Conor Clarke
Conor Clarke is the editor, with Michael Kinsley, of "Creative Capitalism," an economics blog that was recently published in book form by Simon and Schuster. He was previously a fellow at The Atlantic and an editor at the Guardian. He is also on Twitter.
Recently by Conor Clarke
Aug 25 2009, 1:20PM
Why Hasn't the Glenn Beck Boycott Hurt Fox News?
This Glenn Beck boycott is fascinating. I wrote a post for Andrew Sullivan on the substance of the matter last week, and I think it holds up okay. Let me just say that I continue to be amazed that some people think there is a free speech issue here. It seems to me that the right to free speech does not give you the right to massive corporate underwriting. Glenn Beck can defend "the white culture" and call Obama a "racist" in poverty and in private.
What I'm interested now is the economics of the boycott. Thirty-six companies have apparently signed on. And while it appears that some of them never advertised with Beck in the first place (oops), many if not most of them did. To which Fox responds:
What I'm interested now is the economics of the boycott. Thirty-six companies have apparently signed on. And while it appears that some of them never advertised with Beck in the first place (oops), many if not most of them did. To which Fox responds:
Aug 18 2009, 2:37PM
Is The Stimulus Helping Ordinary Americans?
USA Today had a new poll out yesterday that found, among other things, that only 18% of the country says the Obama administration's stimulus "has done anything to help improve their personal situation." And I thought Matt Yglesias made a good point about this: The most widely dispersed elements of the stimulus -- the almost $300 billion in tax cuts, distributed to far more than 18% of the population -- were designed to be inconspicuous. Consumers were not supposed to realize what the tax rebate portion of the stimulus was going to "improve their personal situation."
Jun 1 2009, 11:29AM
Now That The Government Owns General Motors...
As you've probably heard by now, Obama is sending General Motors to file for Chapter 11 bankruptcy. And, as you've also probably heard, the United States will become the majority shareholder of the restructured company, with 60% of the stock. Nationalizing a large car manufacturer is interesting and controversial for all kinds of reasons (is Ford, the "last American car company," now competing with America?), and I think Jon Cohn is making some good points here. But this, from Politico, is kind of odd:
The United States "has become the owner of a significant swath of Corporate America"? Really? That has about as much perspective as, um, line drawings before Brunelleschi (or something). So I thought it would be fun to come up with a graphical representation of what the "significant swath" looks like:
Even as it gets set to announce the bankruptcy of General Motors Monday, the Obama administration is struggling to set parameters on how it will act after taking a 60 percent stake in the new company that emerges -- and now that it has become the owner of a significant swath of Corporate America.
The United States "has become the owner of a significant swath of Corporate America"? Really? That has about as much perspective as, um, line drawings before Brunelleschi (or something). So I thought it would be fun to come up with a graphical representation of what the "significant swath" looks like:
The section of the chart that appears in bright, bumblebee yellow is the percentage of publicly traded American companies owned by the United States.* I don't see much bumblebee yellow. What I do see is that Microsoft Excel feels the need to portray the percentage of American companies owned by the government as an irrational exponential number. That's 5.07e^-02, or %0.0507 of American companies that are owned by the United States. (When I ask Excel to display this breakdown in real numbers without the exponential it just becomes "100%" and "0%.")
In the coming week there will be much debate over what it means for the United States to be the majority shareholder of a major car company. Much of that debate will be serious and interesting. There will also be a lot of talk about how the United States is a socialist country in which the government has nationalized half of what was formerly known as private industry. That debate will be a lot less interesting.
----
(*I should have a little note on methodology here: I took the value of all publicly traded companies in the United States, which is available in the CIA factbook. The last data available is from December 31 2007, so I adjusted that value based on the percentage declines of a few major stock indices. I took that value -- about $12.5 trillion -- and subtracted the publicly traded values of the companies the United States owns. I used AIG, General Motors, Fannie and Freddie. I estimated values for a couple of other companies -- Amtrak, the Corporation for Public Broadcasting, the TVA, etc -- and threw them into the mix, too. A little algebra and presto, we have the chart.
If you wanted to be very generous you could use figures other than the publicly traded values for GM and AIG -- the Obama administration certainly thinks GM is worth more than what it's trading for. If you wanted to be even more generous you could add a couple of the big banks that the government is implicitly guaranteeing. I don't think that will substantially change the picture above, but email me or post a comment with any methodological suggestions.)
In the coming week there will be much debate over what it means for the United States to be the majority shareholder of a major car company. Much of that debate will be serious and interesting. There will also be a lot of talk about how the United States is a socialist country in which the government has nationalized half of what was formerly known as private industry. That debate will be a lot less interesting.
