believed that they were doing the best thing for the country as a whole; that the suffering of a few was a fair price to pay for the betterment of many; and that those who opposed them were short-sighted and, quite possibly, selfish and hard-hearted to complain about the plight of a few when so many would benefit.
The damage from ObamaCare is not on the same scale as the damage from that Third World government’s policies, of course, but the shape of it is the same, as it is for the people displaced by the TVA, as it is for all the people whose lives have been disrupted or damaged in the name of progress or the greatest good for the greatest number or simply because those in our government are convinced they know what’s best for every man, woman, and child in the country. The intentions may have been good but the reality is that the government doesn’t know what’s best; the greatest good for the greatest number is an illusion; and progress is something people do, not something government creates. And you know what they say about the road to Hell.
This shift in my outlook feels very odd to me because so much of my blogging has been about what policies I think the government should be imposing. It will take a while for me to rearrange my thinking now that I understand that the lesson of ObamaCare is that the answer to the question, “What’s the best government health care policy, government education policy, government agricultural policy, government energy policy, government whatever policy?” is almost always going to be, “As close to none as possible”.
And if I’m no longer arrogant enough to believe I know what everyone else should be doing, what the heck am I going to blog about? All the people who still are that arrogant?
Senator Ron Johnson (R-Wisconsin) has announced he will introduce an ”If You Like Your Health Plan, You Can Keep It Act” bill next week. According to Senator Johnson’s press release:
One of the most important promises made by President Obama and Democrat congressional leadership to promote the Affordable Care Act was that Americans who were satisfied with their health plans could keep them. That promise has been broken. More than a million Americans have been notified that the plans they like with the coverage they have chosen have been canceled. Millions more Americans will have the plans of their choice canceled in months to come.
Americans want the freedom to choose their own plans and want to be in control of their own health care. They don’t want Obamacare destroying what they have and what they like. They don’t want their personal choices regarding their health plans and their families’ health plans canceled by Obamacare.
The “If You Like Your Health Plan, You Can Keep It Act” will amend the law to make Obamacare live up to the promises of the politicians who sold the plan to the American public. I will file the bill in the coming week and hope to garner support from fellow Senators of both parties who truly want to make sure President Obama honors his promise that every American has the freedom to keep his or her own health care plan.
I hope you’ll contact you Senators and Representative and ask them to co-sponsor this bill or at least support it. If you’re not sure how to contact your Congressmen, here’s how to find that information:
Find Your Senator
Find Your Representative
To me, this bill is worth supporting for two reasons. First, it’s the right thing to do for people whose current insurance has been cancelled and who will be significantly negatively affected by having to spend more and/or get less when they are left with no options but Obama-approved health insurance policies. In other words, it’s the right thing to do for people who are getting a raw deal.
Second, it asks a version of what I believe is the most important question in the ObamaCare issue, one that should be asked of the President, Secretary Sebelius, every Congressman who voted for this bill, and every one of our fellow citizens who support ObamaCare: Who the hell do you think you are, to tell me what to buy with my own money?
In thinking about a recent comment to one of my posts, I went looking for something I’d written. I did so by searching for the word “profaned” and, to my surprise, I found two old posts that contained that word. Who knew?
I re-read both of them and decided to drag them into the present, for my sake rather than for anyone else’s. When I spend too long in the Doomsday Predictor that is the political part of the Internet and find myself believing that all is lost, most people are idiots, and “they” are a waste of fresh air and sunshine, I need to remind myself of what I wrote, of what I believed and, truly, still believe.
So here they are, not in the order they were written but in the order in which they make sense to me today:
Raindrops on roses
The best things
From an interview Kathryn Jean Lopez did with Kevin D. Williamson (emphasis mine):
LOPEZ: Why is it important to consider politics and government — Barack Obama and the NYPD officer — one and the same?
WILLIAMSON: All politics is force. It’s more obvious when you are dealing with the police and the military, because they carry guns. But those guns are used only to enforce policies mandated by people who do not carry guns themselves. My general rule is: If you are not willing to put a gun to your neighbor’s head over the issue, then you should not be willing to vote to have somebody else put a gun to your neighbor’s head over the issue. Which puts cowboy-poetry festivals, getting monkeys high on cocaine, and other government-sponsored shenanigans into a very different perspective.
I don’t have anything in particular to hang on this; I just think the Williamson Rule is a useful lens through which to view proposed policies. However much I may like a proposed government activity, is it important enough to me to put a gun to someone’s head to implement the activity? If not, then maybe I need to think again before asking the government to do just that.
It’s an oft-repeated belief on the Left that white* working-class voters who support Republicans are voting against their own economic interests. After all, Democrats will take money away from the fat cats and spread it around to everyone who isn’t a fat cat. Therefore, white working-class Republicans must be ill-informed or led astray by conservative rhetoric (or conservative lies) or stupid or all of the above. For those on the Left to say so is simply being truthful.
I don’t think so. What Democrats represent is the redistribution of wealth from those who have more to those who have less. Democratic rhetoric claims this redistribution flows from those few who have a lot to the masses who don’t have a lot. But that’s not what the white working class sees. The white working class sees that people who are poor get stuff for free - housing, food, medical care - while those who work have to pay for this stuff themselves. The white working class sees that people who are very rich somehow manage to stay very rich and even get richer: the working class guy who lost his job, lost his medical insurance, and lost his house is looking at the Wall Street guy who got buckets of money because letting his firm fail would destroy the economy. White working class guy has got to be wondering exactly whose economy has been saved from destruction; it certainly isn’t the economy he lives in.
I suspect the white working class is asking themselves exactly whose money has been taken to give to the poor and - since more redistribution is on the horizon as more of ObamaCare kicks in and if some variant of cap-and-trade gets through and as the effects of financial regulation begin to be felt - they must also be asking themselves whose money is going to be taken in the future. It can’t be people who are poorer than the white working class - they don’t have money to redistribute. So far it doesn’t look like it’s going to be people who are rich - even if their taxes go up there’s no reason to think their special relationship with the government will disappear. That would seem to leave the working class.** Their money will be taken if not through higher income taxes then through a VAT; cap-and-trade; inflation; having to pay bank fees; tighter and/or more expensive credit; forced purchase of particular forms of health insurance; more job loss; or simply by piling a incomprehensibly huge national debt on the backs of their children and their children’s children.
If you look at what the Democrats say they’re going to do then, yes, when the white working class votes Republican you can argue it’s voting against its own economic interests.*** But when you look at what the Democrats have actually done, I’d say the white working class figures - quite rationally - that it’s better to hold onto what little they have rather than risk being the people on the wrong end of the continuing redistribution. This doesn’t mean they think the Republicans are going to help them or, for that matter, hurt the wealthy. It simply means the working class hopes the Republicans will allow them to keep what they earn. They entertain no such hopes about the Democrats.
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* I write here of the white (presumably non-Hispanic) working class because that’s the contingent that swings between Democrat and Republican. I think the same economic factors apply to the non-white and Hispanic working class but they are more solidly Democratic.
