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May 2006

The Return Of Voodoo Economics

Sebastian Mallaby writes:

The Return Of Voodoo Economics: Nobody serious believes that tax cuts pay for themselves, as I noted last week. But most senior Republicans flunk this test of seriousness.... George W. Bush... told a New Hampshire audience, "You cut taxes and the tax revenues increase."... Dick Cheney... asserted in February that the "tax cuts have translated into higher federal revenues." Bill Frist.... "Many people in Washington have long known a dirty little secret about tax-cut measures: When done right, they actually result in more money for the government." Chuck Grassley... mouths the following nonsense: "There is a mindset in both branches of government that if you reduce taxes you have a net loss, if you increase taxes you have a net gain, and history does not show that relationship."...

Okay, so let's review this issue with the help of some experts.... N. Gregory Mankiw of Harvard... who chaired the Council of Economic Advisers in the Bush White House. Mankiw is a top-notch economist hired by Bush and Cheney to advise them. And last year he published a paper on how far tax cuts pay for themselves, reporting enthusiastically that this self-financing effect is "surprisingly large."... [O]ver the long run (the long run being generous to his argument), cuts on capital taxes generate enough extra growth to pay for half of the lost revenue. Hello, Mr. President, that means that the other half of the lost revenue translates into bigger deficits. Mankiw also calculates that the comparable figure for cuts in taxes on wages is 17 percent. Yes, Mr. President, that means every $1 trillion in tax cuts is going to add $830 billion to the national debt....

Mankiw isn't with them. Holtz-Eakin isn't with them. Which raises a question: When top Republicans go around claiming that tax cuts pay for themselves, which economic authorities are they relying on? None, is the answer. These people's approach to government is to make economics up....

Politicians are always speechifying about how the United States must lead the world in research to maintain its edge. But having the world's best economics research isn't particularly helpful if those same politicians are silly enough to tune it out...

Fine until the last paragraph. Then Mr. Mallaby stops saying "Republican politicians" and starts saying "politicians." You can say it, Mr. Mallaby: There's an obvious way to fix the problem you see: simply stop electing Republicans.

Why Oh Why Can't We Have a Better Press Corps? (Adam Nagourney/New York Times Edition)

Outsourced to Sisyphus Shrugged:

Sisyphus Shrugged - uh-huh.: when I read the execrable Adam Nagourney's piece about Democratic prospects in today's Times (shorter AdNags, as ever ready with an upside spin for the party he supports: Being a loser is the new black) I was struck by what he didn't say.... [W]e don't have the views of Democrats. We have Adam Nagourney telling us that his thumb tastes better than any other thumb in the whole world and we wish we could suck Adam Nagourney's thumb in the New York Times, but we can't, because he's Adam Nagourney and we're not, which is why, parenthetically, he has access to that shadowy but powerful group within the Democratic party, the "some" Democrats:

Indeed, some Democrats worry that the worst-case scenario may be winning control of Congress by a slim margin, giving them responsibility without real authority....

Then, at long last... a name... "Tony Coelho, a former House Democratic whip."

Tony Coelho.... Tony the guy who was tossed out of the Gore campaign because he was under criminal investigation.... Tony didn't reappear in politics until they needed a "Democratic insider" to trash Kerry Coelho.... [P]retty much everyone who was willing to talk to Nagourney on the record in terms that even vaguely suggested support for some portion of the putative reasoning behind this vaporous groundswell of strategic loss planning is someone who either jumped or was pushed out of Democratic politics....

[H]e did get this guy, who according to his HuffPo bio has a blog because his brother is Mickey Kaus: "Even though Ms. Pelosi enjoys notable support in her party, her performance was panned even by fellow Democrats. 'I was screaming at the TV as if it were Bush being interviewed'," wrote Stephen Kaus, a lawyer and contributor to, a liberal blog....

I can't see any internal evidence in this remarkable bit of special pleading suggesting that anyone who even has access to our leadership gave Adam Nagourney any information on the yummy goodness of his thumb that he didn't already have.

And, of course, "some" Democrats do agree. I'm guessing maybe not so much the ones who vote [Democratic]...

Tony Snow: Case Study for Social Democracy

Daniel Gross points out that a Press Secretary who has never funded his 401(k) is a powerful argument for social democracy--and against the "ownership society":

Daniel Gross: May 07, 2006 - May 13, 2006 Archives: OWNERSHIP SOCIETY: Tony Snow, President Bush's new spokesman, reveals today that he's not quite on board with this whole ownership society thing. Via Talkingpointsmemo:

TONY SNOW: No. As a matter of fact, I was even too dopey to get in on a 401(k). So there is actually no FOX pension. The only media pension I have is through AFTRA.

I'd bet my weekly wages against his that he hasn't opened a health savings account either.

Snow is 50, and worked at Fox since at least 1996. So in his prime years of earnings he didn't bother to start a 401(K), even though it was likely subsidized by his employer. Oh, and AFTRA, of course, is a union that runs one of those old-fashioned defined benefits plans that are slowly disappearing.

Of course, we should expect to hear lots from Snow in the coming months about how important it is for people to save for their own retirements via 401(Ks) and not to rely on old paternalistic solutions like defined-benefit pension plans or Social Security.

Social Security

Andrew Samwick talks about Social Security reform:

Vox Baby: LMS at AEI: Jeff, Maya, and I will present our Social Security reform plan at noon on Monday, June 19, at the American Enterprise Institute. Here's the lineup:

The three authors of the proposal will present their plan, which will then be discussed by a panel of experts, including Charles P. Blahous, special assistant to the president in charge of Social Security policy at the National Economic Council; Jason Furman, director of economic policy for the Kerry-Edwards 2004 presidential campaign; John C. Rother, director of legislation and public policy for the American Association of Retired Persons (AARP); and Kent Smetters, AEI visiting scholar and an associate professor at the Wharton School. Douglas Holtz-Eakin of the Council on Foreign Relations and former director of the Congressional Budget Office will moderate.

Register for the event and stop by if you are in DC that day. Thanks to Phill Swagel for setting up the panel.

Hyperinflation in Zimbabwe

The downward spiral continues: - Inflation Rate Tops 1,000% For First Time in Zimbabwe: Zimbabwe's annual inflation rate topped 1,000% for the first time, underlining the economic collapse of a country crippled by shortages. Moffat Nyoni, director of the Government's Central Statistical Office, said that inflation for the 12 months to April 2006 was 1,042.9%, according to a state radio report Saturday. A package of the cheapest candy costs 57,000 Zimbabwe dollars and a loaf of bread 100,000 Zimbabwe dollars. But the maximum denomination note is 50,000 Zimbabwe dollars, forcing shoppers to carry bags full of money for basic daily purchases.

Since mobile phones went into service in 1996 as fixed-phone services crashed, the price of the most inexpensive phone has increased 5,000 times. The price of a single car battery this year could have bought 14 brand new cars 10 years ago. There is a joke that toilet paper costs so much -- 125,000 Zimbabwe dollars a roll ($125) -- that it would be cheaper to use 500 dollar notes. And the money needed 12 years ago to buy a house -- three million Zimbabwe dollars, or an entire life's savings -- doesn't even cover a family's monthly expenses today.

The economy has been in free fall since President Robert Mugabe's seizure of 5,000 formerly white-owned commercial farms in February 2000. "We are living with the consequences of [the government's] destructive policies of the past," said economist John Robertson. "They cannot raise the necessary taxes from our shrinking economy."

Inflation in March was 913%. Figures released by Mr. Nyoni's office showed 21% inflation for the month of April alone, fueled by a 27% increase in the cost of basic foodstuffs, 25% in rents, 35% in fuels such as gasoline and kerosene, and 48% in motor vehicle and health insurance.... The lowest-paid workers in formal employment -- domestic gardeners -- earn 2.5 million Zimbabwean dollars a month, but 70% of the work force lack regular jobs due to waves of bankruptcies and earn hourly wages for informal work like bookkeeping, maintenance or cleaning....

An estimated four million Zimbabweans, many of them skilled professionals, are living outside the country. Most remaining Zimbabweans make ends meet by growing sweet potatoes and corn alongside roads and railways or on vacant land. Mr. Robertson said the point of "meltdown" had already been reached for pensioners and others living on small fixed incomes. Money from charities or from relatives living abroad is the only means of survival for many elderly. The United Nations estimates at least three million of the 12 million population are in need of emergency food aid ahead of next month's harvests...

Aid to Afghanistan

I think I have this story right. At a middle school fundraiser for Afghanistan:

"The first thing we're raising money for is for the pump to bring water to the school. And the next thing is more money for the teachers--the teachers have to buy the gasoline to keep the pump running. And after that, we'll need to buy more machine guns for the security guards--because girls go to the school, it's a target..."

Tax Incidence

Greg Mankiw writes:

Greg Mankiw's Blog: Reich on Taxes: I often enjoy reading Robert Reich, former Clinton Labor Secretary and now Berkeley professor.... [O]ver at his new blog, Reich reports some "facts" about the current tax law that I found so surprising that I decided to check them out. Here is what Reich says:

...the rich are now paying a smaller percentage of their income in taxes than at any time in the last seventy-five years. That they pay a lot of taxes nonetheless is a by-product of the mind-boggling increase in their income and wealth relative to most other Americans.... [I]f you consider not just income and capital-gains taxes but all the taxes people pay -- including payroll taxes and sales taxes -- you find that middle-income workers are now paying a larger share of their incomes than people at or near the top....

The best place to look to check these alleged facts is the Congressional Budget Office website.... Here is the Total Effective Federal Tax Rate for 2005, according to a CBO report (Table 2):

Lowest quintile 5.5 percent
Second quintile 12.0
Middle quintile 15.6
Fourth quintile 19.6
Highest quintile 26.3...
Top 1 percent 31.1

These data (which include all federal taxes, not just income taxes) seem hard to square with Reich's second claim....

Reich's first alleged fact is that "the rich are now paying a smaller percentage of their income in taxes than at any time in the last seventy-five years."... I compared that 31.1 percent number for the richest 1 percent with historical tax rates.... What I found is that the average tax rate for the top 1 percent was below the current 31.1 percent rate for 10 of the 11 years from 1982 to 1992. It reached a low of 25.5 percent in 1986. For better or worse, President Bush has not come close to reducing tax rates for the rich to the levels they achieved after President Reagan cut taxes....

I don't know what data Reich was using when he made his claims. He does not post a link to a data source at his blog. If there are data backing up Reich's claims, it would be interesting to figure out why they are inconsistent with CBO data. Comments and explanations from readers are welcome.

I'll ask Bob for his sources on Monday. Meanwhile...

On the "smaller percentage of income" point, I think Greg is wrong and Bob is right. Greg's source for the current (2005) tax rate,, is an August 2004 CBO report. It shows a jump in the federal effective tax rate from 26.7% in 2004 to 31.1% in 2005. Why? Because as of August 2004 Congress had not yet extended relief from the Alternative Minimum Tax into 2005. It did so shortly afterwards (and passed a number of other tax law changes for 2005 as well). Greg should be using something like the 2004 tax rate of 26.7%--not 31.1%--for the current tax rate.

President Bush has reduced tax rates for the rich to roughly the levels they achieved in the Reagan years.

On the "middle class pays as high a share of income as rich" point, I think Greg is right and Bob is wrong... but I don't have my numbers handy.

I should caution that this is really hard to do, especially on the fly without a crack staff of trained professionals backing you up. The distribution tables don't include the effects of the estate tax--repealing the estate tax would make the tax rate on income earned now and passed on lower relative to the tax rate on income earned in the 1980s and passed on. The distribution tables assume that *all* of the corporate income tax is paid by shareholders--an assumption that has to be wrong, although how wrong is a matter of fierce debate.

And in email, the wise Jason Furman--who is close to being a crack staff of trained professionals all by himself--cautions: "top 1% isn't the right concept to compare the 'rich' over time. Since the top 1% have been getting richer relative to everyone else, even in a world of unchanging taxes their tax rates would go up. If we looked at data over time for tax rates for people with incomes 20 times the median income or $1 million or what have you, they tell a slightly different story..."

