The Stump

Check Out Noam Scheiber's New Blog, THE STASH

2009-03-09T21:19:00Z

Dear Reader: Admit it, you’ve been quietly biding your time, waiting for the day when politics would stop being about output gaps and credit default swaps and start being about something fun again, like the Rasmussen daily tracking poll. Well, it’s not happening. At least not any time soon. Which is why I’ve decided to bring you the next best thing: The fun part of economics. (Stay with me.) At The Stash, I’ll be translating all manner of economics arcana into terms you can appreciate without an MBA, and flagging everything you need to know before deciding, say, how much cash to store under your mattress. I’ll also be passing along original, behind-the-scenes reporting on how the Obama administration makes economic policy, and introducing you to the people in charge of making it. If we can’t obsess over veep candidates and electoral college projections, then maybe the fate of the global economy isn’t a bad second choice.

Oh, and I won't be able to do this without you. Please send any questions, comments, or tips to me at noamscheiber at gmail dot com.

--Noam Scheiber

Check Out TNR's New Health Care Blog, THE TREATMENT

2009-03-09T21:16:00Z

Health care soaks up about one-sixth of the nation’s economy. It could soak up an even greater portion of the nation’s political attention in the next year, if Democrats follow through on plans to pursue comprehensive health care reform. So we’ve decided the issue deserves its own blog, The Treatment. I'll be the primary writer and editor. Reporter-researcher Suzy Khimm will be a regular contributor, as will a number of guest bloggers.

The blog's primary focus will be the financing and delivery of health care, with a particular focus on the insurance system--a subject I've been covering for more than a decade, culminating with my 2007 book, Sick. (You can read more about that book, and my background, here.) But we'll also strive to cover other health policy topics, from tobacco regulation to drug safety. With the help of some outside contributors, we may even venture beyond policy, to broader questions about medicine, science, and professional ethics.

That's a pretty diverse set of issues--one that will surely test the limits of our expertise. So please help with suggested links and ideas for posts, by contacting us at TheTreatment@tnr.com. And, as always, please contribute to the comments section. We hope to spark plenty of spirited, though hopefully civil, debates. As in medicine, we know, sometimes it's good to get a second opinion.

--Jonathan Cohn

Farewell to The Stump

2009-01-07T17:20:00Z

As you may have noticed, the presidential campaign--which was the focus of this blog when it launched in late 2007--has ended. The forward momentum of the election fallout and the transition has propelled Noam and me into the New Year. But now it seems that the rationale for doing our own thing, segregated from our beloved colleagues over at The Plank, has ended as well. Everyone at TNR will be obsessively watching and reporting on and writing about the new administration, and we've decided it's best if we all do it under one happy, bustling, constantly-updated URL. If you're already a Plank reader then you can just delete this bookmark, which will soon redirect over there. If not, update your bookmark so you can find us, and the rest of the TNR gang, at http://blogs.tnr.com/tnr/blogs/the_plank.

We'll probably have a couple more posts before the switch tomorrow--and Noam may say his own adieu, print deadline allowing. But before I finish here I want to sincerely thank everyone who read us through the campaign--and especially those stuck with us after the voting was over. It was particularly gratifying to run across Stump readers in unexpected places (most memorably when I ran into commenter "jet" at a John Edwards event in Iowa). Extra thanks to all the regular commentators who made things fun and lively, and that includes both those who called me in the tank for Hillary and the ones who said I was a Hillary hater. And triple thanks to the friends, sources and readers who sent in tips and ideas for items. (I think I've promised a couple kegs worth of thank-you beers that I still haven't delivered--but I will).

Thanks again, everyone--see you all at The Plank.

--Michael Crowley

The Inevitable Jeremiah Wright Angle

2009-01-07T17:13:00Z

If you're avoiding the crowds in Washington, but still crave a little excitement on Inauguration Day, then Reverend Wright may have just the thing. Amy Sullivan (my wife) reports that Wright will mark the occasion with the first in a series of talks on "Prophetic Proclamation" at Virginia Union University in Richmond.

--Noam Scheiber

Obama's "Warning" to Israel?