** I’m leaving aside the middle class. I don’t think the working class is stupid enough to think anyone is going to take money from the middle class and give it to the working class. Nor do I think the working class is stupid enough to think taking money from just the middle class is going to be enough to accomplish the myraid forms of redistribution either underway or in the works.
*** Yes, we could have another whole discussion about whether even if the working class was on the receiving end of redistribution they would support it and want it (there are interests that are not economic) and yet another one about whether the Democrats’ program would be in the working class’ best economic interests in the long term. What I doing here, though, is ruminating on why the Left’s “voting against their own economic interest” claim is weak even in the very short term.
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Reading:
News Flash: Inflation Is on the Way - Kevin D. Williamson at Exchequer on the new issue of TIPS.
Trouble with the humans - The Economist article that jarred this post loose
Of Reds, Racists and Rubes - Anglachel. My favorite snippet (but read the whole thing): People are motivated by rational self-interest, especially in times of need.
Capital Expenditure - Anglachel again. This is one of her posts where our world views are so different I struggle to understand her and quoting Bob Somersby makes her even more opaque while quoting Paul Krugman makes her even less accessible to me. However, if I understand her correctly what she’s saying is that Barack Obama did not and does not have a unifying ideological view of how the world works or how the world should work and this has handicapped him. This combines with - or possibly causes - Obama to be timid in going after what he wants and even in arguing for his desired outcomes.
I agree - this is my view of Obama. He lacks a coherent view of what he wants to have happen, how to get there, and - most important - how all the pieces have to fit together to get him there; in addition, he appears unable or unwilling to take the heat for what he believes in perhaps because he doesn’t believe strongly in anything except himself. The result is the kind of half-hearted, piecemeal legislation we see in ObamaCare. It is neither a huge overhaul that has a chance of working nor a modest, step by step fix with few unintended consequences. Instead it’s Frankenstein’s monster; almost any other outcome - including doing nothing and moving to a Canadian system - would be better than what Obama’s combination of ideological laziness, political ineptitude, intellectual shallowness, and general incompetence have given us.
What Happened to Change We Can Believe In? - Frank Rich:
But the most relentless drag on a chief executive who promised change we can believe in is even more ominous. It’s the country’s fatalistic sense that the stacked economic order that gave us the Great Recession remains not just in place but more entrenched and powerful than ever.
An astonishing piece since Rich spends much of it chastising the Obama Administration for its failure to “unstack” the economic order but winds up by concluding that much of the blame rests with the GOP, its deep pockets backers, and the mean old Supreme Court. (As an aside, blaming the last makes me incredibly weary. I’m sick of hearing that when the Supreme Court does something a commentator agrees with , it’s rightfully the ultimate arbiter of our fates and perfectly justified in riding roughshod over elected officials and the wishes of the voters but when it does something that same commentator disagrees with, it’s a captured and corrupt political cesspool. Pick one.)
Obama the snob - Michael Gerson.
The Psychology of the Taboo Trade-Off - Scientific American on sacred values versus secular ones - especially monetary ones.
Tea Party to the Rescue - Peggy Noonan. Of particular note is Maureen Turner’s explanation of how she ended up supporting the Tea Party: I have voted Democrat all my life, until I started listening to what Obama was promising and started wondering how the hell will this utopian dream be paid for?"
The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread. - Anatole France
And to drive gas guzzlers.
Jeff Jacoby has written a critique of last year’s Cash For Clunkers program. There were a number of problems with this program but the one that stands out for me is the one caused by the environmental aspect of Cash For Clunkers. In order to help the environment, the program required the destruction of the (perfectly usable) cars traded in when new cars were bought. This has reduced the supply of used cars and driven up the price for people who want to buy one. According to Jacoby, there should have been no question who would benefit and who would suffer as a result:
No great insight was needed to realize that Cash for Clunkers would work a hardship on people unable to afford a new car. “All this program did for them,’’ I wrote last August, “was guarantee that used cars will become more expensive. Poorer drivers will be penalized to subsidize new cars for wealthier drivers.’’
I have written before about a government program - outlawing incandescent lightbulbs - that is saving the environment on the backs of those who can least afford it. As I said then, I do not think either Michael Crichton or Aaron Wildavsky would be surprised at yet another example of the truth of Wildavsky’s conclusion that:
resilience is a better strategy than anticipation, and that anticipatory strategies (such as the precautionary principle) favor the social elite over the mass of poorer people.
(Via Greg Mankiw)
One of my recent posts regarding women’s suffrage received a comment from Kevin D. Williamson regarding the post of his that got me started on all this. I had planned to begin this apology post with, “Assuming this comment is truly from the Kevin D. Williamson who wrote the NRO article I referenced”. Once I thought about it, however, I realized I owed Mr. Williamson an apology whether he was the commenter or not.
First, I assumed that I knew the motivation for Mr. Williamson’s apparent distaste for the Nineteenth Amendment. As a very wise woman recently reminded me, I can’t know someone else’s motivation and should therefore assume the best rather than the worst. So I apologize for tarring Mr. Williamson with motives expressed by those at NRO who clearly advocate overturning women’s suffrage but not by him.
Second, I spoke of Mr. Williamson in terms I would never use to a “real” person. I thought that because my blog was very obscure and therefore Mr. Williamson would never see what I wrote, I could act as if there was not actually a human being behind his keyboard. (One of the things that makes me wonder if the Kevin D. Williamson of the comment is the Kevin D. Williamson who wrote the NRO post is that the commenter is far kinder to me than I would have been if I were the person who wrote the NRO post.) I apologize for insulting Mr. Williamson.
A friend gave me one of those page-a-day calendars for Christmas last year, this one called “Forgotten English”. For some reason the September 18 entry on “redargue” amused me. The word itself means “to refute” but what I liked was the quote from James Boswell about Samuel Johnson . (Johnson celebrated his birthday on September 18 hence the reference to him in the calendar.)
About Johnson, Boswell writes:
The truth, however, is, that he loved to display his ingenuity in argument; and therefore would sometimes in conversation maintain opinions which he was sensible were wrong, but in supporting which, his reasoning and wit would be most conspicuous. He would begin thus: "Why, Sir, as to the good or evil of card-playing—"; "Now, (said Garrick,) he is thinking which side he shall take." He appeared to have a pleasure in contradiction, especially when any opinion whatever was delivered with an air of confidence; so that there was hardly any topick, if not one of the great truths of Religion and Morality, that he might not have been incited to argue, either for or against.
I must admit to being in sympathy with Johnson’s view. There is nothing that makes me feel more contrary than an opinion “delivered with an air of confidence”.
[Updated November 25, 2009, at about 4:30pm to add extra Reading.]
Deafening Silence is doing her usual excellent work on ClimateGate, providing a brief narrative, some key points, info on major players, what each side says about the data dump, and links to other sites where more information - including the emails and data themselves - can be found.