Newt Gingrich Is Shrill!

On TV last night, Newton Leroy Gingrich now joined the Order of the Shrill--those driven into shrill unholy madness by the malevolence, incompetence, disconnection from reality, and sheer mendacity of George W. Bush and his administration:

Gingrich on NSA:

COLMES: Then he said when it came out a little while ago that there was some wiretapping he said it only applies to international communications. And now we're finding something else. So it just seems we're not getting a consistent story here, are we?

GINGRICH: No. You're not.

COLMES: Why not?

GINGRICH: Look, I'm not -- Alan, I'm not going to defend the indefensible. The Bush administration has an obligation to level with the American people.

And I'm prepared to defend a very aggressive anti-terrorist campaign, and I'm prepared to defend the idea that the government ought to know who's making the calls, as long as that information is only used against terrorists, and as long as the Congress knows that it's underway.

But I don't think the way they've handled this can be defended by reasonable people. It is sloppy. It is contradictory, and frankly for normal Americans, it makes no sense to listen to these three totally different explanations.

Gingrich Fhtagn!! Gingrich Fhtagn!!! GINGRICH FHTAGN!!!

Interview of the President by Kai Diekmann of BILD

The weirdest interview with George W. Bush I've seen.

Before Kai Diekmann has gotten to say more than "[I was in the Oval Office o]nce, a long time ago" and "Yes, [the rug] is very beautiful," Bush has said six hundred words, including: "...people watch me like a hawk... if I'm going to be [w]ringing my hands and if I'm all worried about the decisions I make are not going to lead to a better tomorrow, they'll figure it out.... I not only strongly believe in the decisions I make, I'm optimistic that they're going to work -- very optimistic... they want me to change -- they being the -- and I'm not changing, you know. You can't make decisions if you don't know who you are, and you flip around with the politics. You've got to stay strong in what you believe and optimistic about that you'll get good results. And so -- the other thing I want you to know about me is that no matter how pressurized it may seem, I'm not changing what I believe. Now, I may change tactics, but I'm not going to change my core beliefs.... I'm not changing. I don't care whether they like me at the cocktail parties, or not. I want to be able to leave this office with my integrity intact..."

Remember: at this point in the interview Bush has not been asked a single question.

I wonder who he thinks "they" are...

Interview of the President by Kai Diekmann of BILD:

THE PRESIDENT: Have you ever been in the Oval Office before?

Q: Once, a long time ago --

THE PRESIDENT: I'll give you a quick tour before our interview. So, the first thing that a President does, which I didn't realize, was pick a rug. I have no idea about rugs. And so in this job you've got to delegate. The American President is in a position where there's just unbelievable complexities to the job -- Darfur, Iran -- a whole lot of issues. So I delegated the decision about the rug to my wife.

The second thing a President has got to do is have a strategic mind. In order to be successful, in my judgment, as the President, you've got to constantly think strategically. And so I said to her, you pick out the colors, you be the tactical person, but I want it to say "optimistic person." That's all I wanted it to say. Here is the result. Isn't it beautiful?

Q: Yes, it is very beautiful.

THE PRESIDENT: There's a sense of optimism when you come in here. And there's a reason why. You cannot lead people unless you're optimistic about what you're doing. You've got to believe it in your very soul. One of the interesting things about the presidency is people watch me like a hawk. They're looking at my moves. And if I'm going to be ringing my hands and if I'm all worried about the decisions I make are not going to lead to a better tomorrow, they'll figure it out.

And so when you talk to me today, I just want you to know I not only strongly believe in the decisions I make, I'm optimistic that they're going to work -- very optimistic.

These are all Texas paintings. That's West Texas, those are other Texas paintings. At least if you're a Texan, it reflects a way of life and a way of thinking. The interesting thing about Washington is that they want me to change -- they being the -- and I'm not changing, you know. You can't make decisions if you don't know who you are, and you flip around with the politics. You've got to stay strong in what you believe and optimistic about that you'll get good results.

And so --the other thing I want you to know about me is that no matter how pressurized it may seem, I'm not changing what I believe. Now, I may change tactics, but I'm not going to change my core beliefs -- a belief that freedom is universal, or the belief that private markets work, a belief in ownership -- when p own something, society is better off; a belief that there's a role for government, but it's limited in nature. And I'm not changing. I don't care whether they like me at the cocktail parties, or not. I want to be able to leave this office with my integrity intact.

That's George Washington, the first President, of course. The interesting thing about him is that I read three -- three or four books about him last year. Isn't that interesting? People say, so what? Well, here's the "so what." You never know what your history is going to be like until long after you're gone. If they're still analyzing the presidency of George Washington -- (laughter.) So Presidents shouldn't worry about the history. You just can't. You do what you think is right, and if you're thinking big enough, that history will eventually prove you right or wrong. But you won't know in the short-term...

Thomas P.M. Barnett Is Shrill!

Global strategic analyst Thomas P.M. Barnett has joined the ranks of the shrill, unbalanced critics of the Bush administration:

Thomas P.M. Barnett :: Weblog: Putin's backtalking is just another sign that the Bush administration is a spent force: ARTICLE: "Putin Hits Back, Criticizing U.S. In Yearly Address: Russian Leader Call for Stronger Military," by Judith Ingram, Washington Post, 11 May 2006, p. A1.

Nice line: "We are aware of what is going on in the world. Comrade wolf knows whom to eat, he eats without listening, and he's clearly not going to listen to anyone."

Translation: "The Bush Administration does what it wants with its military and energy policies. It decides to invade and conquer one of the world's largest oil reserves, and does so with little care for allies' opinions. Even know, though, this regime lectures the world on democracy while consorting with whatever dictators it cares to, so long as their access to energy is assured."

Cheney warns that Putin is threatening to reverse the gains of the last decade in Russia. Guess what? Plenty of our allies belief Bush and Cheney have already reversed the gains made by globalization over the past decade!

Yes, yes, the Clinton years are looking better by the minute....

[T]his administration seems intent of making sure we reduce our partnership with Russia as much as possible. Why? Apparently right now we need allies less than ever. Putin's backtalking... signals the growing awareness internationally that the Bush Administration is a spent force. This crew is not inclined to change their spots now, and the world knows it. So, quite frankly, our debates should focus most on who and what comes next for America. The conversation is basically over with the Bush Administration. So it's time to focus on the new ideas, the new leaders, and the lifers within the bureaucracy who will both rule--for all practical purposes--in the meantime and be there when the new crew arrives.

Matt Yglesias Is a Philosophical Naif

Matthew Yglesias is a philosophical naif. He writes:

Bush: Secret Progressive | TPMCafe: Interesting to see Glenn Reynolds and Jonah Goldberg both falling for the bogus theory that the Bush tax cuts have made the tax code more progressive.... Does anyone seriously believe that Bush (accidentally?) and highly counterintuitively implemented a change to America's income distribution that runs highly contrary to the long-held goals of conservative tax policy? That this shift went unnoticed -- for years -- until it all of a sudden emerged out of the either from a variety of highly-partisan outlets? That's just silly.... Glenn and Jonah both have a weakness for the politics of resentment... they're willing to believe the world operates in totally bizarre ways and pass this sort of theory on without checking any of the relevant information....

[T]he Joint Economic Committee study that allegedly proves "Bush's tax cuts make the tax system more progressive" doesn't even purport to show that. Rather, it (misleadingly) claims that his tax cuts made the personal income tax more progressive. Bush's tax policies have also reduced the personal income tax's share of the overall tax burden in favor of the regressive FICA...

Matt writes as if Glenn Reynolds and Jonah Goldberg are trying to figure out what is going on, and then to communicate it to others in some sort of Habermasian speech situation.

They aren't.

Matt is wrong when he says that Reynolds and Goldberg "believe the world operates in totally bizarre ways." You cannot make inferences from what they write to what their beliefs are.

Good News on the March Trade Deficit: $62 Billion ($744 Billion a Year)

Brad Setser on the March trade deficit:

RGE - Not quite as good as they look (the March trade numbers): Not quite as good as the headline fall suggests. That is my initial take on the March US trade numbers.... The US trade deficit dipped to $62 billion in March. That wasn't expected. Certainly not by me....

The deficit improved because of strong exports. The export numbers are as good as they look. Broad across the board gains. Aircraft are doing fine -- the US exported about $10b of planes in q1, v $6b a year ago. But Boeing didn't drive the data. March aircraft exports were a bit below February exports. The US sold a lot more electronics.

And the deficit improved because of an unusual fall off in imports.... [T]he main reason for the better-than-expected deficit: oil That's right. Oil. Oil imports fell... by about $2 billion in March....

I always like to look at Exhibit 17 of the trade report. It is the data on oil imports in its rawest form. And it turns out that the US imported less oil this March than last March: 397,983 thousand barrels v. 420,260 thousand barrels.... Maybe higher prices are having an impact. That is the good news. The bad news: the March import price of $52.26 a barrel (a bit below February) is not going to last...

A Good Piece by Martin Feldstein About the Coming Rise in U.S. Household Savings

Marty writes:

Foreign Affairs - The Return of Saving - Martin Feldstein: The savings rate of American households has been declining for more than a decade and recently turned negative. This decrease has dramatically reduced total national savings despite a rise in corporate saving. In 2003 and 2004, the combined net savings of households, businesses, and government were only about one percent of gross national income -- the lowest level in at least 50 years.

This sharp decline in saving has... reduced productivity-enhancing net business investment... made the United States increasingly dependent on capital from the rest of the world to finance that investment.... The downward trend in U.S. household saving will likely soon be reversed. In the long term, a substantial rise in household saving will have a positive effect on the U.S. economy. But the initial effects will pose problems for the United States and its trading partners. If these effects are not managed well, the result could be declines in output and employment and a corresponding rise in U.S. protectionism....

Individuals in their 40s and 50s tend to save money, whereas many in their 60s and beyond are... spending the assets that they accumulated.... Net household savings in the United States fell from an already low 1.7 percent in 2004 to -1 percent in the second half of 2005. This... stands in sharp contrast to the rate until the mid-1990s: 7 percent or higher.... That household saving has declined should come as no surprise. The rising prices of stocks and homes have made many Americans much wealthier.... Between 2000 and the start of 2005, the overall net worth of the household sector increased by nearly $7 trillion. As a result, many individuals in their 40s and 50s looked at the value of their IRAs, 401(k) accounts, and homes and rightly concluded that they did not have to save as much for their retirement as they would have had to in the past....

As mortgage interest rates have come down from nearly eight percent in the mid-1990s to less than six percent, individuals have been able to increase the size of their mortgages without having to raise their monthly mortgage payments. Although some of the extra mortgage borrowing has been converted into other savings, much of it has been used to finance additional consumption. The amounts involved have been enormous. In the past five years, the value of U.S. home mortgage debt has increased by nearly $3 trillion....

[The] basic accounting identity -- that the current account deficit is the amount of capital inflows to the United States -- links the U.S. trade imbalance to U.S. dependence on foreign capital. Accordingly, the United States can reduce its dependence on foreign capital inflows only if it reduces its current account deficit. Doing so will require a slowdown in the growth of consumer spending....

The flow of funds to the United States should be a matter of concern not only because it has increased so rapidly but also because those funds now come in what may prove to be a much less sustainable form. In the late 1990s, most of the capital that flowed into the United States came in the form of equity investment by private investors.... Today, the capital inflows to the United States primarily go toward purchasing bonds and making bank deposits, including very sizable deposits by foreign governments at the Federal Reserve.... The available data do not distinguish between purchases by banks on behalf of private investors and purchases by banks on behalf of foreign governments. But extensive conversations with officials and private bankers suggest that an overwhelming share of the foreign capital inflows in recent years has come from foreign governments....

Since governments do not make investment decisions by simply balancing risk and return the way private investors do, it is particularly difficult to anticipate their future behavior. How long will foreign governments want to keep running large current account surpluses and investing those surpluses in relatively low-yield foreign bonds? And how will they respond to developments in the United States or in the global economy in the future? These unanswerable questions add to the overall uncertainty of the global economic outlook....