----
(*I should have a little note on methodology here: I took the value of all publicly traded companies in the United States, which is available in the CIA factbook. The last data available is from December 31 2007, so I adjusted that value based on the percentage declines of a few major stock indices. I took that value -- about $12.5 trillion -- and subtracted the publicly traded values of the companies the United States owns. I used AIG, General Motors, Fannie and Freddie. I estimated values for a couple of other companies -- Amtrak, the Corporation for Public Broadcasting, the TVA, etc -- and threw them into the mix, too. A little algebra and presto, we have the chart.
If you wanted to be very generous you could use figures other than the publicly traded values for GM and AIG -- the Obama administration certainly thinks GM is worth more than what it's trading for. If you wanted to be even more generous you could add a couple of the big banks that the government is implicitly guaranteeing. I don't think that will substantially change the picture above, but email me or post a comment with any methodological suggestions.)
May 27 2009, 3:02PM
Does The Right Need a Center for American Progress?
Douglas Holtz-Eakin, the McCain campaign's top economics adviser and a former head of the Congressional Budget Office, has got it into his head that what conservatives need is a new think tank:
That diagnosis is pretty appealing to me, and I would have thought it would be appealing to liberals like Matt Yglesias and Paul Krugman. But it isn't. Why?
"I think there is now pretty widespread recognition that the Republican Party needs to become demographically broader, more welcoming of different ideas," said Holtz-Eakin, who ran the Congressional Budget Office from 2003 to 2005. "And it's time to think strategically about how to appeal more broadly outside the South."
That diagnosis is pretty appealing to me, and I would have thought it would be appealing to liberals like Matt Yglesias and Paul Krugman. But it isn't. Why?
May 13 2009, 9:41AM
AIG: We Don't Need Your Help (For Now)
Does anyone still care about AIG? Probably not. But on the offchance
someone out there is still sharpening a pitchfork: CEO Edward Liddy
will be back on the hill later today to testify before the House
committee on Oversight and Government Reform. I've put his full
testimony is at the end of this post.
It's been just about universally reported that Liddy will say AIG doesn't need any more government money (AP, AIG's Liddy: We don't need more government money; ABC, CEO Liddy: No More Bailouts Needed For AIG). That's kind of true, but comes with a pretty big caveat. From Liddy:
It's been just about universally reported that Liddy will say AIG doesn't need any more government money (AP, AIG's Liddy: We don't need more government money; ABC, CEO Liddy: No More Bailouts Needed For AIG). That's kind of true, but comes with a pretty big caveat. From Liddy:
May 12 2009, 12:12PM
Obama To Cut Taxes For the Rich
Nice little scoop from Bob Williams of the Tax Policy Center, who wades into the weeds of the Obama administration's tax plans and returns alive, bearing news that the administration actually cutting taxes for some high-income earners:
The rate hike we've known about for a while. But the change in threshold is, I believe, new. Of course, Williams quite sensibly complains that changing the threshold (1) makes the original proposal less progressive and (2) will result in raising less revenue. All sensible. But it will surely help insulate the president from the criticism that he is only using the tax code to plunder.
The administration's tax proposals call for hiking the top two tax rates from 33 and 35 percent to 36 and 39.6 percent and raising the threshold to get into the new 36 percent bracket. For couples, that bracket would start at $231,300 in 2009, up from $208,850; the starting point for singles would climb from $171,550 to $190,650.
The rate hike we've known about for a while. But the change in threshold is, I believe, new. Of course, Williams quite sensibly complains that changing the threshold (1) makes the original proposal less progressive and (2) will result in raising less revenue. All sensible. But it will surely help insulate the president from the criticism that he is only using the tax code to plunder.
May 12 2009, 10:27AM
Philadelphia Inquirer Hires John Yoo As Columnist
Yoo has written columns for the Inquirer on a freelance basis, but the arrangement now seems to have become more formal.
May 11 2009, 10:44AM
Don't Hold Your Breath For Corporate Tax Reform
Later this morning the White House is releasing new details on the budget, which will include new details on its plan to reform the manner in which foreign corporate income is taxed. I got the sense last week that the proposed changes were party of a larger scheme to overhaul the corporate tax. Deputy National Economics Council Director Jason Furman wrote that the "administration's plan is intended as a major, first step" in addressing problems with the tax, and Obama himself said these changes were a "down payment on the larger tax reform we need" to make our tax system fairer and more efficient.
May 7 2009, 12:37PM
Why Peter Orszag Reminds Me of John McCain
I just got off a conference call with Budget Director Peter Orszag in which he talked about the newly released details on the Obama budget. Most of what was under discussion was the $17 billion in new cuts, which has been gently mocked as a drop in the $3.4 trillion ocean of a budget. Orszag's defense was this: "We can no longer afford broken window budgeting." Which meant: Even if the program cuts are small, perpetuating small, crappy programs sends the wrong signal -- namely, the signal that we are willing to perpetuate small, crappy programs.