I’ve been wandering around reading about this for the last few days and I think the most telling exchange occurred at RealClimate, the Website run by some of the “working climate scientists” who are in the forefront of the research and advocacy that supports the idea of Apocalyptic Anthropogenic Global Warming. Here you will find AAGW luminaries like Gavin Schmidt and Michael Mann and here you will also find Schmidt’s response to ClimateGate. Called “The CRU hack”, this post is a RealClimate masterpiece and well worth reading. As is usually the case at RealClimate, the comments are worth your time also - - although I freely admit I have not made it through all 1,092 comments on the post much less the 502 comments on Schmidt’s follow-up post.
If I may digress briefly, I have often thought there must be a word for writing that is an example of what it is discussing. An easy on the beauty of the English language that uses English beautifully. A piece bemoaning poor grammar that is itself filled with grammatical errors. A paean to courage that required great courage to write. A childish refutation of accusations that the writer is childish. A rant about rants. Onomatopoeia writ large, so to speak. Schmidt’s original post, written in response to charges that science comes far down on the priority list of the AAGW establishment; that said establishment is knowingly making dubious claims; and that said establishment slurs and marginalizes those who disagree with it, would deserve pride of place in any list of such writings.
Back to the post. Schmidt writes:
Clearly no-one would have gone to this trouble if the academic object of study was the mating habits of European butterflies.
Commenter lgarvin replies in part:
That depends on whether or not people were trying to re-order the global economy on the basis of those butterfly studies.
And that, of course, is the crux of the matter. I am willing to accept that most scientific disciplines seethe with personalities, politics, pettiness, and personal attacks. (Hey, I went to grad school.) I am certainly aware that older software often suffers from ugly code, indecipherable routines, an excessive need for manual intervention, and - shall we way - hinky data sets. But most scientific disciplines are not insisting that we need to immediately radically alter the entire basis of our way of life or face cataclysm.
If you’re prophesying the end of the world then - unless you're speaking directly with God - you should be sure both your data and your programs are clean; you should be not merely willing but eager to provide your data and your programs to the whole world for verification; and you should be delighted that people with expertise in related fields like statistics are interested enough in what you’re doing to dissect it. Most important, you should make clear to those who lives you want to at best upend and at worst pretty much destroy that you are, in fact, sure, eager, and delighted. Making it clear that you uncertain, recalcitrant, and scornful is not a good way for you to convince me that you know what you’re talking about, much less that my world is safe in your hands.
*****
Reading:
Deafening Silence points out that the Climate Audit site is difficult to get into due to increased volume. This problem now seems to be resolved but posting is occurring at a Climate Audit mirror site here.
Watts Up With That is posting on Climategate. The oldest post is here.
A stand-alone Website has a searchable data base of the CRU emails, organized somewhat differently from the one Deafening Silence links to.
The emails sound bad but much of what is in them can be explained or spun or is understandable to anyone who has ever written an exasperated email. Not all, but much. I think the state of the computer software code and databases is much more interesting:
L'Ombre de l'Olivier looks at some of the code. He has a link to his copy of HARRY_READ_ME.txt. This is apparently a log kept by the poor programmer who inherited the software at the East Anglia CRU when the original developers left. The programmer (Harry) documents the problems he encounters while trying to figure out what’s going on. You don’t need to read code to follow what’s going on - Harry’s comments tell the story.
HARRY_READ_ME is both agonizing and hysterical. (Be sure to visit Item 17 for a look at squared numbers going negative.) I haven’t read through the whole thing yet but so far my favorite line is in Item 27:
Oh GOD if I
could start this project again and actually argue the case for
junking the inherited program suite!!
Amen, brother. Amen.
*****
Updated November 25, 2009, at about 4:30pm:
This post from the CBS News blog is a must-read. It provides more background thus complementing what Deafening Silence has up. The post concludes with:
The irony of this situation is that most of us expect science to be conducted in the open, without unpublished secret data, hidden agendas, and computer programs of dubious reliability. East Anglia's Climatic Research Unit might have avoided this snafu by publicly disclosing as much as possible at every step of the way.
I found this via Megan McArdle although I’d seen references to it elsewhere. Please do also read McArdle’s post in which she draws an interesting conclusion about the value of any cost-benefit analysis based on the East Anglia CRU software and points out that if - as appears to be the case - the East Anglia CRU itself “cannot now replicate its own past findings” then:
Obviously, this also casts their reluctance to conform with FOI requests in a slightly different light.
Way to go guys. So the government - Democrats and Republicans - passed a bill that is going to phase out incandescent light bulbs and force us all to us to buy fluorescent light bulbs instead.* This, we are assured, will save the planet. Maybe so but it’s not doing much for the people who live on the planet: not only is this dim bulb of an idea destroying jobs in the United States it’s also poisoning workers in China.
The bibliography for State of Fear includes a description of Searching For Safety by Aaron Wildavsky (my hyperlink):
Drawing on data from a wide range of disciplines, Wildavsky argues that resilience is a better strategy than anticipation, and that anticipatory strategies (such as the precautionary principle) favor the social elite over the mass of poorer people.
I’m well aware that those who desperately want to save the planet sneer at Michael Crichton. I suspect, however, that neither Crichton nor Wildavsky would be surprised to discover that the light bulb legislation was supported by the Alliance to Save Energy - which includes such light bulb luminaries as Philips - and by General Electric. - the very company busy closing factories in Kentucky, Virginia, and Ohio while making fluorescents in China.
*****
* I feel compelled to quote Representative Ted Poe who, according to Wikipedia, contended “that the United States Constitution does not give the federal government the power to determine what light bulbs people are allowed to use.”
Sometimes I think I should confine my blogging - and commenting on other blogs - to waiting for bloggers like Villainous Company and Megan McArdle to say things best and then put in links to what they say. They each have a sparkler up this morning.
VC ghostwrites “A Few Words From Nan Pelosi on Health Care” which sums up brilliantly how those of us who oppose the vast overhaul of health care (or insurance or whatever we’re calling it now) think we are perceived by our Democratic officials:
We welcome your comments... so long you're not a Republican (they got us into this mess) or an Independent (a bunch of idiots duped by clever demagoguery). Real Americans understand the need for health care reform.
Meanwhile, Megan McArdle has the most intelligent post I’ve seen on why Section 1233 is not worrying in and of itself but the drive to cut costs should be - particularly when the government is the only or the dominant player:
But though the implication that the Democrats are heartless technocrats is thoroughly wrong, I think the worry underlying it is legitimate.
She called the post “The Politics of Cost Control”; I’d call it “Balance of Power” or simply “Quis custodiet ipsos custodes?”
Had I known these posts existed I could have replaced most of the comment I made at progressive Blue Lyon this morning with those two links - although I would still have kept my last two paragraphs:
I certainly agree that Section 1233 (the end of life counseling provision) in HR3200 (the House health care bill) does not mandate this counseling, much less mandate producing a living will or an OLST, much less mandate choosing less end of life care rather than more. I've written (and written and written) about this on my blog. I think making people scared of end of life planning is a really bad idea and I think Betsy McCaughey who seems to have started the whole "it's required" lie should never again be considered an expert on anything remotely having to do with health care.