Share prices are not likely to double again in the next decade, nor will housing prices continue to rise at double-digit rates. Accordingly, households will be able to increase their wealth for retirement and other purposes only by reducing the growth of their spending so that it is less than the growth of their after-tax incomes -- that is, by saving more. Most important, mortgage interest rates have stopped falling, bringing an end to the dissaving that occurred when homeowners simultaneously reduced their monthly mortgage payments and extracted massive amounts of cash simply by refinancing their mortgages. This suggests that there will be a relatively rapid rise in the savings rate.

This coming rise in household saving will eventually be good for the U.S. economy.... But a higher U.S. savings rate will also pose a challenge... it will mean a reduction in the exports to and an increase in the imports from the United States.... The coming rise in the U.S. savings rate could temporarily cause a serious problem for the U.S. economy as well. As consumer spending falls, GDP and employment will also decline. This decline will last until net exports increase.... [T]here is the danger of a time lag between when the savings rate rises and when the U.S. trade deficit declines. Such a lag would cause a slowdown in the growth of output and employment, potentially leading to a recession....

Foreign governments would thus do well to anticipate the coming rise in the U.S. savings rate.... [I]t would be best to allow exchange rates to adjust before the U.S. savings rate rises. Equally important, the United States' trading partners must find ways to increase their domestic demand in order to maintain their output and employment even as exports to the United States decline...

But it would have been much better had it included, somewhere, the phrase "government budget deficit."

Impeach George W. Bush. Impeach Him Now

Yet another violation by Bush of his oath to take care that the laws be faithfully executed. David Ignatius:

How the CIA Came Unglued: The chronic mismanagement of the CIA under Goss and Murray has been an open secret for many months, and the real question is why it took the Bush White House so long to fix it. When I posed this question a few weeks ago to a senior administration official, he repeated the line that the agency was full of leakers and obstructionists. The political vendetta against the CIA went to the top, in other words. It did real damage to the country before President Bush finally called a halt...

Impeach George W. Bush. Impeach him now.

Robert Reich Watches the Bush Clown Show

Robert Reich on Bush tax policy:

Robert Reich's Blog: Tax Obscenity: 87 percent of the benefits of this tax cut will go to the 14 percent of American households earning above $100,000 a year. Twenty-two percent of the benefits will go to the richest two-tenths of one percent of American households earning more than a million dollars a year.

I'd appreciate it if someone could explain to me why we need another tax cut for high-income Americans especially when the gap between the rich and poor, and between every rung on the income ladder, is wider than it's been in almost a century. Some administration apologists, including the editorial page of the Wall Street Journal, claim repeatedly that the rich are paying a larger-than-ever share of income taxes, so it's entirely fitting that they get the lion's share of any tax cut.

This logic conveniently leaves out two facts. First, the rich are now paying a smaller percentage of their income in taxes than at any time in the last seventy-five years. That they pay a lot of taxes nonetheless is a by-product of the mind-boggling increase in their income and wealth relative to most other Americans. Second, if you consider not just income and capital-gains taxes but all the taxes people pay -- including payroll taxes and sales taxes -- you find that middle-income workers are now paying a larger share of their incomes than people at or near the top. We have turned the principle of a graduated, progressive tax on its head.

The Conservative Nanny State

Dean Baker's well-regarded new book:

The Conservative Nanny State: by Dean Baker: Dean Baker debunks the myth that conservatives favor the market over government intervention. In fact, conservatives rely on a range of "nanny state" policies that ensure the rich get richer while leaving most Americans worse off. It's time for the rules to change. Sound economic policy should harness the market in ways that produce desirable social outcomes -- decent wages, good jobs and affordable health care...

Impeach George W. Bush. Impeach Him Now.

Jane Harman doesn't seem to understand that a law already contains a provision that requires that people comply with it. Atrios comments:

Eschaton: Just on CNN, it appears Jane Harman may have finally woken from her slumber and her and other Dems have introduced legislation which would require the NSA to comply with FISA. Of course, FISA already requires them to comply with FISA so, you know, maybe if we super-double-mean-it the administration might listen.

I suppose it's a step, but... members of Congress [need] to come to terms with the fact that Bush and his administration have declared the right to violate any law they want to violate. They've said it very plainly. They haven't really tried to hide it. Why everyone pretends not to hear I do not understand.

The President's duty is to take care that the laws be faithfully executed. George W. Bush has not.

Impeach George W. Bush. Impeach Richard Cheney. Impeach them now.

Radio: Marketplace: The Latest Bush Tax "Cut": May 11, 2006

My script for Marketplace Radio for today. Listen:

As is often the case with this administration, there are two reasons for doing things. One is the real reason and the other is the ostensible reason.

Bush once said to a smug, well-fed, and well-dressed crowd: "Some call you the rich. I call you my base!" The real reason for these tax cuts is that people making at least a million dollars a year would be sad if they didn't get 42,000 off of next year's tax bill.

The ostensible reason--the one they give the middle class, together with its twenty dollar tax break, is that the 2003 tax cuts jump started the economy. Without this tax cut, they say, the economy will stall and a recession will threaten.

Don't buy it.

Just think back. In 1981 the claim was that the Reagan tax cut would set off an economic boom. But the 1980s had the slowest rate of productivity growth in America of any decade since the Civil War.

In 1993, the claim was that Clinton's tax increases would send the economy into recession. But the rest of the 90s saw the fastest economic growth in America in 30 years.

Yes, the economy has been doing relatively well since 2003. But a stopped clock is right twice a day.

The reasons that the economy has been doing relatively well over the past three years have everything to do with the underlying technological revolution in computers still centered in Silicon Valley. Those computers increase productivity. That increases output, saves money, and boosts corporate profits to record.

The economy is also humming along because of the availability of cheap money thanks to the Federal Reserve. All that cash sloshing around at corporations has improved business executives' confidence.

The good economic news of the past few years has little to do with Bush administration economic policy.

Don't let them trick you: To stave off recession, we don't need to give everyone making more than a million dollars year a $42,000 a year present.

Radio: Marketplace: Glenn Hubbard: Oil Market Making Washington Crazy

Glenn Hubbard has a nice commentary at Marketplace about the politicians' attempts to "exploit" the gas price issue:

Marketplace: Oil market making Washington crazy: GLENN HUBBARD: Now, I know policymakers and economists don't always speak the same language. But Washington's recent rhetoric on oil is enough to make an economist's head spin.

Consider Congress' pandering offer of $100 tax rebates to help cover the cost of gas. Or President Bush's recent call to investigate "price gouging" while simultaneously pressing for greater investment in the oil industry.

These statements are sufficiently over the top to bring forth an involuntary Econ 101 reaction. You know what I mean -- supply and demand.

Tightening supply reflects continued low production in Iraq, supply disruptions in Nigeria, and investment-unfriendly politics in Venezuela and Bolivia.

At home, regional variations in environmental standards and recent mandates for blended ethanol that exceed production squeeze gasoline supply and raise prices.

On the demand side, we in our SUVs make too little effort to encourage energy efficiency. And abroad, China has leapt past Japan as the world's number two oil consumer.

Politicians' rhetoric notwithstanding, we repeal the laws of supply and demand only at our peril.

Think of the disastrous program of federal crude oil price regulation in the 1970s or Hawaii's recent repeal of its scheme to cap fuel prices that led to shrinking supply.

But there is an antidote to high prices. The answer is: high prices. High prices encourage conservation on the demand side. They also encourage the development of new oil reserves %u2014 and, importantly, alternative energy sources -- on the supply side.

And some policy activism would help.

We need to support basic research for new technologies and export energy-efficient techniques to emerging economies.

We need to clear out harmful domestic barriers to production and refining.

And at the broadest level, we need to coordinate the domestic and foreign policy sides of the nation's energy policy.

At the very least, ideas like "price gouging" and "$100 rebates" need to be, well, more refined.

The Bipartisan Congressional Clown Show Opens!

And Jim Hamilton reviews it:

Econbrowser: Congressionally mandated shortages: Last week the U.S. House of Representatives voted by an overwhelming margin to guarantee gasoline shortages the next time we face a significant disruption in petroleum supplies.

One of the common complaints I hear from noneconomists is, why should the price of gasoline go up as soon as there is any news of a disruption in oil flowing from somewhere like Nigeria, when the gasoline in the pipeline and the station's tanks have already been bought and paid for by the company at a lower price?

Why, indeed? The answer is, because if the price didn't spike up immediately on the news, the result would be a disaster for the public. I presume we can agree that the supply disruption will eventually mean that the price will have to be higher and consumers are going to have to make do with less gasoline. How should you as a consumer behave, if the price did not go up today, but you know that in the future, you might not be able to buy gas or will have to pay a much higher price than you do today? The answer is, you should rush out and top off your tank right now, while gas is still available and cheap.

Of course, when all your neighbors get the same idea that you had, the result is a huge surge in the quantity of gas everybody is trying to buy, which the system won't have the resources to deliver. Panic buying by consumers would create shortages even if there had been no disruption in supply.

Fortunately, it would not ever be in the personal financial interests of gasoline station owners to allow this to happen. Why should they run their tanks dry selling gas for $3.00 a gallon, if there would be someone willing to pay them $3.50 for that same gas? A station owner who was trying to maximize profits would never do this. What we would expect to see in a properly functioning market is for the price instantly to jump significantly above the value it will be at next week. That creates an incentive for consumers to let their tanks run a little lower right now rather than top them all off, which is exactly what we need to see happen in order to deal with the crisis.

Anyone who has taken an introductory economics class will recognize this as an example of exactly how capitalism is supposed to function. The gasoline seller and buyer are both just doing what is in their own selfish interests, yet the outcome is a sensible and appropriate response to the challenge.

Unfortunately, 389 members of the U.S. House of Representatives evidently skipped that econ lecture, and think that if the owner's already paid for the gas in the pipe, you shouldn't have to pay any more at the pump...

Another Right-Wing Conservative Joins the Order of the Shrill

Welcome, right-wing judicial hero Judge J. Michael Luttig. We might carp a little on how long it took you to be driven into shrill unholy madness. But at least you know when you have been lied to and double-crossed. Now you clearly see the incompetence, mendacity, disconnection from reality, and malevolence of the George W. Bush administration.

We understand you already have your robe:

For Luttig, a Breakdown in Trust: On Nov. 22, U.S. Circuit Judge J. Michael Luttig was at work in his chambers here when he received a telephone call telling him to switch on the television. There, he saw Attorney General Alberto Gonzales announce that the government would file charges against Jose Padilla in a federal court -- treating the accused terrorist like a normal criminal suspect.

The judge was stunned. Two months earlier, he had written a landmark opinion saying the government could hold Padilla without charge in a military brig. The decision validated President Bush's claim that he could set aside Padilla's constitutional rights in the name of national security. The judge assumed the government had a compelling reason to consider the suspect an extraordinary threat. Now Gonzales wanted the courts to forget the whole case.

It didn't take long for the judge's anger to burst out into the open. The clash, which underscores the increasing skepticism among even some conservative jurists toward the Bush administration's sweeping theories of executive power, culminated yesterday in Judge Luttig's resignation. Read more in today's Page One article. -- Jess Bravin and J. Lynn Lunsford.

Continue reading "Another Right-Wing Conservative Joins the Order of the Shrill" »

David Frum Tries to Set Out What Went Wrong

David Frum laments the fate of the small government conservatives. He doesn't quite put it this way, but they were the victims of the political equivalent of a Nigerian 419 scam. "Compassionate conservatism will turn out to be small-government conservatism," Karl Rove and others IMd them. "You just need to deliver your votes and give us access to your bank accounts and everything will be fine." And, as so often happens with those who think they are in on the con, they turned out not to be.