2009-01-07T14:41:00Z

That's how one senior Ha'aretz writer interpreted yesterday's expression by Obama of "deep concern" about civilian casualties:

Obama made it clear that starting on January 20 the rules of American involvement in the region will change, and his administration will be a lot more active in pushing the diplomatic process between Israel and the Arabs forward.
Obama's timing, after the strike on the school, signals the direction the U.S. will turn in its attitude to the region: It will support Israel, but will oppose any harming of Palestinian civilians. This means that Israel will find it difficult to close the crossings into the Gaza Strip at will.

This week I made some calls to regional experts asking for their take on how Obama might approach the peace process in the wake of the Gaza incursion, and one of them, Shibley Telhami of the University of Maryland the Brookings Institution, agreed that Obama is likely to put a far higher premium on the civilian toll than had the Bush administration:

"Given how he’s tackled human rights, humanitarian issues and the kind of position he wants to take globally in terms of a signal of where we stand, it’s clear he’s going to be much more sensitive to civilian casualties," Telhami told me. "You can say we're going to go in and not repeat certain policies, do things like close Guantanamo, and not be sensistive to the kind of civilian casualties that have people demonstrate in the street around the world. That doesn't tell you what policies he’s going to pursue, but in terms of how he projects himself, that tells you something."

This is mostly speculation at this point--but also a seemingly credible analysis.

--Michael Crowley

Panetta and the Pros, Cont'd

2009-01-07T14:20:00Z

Les Gelb offers a (much fuller) variation on a point I made yesterday, which is that having been an intelligence "professional" isn't necessarily a predictor of success at the CIA. George Tenet was a longtime "pro," but his tenure--though it had some successes--was mostly a disaster. Adds Gelb:

Before others join them, they would all do well to scrutinize the history of past appointments of pros and non-pros. I would say that the non-pro defense secretaries Clark Clifford and Mel Laird were every bit as good in their handling of the Pentagon and of the Vietnam War as the highly experienced and professional Bob Gates is in handling Iraq and his present duties. George Shultz and James Baker, who had no particular backgrounds in foreign affairs or the State Department, served just as ably as secretary of state as did Henry Kissinger. As for the CIA, outsiders like John McCone performed about as well as the ultimate professional, Richard Helms.

Anyway I find the intensity of interest in this pick--especially the process question of which Senators were notified and which weren't--a little curious. The far more important and interesting question is what policies Obama will hand down to the CIA from on high, particularly when it comes to whether we will continue a policy of renditioning terror suspects to other countries for "interrogation." Panetta is a hard-liner against torture but he was present at the creation of the rendition practice under Bill Clinton in the 1990s--but it's Obama's call anyway, not his.

Also, if the instant, obsessive bloggy news cycle means there's going to be a mini- daylong controversy every time Obama fails to kiss properly the ring of every committee chair he is in for a long, long presidency.

--Michael Crowley

Transition News 1/07

2009-01-07T13:57:00Z

Obama offers a grim budget outlook.

PEOTUS does quick outreach to mend rifts over the Panetta pick.

David Ignatius, however, says Panetta is a good choice.

Friedman gives Obama advice on the Gaza crisis.

Politico breaks down the strengths and risks of Obama's economic plan.

What should Obama's Justice Department focus on first?

Obama transfers more than $3 million of his campaign funds to the DCCC.

Michael Gerson assesses Obama's ambition.

Attorney who used to work with Burris in Illinois says he should back away from the Senate seat because he "fails to recognize the difference between right and wrong."

In light of the Sanjay Gupta pick, WaPo wonders which other TV stars might be in line for administration jobs.

Slate asks readers to collaborate and write Obama's inauguration speech.

--Seyward Darby

Quote of the Day

2009-01-06T18:25:00Z

RNC Chairman Mike Duncan on rebuilding his party.

"We have to do it in the Facebook, with the Twittering, the different technology that young people are using today."

Harness the the tubes! Watch out, Change.org.

--Michael Crowley

Bayh Backs Panetta

2009-01-06T17:16:00Z

The high-profile Democrat (remember the Obama-Bayh ticket?) and Intelligence Committee member lauds the choice, as well as the man whom Dianne Feinstein and Jay Rockefeller are said to have preferred. His statement:

“Leon Panetta is an outstanding public servant, and I intend to support his nomination for CIA director. We should respect the judgment of President-elect Obama and his commitment to do what’s right for our country.

At the same time, I have very high regard for Steve Kappes, the deputy director of the CIA. I’ve been in some extremely sensitive meetings involving matters of life and death with him and have been impressed by his competency. I hope we can convince both Mr. Panetta and Mr. Kappes to work together at the CIA for the sake of our country’s national security.”