May 7 2009, 10:43AM
Treasury To Banks: "Please Fire Everybody"
This statement from the Federal Reserve seems to have the most stress-test preview details. The full, non-leaked results will be posted at 5pm tonight. The banks that needs more capital will have until June 8 to come up with plan, and until November 9 to implement that plan. But I thought this paragraph, tucked into the middle of the release, had a charmingly euphemistic way of suggesting that the banks might also consider firing a bunch of their managers:
Apr 28 2009, 8:24AM
The Stimulus Spending Isn't Fast Enough
The administration's website for tracking the stimulus spending, recovery.gov, has started to fill up with loads of useful information that is worth checking out. In particular, take a look at the spending updates. Bob Williams of the wonderful TaxVox blog says
the spending has "gotten off to an encouraging start" and we should
"watch to see how the game plays out." I agree with the latter part:
It's too early to judge the stimulus. But I really don't see what's so
encouraging about the information the government has released. If
anything, it's evidence that the government had better spend
faster!
Apr 27 2009, 1:04PM
Geithner's Calendar, By The Numbers
The New York Times was kind to post a big PDF
of Tim Geithner's schedule from when he was head of the Federal Reserve
Bank of New York, and I spent most of the morning wandering through it
for items of interest. I've put some raw quantitative data -- who did
he meet with, and how often? -- after the jump.
But the most interesting detail, in a way, is the dog that didn't bark: I can't find any mentions of Barack Obama, or Joe Biden, or transition head John Podesta in the entire schedule. There are a few scant references to meetings at the transition office -- about a half dozen in December and January -- but as far as I can tell there is no contact with the campaign or the president-elect before that, and no specific mentions of the president-elect at all. (The calendar runs from January 2, 2007 to January 11, 2009.) And since Geithner's November 4 schedule is packed from 7.30am to 7.15pm, I doubt the man had time to vote.
But the most interesting detail, in a way, is the dog that didn't bark: I can't find any mentions of Barack Obama, or Joe Biden, or transition head John Podesta in the entire schedule. There are a few scant references to meetings at the transition office -- about a half dozen in December and January -- but as far as I can tell there is no contact with the campaign or the president-elect before that, and no specific mentions of the president-elect at all. (The calendar runs from January 2, 2007 to January 11, 2009.) And since Geithner's November 4 schedule is packed from 7.30am to 7.15pm, I doubt the man had time to vote.
Apr 15 2009, 3:45PM
Truth And The Tax Day Tea Parties
About these tax-day tea parties: It's obviously fine if citizens want to exercise their first amendment rights and hold protests. Admirable, even. And if these protests are underwritten by corporate backers or supported by various media organizations (there seems to be some debate about this), that's OK too. First Amendment rights all round! But what I don't understand is why these rallies are being held to protest, among other things, "higher taxes." (Higher spending is another matter.) There is a widespread perception that Obama is raising taxes willy nilly, so maybe this is worth clearing up. As far as I know, there are five individual tax provisions in the
president's budget that could be described as a tax increase. So yes,
there will be some higher taxes. What's confusing to me is that the
vast majority of these taxes affect only those households with an
annual income of greater than $250,000. And the vast majority of these
increases would have happened anyway if the Bush tax cuts were allowed
to expire on schedule.
Apr 10 2009, 12:43PM
Plenty of New State Taxes
The Wall Street Journal reports that at least ten states are planning major sales or income tax hikes to close budget gaps: Arizona, Connecticut, Delaware, Illinois, Massachusetts, Minnesota, New Jersey, Oregon, Washington and Wisconsin.
The most interesting of these, I think, is Arizona -- which, in addition being one of the states hardest hit by the recession (its budget gap this year is $3.4 billion) has both a Republican governor and a Republican legislature. They are now facing off over $1 billion in proposed tax increases.
This happens because states, unlike the federal government, cannot deficit spend. And I would bet that as state tax revenues continue to tumble there will be more state-level Republicans who are willing to stomach tax increases. The breakdown of state budget shortfalls looks pretty bipartisan:
The most interesting of these, I think, is Arizona -- which, in addition being one of the states hardest hit by the recession (its budget gap this year is $3.4 billion) has both a Republican governor and a Republican legislature. They are now facing off over $1 billion in proposed tax increases.