It's a very intelligent discussion that ends with Frum painting what he regards as a favorable picture of the future for small-government conservatives: if things work out well, they could be the twenty-first century equivalent of the nineteenth century whigs:

David Frum: for the GOP to reinvent itself as a limited-government would require it to repudiate much or maybe close to all of the domestic agenda of the Bush administration. That has happened before: The Reaganites did it to the Nixon/Ford legacy. But that happened only after the greatest political scandal of the 20th century had removed or discredited much of the previous generation of party leadership.... Whatever happens in 2006 and 2008, the Bush/Rove operation will retain enormous residual strength -- enough certainly to deter credible candidates from running as critics of Bush.... [M]ost of the governors and senators who look like plausible presidential material have already committed themselves to some form or another of Bush-style compromise with activist government.... [I]t's hard to count many votes for a Reagan redux even if one were somehow to reappear.

So what does this mean for limited-government conservatives?... Two things I'd say.

One is memory.... It may be that the future of [small government] conservatism is to recognize that it belongs to the past.

The second possibility is that conservatism will live on as a tendency within both parties rather than as a compact and self-conscious movement in control of one of them.... Long after the Whigs went out of business... their ideas and preferences exerted influence.... A Republican President and Congress gave the country the nonpartisan civil service the Whigs had wanted; a Democratic President and Congress restored a central bank in 1913. Progressive ideals of government by experts, scientific management, and government responsibility for the health and welfare of the population have likewise become the common inheritance of both modern parties...

Stupidest Wanna-Be President Alive

Ryan Lizza writes:

George Allen's race problem: It was the night before a major basketball game with Morningside High. The mostly black inner-city school adjacent to Watts was coming to the almost entirely white Palos Verdes High to play. When students arrived at school on game day, they found graffiti spray-painted on the school library and other places. All five people who described the incident say the graffiti was racially tinged and meant to look like the handiwork of the black Morningside students. But it was actually put there by Allen and some of his friends. "It was something like die whitey," says Campbell. The school administrator, who says he is a Republican and would "seriously consider" voting for Allen for president, says the graffiti said, "burn, baby, burn," a reference to the race riots.

I had Allen's high school yearbook open in front of me. I kept thinking about the creepy game day prank and the classmates who described the rebel flag on the car and the e-mail from Patrick Campbell: "Some of my classmates and I became rather disturbed a few years ago when we learned that George was rising in the political scene," he had written me. "Mr. Allen is known as a racist in our Southern California society which is why we feel he relocated to an environment which was more supportive of his view points."... Did anything that happened in high school really matter today?

I stared closely at Allen's smirk in his photo, weighing whether his old classmates were just out to destroy him. And then I noticed something on his collar. It's hard to make out, but then it becomes obvious. Seventeen-year-old George Allen is wearing a Confederate flag pin.

Still, I wasn't sure I'd ask him about it. And then he says something that changes my mind. As a child, Allen tells me, before he even moved to California, he learned about the painful history of the South when his dad would take the kids on long drives from Chicago to New Orleans and other Southern cities for football bowl games. There was one searing memory from those trips he shares with me. "I remember," Allen says, "driving through--somehow, my father was on some back road in Mississippi one time--and we had Illinois license plates. And it was a time when some of the freedom riders had been killed, and somehow we're on this road. And you see a cross burning way off in the fields. I was young at the time. I just remember the sense of urgency as we were driving through the night, a carload of people with Illinois license plates--that this is not necessarily a safe place to be."

Now the pin seemed even worse. Why would a young man with such a sensitive understanding of Southern racial conflict and no Southern heritage wear a Confederate flag in his formal yearbook photo?...

Stupidest Reporter Alive

Elizabeth Bumiller has been covering the Bush White House for sixty-three months, and only now does she tell us that until now, within the Bush White House, it has been considered uncool, a bit rude and hostile, to be "overtly demanding... [to] challenge you on a lot of things... to see if there are any holes in the argument..."

Isn't this type of thing the thing that a real reporter covering the Bush White House would have reported in Month One, not in Month Sixty-Three?

Todd Gitlin comments:

Sorry To Have Left Out the Logic, But We're Improving | TPMCafe: In this morning's NYT piece by Elisabeth Bumiller, who seems to be stirring to life now that Bush is bobbing along in the 30-plus-percent approval range, there's interesting confirmation of just how idiotically the White House has conducted itself for five-plus awful years. "Mr. Bolten has a sharper management style than Mr. Card," Ms. Bumiller writes. "'Josh is a little more overtly demanding,' said one former member of the administration who was granted anonymity so that he could stay on good terms with White House aides. 'He's immediately playing the devil's advocate, and he'll challenge you on a lot of things, mostly to make sure it was well thought through and to see if there are any holes in the argument.'"

I read it this way: Paul O'Neill (as channeled by Ron Suskind in The Price of Loyalty) was right to have been shocked when he went to Washington as Secretary of the Treasury and discovered that Bush and the inner circle were not interested in memos arguing contrary opinions--a practice O'Neill had observed in both the Nixon and Ford administrations. There was no devil's advocacy, not even any half-logical angel's advocacy.

Bush, flying on a gut and a prayer, knew what he wanted. His chief of staff didn't care whether arguments were "well thought through" or whether there were "any holes" in them. The hell with logic, the hell with evidence. And his chief of staff didn't care because the Decider-in-Chief didn't care.

But never mind: Bush will now be "a little more overtly" well-advised.

Now, after 63 months of the steady catastrophe of the Bush years, it can be told.

Stupidest Award Ceremony Alive

What I want to know is: did the summarily-fired-on-Monday Porter Goss show up this afternoon to pick up his award and accompanying expressions of confidence in him from the Republican congressional leadership?

The Raw Story | GOP House Speaker taps Cheney, Goss for Congressional Distinguished Service Awards: On Wednesday afternoon in the U.S. Capitol, Distinguished Service Awards will be bestowed upon Vice President Dick Cheney and former CIA Director Porter Goss, two former House members selected by House Speaker J. Dennis Hastert (R-IL), RAW STORY has found. "The Congressional Distinguished Service Award was established to honor former Members of the House who have performed their duties on behalf of their constituents and the American people with such extraordinary distinction and selfless dedication as to merit special recognition," reads an invitation to the ceremony obtained by RAW STORY.

Porter Goss served as a Florida Congressman from 1989 until September of 2004, when he was tapped by President Bush to take over the CIA directorship. Cheney was formerly a member of the House for Wyoming.

House Democratic Leader Nancy Pelosi (D-CA) nominated Jesuit Catholic priest, law professor, and former Massachusetts Congressman Father Robert Drinan and Ambassador Lindy Claiborne Boggs, who represented Louisiana for 18 years in the House and served as an ambassador to the Vatican.

The 2006 Distinguished Service Award Ceremony will take place on Wednesday at 2:30 p.m. in Statuary Hall in the United States Capitol.

According to a press release issued by Pelosi three years ago, the Congressional Distinguished Service Award was established in 2002 and is periodically awarded. For the first ceremony, in 2003, Pelosi selected Lous Stokes (D-OH) and Don Edwards (D-CA), while Hastert nominated John Rhodes (R-AZ) and Robert H. Michel (R-IL) (link).

RAW STORY was unable to ascertain whether Cheney or Goss, who mysteriously and suddenly resigned as CIA director last Friday, will be attending the ceremony to accept their awards in person. It's also unknown when Hastert tapped Cheney and Goss for the honors...

Stupidest Magazine Editor Alive?

A correspondent asks me what I think of John Micklethwait as boss of the Economist. I think he may well be a disaster. Look at the kind of stuff he was writing in mid-2003: Lexington: July 5, 2003: The Hillary factor: IS THERE anything one less wants to revisit than the Clinton wars?... Sidney Blumenthal... Clinton brown-noser... tediously one-sided.... Now the wronged woman herself... who in their right mind wants to be dragged back to Whitewater, the pouting intern or any of the other features of Clintonia, that bitchy, chaotic house party where American politics summered in the 1990s?....

George Bush... has done pretty well by fighting hard for his own team.... Mrs Clinton... has Mr Bush's capacity to elicit frenzied support from her core constituency....

Bush's ability to destabilise her enemies. One reason why liberals can't lay a finger on Mr Bush is that they are just too damn angry to punch straight: read, say, Paul Krugman's columns in the New York Times and you are often left worrying less about the commander-in-chief than about the columnist-in-a-tizz....

All this points to the third big similarity between Mrs Clinton and Mr Bush: self-discipline.... There has been a palpable change in the White House's productivity: nobody was better at analysing a problem late into the night than Mr Clinton; but Mr Bush actually gets things done...

Now as of mid-2003, the outlines of the Bush story were already clear: a crew that were very good at politics, but hopeless and hapless at policy. The small-government Republicans were already furious at what Bush had done to spending and the deficit. The foreign-policy realist Republicans were already furious at Bush's diversion of U.S. effort away from the war against Al Qaeda onto the sideshow of Saddam Hussein. The Republicans who knew anything about the Middle East were already furious at Bush's refusal to take postwar Iraqi reconstruction seriously: hope was not a plan. Flotillas of Bush subcabinet officials were telling stories at dinner parties all over Washington about how the underbriefed Bush made seat-of-the-pants decisions--and then would never revisit them no matter how dumb they turned out to be.

Micklethwait knew all this. Micklethwait doesn't claim that Paul Krugman's critiques are wrong--only that they are "shrill." He doesn't claim that Bush's policies make sense or that the Bush White House makes good decisions--only that it "gets things done." He hopes to distract attention from the already-harsh judgments of Bush by the reality-based community by waving the bloody shirt:

Since September 11th, the United States has had more important things to think about...

So why didn't Micklethwait use any of his column inches to tell his readers the real story of the Bush policy clown show that he knew was ongoing in 2003? Was it fear of being cut off by inside administration sources? Was it that he regarded himself as on the Republican side--a cheerleader for the team? Was it that the corporate masters of the Economist had made a decision that their columnists should lean Republican in an attempt to expand circulation among America's upper and overclasses? Was it that he was such a bad judge of sources that he believed the spin of the White House media machine?

I don't know.

Stupidest Administration Alive: The Clown Show That Is Bush Administration Fiscal Policy

That's twenty for you, forty-two thousand for me. David Corn directs us to the Center on Budget and Policy Priorities:

David Corn: Twenty Dollars--Hooray!: Dog bites man--that ain't news. And it seems that tax cuts for the well-off in the Bush years don't cause much of a splash, either.... Here's the CBPP breakdown: House and Senate negotiators have reportedly reached final agreement on the $70 billion tax-cut reconciliation package. Although no official description of the agreement has been released, press reports on the contents of the final package indicate that it will offer virtually no benefits to low- and moderate-income households, but shower high-income households with very large tax cuts.

The Urban Institute-Brookings Institution Tax Policy Center has examined the major provisions that are expected to be in the package, including a two-year extension of capital gains and dividend tax cuts, a one-year extension of relief from the Alternative Minimum Tax, and a proposal to lift the income limits that apply to converting retirement funds to Roth IRAs. Preliminary estimates by the Tax Policy Center show that:

  • About 87 percent of the benefits of the reconciliation conference agreement would flow to the 14 percent of households with incomes above $100,000, and 55 percent of the benefits would go to the 3 percent with incomes above $200,000. Households earning more than $1 million a year, which represent only 0.2 percent of all households, would receive 22 percent of the benefits of these tax cuts.
  • In contrast, the three-quarters of households with incomes below $75,000 would receive just 5 percent of the benefits. The 60 percent of households with incomes below $50,000 would receive less than 2 percent of all benefits.
  • Looked at in dollar terms, the differential treatment of various income groups is even more striking. The average tax cut for the 20 percent of households in the middle of the income spectrum would be just $20. But the average tax cut for those in the top one percent of the income spectrum would be $13,800. For those with incomes above $1 million, the average tax cut would be $42,000.

Twenty bucks for average Americans. Happy days.

Stupidest Legislators Alive

From Swopa of Needlenose.

Can you hear me now? Ooops... | Needlenose: I come across a news story that I realize is tailor-made for a Needlenose post -- one that fits here better than it does in the New York Times. This morning brings just such an article, courtesy of the Times of London:

The fragile state of the sectarian divide in Iraqi politics was exposed today when a fight broke out in parliament after a mobile phone ringtone played a Shia Muslim chant.