However (you knew this was coming, right?) the Democrats really shot themselves in the foot with this issue. They put a provision for end of life counseling (including lots of detail about stuff like being sure to talk about withholding antibiotics) in a bill they're selling as a good way to cut health care spending. Duh. As if that's not enough, they're proposing to take about $200 billion out of Medicare funding plus they're proposing the IMAC whose specific purpose is to cut Medicare spending. And as if all that isn't enough, the brother of the President's chief of staff loves to write scholarly articles that are about making medical care “not guaranteed” for those "who are irreversibly prevented from being or becoming participating citizens" - which Sarah Palin is understandably reading as “Down syndrome children”. Throw in the confusion between Comparative Effectiveness Research and Cost Effectiveness Analysis (I believe the former was in the stimulus, the latter is not legislated but may be implied by IMAC), stir well with the concept of QALY (not in our bills but Dems really need to never talk about how wonderful Britain’s health care system is), and let's face it. If a vile Republican operative had set out to create the perfect climate for whipping up opposition to the health care bill he couldn't have done better than this.
Furthermore the Democrats seemed amazed that anyone would oppose this bill. Once they got over their amazement they decided that those opposing it were either minions of the evil insurance companies (or big pharma or ear, nose, and throat docs) or minions of Karl Rove or minions of the VRWC. If someone who opposed the bill was none of the above then he or she must be someone who was so stupid they bought the propaganda of one of those groups. This gave those on the Right the freedom to wonder aloud why dissension was great when Bush was President but not now and it gave people watching TV the freedom to wonder just how likely it is that some old guy in Bermuda shorts with a go-cart from the Scooter Store is a tool of the VRWC.
Then Nancy Pelosi started talking about Astroturf swastikas and all hell broke loose - including that tirade from Limbaugh which was only one small piece of a much longer tirade which started as a pushback against Pelosi’s comment. This does not excuse Limbaugh (talking about Nazis wasn’t constructive under Bush and it’s not constructive under Obama) but then he doesn’t speak for Republicans or conservatives any more than Keith Olbermann (he of accursed name) speaks for Democrats or progressives.
If I may be even more nakedly partisan for a moment, I think this is a fundamental problem with Democrats/liberals/progressives being absolutely convinced that their way is right, just, and rational - and is the only way that is. It leaves them totally unprepared for opposition and totally unable to respond to that opposition effectively. They are so certain that any decent, thinking person would agree with them they have no mechanism for dealing with those who don’t except to insist such people are either evil or idiotic. This can be an excellent tactic when you’re out of power, a lousy one when you’re in. And it’s never a good tactic when the opposition starts to approach 50% in the polls.
Finally, for a man who ran such a successful Presidential campaign, Obama is doing a lousy job getting important legislation passed. Perhaps the only thing he’s really good at selling is himself.
Part of Blue Lyon’s response to this was:
Furthermore the Democrats seemed amazed that anyone would oppose this bill.
Especially people supposedly on their side. All the Dems in power can seem to do is dismiss, as you said, anyone who isn’t in Obama’s thrall or who are not willing to blindly follow them into — I don’t know what.
Is there anybody outside the Federal government who likes what’s going on with health care, er, insurance reform?
On July 2, Politico broke the story on the Washington Post’s plan to sell seats at their own form of dinner theater:
Washington Post publisher Katharine Weymouth said today she was canceling plans for an exclusive "salon" at her home where for as much as $250,000, the Post offered lobbyists and association executives off-the-record access to "those powerful few" — Obama administration officials, members of Congress, and even the paper’s own reporters and editors.
I like the word “even” there at the end, as if somehow WaPo selling access to its own employees is more remarkable than it selling access to government officials. Yet much of the commentary I’ve read does focus on how terrible it is for the paper to apparently sell access to its staff. The story came to light because a lobbyist who was solicited for the events “felt it was a conflict for the paper to charge for access to ... its ‘health care reporting and editorial staff.’" Along the same lines, a Howard Kurtz article in WaPo itself reports:
Executive Editor Marcus Brauchli said he was "appalled" by the plan. "It suggests that access to Washington Post journalists was available for purchase," Brauchli said. The proposal "promises we would suspend our usual skeptical questioning because it appears to offer, in exchange for sponsorships, the good name of The Washington Post."
An article by the Post’s ombudsman quotes Katharine Weymouth, Post publisher and hostess of the salons as saying:
Sponsorship of events, like advertising in the newspaper, must be at arm's length and cannot imply control over the content or access to our journalists.
Certainly the idea that a newspaper might be willing to sell its reporting to a series of dinner guests is deeply disturbing. But what is far more interesting and disturbing to me is the idea that a newspaper can - for the right price - deliver up members of the Administration and of Congress. Am I the only person upset by this? True, both Kurtz’ article and the ombudsman’s article raise this issue albeit somewhat briefly:
Even without the newsroom's participation, the aggressively worded pitch conveys the impression that The Post is offering special interests access to administration officials and lawmakers, raising a separate set of concerns about a dubious partnership with those covered by the newspaper. The Post often questions whether corporations, unions and trade associations receive access or favors in return for campaign contributions. [snip]
Tom Fiedler, dean of Boston University's College of Communication, said news organizations should be a neutral broker among differing interests and that "what The Post was looking to do was to make a profit on the role of the convener. . . . The idea of crossing a boundary line that seems to me painted so brightly white, I'm astonished that it got this far."
The problem: The Post often decries those who charge for access to public officials. This raised the specter of a money-losing newspaper doing the same thing -- and charging for access to its own reporters and editors as well.
Note however that while both Kurtz and the ombudsman are suggesting it is probably unethical for the Post to promise lobbyists that their money will buy government officials as fellow dinner guests, neither appears to even consider that the Post might not be able to deliver on that promise.
To his credit, Jim Cooper, the Congressman who agreed (perhaps understandably) to attend the first Post salon has said (via a spokesman) that once he understood the nature of the dinner “he would not have attended ‘a radioactive event. . . . You don't want to be put in a position as a congressman where someone's buying access to you.’” Similarly, the White House has denied that any Administration official had agreed to attend any of the salons and has taken this opportunity to remind staffers of the ethics rules under which they work.
All well and good. But unless the Washington Post is suffering from delusions of grandeur - and those outside the Post who are writing about this story share that delusion - the Post would have been able to deliver up public officials to lobbyists willing to pay for them. Call me old-fashioned but that seems at least as wrong as the Post delivering up its own employees for cash on the barrelhead.
I’m almost sorry this story broke before the first salon: it would have been interesting to see which non-paying, non-Post guests would have made an appearance.
In an essay about Barack Obama’s May 21 remarks on national security, Byron York says:
It’s often said that Obama is learning what it means to be commander in chief, now that he bears the burden of the nation’s security. Governing, it is said, is different from campaigning. But do you really believe Obama didn’t know what was involved in closing Guantanamo back when he was giving all those campaign speeches? It is simply not credible to argue that Obama, during the campaign, didn’t know that our foreign allies would not take Gitmo prisoners, didn’t know that transferring them to our domestic prisons would involve significant risks and didn’t know that American communities would not welcome terrorists as neighbors.