--Michael Crowley

Obama's Tax Cut Gambit: Shrewder Than You Think

2009-01-06T17:08:00Z

Another thought occurred to me reading this morning's stories about Obama's trip to the Hill yesterday. One of the presumed rationales for leaning so heavily on tax cuts is political, the theory being that it helps you attract GOP votes. (Set aside the substantive rationale, which is powerful on its own, and Obama's denial of this motive.) In response to which, people like Paul Krugman argue that:

Republicans are not going to come on board. Make 40% of the package tax cuts, they’ll demand 100%. Then they’ll start the thing about how you can’t cut taxes on people who don’t pay taxes (with only income taxes counting, of course) and demand that the plan focus on the affluent. Then they’ll demand cuts in corporate taxes. And Mitch McConnell is already saying that state and local governments should get loans, not aid--which would undermine that part of the plan, too.

I think that's mostly right as a prediction of the GOP response. But, unlike Krugman, I think that response could be a good thing for Obama and the Democrats, in that it exposes the GOP's true priorities in a way that's politically damaging to them.

By agreeing to channel up to 40 percent of the stimulus through tax cuts, Obama is essentially calling the GOP's bluff. He's saying, "You guys are making a principled argument that tax cuts can be a more efficient way to stimulate the economy. I'm accepting that argument in large part. So rather than spend a lot of money helping low- and middle-income people, I'm going to get that money to them via tax cuts."

At which point he's kind of backed them into a corner. If the GOP accepts, then great. If they turn around and say, "Well, when we said tax cuts, we actually meant tax cuts for wealthy people, not for low- and middle-income people," then it becomes blindingly obvious that they weren't making a principled argument at all. They were trying to shake Obama down on behalf of their rich cronies.

And, indeed, it looks like the GOP, while momentarily torn, can't resist the taking the bait. According to today's Post, Arizona Sen. Jon Kyl is responding by pushing for permanent cuts in corporate and capital gains taxes--neither of which is likely to have much short-term stimulative effect. (See here for an explanation of the faulty capital gains logic.) Something tells me Obama won't have trouble winning a debate between tax cuts for working people and tax cuts for big business and wealthy investors.

In a sense, this is an early application of the "theory of change" Obama hinted at during the Democratic primaries, which American Prospect editor Mark Schmitt brilliantly sized up. Back then Schmitt wrote:

As Michael Tomasky describes it in his review of The Audacity of Hope, "The chapters boil down to a pattern: here's what the right believes about subject X, and here's what the left believes; and while I basically side with the left, I think the right has a point or two that we should consider, and the left can sometimes get a little carried away." What I find fascinating about his language about unity and cross-partisanship is that it is not premised on finding Republicans who agree with him, but on taking in good faith the language and positions of actual conservatism -- people who don't agree with him. ...

The reason the conservative power structure has been so dangerous, and is especially dangerous in opposition, is that it can operate almost entirely on bad faith. It thrives on protest, complaint, fear: higher taxes, you won't be able to choose your doctor, liberals coddle terrorists, etc. One way to deal with that kind of bad-faith opposition is to draw the person in, treat them as if they were operating in good faith, and draw them into a conversation about how they actually would solve the problem. If they have nothing, it shows.

Exactly.

--Noam Scheiber

Why Panetta? The Gates Factor

2009-01-06T16:23:00Z

Leon Panetta seemed to come out of nowhere as Obama's CIA pick. But as the insta-reporting notes, he was a member of the 2006 Iraq Study Group team. Another member of that panel was Defense Secretary Robert Gates--who is himself a former CIA director, remember. Bob Woodward's latest book, The War Within recounts, among other things, a long discussion between Panetta and Gates on the return flight from a fact-finding mission to Iraq. The passage includes the concern of the organization-oriented Panetta that no one was clearly in charge of US Iraq policy:

He knew from his experience as President Clinton’s chief of staff that someone in the White House had to take charge of such issues. But the Bush administration seemed to have no such authority. “Who controls policy there? Is it Hadley? Is it Rice? Is is Rumsfeld? Is it the National Security Council?”

The others agreed it was an important question. Panetta tried to get an answer but never did.