A procedural session of the Iraqi parliament was suspended as Shia and Sunni leaders stormed out to protest the ringtone and the subsequent scuffle, which erupted between the armed bodyguards of the Sunni speaker Mahmoud al-Mashhadani and the hardline Shia politician, Gufran al-Saidi.

The mobile phone belonged to Ms al-Saidi, who is a member of the Islamist movement led by the radical Shia cleric Moqtada al-Sadr. According to Ms al-Saidi, one of her guards was holding her phone when it rang, playing a Shia prayer.

Mr al-Mashhadani sent one of his guards -- because of the risk of assassination in Baghdad, all Iraqi politicians come to parliament accompanied by armed men -- to ask her to turn it off. But the phone rang again, at which point a fight broke out in the lobby of the parliament building, with guards from both sides and a veiled Ms al-Saidi joining in.

Ms al-Saidi led a walkout on to the steps of the parliament building, where she told waiting television crews: "I demand an urgent investigation." She was joined by the independent MP, Mithal al-Alusi, a Sunni who leads the small Nation party, who said "those involved should be sued" and that bodyguards should be unarmed in parliament.

. . . After 20 minutes, the protesting MPs were led back into the chamber by the outgoing Iraqi Prime Minister, Ibrahim al-Jaafari.

Stupidest Man Alive?

A correspondent begs me to reopen the "Stupidest Man Alive" contest and award the prize to wingnuts supreme Billy Beck and Perry Eidelbus:

Two--Four: Signpost Lies: Perry Eidelbus hits on one particular outrage that the left has been perpetrating for years, now, which is the idea that there were federal government surpluses under The Lying Bastard of The Ozark Long March. They will seriously look you in the eye and tell you that there was an extra two hundred billion dollars lying around in 2000. That is, of course: if words mean anything at all, then that's what they say means. It's palpable horseshit, and it's keenly offensive to reasonable people that these creeps keep foisting it the way they do. Why do they keep lying like that?

If you go to the 2006 Economic Report of the President, issued by George W. Bush and his administration, and look at page 375, Table B-78: "Federal receipts, outlays, surplus or deficit, and debt, fiscal years, 1940–2007 [Billions of dollars; fiscal years]", you will find that George W. Bush reports a federal government surplus of $236.2 billion for fiscal year 2000.

Maybe this is a subtle way of making the claim that George W. Bush is a man of the left? Naah. They're not that smart.

Gary Fields of the Wall Street Journal Gets Snookered...

He writes, in the "Washington Wire" column:

Washington Wire: Speaking Hypothetically: A storm is brewing around Housing and Urban Development Secretary Alphonso Jackson. Last month, in an address to a Dallas minority business forum, he spoke of a contractor who "made a heck of a proposal" but was later rejected after telling the HUD secretary, "I don't like President Bush."

The conversation was only hypothetical, said HUD spokeswoman Dustee Tucker.... Tucker, who attended the Dallas event, said Jackson was explaining to a group of Dallas business leaders how politics might play a role in contracting when he offered the example. The Dallas Business Journal reported that Jackson told the audience: "He didn't get the contract. Why should I reward someone who doesn't like the president so they can use funds to try to campaign against the president? Logic says they don't get the contract."

Tucker said the secretary is not part of the contracting process at HUD, she added. "That is handled by the office of procurement." --Gary Fields

What Fields doesn't seem to know about HUD flack Dustee Tucker is that:

Dallas Business Journal:: On May 3, Tucker told the Business Journal that the contract Jackson was referring to in Dallas was "an advertising contract with a minority publication," though she could not provide the contract's value...

It's rare that a flack can tell a Wall Street Journal news reporter that something she previously gave details on never happened without getting pinned to the table like a dead butterfly. But it happens

Covering the Economy: Peculiar Problems of Covering the Bush Administration

One last reading--not about covering the economy per se, but taking off from our discussions about the peculiar problems of covering the George W. Bush administration. Here is an interesting May 2001 article by Washington Post national political editor John F. Harris.

Ignoring the Democratic-representative-Rahm-Emanuel-is-a-crybaby passage at the beginning, it is a thoughtful but somewhat bizarre account of why the press has given George W. Bush such an easy ride throughout his presidency. Harris says:

The difference... there is one big reason for Bush's easy ride: There is no well-coordinated corps of aggrieved and methodical people who start each day looking for ways to expose and undermine a new president.... It is Bush's good fortune that the liberal equivalent of this conservative coterie does not exist.... [T]here's no denying that we [reporters] give more coverage to stories when someone is shouting.... Democrats are not likely to give as good as they got. They simply aren't as well organized. And they are not shouting as loudly.... Few liberal commentators see themselves self-consciously representing an ideological movement the way many conservatives do. The Brookings Institution tilts liberal but is not an ideological arsenal in the way the Heritage Foundation is.... James Carville... [says]: "The press finds it easier to cover sex than stupidity." Bush is not stupid, but Carville's larger point has some truth.... The Washington press corps collectively may have fallen a bit out of shape at the hard work of examining, exposing, and critiquing public officials as they go about making the decisions that affect national life...

The bizarre thing is that there is no sign that any of the insights in this article have informed the coverage of George W. Bush and his White House by John Harris and his people. This is too bad. By May of 2001 I knew--and I am sure John Harris knew--the real story of George W Bush and his White House. As one ex-Bush speechwriter puts it:

If you were looking for a diligent manager of the office of the presidency, a close student of public policy, a careful balancer of risks and benefits--George W. Bush would never be your man. But is this news?... He is impatient, quick to anger; sometimes glib, even dogmatic, often uncurious, and as a result ill-informed....

Add to this that Bush is unusually stubborn, and will not revisit and undo a bad decision that he has made. Add to this that Bush is unusually bad at distinguishing those who are telling him the truth from those who are telling him pleasing lies. Add to this that Bush is, in the words of his choice to be Treasury Secretary, Paul O'Neill, "like a blind man in a room full of deaf people." And you have a true picture of our president that will go a long way toward helping you understand the past five and a half years.

Now, of course, this picture of Bush is common knowledge: found in the pages of the Weekly Standard as well as the Nation. Back in May 2001 it was limited to those who worked for Bush, those who--like me--had friends who worked for Bush, and reporters--like John F. Harris--who had sources who worked for Bush.

But the national political staff of the Washington Post has, I think, played no role at all in disseminating this true picture of Bush to the world. And is there a more important job for the Washington Post's national political staff than disseminating a true picture of the President and his White House? I think not.

Here's Harris's article:

Mr. Bush Catches a Washington Break: The Washington Post - Washington, D.C. John F. Harris May 6, 2001 B.01: I was on the receiving end the other day of a harangue from Rahm Emanuel, a top aide in the Clinton White House, who is not impressed by the news media's coverage of President Bush. "The Washington press corps has become like little puppy dogs," he said. "You scratch them on the tummy and they roll right over."

His complaint had a note of self-pity -- How come you never gave us a break? -- that was characteristic of the Clintonites. But Emanuel was expressing a view I hear these days in virtually every conversation with any Democrat.

Are the national news media soft on Bush? The instinctive response of any reporter is to deny it. But my rebuttals lately have been wobbly. The truth is, this new president has done things with relative impunity that would have been huge uproars if they had occurred under Clinton. Take it from someone who made a living writing about those uproars.

The difference is not in journalists' attitudes toward Bush or their willingness to report aggressively on him. It is that nearly all the political and institutional forces that constitute Washington writ large have aligned to make Bush's life more pleasant than Clinton's ever was, even at the start of his presidency.

There are many small reasons: Republicans and Democrats alike seem exhausted from the negativity and scandal of the Clinton era. The Bush team is mostly competent and well-focused, so it has given adversaries fewer handles to grab. And even his opponents seem to think the new president is a likable enough fellow.

Above all, however, there is one big reason for Bush's easy ride: There is no well-coordinated corps of aggrieved and methodical people who start each day looking for ways to expose and undermine a new president.

There was just such a gang ready for Clinton in 1993. Conservative interest groups, commentators and congressional investigators waged a remorseless campaign that they hoped would make life miserable for Clinton and vault themselves to power. They succeeded in many ways. One of the most important was their ability to take all manner of presidential miscues, misjudgments or controversial decisions and exploit them for maximum effect. Stories like the travel office firings flamed for weeks instead of receding into yesterday's news. And they colored the prism through which many Americans, not just conservative ideologues, viewed Clinton.

It is Bush's good fortune that the liberal equivalent of this conservative coterie does not exist. Take the recent emergency landing of a U.S. surveillance plane in China. Imagine how conservatives would have reacted had Clinton insisted that detained military personnel were not actually hostages, and then cut a deal to get the people (but not the plane) home by offering two "very sorrys" to the Chinese, while also saying that he had not apologized. What is being hailed as Bush's shrewd diplomacy would have been savaged as "Slick Willie" contortions.

Try to recall this major news story during Clinton's first 100 days: Under pressure from Western senators, the president capitulated on a minor part of his 1993 budget deal, grazing fees on ranchers using federal lands. A barrage of coverage had an unmistakable subtext: Clinton was weak and excessively political and caved to special interests. Bush has made numerous similar concessions on items far more central to the agenda he campaigned on, such as deemphasizing vouchers in his education plan and conceding that his tax cut will be some $350 billion smaller than he proposed. For the most part these repositionings are being cast as shrewd rather than servile.

Do you suppose there would have been an uproar under Clinton if Democrats had been rewarding donors with special closed-door briefings by Cabinet secretaries? The New York Times reported the other day that GOP donors received just such a briefing with Health and Human Services Secretary Tommy Thompson as thanks for their efforts. Far from an uproar, the story has had only a faint echo. Clinton's "donor maintenance" coffees led to a year of congressional inquiries.

Bush and aides boast that the days of an obsessively political White House ended with Clinton. Thomas B. Edsall, my Post colleague, wrote in a story last month that generated little comment that Bush political advisers are conferring regularly with Catholic leaders in anticipation of the 2004 election. That revelation under Clinton would have prompted waves of coverage about a president addicted to the permanent campaign.

What's going on here? It is not that reporters have been charmed by Bush. It is not that Democrats are nicer, more decent people than Republicans. The difference is that the GOP conservatives' zeal to undermine Clinton -- and the techniques they used to do it -- flowed from special historical circumstances. For a generation before Clinton, conservatives believed they would never get a fair shake from the establishment news media -- "an effete corps of impudent snobs," in Spiro Agnew's words.

One response of the conservatives was to create new voices of their own: think tanks, columnists, magazines, radio programs. These voices tended to be in concert. The sense of grievance and insurgency that fueled the modern conservative movement makes these activists more likely to network and promote a common message. This can be a powerful asset in political and policy wars. Recall how conservative writer Bill Kristol, with a series of memos distributed widely on the right, successfully challenged a key premise of the Clinton health care debate. We need to stop using the word "crisis," since this only helps Clinton, Kristol enjoined his fellow travelers.

Conservatives became skilled in using the same news media they reviled. In the early days -- well before Clinton's Whitewater and sexual controversies reached full flower -- every misstep was pounded by the opposition and turned into a major event. The storms of that first year whirred by in an indistinguishable blur: Zoe Baird, Waco, the Christophe haircut, the travel office, Somalia. From the vantage point of the right, there were no small stories, only big ones; no complicated explanations, only ones that illustrated Clinton's incompetence or venality. Bush's missteps -- contradictory statements about whether the White House was closing the offices of women and AIDS, for instance -- are not being flogged as metaphors for his presidency.

Reporters and editors do not work like commentators. There are no newsroom deliberations about how "soft" or "mean" to be on a president. And we aim to make our own judgments about what's important, rather than respond in Pavlovian fashion to whatever ideologues or interest groups are inveighing about. But there's no denying that we give more coverage to stories when someone is shouting. For example, the toughest coverage Bush has gotten has been over decisions to suspend environmental rules issued by Clinton, which infuriated liberals.