I’m sure that Obama was aware of all the difficulties York lists and understood quite well that they made closing Guantanamo difficult - perhaps impossible - for the Bush Administration. However, I’m also sure that Obama believed those difficulties would not be problems for him: he was certain the Guantanamo situation would resolve itself as he wanted it to when he decreed that it would do so.
I first put my interpretation of this belief on Obama’s part into words as a comment in response to TigerHawk wondering what on earth Obama could be thinking in proposing his new tax structure for overseas profits. The more I see Obama in action the more accurate I think my interpretation is so - for future reference - here’s a self-citation:
Obama believes the world will arrange itself as he wants. I know there are people out there speculating that he has some type of narcissistic disorder or something but I think his belief is based partly on his conviction that he himself is Good with a very capital “G” and partly on past experience. Heaven knows he’s had millions of people telling him he’s practically the Second Coming and I imagine that his combination of intelligence (however facile); symbolism; and charm (although it’s lost on me) have generally meant much of the world *has* arranged itself as he wants.
Thus Obama believes corporations not paying lots and lots of taxes is Bad and he therefore is going to tax them. He assumes our allies will want to do whatever they can to help him and it never occurs to him that they may react badly to one of his policies.
There’s been a pattern of this: Closing Guantanamo is Good and the issue of what to do with the prisoners there will simply resolve itself. Trashing big financial institutions is Good and it never occurs to Obama that those same institutions may not thereafter be champing at the bit to go into business with the government in the PPIPs. Stress-testing the banks is Good and it never occurs to anyone that if banks “fail” there may be a crisis of confidence; surely if Obama says “All is well” everyone will believe him. Releasing the OLC memos is Good and Obama seemed to assume he could then just say, “And now we’re done with that” and everyone would say, “Good job, glad that’s over with.”
This is actually pretty funny when you consider that the term “reality-based community” comes from an account a reporter gave of his discussion with a Bush aide:
The aide said that guys like me were "in what we call the reality-based community," which he defined as people who "believe that solutions emerge from your judicious study of discernible reality." ... "That's not the way the world really works anymore," he continued. "We're an empire now, and when we act, we create our own reality. And while you're studying that reality—judiciously, as you will—we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors…and you, all of you, will be left to just study what we do."
The hubris of an Administration that believed it could create the reality it wants is nothing compared to the hubris of a President who believes the rest of the world will create the reality he wants.
In the case of Guantanamo, however, the rest of the world did not respond as desired to his hand-waving, make it so approach. That is, no host nations sprang forward to take the terrorists off his hands; the Congress had the temerity to ask for a detailed plan before providing the funds for Obama to do as he saw fit with the prisoners. So now Obama has been forced to make “remarks” and propose an actual plan. Or, more accurately, a plan for a plan: he’s told us more about what he’s going to do but he still hasn’t actually told us exactly how he’s going to do it.
I have fewer objections to Obama’s remarks than many other commenters on the right and the left. There were some odd elements such as Obama insisting that some Republicans wanted Guantanamo closed and that Guantanamo had done more harm than good. Those references belong in an environment where closing Guantanamo is not a done deal, where people need to be convinced about this decision. Maybe this is just more evidence that Obama cannot get out of campaign mode but it seems, well, odd.
It’s also odd that went out of his way to emphasize this:
Meanwhile, over 525 detainees were released from Guantanamo under not my administration, under the previous administration. Let me repeat that: Two-thirds of the detainees were released before I took office and ordered the closure of Guantanamo.
I’m not sure what point Obama is trying to make. Perhaps he’s saying that since Bush released prisoners there’s no reason for him not to do so. Perhaps he’s saying that those unlikely to be dangerous have already been released but that seems an unlikely point from a man who wants to close Guantanamo. Perhaps he’s simply trying to argue that there are so few people left, no one should care if they all get out. Again, it’s odd - and perplexing.
The Bush-bashing is unnecessary of course and I wonder if it’s beginning to be counter-productive. Imagine if Obama had simply said that the previous Administration took actions that seemed reasonable to them but that he, Obama, disagrees and believes we are better served by trying something else. In fact, if Obama was half as smart as people think, he should go further than that. He should be saying that because of the former administration’s unceasing efforts to keep us safe, the country is now in a position to close Guantanamo. That would take a lot of the wind out of Dick Cheney’s sails - although it would also make it harder for Obama to insist Guantanamo is “a mess”, a characterization which will serve as a nice cover if closing it doesn’t go smoothly.
Once you get past those problems, though, Obama is trying to establish a set of procedures for dealing with the prisoners at Guantanamo that goes beyond just looking them up until the President says they can go. I applaud this effort but I don’t think he’s been very successful - and in my darker moments I think it’s because there simply may not be a better system given the situation we’re in.
The heart of Obama’s speech is his division of the inmates at Guantanamo into five groups (Gallia est omnis divisa in partes tres...):
1) Try some in criminal court.
2) Try some via revamped military commissions.
3) Release the ones the court has said must be released. This is where it gets interesting: where are we going to release them? Are we going to put them back where we found them? Open the gates at Guantanamo and let them wander out? Find foreign hosts? Or - and this is the $64,000 question - are we going to release them into the United States? Obama didn’t say.
This situation is complicated by the fact that it is against the law. to admit to the United States “any alien who has received terrorist training or has belonged to an organization that promotes terrorism — against anyone.” I don’t think the sheer fact of illegality would deter this Administration but the law will do nicely for nervous Congressmen who don’t want to let prisoners live in their districts but need legal cover for their refusal to arrange things as Obama wants.
4) Send some overseas. Obama says his administration “is in ongoing discussions with a number of other countries about the transfer of detainees to their soil for detention and rehabilitation.” Here again Obama is relying on others to order the world as he desires. It will be interesting to see if they comply - and if so, what their price is.
5) Keep some indefinitely without trial. This is the Bush policy but Obama wants to make it more legal by establishing Congressional and judicial oversight of the executive’s decision to hold onto the prisoners. Ace of Spades has outlined the Constitutional issue with trying to create “legal” indefinite retention and argues the Bush’ system is more justifiable than the one Obama is trying to create. I’m very much afraid that he is correct.
At the same time, Obama’s review process is almost certainly meaningless: if the President says the country needs to hold onto someone because he’s a terrible threat, what Congressman is going to oppose him and take the risk of being the person who released the next Osama bin Laden? Even when so many Democrats were screaming that Guantanamo was another Bush disaster, I suspect it would have been well nigh impossible to find a member of Congress willing to actually take responsibiity for turning any of the prisoners loose. (Depending on how Obama structures this - there’s that lack of detail again - the judicial part may be more interesting.) Obama will be able to go right on doing what Bush was doing while looking like he’s not.
I’m not sure if this makes Obama smarter than Bush or just less honest. I am sure it makes me a lot more nervous.
At the age of 27 I emerged from the money-free world of graduate school into a land of regular employment with a paycheck that looked huge and bright, shiny credit cards. I proceeded fairly quickly to get myself in way over my head financially. Once I realized I was spending a more than trivial amount of time fretting over bills, I took myself off to a financial counselor who assigned me homework: write down everything I’d spent over the last year and then everything I was obligated to spend currently. Unusually for me, I actually did my homework - clear proof of how truly worried I was - and reported back that it had been an eye-opening experience.