--Michael Crowley

How Intelligence Professionals See Panetta

2009-01-06T16:07:00Z

Josh Marshall posts an interesting take from a reader who's a veteran intelligence professional:

The issue is not intell guy or non-intell guy. The big issue for Blair and Panetta is strategic or tactical orientation. We are fighting two wars and the warfighter always screams they don't have enough intel or enough of anything for that matter. The dice are so loaded for support to the warfighter that critical strategic intelligence for the President and other senior leaders goes wanting due to time constraints on collection assets.

We need a significant re-orientation away from tactical support by CIA and other National agencies and back to their primary mission - direct intelligence support to the President. The last 15 years have seen an explosion of tactical intelligence capability with the advent of UAVs (which DoD fought against for so long due to the fighter pilot mentality). National systems need to be re-oriented to national priorities and away from tactical or operational desires of the warfighter.

I think the Panetta selection is another indication of the change coming. I was concerned that the selection of Jones as National Security Advisor and Blair as DNI underscored the great concern that I have about the militarization of intelligence. The selection of Panetta, with a much wider and deeper power base than either of them, makes me hopeful in this regard. Panetta is a skilled operator, he knows how to get things done. He knows how to get a budget approved and to make the wheels of government work. He will be a force - both in the Administration and on the Hill -- much larger than any career guy could be. This is good. It gives the CIA the opportunity to re-create itself within the current structure.

In a nutshell, this person is arguing that the CIA's primary mission should be helping the president see the big picture. And that Panetta, by virtue of his stature and bureaucratic skill, is well-suited to the task.

--Noam Scheiber

What Panetta Can Look Forward To

2009-01-06T15:32:00Z

After thinking of George Tenet last night, I flipped through the man's recent memoir At the Center of the Storm, and stumbled upon this surreal passage about a spring 2000 trip Tenet took to Moscow to meet with the head of the Russian security service:

[O]ur hosts offered us a tour of the American section of the prison museum, which includes, among other artifcacts, the silencer- and poison needle-equipped pistol that Gary Powers carried when his U2 spy plane was shot down over the USSR in 1960. We declined--we weren't there to play tourist--so our hosts hurried us off for a dinner--and that's when things got really weird.
Waiting at the top of the stairs at the Praha Restaurant entrance was a very tall, voluptuous blond woman. At her side in attendance were two dwarfs, neither much more than three feet tall. As we reached the top of the steps, our hostess turned, the dwarfs turned with her, each taking one of her hands, and the three of them then paraded side by side down a long hall, leading us into the restaurant proper.
You would think that a meal that started so, um, uniquely might at least have led to a little conviviality, but that wasn't the case.

Don't get too excited, Leon: Being CIA Director isn't all blondes and dwarves! But it still sounds like it can be pretty fun.

--Michael Crowley

Transition News 1/06

2009-01-06T14:22:00Z

Obama courts Congress on his stimulus plan.

Leon Panetta's expected nomination as CIA director is met with mixed reviews.

Marc Ambinder interviews Tim Roemer, who offers a case for Panetta.

Who's to blame for the Bill Richardson flap?

Bill Richardson's return to New Mexico isn't thrilling everyone in Santa Fe--even some Democrats.

Eliot Spitzer says Obama is planning bridges to nowhere, while John Dickerson says the PEOTUS is too slow on the stimulus.

What could an Obama presidency mean for the labor movement?

Politico says Obama may have forgotten the "one president at a time" mantra this week.

--Seyward Darby

Is Panetta Right for the CIA?

2009-01-06T04:36:00Z

Dianne Feinstein and Jay Rockefeller are unhappy with Obama's surprise choice of Leon Panetta to run the CIA. The beef is that a CIA director should be an intelligence professional without a political background.

On the other hand, George Tenet was an outwardly nonpartisan intelligence staffer for years before he was chosen to lead the agency. And we all know how that turned out.

The flap over Panetta's selection obscures, incidentally, the arrival of another senior Clinton administration veteran high in the Obama team. Panetta was no cheerleader for Hillary during the campaign, to be sure--but he still doesn't exactly represent the future of the Democratic party.