For the most part, Clinton's foes and their contemptuous views of him were within the bounds of fair debate. But Democrats are not likely to give as good as they got. They simply aren't as well organized. And they are not shouting as loudly.

Few liberal commentators see themselves self-consciously representing an ideological movement the way many conservatives do. The Brookings Institution tilts liberal but is not an ideological arsenal in the way the Heritage Foundation is. Who is the liberal version of Rush Limbaugh, who so colorfully rallied opposition to Clinton? Nor is there an obvious Democratic version of Rep. Dan Burton (R-Ind.), eager to aim the investigative apparatus of Congress at the White House. Bush is also catching a break from his own side: Clinton's nomination of a gay man as ambassador to Luxembourg caused outrage on the right; Bush's naming a gay AIDS czar was met largely with silence on Capitol Hill.

In Clinton's first term, Rep. Richard K. Armey (R-Tex.) turned to Democrats and said, "Your president is just not that important to us." This underscores the irony that Bush, whose ascension was clouded by questions over whether he really won, has been accorded more legitimacy by the opposition than Clinton was -- or than Gore would have had he become president while losing the popular vote.

It also illustrates how Bush and his aides miss the point with their constant boasting about how Bush has "changed the tone" in Washington after the coarsening Clinton years. Clinton disgraced himself through his personal behavior and by then taking flight from honor and accountability. But Washington's snarling public tone was caused more by his opponents; he was as ready to meet with Republicans as Bush is with Democrats. Little of his rhetoric ever matched the vitriol that congressional Republicans aimed at him.

James Carville, one of the few Democrats to match conservative zeal for combat, is frustrated by his party's timidity. "There's a tendency not to get all gassed about things: People just don't have the energy for it now." He is even more disdainful of the media for not reacting more aggressively to such things as Bush's discomfort at news conferences and confusing statements on Taiwan that left aides on clean-up duty. "In the Clinton administration we worried the president would open his zipper, and in the Bush administration, they worry the president will open his mouth," he said. "The press finds it easier to cover sex than stupidity."

Bush is not stupid, but Carville's larger point has some truth to it. Clinton's personal tale was so consuming that, over time, covering him became as much about soap opera as about policy. The Washington press corps collectively may have fallen a bit out of shape at the hard work of examining, exposing, and critiquing public officials as they go about making the decisions that affect national life.

The Bush White House makes this task more difficult by being especially disciplined in talking to the news media. Over time, however, it is not possible to control a public message as tightly as Bush believes he can. Good for this White House in avoiding the worst stumbles of the early Clinton administration; good for Washington in giving a new president a break at the start. And those people eager to see this president face scrutiny can rest assured: The opposition is sure to awaken.

Put Charles Krauthammer on Lithium Immediately!

That tears it. I always thought Charles Krauthammer was clinically insane. Now we have proof. Somebody put him on lithium before he hurts himself:

Media Matters - Krauthammer: Goss was "trying to deal with the jihadists inside" the CIA: From the May 5 edition of Fox News' Special Report with Brit Hume, with guest host Jim Angle:

ANGLE: Now, Charles, one of the interesting things here is that Senator [Pat] Roberts [R-KS] was talking about the fact that Goss was essentially rebuilding the CIA after some very difficult years, two tumultuous episodes in which its competency was questioned, and rebuilding the size of the agency.

KRAUTHAMMER: And also trying to deal with the jihadists inside the agency, the people who consider themselves the loyal opposition, which really is the role of Congress, but who oppose administration policy, had been leaking, and had been trying to undermine and obstruct administration initiatives. One of the roles he had adopted, Goss, was to go after these people. He fired Mary McCarthy, who supposedly was the leaker on the secret prison story. And I think there's some -- you know, if you look at this, you could say, "Well, maybe he was defeated by that element in the CIA." From what I've heard, that's not so. And the next -- and his successor's going to be as tough on the leakers as he was...

Why oh why can't we have a better press corps?

Why Oh Why Can't We Have a Better Press Corps? (Chicago Tribune Edition)

Frank James of the Chicago Tribune is strangely hobbled by journalistic convention. He writes:

The Swamp - Chicago Tribune - Blogs.: Bush cabinet member's world of make-believe: A recent story in the Dallas Business Journal reported that in a speech to a Dallas real-estate group, [HUD Secretary] Jackson told a story about a businessman who won a place on the federal government's list of approved contractors visiting Jackson's Washington, D.C. office to thank him.

During his visit, according to Jackson, the prospective contractor began bad-mouthing President Bush. As Jackson told the story in Dallas, he was understandably deeply offended and made sure the businessman didn't receive a HUD contract. The story quotes Jackson as saying: "He didn't get the contract. Why should I reward someone who doesn't like the president, so they can use funds to try to campaign against the president? Logic says they don't get the contract. That's the way I believe."

That a cabinet secretary would openly brag in public about keeping an approved contractor from receiving a contract because of the contractor's stated political beliefs would be astounding in it's own right.... Jackson's spokesperson, Dustee Tucker... said that Jackson made the whole story up.... "So he was offering an anecdote... the secretary's point was a hypothetical, what he said was an anecdote. It did not happen."

Let's stop here momentarily and leave aside Tucker's apparent misimpression that an anecdote is by definition fictional. It isn't. An anecdote is a story about something that really happened, often used to illustrate a larger point....

Let's pick up with Tucker's explanation. "It did not happen. The secretary is not part of the contracting process here at HUD. That is handled by a senior official in our procurement office. He was offering it as an anecdote to say this is what happens. People in D.C. will come up to you, trash you, say terrible things about you, trash your boss, and then they'll turn around and ask you for money. So the secretary was offering it as an anecdote," she said. "He definitely said this in front of the (Dallas) meeting. But this meeting did not occur. The meeting with this official (in his office.) It was a hypothetical. He was offering it anecdotally. You know when you tell a joke you put yourself in first person, for delivery," she said. "You say I was on this train and so and so did this even if you know it wasn't a train. The secretary was putting himself in that first person to make the story more effective... The secretary was taking situations that have happened to him in the past. As you know, people come up to political figures all the time and say 'I don't like you, I don't like your politics, I don't like the president... He was blending together things that happened to him in the past."...

Clearly, Jackson very much would prefer to have evaporate the notion that he's torpedoeing contracts of administration critics, so much so that he'd rather push the idea that he says untruths in his speeches. Either way, it's all very strange.

It's not "strange," Frank. That's not an appropriate description. The appropriate description is: "Jackson and his flack Tucker are bats--- insane and live in a fantasy world. They have no business working for the federal government at any level. They need to leave yesterday--and the people who hired them need to leave yesterday too."

"Strange"? Feh!

UPDATE: The Daily Kos has a quote from last week, when flack Tucker's story was different:

"On May 3, Tucker told the Business Journal that the contract Jackson was referring to in Dallas was `an advertising contract with a minority publication,' though she could not provide the contract's value."

Impeach George W. Bush. Impeach Him Now

A Tiny Revolution writes:

A Tiny Revolution: How Did I Miss THIS?: Until today I'd never heard of this special Douglas Feith plan after September 11th:

Days after 9/11, a senior Pentagon official lamented the lack of good targets in Afghanistan and proposed instead U.S. military attacks in South America or Southeast Asia as "a surprise to the terrorists," according to a footnote in the recent 9/11 Commission Report. The unsigned top-secret memo, which the panel's report said appears to have been written by Defense Under Secretary Douglas Feith, is one of several Pentagon documents uncovered by the commission which advance unorthodox ideas for the war on terror. The memo suggested "hitting targets outside the Middle East in the initial offensive"...

Specifically, Feith wanted to bomb the "triple border region" where Paraguay, Argentina and Brazil meet. I think one thing's for sure: that would have been "a surprise." And, not just for Osama bin Laden.

Moreover, if the criteria was just that our response be violent and "a surprise to the terrorists," attacking South America is thinking kind of small. Here's what I would have suggested:

  • assassinate the Dalai Lama
  • blow up the moon
  • have the entire Bush cabinet dress up as Carmen Miranda and then, on national television, commit hari-kiri

I hope you might have some ideas of your own.

Impeach George W. Bush. Impeach him now.

Why Oh Why Can't We Have a Better Press Corps? (Slate Edition)

Outsourced to low-wage laborer Matthew Yglesias. He takes on John Dickerson:

Investigations | TPMCafe: John Dickerson, for example, seems to have decided that it was a major gaffe for Nancy Pelosi to tell The Washington Post that one thing a Democratic House Majority would do would be to hold oversight hearings. His rationale is that since Elizabeth Dole wrote a fundraising letter saying Democrats would "call for endless investigations, congressional censure and maybe even impeachment of President Bush" apparently the smart thing to do would be for Democrats to just deny any intention of mounting investigations.

There are a lot of problems with this theory.... Dole's letter was a fundraising mailing going out to hard-core Republicans... the 30 percent or so of Americans who approve of George W. Bush job performance.... [I]t makes perfect sense for GOP fundraisers to appeal to those people. But it also makes perfect sense for Pelosi to appeal to the much larger group of people who disapprove of Bush's performance. One of the main things those people might be hoping for from a Democratic congress would be a check on Bush's power. Indeed, many of them may not be very interested in a progressive agenda for America at all, just scared of where the current crew is heading things. By promising oversight, Pelosi is re-iterating that though you can't vote the unpopular Bush out of office, you can vote in a congress that will keep him under control.

Perhaps more to the point, what could possibly be served by denying that... a Democratic congress will mean subpoena power? What's at issue are two different ways of characterizing this. Dole wants people to think of partisan witch-hunts, Pelosi wants people to think of sober-minded oversight.... The only way to challenge Dole's characterization is for Pelosi to offer one of her own, which is exactly what she did.

When last we saw John Dickerson, he was arguing that even though he and two other Time reporters knew that the quotes from Scott McClellan they were publishing in Time were false, it would have been unethical for Dickerson to have told his readers that the quotes from McClellan were false by adding the sentence "But Time reporters suspect that McClellan's denials are not accurate" to a paragraph that ended:

White House spokesman Scott McClellan said accusations of Rove's peddling information are "ridiculous." Says McClellan: "There is simply no truth to that suggestion."

Why it would have been "unethical" to accurately report the story that Time reporters knew is something that Dickerson left unexplained. See and I think Dickerson believes that "it would have been unethical" means "McClellan would have yelled at me."

Why oh why can't we have a better press corps?

George W. Bush: Radical Feminist or Liberal Republican?

The Poor Man wakes, rises from his bed in Drowned R'lyeh, and notices something:

The Poor Man: Phyllis Schlafly... George W. Bush is, in fact, a mere sockpuppet for radical feminists!

Is President George W. Bush a feminist, or is he just a typical gentleman who is intimidated by feminist...?

[Jonah Goldberg of National Review] does her one better... after six years of worship at the altar of Bush, he suddenly notices this totally amazing thing that no one has ever noticed before:

But there is one area where we can make somewhat useful comparisons between Nixon and Bush: their status as liberal Republicans.

And thus the Poor Man reclaims his rightful place as the Grand Heresiarch of the Order of the Shrill:

There is only perception, and perception is only belief. You make yourself believe Bush is a liberal, and you get your friends to agree with you that Bush is a liberal, and, presto-chango, Bush is a big liberal. Everybody even says! I’ve always said! They even say I’ve always said!

But see, there’s a problem. He’s your boy. You loved him and lied for him and slimed every decent person - including no small number of proper conservatives - who tried to point out what you and he were up to. Seven years and counting, you and him against the world. So you can call him a “feminist” or you can call him a “liberal” or you can call him “dreadlock’d vegan anarchist”, but that just means you’re a liberal feminist vegan anarchist with dreadlocks, too.

It’s too late.

You can point out all those times when you only shook your Team Bush pom-poms with 108% enthusiasm, but, outside of Wingnuttia, no one is listening. Call him what you want, believe whatever you have to believe, but he was your boy when it was popular, and he’s your boy now, and forever.