The counselor smiled and told me that for most of his clients the exercise of having to face in black and white exactly what their financial situation really was often sufficed to set them on the path to economic righteousness. It certainly did for me. I took the counselor’s advice to recast my car loan; it meant exchanging lower monthly payments for a longer term and therefore more interest paid in the end, but was still an excellent deal since the money I saved each month on that payment could now go to pay down the much more expensive credit card debt I owed. I took a second weekend job and put every penny from that job and every penny I could squeeze out of my regular paycheck toward my credit card debt.
Within a year I was debt-free and able to quit my weekend job. As I got a credit card paid off, I cancelled it and for years after that experience the only credit card I carried was American Express - because that I had to pay off every month. I cannot tell you how many free credit card offers I have torn up, how many times I have turned down the offer of a department store credit card. (“Sign up now and get 10, 15, 25% off your current purchase.”) I found that if a particular saleslady was especially insistent I could simply explain that I found too many credit cards too great a temptation and almost always receive an “I gotcha” in response.
I know it is this piece of my history that colored much of my initial reaction to Edmund Andrews’ story of taking on truly massive debt. The contempt I felt for him and his story stemmed from the fact that he had taken on so incredibly much debt without stopping to think about what he was doing and stop doing it and - most of all - from the fact that he had put assorted children at financial risk through his greed and stupidity. Nonetheless, I could understand both the greed and the stupidity. I got into trouble when I moved from a graduate school world of bare minimum money to a gainfully employed world that looked filled with financial excess. In Andrews’ case, it was the world that moved. As Andrews puts it, “this was unlike any other time in history”; “the money was there”. Like me, Andrews found himself in a new world of financial excess and was unable or unwilling to resist the shiny goodies that now seemed within his reach.
So I could relate to the core of his story if not to the sheer excess or to his willingness to drag his and his new wife’s children over the edge with him. Andrews’ story was a small version of the great tragedies: we relate to Othello because we understand jealousy; to Macbeth because we understand ambition; to Romeo and Juliet because we have felt “I’ll die if I can’t have you” love. We would never go so far as murder, serial murder, or suicide but we understand the impulse behind them. I never went - would never have gone - as far as Andrews down the road to financial ruin but I could understand the basic impulse, the response to that unexplored realm of materialist plenty.
There’s just one problem. It looks like Andrews’ story was not a classic tragedy for our time but the oldest cliche in the book: a mid-life romance with the least suitable person he could find. According to Megan McArdle, Andrews’ “brainy, regal, sexy, fiery and eclectic” new wife Patty is a repeat bankrupt. She filed for bankruptcy in 1998 along with her first husband. Almost as soon as her eight-year waiting period was up, in 2007, she filed again. At this time she was already married to Andrews and although she attempted to file separately, his income was added to the filing at the insistence of a creditor.
Patty’s bankruptcy filings were not mentioned in Andrews’ New York Times article and according to McArdle are not mentioned in his book either. This is like Shakespeare forgetting to mention Iago, Lady Macbeth and the witches, and those two other guys who killed themselves over Juliet. Andrews is not a kid in the brand new candy store of financial excess: he’s a sane, sober economics writer who kicked over the traces just before his 50th birthday by marrying a woman who thrives on not just financial excess but financial chaos. He’s the pushing-50 bank manager who falls for an embezzler; the pushing-50 cop who is infatuated with the crook; the pushing-50 Baptist minister who marries the alcoholic. He’s sad and trite and because of the kids he’s even tragic. But he is not a cautionary tale about subprime mortgages, easy credit, predatory lending, or too many credit cards. He's not even a cautionary tale about greed. He’s just a guy who makes us yearn for the days when he would have gotten his hormonal rebellion out of his system by spending a little too much on a red convertible and hair plugs.
I have far less desire to read Andrews’ book than I did before I knew about Patty’s bankruptcies and if I do read it, I’ll be mostly looking for the things in the book that don’t quite make sense unless you know about his data dropout. I also no longer have any desire to hear Patty’s version of the story. I don’t consider her the villainess of the piece - she is what she is and always has been - but I no longer feel she came off badly in Andrews’ version. Besides she is as much of a cliche as he is.
However, I would still like to hear Patty’s former husband’s version of their economic adventures and, boy, would I love to hear what Andrews’ former wife has to say about their financial life together.
On May 14, The New York Times printed Edmund Andrews’ article about embracing massive debt. I have six thoughts on this.
First, I don’t see how anyone can claim this is a story about predatory lending. To me, predatory lending assumes a certain lack of sophistication, intelligence, and/or education on the part of the borrower and a certain amount of misleading on the part of the lender. Andrews is an economics reporter for The New York Times and as Conor Clarke points out certainly seemed to understand the costs of borrowing more money than you can afford in order to buy a home. As for the lender (Bob), he didn’t mislead Andrews in any way. Although Andrews skims over the process, it seems clear to me he wound up talking to Bob because Andrews and his real estate agent both knew he’d never qualify for a “normal” mortgage. Once contacted, Bob made it clear that obtaining a mortgage would require withholding pertinent information (emphasis mine):
But given my actual income after alimony and child support, I couldn’t possibly have qualified for a standard mortgage. Bob’s plan was to write a “stated-income loan,” or “liar’s loan”,” so that I wouldn’t have to give the game away by producing paychecks or tax returns.
When Bob’s first attempt at this type of loan failed, Bob explained exactly why this had happened: the underwriters determined Andrews was carrying too much debt. Instead Bob got him a loan which allowed him to withhold even more pertinent information. There was a higher interest rate but Bob reassured him that his home’s value would go up and he could refinance.
Bob was right. After a year and a half the house had gone up enough in value to allow Andrews to take out a home equity loan which Bob told him up front would be “really ugly”. Why did Andrews need this home equity loan? Because he’d buried himself in credit card debt. So instead of thanking the mortgage gods that he could buy the house at all, cutting expenses to the bone, preserving his good credit score, and being able to refinance the house at a good rate when its value went up, Andrews spent money like it was water and relied on the increased value of his house to cover his credit cards.
There is no doubt this was stupid on Andrews’ part but he knew and understood exactly what he was doing. No one can believably claim otherwise. As for Bob, he did not mislead Andrews at any point. Do I think Andrews should have been able to get the loans he did? No. I believe the law should require that buyers put 20% down on a mortgage and that the monthly payments on their mortgage should not exceed more than 25% of their income. Home equity loans shouldn’t change those figures. So it should be illegal for Andrews to borrow and Bob to lend the way they did. But it’s not. It is in fact perfectly legal and everyone went into this situation with their eyes wide open.