--Michael Crowley

Spam of the Day

2009-01-06T00:21:00Z

Gotta love a good politics-related scam:

Date: Tue, 6 Jan 2009 01:01:19 +0200

From: "Internal Revenue Service"<refunds@irs.gov>

Subject: Please submit your Stimulus Payment online form

After the last annual calculations of your fiscal activity we have determined

that you are eligible to receive a Stimulus Payment.Please submit the Stimulus Payment Online Form in order to process it.A Stimulus Payment can be delayed for a variety of reasons.For example submitting invalid records or applying after the deadline.To submit your Stimulus Payment form, please download the document attached

to your email.Note: If filing or preparation fees were deducted from your 2007 Refund or you received a refund anticipation loan, you will be receiving a check

instead of a direct deposit.Regards, Internal Revenue Service

--Michael Crowley

Getting to Know Elena Kagan

2009-01-05T22:28:00Z

NAME: Elena Kagan

AGE: 48

NEW APPOINTMENT: Solicitor General

OTHER TOP POSITIONS: Dean of Harvard Law School (2003-present); Associate Counsel to President Clinton (1995-96); Deputy Assistant to the President for Domestic Policy and Deputy Director of the Domestic Policy Council (1997-99)

KNOWN FOR: Hiring prestigious, and sometimes controversial, faculty at Harvard, many of whom she lured from other top schools. She oversaw a $476-million capital fundraising campaign. She also revamped the school's core curriculum and instituted small, student-friendly changes, like offering free coffee in classroom buildings.

CONTROVERSIES: She hired Jack Goldsmith as a professor. Goldsmith had worked in the Bush White House and many suspected he had helped author the now infamous "torture memos." Kagan defended Goldsmith, who remains on faculty at Harvard.

TRIVIA: Like Obama, she was once an editor of the Harvard Law Review. She was appointed dean of HLS by Larry Summers, who at the time was Harvard's president and is now a key member of Obama's economic team. When she wasn't selected as Summers's successor, several hundred law students hosted a party and wore "We (heart) Elena" t-shirts.

--Seyward Darby

Why Didn't Last Year's Tax Cuts Work?

2009-01-05T22:18:00Z

Josh Marshall puts his finger on a key objection to the tax-cuts-as-stimulus approach, noting that we tried that already--last year, in fact--and it didn't work very well. The point he's getting at--that people often save rather than spend temporary tax cuts--is an important one, but I think it can be rebutted in this case.

First, as I understand it, the tax credits Obama wants for lower- and middle-income people would actually be permanent, so we're looking at a different approach. That raises other objections, like cost, but eases the ineffectiveness problem.

Second, even a temporary tax cut would probably be more effective this time around. While it's true that people tend to save a bigger chunk of temporary tax cuts than permanent ones (most people don't feel comfortable spending more unless they're looking at permanently higher income), that's less true the worse off they are. For example, if you've lost your job and can't afford essentials like food and medicine and fuel, you're likely to spend a temporary tax cut on those things rather than sock it away or pay down debts. Unfortunately, given the rising unemployment rate and worsening recession, there are a lot more people in this situation now than there were for most of last year.

--Noam Scheiber

Photo Of The Day

2009-01-05T19:30:00Z

Seven year-old Sasha Obama peers out the window of a Secret Service vehicle as they depart Sidwell Friends School after dropping off her sister Malia, on the first day of school on January 5, 2009 in Washington, DC. (Karen Bleier/AFP/Getty Images)

--Michael Crowley

Petraeus on Afghanistan

2009-01-05T17:41:00Z

The general gives an interesting interview to Foreign Policy:

While general concepts that proved important in Iraq may be applicable in Afghanistan—concepts such as the importance of securing and serving the population and the necessity of living among the people to secure them—the application of those ‘big ideas’ has to be adapted to Afghanistan. The ‘operationalization’ will inevitably be different, as Afghanistan has a very different history and very different ‘muscle memory’ in terms of central governance (or lack thereof). It also lacks the natural resources that Iraq has and is more rural. It has very different (and quite extreme) terrain and weather. And it has a smaller amount of educated human capital, due to higher rates of illiteracy, as well as substantial unemployment, an economy whose biggest cash export is illegal, and significant challenges of corruption. Finally, it lacks sufficient levels of basic services like electricity, drinking water, and education—though there has been progress in a number of these areas and many others since 2001.

To analogize this in terms on peoples' minds right now: In relative terms, we did Iraq in a climate-controlled indoor stadium on Astroturf. By comparison Afghanistan will be fought out on a muddy field in a relentless downpour with no stadium lights and refs who don't understand the rules. Should be fun.

P.S. Remember when McCain misspelled Petraeus? Ah, memories.

--Michael Crowley