Over at Angry Bear, the Progressive Liberal opens his eye, waves his tentacles, and freaks out as well:

Angry Bear: Michael Darda [of National Review] dips into the Kudlow file of nonsensical concepts... nominal "core GDP."... [W]hy would he and Kudlow want to exclude net exports from their calculations?

Because they have no idea what "nominal core GDP" would mean. What they have calculated is nominal private absorption--not nominal core GDP.

PGL goes on:

The suggestion from Darda and Kudlow that private spending growth exceeded overall growth is both false, and also contradictory to the claim of certain small government conservatives that Bush has somehow been a liberal. The decline in the private spending/GDP ratio... is simply the flip side of the increase in government purchases....

As Kudlow once tried to argue -- Bush has not cut government spending "Reagan style". Then again -- neither did President Reagan.

And then he reaches four octaves of shrillness above high C:

[I]n the 1980's... conservatives blamed the Reagan deficits on exploding government spending... conservatives today claim Reagan succeeded in small government conservatism. Of course... government spending as a share of GDP neither rose nor fell appreciably in the 1980's.

A good try, PGL, but to no avail: the Poor Man remains the Grand Heresiarch of the Ancient, Occult, and Hermetic Order of the Shrill: those who have been driven into shrill unholy madness by the mendacity, incompetence, malevolence, and disconnection from reality of George W. Bush and his administration.

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

Richard Cohen is upset that he is being pursued by a digital lynch mob. "Why are people using the internet to say nasty things about me?" he asks. "Why don't they like me? Why do they think I should be fired?"

Let's see if we can make it clear. Here we have Swopa explaining why he doesn't like Richard Cohen:

From the Department of Moral Relativism | Needlenose: Richard Cohen, writing last week on Stephen Colbert, who dared to lampoon Dubya in the presence of the Shrub-in-Chief himself:

The sort of stuff that would get you punched in a bar.... Colbert was more than rude. He was a bully.

And here's Richard Cohen today, milking a column out of readers' reaction to his pan of Colbert's monologue:

The e-mails pulse in my queue, emanating raw hatred. . . . I know it's only words now appearing on my computer screen, but the words are so angry, so roiled with rage, that they are the functional equivalent of rocks once so furiously hurled during antiwar demonstrations....

None of that "sticks and stones" nonsense for this perceptive, sensitive observer of the political scene! Don't Colbert et al. know that people have feelings, and how wrong it is to hurt them? But wait... here's Richard Cohen last October, on the outing of Valerie Plame as a CIA officer, in retaliation for her husband's criticism of the Corleone Bush administration:

Not nice, but it was what Washington does day in and day out. . . . it was not the intent of anyone to out a CIA agent and have her assassinated (which happened once) but to assassinate the character of her husband. This is an entirely different thing. She got hit by a ricochet....

If you're King Dubya, or Prince Karl, or even a hanger-on like Sir Richard, anything that discomfits you is worthy of condemnation. But if you're outside that charmed circle -- or, even worse, suffer a "ricochet" because of the actions of someone within it -- then Cohen's message is, "Suck it up, bitch, this is a tough town."

And here's Greg Mitchell explaining why he doesn't like Richard Cohen:

While America Slept: Richard Cohen... said he had long been skeptical of [the] idea [that Bush wanted war with Iraq], but now had come to accept it. That's all well and good, but where was Cohen a little more than three years ago, when this fact was as plain as the smirk on the president's face, and the columnist agitated for war anyway? If there was an "I'm sorry for being so stupid" embedded in Cohen's column, I didn't spot it.

This is the man who, on Feb. 6, 2003, after Secretary of State Colin Powell's deeply-flawed testimony in New York, wrote: "The evidence he presented to the United Nations -- some of it circumstantial, some of it absolutely bone-chilling in its detail -- had to prove to anyone that Iraq not only hasn't accounted for its weapons of mass destruction but without a doubt still retains them. Only a fool -- or possibly a Frenchman -- could conclude otherwise."

Yet Cohen has the nerve to write today: "Colin Powell, you may recall, soiled his stellar reputation with a United Nations speech that is now just plain sad to read. Almost none of it is true."

What about Cohen's reputation?

Now Cohen observes that "Paul Wolfowitz was obsessed with Iraq, and that seems to have been true of the White House as well." Of course, this was well-known in 2003... but it didn't stop Cohen from cheerleading for the war. Today Cohen notes there is "plenty of evidence [Bush] had Saddam on his mind and in his sights from the very moment he got the news of the terrorist attacks on the World Trade Center and the Pentagon.... Whatever Bush's specific reason or reasons, the one thing that's so far missing from the record is proof of him looking for a genuine way out of war instead of looking for a way to get it started. Bush wanted war. He just didn't want the war he got."... [T]he same can be said of Cohen.... It would be nice if Cohen would admit that, like Bush, he chose poorly, with disastrous consequences.

Writing as a man who doesn't think Stephen Colbert is all that funny... Is there anybody, anybody at all who doesn't dislike Richard Cohen?

Martin Wolf Commands: "Let the Dollar Fall!"

Martin Wolf channels Maury Obstfeld and Ken Rogoff: / Comment & analysis / Columnists - Martin Wolf: Let dollar fall or risk global disorder: A very simple description of the current state of the US economy would be as follows: total demand is 107 per cent of gross domestic product; total output of tradeable goods and services is some 25 per cent of GDP; total demand for tradeable goods and services is 32 per cent of GDP; and total demand and supply of non-tradeables is 75 per cent of GDP. The difference between supply and demand for tradeables, by definition, equals the trade deficit.

Now assume a reduction of only 3 percentage points in the ratio of the trade deficit to GDP. This is just under 10 per cent of total demand for tradeables. Assume, for simplicity's sake, that the incremental demand for tradeable goods and services is proportionate to that for non-tradeables. Without any shift in relative prices, overall demand in the economy needs also to fall by just under 10 per cent, to deliver the desired reduction in the trade deficit. This would generate a fall of about 7 per cent in GDP, all of which would fall upon industries producing non-tradeables. But such a deep recession would create misery, while contributing nothing to the desired improvement in the external deficit.

To avoid the massive recession that expenditure reduction alone would generate, the price of non-tradeables has to fall substantially relative to that of tradeables. Such a shift is a decline in the real-exchange rate. This should move spending towards non-tradeables and potential supply towards tradeables. Under plausible assumptions the real exchange rate changes needed to shift the economy in the desired direction are large. The quicker the adjustment, the bigger they must be. That is a good reason for making those adjustments slowly, which is also a reason for avoiding postponing them indefinitely.

Could these changes in real exchange rates be achieved without moves in nominal exchange rates? The logical answer, again, is yes. But that would require a fall in the nominal price of non-tradeables in the US -- in other words, outright deflation in that country -- and a rise in the price of non-tradeables in the exporting countries -- in other words, rapid inflation there. The former is inconceivable, while the latter is apparently unacceptable. So nominal exchange rates must move.

Impeach George W. Bush. Impeach Him Now


More from the Admirable Candor Department - Wonkette: HUD Secretary Alphonso Jackson, speaking before a group of minority executives in Dallas, had this to say about his interaction with an applicant for a government contract who voiced opposition to the president:

[This contractor] made a heck of a proposal and was on the (General Services Administration) list, so we selected him. He came to see me and thank me for selecting him. Then he said something -- he said, "I have a problem with your president."

I said, "What do you mean?" He said, "I don't like President Bush." I thought to myself, "Brother, you have a disconnect -- the president is elected, I was selected. You wouldn't be getting the contract unless I was sitting here. If you have a problem with the president, don't tell the secretary."

He didn't get the contract.... Why should I reward someone who doesn"t like the president, so they can use funds to try to campaign against the president? Logic says they don't get the contract. That's the way I believe.

Wow. We had a hard time believing Secretary Jackson actually said these things (although his honesty is refreshing)...

Impeach George W. Bush. Impeach him now.

Jared Bernstein on Eddie Lazear

Jared Bernstein thinks Eddie Lazear has drunk too much of the koolaid. He writes:

Why’d Ya Do It, Eddie? When Good Economists Go Bad. By Jared Bernstein

Edward Lazear is a really interesting economist who just weeks ago took the job as chairman of the President’s Council of Economic Advisors. But as did Greg Mankiw, he has already drunk deeply of the magic elixir that flows from the CEA’s water coolers—the one that makes top economists say lowly things.

On Monday, May 8, Lazear and CEA colleague Katherine Baicker (L&B) had an oped in the Wall St. Journal that presented economic data with a level of spin I’m sure they’d never accept from an undergrad.

Essentially, L&B engage in two sleights of hand. First, they try to create the impression that growth over the past few years has been broadly shared, and secondly, they cite long-term tends with no reference to the fact that the gains occurred pre-2000. They then tout Bush economic policies with no regard to the fact that the trends they cite became uniformly worse over his tenure.

Here are a few examples of their misleading arguments.

The authors point out that “Per capita personal disposable income, a good measure of Americans’ spending power, has grown over 8%, or $2,100, since 2001.”

As pointed out in this recent EPI analysis, when inequality is on the rise, this average measure of income is not at all representative of the typical family’s experience. Since 2000, despite the overall growth cited by L&B, the median family’s income is down 3%, or $1,500. These data are only available through 2004, but median weekly earnings of full-time workers fell 1.4% in inflation-adjusted terms, 2004q1-2006q1, a $500 loss of spending power for full-year workers.

They then turn to the tired explanation that it’s all about education, pointing out the college wages are up since 1980 while those of high-school dropouts are down. No one disagrees that a more education educated workforce is always desirable, but what about the fact that college-educated workers have struggled over this recovery? In fact, one reliable source shows their annual earnings to have fallen by 5% in real terms since 2000. That source: The CEA’s 2006 Economic Report of the President (Table 2-1).

Even skilled workers have fallen prey to the productivity/wage gap over the past few years, including a long jobless recovery with significant losses in high-end sectors, like IT, and increased offshore competition from skilled workers abroad.

Finally, a good example of their fun with numbers comes from the section on mobility. They point out that the “average worker who was between 25 and 34 years old in 1994 earned 52% more in real terms in 2004.”

According to this Census table,, the mean income (not earnings) of 35-44 year-olds in 2004 was indeed 52% higher than that of 25-34 year-olds in 1994. But there are two problems with this point. First, the median growth was 33%, again revealing the problem of using averages when inequality is on the rise.

But here’s the bigger problem. Incomes almost always rise as families age, so L&B have that built-in a large bias into their comparison. As the table shows, however, all this growth occurred in the 1990s. Since 2000, the real income growth of both age cohorts has declined, by 6% for 25-34 year olds and 1% for the older group.

Real Average Income Growth by Age Cohort, 1994-2004

1994-2000 2000-04
25-34 21.4% -6.3%
35-44 14.2% -0.8%

Source: Census Bureau

True, the table compares a boom with a bust (though 2001-04 are recovery years), but L&B are touting the impact of Bush economic policies on income growth, so this comparison is not only justified, it’s essential. Readers need to recognize that no matter how hard you twist the facts, you simply can’t make a believable case that the recovery has broadly reached working families.

L&B make a few other egregious claims in the piece—“the president’s tax cuts have made the tax code more progressive” (see for a discussion of how the opposite has occurred), showing that they’ve quickly learned the “up is down and left is right” logic of the Bush econ-agenda.

Such misleading analysis needs to be constantly challenged. Yes, this has been an exceptionally productive economy over the past five years, with output per hour up 18%, 2000-05. Yet the gap that so many Americans perceive between such top-line statistics and their own circumstances is real. When smart, reputable economists deny this reality, they do a disservice to their post.

Remember: The Cossacks Work for the Czar!

One important strand of advocacy on the right today is to defend George W. Bush by saying that everything that has gone wrong is the fault of Donald Rumsfeld, who reported to George W. Bush--pretending that the cossack (Rumsfeld) doesn't work for the Czar (Bush). Now comes David Frum, defending Donald Rumsfeld against the charge that it is all his fault. How? By saying that it is in large part the fault of... Tommy Franks, who reported to Rumsfeld. The cossacks work for the Czar, David!