Second, the article reminds me very much of Jon Krakauer’s Into Thin Air, a book about a lot of people who should have known better trying to climb Mount Everest under the auspices of a lot of guides who should have know better. The book is a horrifying tale of people endangering themselves and others to feed their greed. The climbers’ greed was for glory, for bragging rights, for achieving something they had not earned. How different is that from Andrews’ greed for a nice home, a beach house, dinners out? Not very. And Bob the mortgage guy is not so different from the Everest guides who did nothing illegal and were totally upfront about the fact that there was risk involved but must have known they were putting their clients in a terribly dangerous position.
Similarly, I found Into Thin Air un-put-downable but I hold the author in contempt as a human being. Although not as strong - Andrews’ little adventure didn’t actually kill people - my reaction to his story and him are the same. As Althouse put it:
It was a readable article. I'll give him that. But I wanted to smack him.
Third, I won’t buy the book Andrews has written, for which his NYT article is just a teaser. I’ll read the book, just as I read and reread Into Thin Air but I won’t contribute to bailing Andrews out of debt by paying for it. Althouse says she “felt aggressively hostile to giving Andrews any attention.” I feel aggressively hostile to giving him any money.
Fourth, I’d like to know how Andrews is doing in five years. I’m assuming he’s counting on the book to get his head above financial water. It will be interesting to see if it does so or if he continues to see every hope of increased income as a reason to run up still more debt.
Fifth, when people make the argument that getting married, staying married, and having kids in a stable marriage is the best way to avoid poverty, I tend to think they’re talking about the poor, uneducated, and disadvantaged finding it easier to escape poverty by following this advice. Based on Megan McArdle’s thoughts after reading Andrews’ book, though, it’s pretty clear Andrews’ slide into financial hell began when he divorced his wife; his inamorata, Patty, divorced her husband; Andrews and Patty got married; and “Andrews took on the obligation to support two adult women and, by [McArdle’s] count, six children.“ Clearly a messy personal life is not just a recipe for staying poor; it’s also a good way to get poor.
Sixth, I’d really like to hear some other versions of this story. Andrews’ first wife and Patty’s former husband would provide an interesting look at what their financial lives looked like prior to breaking up and reforming the families.
As for Patty, she comes off pretty badly in the article. I’d love to hear her view of what was going on as they spent more and more and had less and less. Maybe if Andrews’ book isn’t enough to get them out of debt, Patty can give it a try.
I worked for a major financial institution from 1990 to 2001 and were was therefore employed by such when Glass-Steagall was repealed. I believed at the time that the repeal was a mistake although I have to admit that my belief was more gut-level than intellectual. It simply seemed obvious to me that letting financial institutions get too big and do too many things was a recipe for disaster. While people who supported the repeal seemed to be arguing that agglomeration meant the losses from one type of business would be offset by gains from another, I worried about insurance losses crashing my bank or banking losses making my insurance worthless.
Then came the great financial meltdown of 2008 and some pundits began pointing the finger at deregulation, especially the Gramm-Leach-Bliley repeal of Glass-Steagall. Nonsense, replied other pundits. If anything, they claimed, the repeal of Glass-Steagall helped save at least some of the financial system enabling - for example - Bank of America to take over Merrill Lynch.
I don’t know how much the repeal of Glass-Steagall contributed to the current crisis. But I would just like to point out that both Bank of America and Citicorp* were beneficiaries of the repeal and I don’t think anyone would cite them today as shining examples of financial success. And so my gut is telling me that I was right all those years ago: the repeal of Glass-Steagall was a bad idea - although it was certainly only one bad idea among many over the last decade.
Why bring this up now? I’ve recently been reading through a lot of posts at MaxedOut Mama and ran across one that backs up my old gut feeling about Glass-Steagall (I’ve reproduced only bits and pieces - you really should read the whole thing):
... Wall Street argued with some passion and a lot of political cash that over time, the US economy was being disadvantaged by overly stringent regulation. ... I think one could fairly argue that over time, the reverse of the IB arguments were true - the regulatory constraints in our financial system prevented soaring to the heights, but over time fostered a healthy economic climate and sustained growth. ...
The result was that overall regulation was reduced, the incentives to verticalize were massive, counterparty buffers were eliminated, and within less than 10 years, the financial system imbalances that produced the Great Depression in the US had returned.
In the same post, MaxedOutMama also has a most interesting description of how things worked before and after agglomeration which demonstrates how the repeal of Glass-Steagall eliminated checks and balances that had existed earlier.
MaxedOutMama’s analysis was presaged by the October 2007 testimony of Robert Kuttner to the Committee on Financial Services of the U.S. House of Representatives, chaired by Barney Frank (via Anglachel’s Journal):
Since repeal of Glass Steagall in 1999, after more than a decade of de facto inroads, super-banks have been able to re-enact the same kinds of structural conflicts of interest that were endemic in the 1920s -- lending to speculators, packaging and securitizing credits and then selling them off, wholesale or retail, and extracting fees at every step along the way. And, much of this paper is even more opaque to bank examiners than its counterparts were in the 1920s. Much of it isn't paper at all, and the whole process is supercharged by computers and automated formulas. An independent source of instability is that while these credit derivatives are said to increase liquidity and serve as shock absorbers, in fact their bets are often in the same direction -- assuming perpetually rising asset prices -- so in a credit crisis they can act as net de-stabilizers.
Do read Kuttner’s entire testimony. It is a plea for intelligent regulation, reminding us that if the government is going to bail out entities it is wise for it to regulate their behavior in an attempt to avoid having to do so.
(I’m also struck by what both MaxedOutMama and Kuttner say about NRSROs (Nationally Recognized Statistical Ratings Organizations). It seems to me they dropped the ball big-time and yet I’ve read relatively little condemnation of their behavior. As Kuttner put it, “In this decade, it remains to be seen whether the bond rating agencies were corrupted by conflicts of interest, or merely incompetent.”)
So what conclusions do I draw from this other than that my gut often knows more than I do? Specifically that financial rules in place for 65 years shouldn’t be tossed aside lightly - which I suppose means I'm a conservative. Generally that hubris leads to nemesis - which I suppose means I'm a realist.
*****
*One of the theories floating around at the time was that Glass-Steagall was repealed specifically to allow Traveler’s and Citibank to merge; that they had announced their merger and dared Congress not to accommodate them.
If we go ahead with the Paulson plan, the United States Secretary of the Treasury will become one of the most powerful people on the face of the earth. Given this, I’d like to know who Barack Obama and John McCain intend to put on the mound.
As of today, John McCain is winning the popular vote, up 2.3 points.
At the same time, Barack Obama is winning the Electoral College, 259 to 247.
I know it’s early, I know these are just polls and leaners, I know much can - and almost certainly will - change between now and November 4. Nonetheless, given this post of mine from more than two months ago, I am putting up the sub-title I originally envisionsed (heh, heh) when I started this blog. It - like my blog name - is from Marion Zimmer Bradley’s Firebrand, a retelling of the story of Kassandra of Troy.
Now I need to go take a couple of Motrin. I think I hurt my arm patting myself on the back.