UPDATE: In email David Frum points out that "work for" is too simplistic a term. The Czar and the cossacks have a complicated principal-agent relationship, and the cossacks can do a lot of damage on their own (for which they can then be awarded the Presidential Medal of Freedom).

No. That's too snarky. The Sixteen-Year-Old has taken our family copy of Cobra II off somewhere before I could read it. I need to find it...

AEI - Short Publications - David Frum: Now comes an important new book, Cobra II: The Inside Story of the Invasion and Occupation of Iraq, by New York Times correspondent Michael Gordon and retired Marine Corps Lieutenant General Bernard Trainor. Their story bears hard on Rumsfeld. But it daringly points a finger at a normally blame-proof figure: the general who actually planned and led the Iraq campaign: General Tommy Franks, head of U.S. Central Command during both the Afghan and Iraq wars. It was General Franks who adamantly refused to engage in post-war planning for Iraq. Long before George W. Bush was elected president, CentCom (then led by Gen. Anthony Zinni--a future opponent of Bush's decision to overthrow Saddam) had drawn up a contingency plan for war with Iraq. This plan was a huge and heavy Colin-Powell-style plan, which contemplated the use of at least 380,000 troops. It deviated in almost every way from the plan actually adopted in 2003--with one exception.

To quote Gordon and Trainor: "There was a gaping hole in the occupation annex of the plan. CENTCOM would have the responsibility of general security. But there was no plan for the political administration, restoration of basic services, training of police, or reconstruction of Iraq." The principal author of the Zinni plan: his deputy, Tommy Franks. As the war plan moved from the realm of the contingency to the realm of the real, Franks continued to refuse to think about what would happen after the shooting ceased. Gordon and Trainor again: "Franks told his commanders that his assumption was that Colin Powell's State Department would have the lead for the rebuilding of Iraq's political institutions and infrastructure." In October, 2002, however, Franks' assumption was invalidated: At Rumsfeld's insistence, the President agreed that the Department of Defence would assume overall responsibility for the postwar occupation.

Rumsfeld's civilian deputies, Paul Wolfowitz and Doug Feith, welcomed this responsibility as an opportunity to put Iraqis in charge of their country's reconstruction. But there was only one organized group of Iraqis able to serve as a transitional, provisional government: Ahmed Chalabi's Iraqi National Congress (INC). And General Franks fully shared the fierce, almost unreasoning, hatred for the INC that pervaded the State Department and CIA. The INC, for example, proposed to recruit a brigade of Free Iraqi forces to enter Iraq with the coalition. "Franks remained unenthusiastic, to say the least. After a briefing from [Feith's aide Bill] Luti on his pet project, Franks turned to Feith in a Pentagon corridor, letting him know where he stood: 'I don't have time for this f--king bullshit,' Franks exclaimed."

Franks wanted to race to Baghdad as rapidly as possible. To achieve his plan, he bypassed thousands of Iraqi Fedayeen fighters. These black-garbed guerillas ambushed and killed American soldiers--and then faded into the landscape. The Americans could not chase or identify them because Franks' determination to travel light had sent U.S. forces into battle with few or no interpreters. In late March, Franks' deputy commander, John Abizaid, discreetly asked the INC for help. Chalabi offered 1,000 men. Gordon and Trainor point out that while Franks had previously disdained Luti's proposal to train a carefully screened Iraqi force, his command now proposed a variant of the plan "conceived in haste to deal with unexpected difficulties." But by the time the INC men landed in southern Iraq, the emergency had passed, and Franks had reverted to his previous attitude. "The fighters arrived with virtually no provisions and no welcome. They were ushered into a busted-up hangar. . . . For weeks, [the local commander] scrambled to find a way to arm and equip them. . . . They never played a significant military role."

Franks flew into Baghdad on April 16 to meet with senior U.S. commanders. He told them they should prepare to pull out within 60 days. "Franks laid down the rule that was to guide the next phase of the operation: The generals should be prepared to take as much risk departing as they had in their push to Baghdad." Franks intended to hand over responsibility to a new Iraqi government. But he himself had guaranteed that no such government was waiting to go. Franks lived by his own "quick out" principle. He retired from the army in July, 2003, selling his memoirs for a reported $5-million, booked a busy speaking schedule, and joined the board of the Bank of America...

Jane Galt Says George W. Bush Is a Leveling, Redistributionist Mole!

Jane Galt says that the Bush tax cut will, in the end, be progressive:

Asymmetrical Information: You say "Progressive", I say "Regressive": There are four ways that I can think of for the US to deal with its debt burden.... 1) Raise taxes to pay it off. This will be a burden on America's relatively poorer members only to the extent that the tax burden falls on them. But while overall withholdings are only very mildly progressive in America (thanks to Social Security payments), income tax is extremely progressive.... Is the tax system likely to change? Colour me sceptical. "Raise taxes on the poor" just doesn't have much of a ring to it.... I find it much more likely that we will see another Clinton style increase on the top earners, while keeping Bush innovations like the 10% tax bracket, meaning that the rich will be doing the bulk of any debt repayment...

The argument that a tax cut for the rich is ultimately progressive because it runs up the deficit and creates a political backlash that ultimately leads to bigger tax increases for the rich than the tax cut--that is not one I've heard before. Yet it does have a certain plausibility, now that I think about it.

George W. Bush, redistributionist mole!

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

LizardBreath thinks that the New York Times's Sarah Lyall needs a new career--she should be working for the Republican National Committee, not for a newspaper:

Unfogged: Sunday's Times had an article on problems with the dental care provided by the British National Health Service. Apparently waiting times are too long, dentists are too time-pressured and therefore give substandard care; and dentists feel that they're underpaid and so leave the NHS for private practice. And so as a result of all of these failings of the NHS, people living in Britain have terrible, terrible teeth.

Except, of course, that that's an idiotic conclusion. As the above sentence makes clear, private practice is still an option. Anyone in Britain who wants to go to a dentist, and has the money to pay for it, can see a private dentist whenever they want, just like in the US. The only thing the NHS is doing is providing free dental care to those who otherwise couldn't afford it, or don't choose to pay for it. So a story about the rotten teeth suffered by the poor British who have been failed by their NHS is terribly incomplete -- they've been failed by the market provision of private dental care, and the NHS hasn't managed to fully compensate for that market failure. In the US, of course, people who can't afford to go to the dentist are less likely to get care than people in Britain; they haven't even got a flawed NHS to fall back on.

Man, you read stories like this, and you'd almost think people were trying to make universal health insurance look bad.

National Review Takes on the Academy!

Mark Bauerlein explains why there are so few American Tobacco Institute Professors of Epidemiology, so few ExxonMobil Professors of Atmospheric Physics, so few Dinosaurs-Were-too-Big-to-Fit-in-the-Ark Professors of Biology, and so few Supply-Side Jesus Professors of Theology:

Phi Beta Cons on National Review Online: As the intellectual-diversity movement unfolds in state legislatures and in the media, a pattern of resistance has developed.... The inquiry was set up to focus on specific events and actions: Have professors punished conservative students at grading time? Have partisan incidents spread through classrooms? Are there intimidated professors and harassed students lurking underground? In these cases, the attention fell on individual teachers and episodes. It was the personal contact that counted.

For an inquiry into bias in an institution the size and complexity of the university, this is a dead end. Academia is a subculture, an insider's universe.... A set of mores, protocols, attitudes, and norms develops. In its better forms, it goes by the name of professionalism. But how easily do those attitudes and norms slide into cliquish, parochial, or ideological behavior, especially when professionals talk only to themselves. Bias, then, operates more systematically, less overtly than in a rant against George Bush in the classroom, less individualistically than in one person's exercise of power...

Sounds like some New Leftist from 1968: the universities' professors don't have my ideological slant on the world, therefore the whole institution must be biased. And someone should clue Mark in. There has been a shift in the right-wing party line: ranting against George W. Bush is not a sign of ideological bias, but of attachment to reality:

  • Al Neuharth's right-wing credentials are impeccable: yet he rants about how "the 37% who have switched from pro-Bush to anti-Bush... finally realized they were suckered by Bush and his buddies."
  • White Fox House News Press Correspondent Secretary Tony Snow's right-wing credential are impeccable: yet he rants about how Bush is an "embarrassment [who]... doesn't seem to mean what he says... didn't have the drive and work ethic [for the presidency]."
  • David Ignatius's right-wing credentials are impeccable: yet he rants "You would have thought it was impossible to make our intelligence problems even worse, but the Bush administration has accomplished that."
  • Peggy Noonan's right-wing credentials are impeccable: yet she has a special message for George W. Bush: "Just because they call you a jackass doesn't mean you're Lincoln."

And I haven't even mentioned the likes of Bruce Bartlett and Andrew Sullivan. As the New Republic's Ryan Lizza put it:

The Bush-haters are at it again. This one complains about "the sad state of the Bush administration." This one here burbles, "I think this Administration is the most politically and substantively inept that the nation has had in over a quarter of a century." And those are just the guys at National Review...

Say that rants against George W. Bush are a sign of left-wing bias, and you do nothing but demonstrate your utter cluelessness to the world in which you live.

Jonathan Chait Confuses Himself

Jonathan Chait writes:

Chait: Lieberman, unlike other Democratic hawks, musters little passion for exposing and correcting the massive blunders the Bush administration has committed. When the Abu Ghraib scandal broke, Lieberman noted, in Bush's defense, "Those who were responsible for killing 3,000 Americans on Sept. 11, 2001, never apologized." (As if anybody was suggesting we were as bad as the terrorists.) Last fall he said, "In matters of war, we undermine presidential credibility at our nation's peril." The clear implication is that it's counterproductive -- traitorous, even -- to call the administration on its foreign policy dishonesties. This is not how the loyal opposition in a democracy ought to behave.

Foreign policy is hardly the only smudge on Lieberman's record. He is a longtime supporter of taxing capital gains at a lower rate than other income -- a stance gratifying to owners of stock but lacking in economic sense or basic fairness. He has long opposed sensible financial regulations. Even after his pro-business stance came under fire in the wake of the Enron scandal, Lieberman opposed sensible reforms. (As one of Lieberman's friends told the New Republic's Michael Crowley in 2002, "It'll be remembered that he didn't go off the deep end" -- meaning, after the populist furor dies down, Lieberman could resume raking in contributions from grateful executives.) He supported the disgraceful energy bill and federal intervention in the Terri Schiavo case.

Lieberman obviously relishes his role as every conservative's favorite Democrat. It's a mutually beneficial relationship. He's lavished with praise for his statesmanship, vision and bipartisanship. And, in the process, Republicans implicitly get to show what's wrong with the rest of his party. Bush and Dick Cheney applaud Lieberman regularly for believing we must win in Iraq, as if to suggest no other Democrat thinks the same...

OK. So Chait thinks that Lieberman is a bad senator (for a Democrat). Thus it would be a good thing for the country if he lost his seat in the primary (unless that made it likely that the seat would pass to an even worse Republican in the general election).

But then Chait goes off the rails:

In the end, though, I can't quite root for Lieberman to lose his primary. What's holding me back is that the anti-Lieberman campaign has come to stand for much more than Lieberman's sins. It's a test of strength for the new breed of left-wing activists who are flexing their muscles within the party. These are exactly the sorts of fanatics who tore the party apart in the late 1960s and early 1970s.... [S]ince their anti-Lieberman jihad is seen as stemming from his pro-war stance, the practical effect of toppling Lieberman would be to intimidate other hawkish Democrats and encourage more primary challengers against them. If Lieberman loses, he'll play the same role as before, only this time with the power of martyrdom behind him: the virtuous anti-Democrat, too good and honest for his party. If you think Lieberman is sanctimonious now, wait until you see him in defeat.

No, Jonathan. The anti-Lieberman campaign is not about whether the left wing dominates the Democratic party, it is about whether Lieberman is a good senator. Those who are opposed to Lieberman are not arguing that Lieberman is too conservative, they are arguing that he is doing a bad job as a senator. And you agree with that.