On June 29, Katrina vanden Heuvel was part of the Round Table discussion on This Week with George Stephanopoulos. While discussing the possibility that a Bob Barr third-party candidacy might draw enough votes away from John McCain to open up states like Alaska and Georgia for an Obama victory, vanden Heuvel said:
We’ve been talking about expanding the electoral map. I think until you bust open the Electoral College - which I hope we’ll do in 2012 - you can’t expand it that much.
This struck me as odd since four years is not very long to pass the Constitutional amendment that would be needed to do away with the Electoral College. Or would it? I turned to Wikipedia and eventually found The National Popular Vote Interstate Compact, also known as The Amar Plan. This, it turns out, is precisely what vanden Heuvel had in mind.
Under The National Popular Vote Interstate Compact (TNPVIC), individual states agree to abide by the national popular vote. In other words, regardless of how voters in a particular state vote, that state will cast all its electoral votes for whoever wins the popular vote nationally. TNPVIC further specifies that states can agree to the Compact but their agreement will not take effect until states controlling a majority of electoral votes have signed onto TNPVIC. As Wikipedia points out, this means that as few as eleven states could put this Compact into effect: the eleven states with the most electoral votes control a majority of those votes.
It is not clear whether TNPVIC is Constitutional. On the one hand, Article Two, Section 1, Clause 2 of the Constitution allows each state to decide for itself how to apportion its electoral votes. On the other hand, Article One, Section 10, Clause 3 (the Compact Clause) forbids states from entering into compacts with other states without Congressional approval. On the third hand, the extent of the Compact Clause’s prohibition seems to be unclear. Even if TNPVIC is Constitutional, however, it is clearly an attempt to make an end-run around the mechanism for amending the Constitution provided in Article Five.
Article Five requires a two-thirds vote of quorums of both Houses of Congress or a request by two-thirds of the state legislatures to even propose amending the Constitution. It further requires that three-fourths of the states (either by Legislature or Convention) approve the amendment before it takes effect. And, in fact, there have been previous attempts to abolish the Electoral College using the Constitutionally prescribed amendment process. Since these attempts failed, TNPVIC was devised to do away with the need for those pesky super-majorities: the Compact could effectively amend the Constitution with only eleven/fiftieths of the states agreeing. Not only does this approach treat the Constitution as a system to be beaten rather than the highest law of the land, it drives another nail into the coffin of Federalism.
Alongside my outrage, however, I must admit to some amusement. I’m not entirely sure the lawmakers and governors who support TNPVIC have thought this through. The Compact was dreamed up in 2001. It doesn’t take a Constitutional lawyer to conclude that the scheme was originally developed in response to the 2000 Presidential election in which Al Gore won the popular vote and George W. Bush won the Electoral College. Based on the timing - and on Katrina vanden Heuvel’s approval - I’m guessing TNPVIC is driven primarily by Democratic outrage over being cheated out of the Presidency in 2000. I’m further guessing that Democrats suspect it’s unlikely approaching impossible that there will be a situation where Republicans win the popular vote but Democrats win the Electoral College. What if they’re wrong?
As a starting point, let’s assume the 2008 election will look just like the 2000 election - and then we’ll change a few things and see what happens.
First, let’s say that all the states that went for Gore in 2000 approve TNPVIC in time for the 2008 election. That would mean states controlling 260 electoral votes would have approved the Compact. (This number is different from the 266 electoral votes Gore received because redistricting has changed the electoral vote map. And because there was one abstention by a District of Columbia elector. Who knew?) To get TNPVIC to go into effect, it needs states controlling 270 votes to agree to the Compact. So let’s say Florida also signs onto TNPVIC. That means that states controlling 287 electoral votes have now approved TNPVIC and it will take effect for the 2008 election.
Second, let’s say that every state that went for Gore goes for Obama. And let’s give Obama Florida by saying that 1000 Floridians who voted for Bush now decide to vote for Obama. Now Obama has 287 electoral votes, all of them from states that signed on to TNPVIC, and Obama has the popular vote. Obama is the President and all is well. But what if there’s a shift - just a slight shift - in the popular vote?
In 2000, Bush got 50,455,156 votes; these become McCain’s votes in 2008. Gore got 50, 992,335 votes; these become Obama’s votes in 2008. We’ve already taken 1000 Florida votes away from McCain and given them to Obama, so now our numbers are:
McCain - 50,454,156
Obama - 50,993,335
Obama is winning the popular vote by 539,179. In 2008 there were 6 states where the margin of victory was less than 12,000 votes: Florida, Iowa, New Hampshire, New Mexico, Oregon, and Wisconsin. That leaves 44 states plus the District of Columbia where we can play with the popular vote a little. Let’s say that in each of these 45 states (yes, I know DC is not a state) there’s a swing in the popular vote of 12,000. That is, in each of these 45 states 6,000 people who voted for Gore decide to vote for McCain. That means McCain would pick up 270,000 votes and Obama would lose 270,000 votes.
Now our popular vote looks like this:
McCain - 50,724,156
Obama - 50,723,335
Oops! Guess who gets to be President? And guess how happy the voters in the states that signed on to TNPVIC are going to be when their elected officials inform them that, yes, we know you voted for Obama and, yes, we know he won the Electoral College and, yes, we know he should be President, but we’re going to cast our electoral votes for McCain?
I’m sure the supporters of the TNPVIC consider an outcome like this very unlikely. But I think there’s a good chance this scenario or one very like it will happen. Look at it this way. More than 225 years ago a group of pretty smart guys wrote a Constitution that embodied a new way of looking at government and at the same time glued a bunch of disputatious states into one nation. That Constitution has served us well for all these years, amended as necessary by a mechanism designed to be as difficult as possible and thereby to avoid the tyranny of the majority. Now a group of people, many angry at losing and all tired of playing by the rules, are willing to do whatever it takes to get their way. If that means cutting the heart out of two Articles of the Constitution, that’s fine with them because they know how this country should be governed far better than those old-timers in funny clothes.
I call that hubris. And as our forefathers in democracy taught us, nothing follows hubris as inexorably as nemesis.
*****
Sources, numbers, and a confession:
Presidential Election of 2000, Electoral and Popular Vote Summary
Wikipedia - United States presidential election, 2000 (detail)
Wikipedia - United States presidential election, 2000
Wikipedia - List of U.S. states by population
I took the transcript of Katrina vanden Heuvel’s comment from my own tape of This Week with George Stephanopoulos. You can find the video at This Week under “The Roundtable”. (I assume this moves off the main site once the next show airs.) Her comment about the Electoral College should begin about 7-8 minutes in.
The final numbers in this post look pretty simple, but I juggled numerous articles and four spreadsheets to get to them. I love my iMac but I hate not being able to put code behind Appleworks' spreadsheet the way I could behind Excel. If you find any mistakes, please let me know.
Although the existence of The National Popular Vote Interstate Compact came as a surprise to me, my home state of New Jersey is one of four states that have signed onto this deal. My only excuse for not realizing this is that the Legislature did this in 2007 when for good reason I was paying absolutely no attention to politics. The other three states that have signed onto the Compact are: Maryland, Illinois, and Hawaii. All four of these states went for Gore in 2000. They also went for Kerry in 2004; and Clinton in 1992 and 1996.
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