This happens because states, unlike the federal government, cannot deficit spend. And I would bet that as state tax revenues continue to tumble there will be more state-level Republicans who are willing to stomach tax increases. The breakdown of state budget shortfalls looks pretty bipartisan:
Apr 9 2009, 1:22PM
The Other Warren Commission Report
The Congressional Oversight Panel, led by Elizabeth Warren, released its six-month TARP report Tuesday evening (PDF). If documents could wield pitchforks, this one wouldn't. But it does contain one little sliver of populist outrage. The report judges TARP by four criteria -- transparency, assertiveness, accountability and clarity. The current administration gets "mixed" results. (And, based on Warren's video introduction, Hank Paulson gets points only for "assertiveness." Which seems fitting.) And the report's reading on accountability seems especially harsh. It says that any bank plan must include:
Willingness to hold management accountable and to prevent excessive risk-taking in the future; also, to build public trust that any taxpayer support is designed to protect the system by replacing -- and, in cases of criminal conduct, prosecuting -- failed managers. Accountability for managers appears critical both in terms of public support and in terms of facilitating an accurate assessment of the financial status of sick financial institutions.This point gets made several times in the document, and it's hard to interpret it as something other than than a rebuke of the administration for not shooing off guys like Ken Lewis at BofA. (And if there's any illusion that Ken Lewis needs shooing off, here's what he told Fox Business earlier: "I plan to be in the job because I want to get us through this. I want to be on the other side of it to take advantage of the upside and no bank in the world will be better positioned than we will across all the products and geographies.")
Apr 6 2009, 5:56PM
Quote of the Day: Bachmann on the Edward M. Kennedy Serve America Act
The real concern is that there are provisions for what I would call reeducation camps for young people.
Multimedia
Apr 6 2009, 5:51PM
Spitzer: No Excuses
Former New York Gov. Eliot Spitzer (D) appeared on NBC's Today show Monday morning and told host Matt Lauer that there are "no excuses" for his prostitution scandal. "I have tried to address these gremlins and confront them," he said.
Apr 1 2009, 4:51PM
Where Ryan's Crazy Graph Came From
I poked fun at Paul Ryan's 100-year federal spending graph in an earlier post, but I wanted to do a follow-up on exactly where this nutty figure comes from. The same graph appears in the full alternative budget, so it's worth figuring out. Here's the alternate version of the same graph:
Apr 1 2009, 2:10PM
Paul Ryan's "Glimpse of Our Future"
I'm still reading the Republicans' alternative budget (pdf), but I did want to highlight this odd graph from Republican Paul Ryan's Wall Street Journal op-ed on the subject:
Mar 24 2009, 4:51PM
Can You Cheat Geithner's Bank Plan?
I indicated earlier that there's been some debate about this question. Karl Denninger wrote up a proposal for how gaming the system might work, and Tyler Cowen seconded it. How would this work? Denninger's plan has three steps:
But this probably won't work. The problem lies in step one: You can't bid on your own assets in the manner Denninger describes. The Treasury guidlines (pdf) aren't totally clear on this point, in part because the sentence restricting bidding on one's own assets looks like it as written by William Faulkner. But here is the restriction:
--I become a "bidder" and "bid" on my own assets at [an inflated price]
--I am providing 5 or 10% of the money. The rest is covered by Treasury, The Fed and the FDIC via guaranteed bond issuance.
--The loan, ex my contribution, is non-recourse. That is, I can lose 5 or 10% of the total portfolio purchased, but nothing more.
But this probably won't work. The problem lies in step one: You can't bid on your own assets in the manner Denninger describes. The Treasury guidlines (pdf) aren't totally clear on this point, in part because the sentence restricting bidding on one's own assets looks like it as written by William Faulkner. But here is the restriction:
Mar 23 2009, 5:40PM
Tim Geithner's "Buy America"?
Treasury Secretary Tim Geithner at last month's G7 meeting:
From the fund manager application (pdf) for Treasury's new public-private investment fund:
All countries need to sustain a commitment to open trade and investment policies which are essential to economic growth and prosperity.
From the fund manager application (pdf) for Treasury's new public-private investment fund:
Fund Managers will be pre-qualified based upon criteria that are anticipated to include [...] Headquarters in the United States.
Mar 17 2009, 4:43PM
Laurence Tribe: Is Taxing AIG Legal?
I suggested last night
that Carolyn Maloney's idea to introduce an "AIG Taxpayer Protection
Act" -- a bill that would tax AIG bonuses at 100% -- would be
unconstitutional, and Steve Waldman knocked me around
a bit. (You can decide for yourself whether a bill called the "AIG
Taxpayer Protection Act" would be sufficiently general to pass
constitutional muster, and whether senators who suggest that AIG's
employees commit hara-kari have punitive intentions in mind.) But the
general question is much more complex than I originally thought. And
because Chris Dodd has now embraced the idea
of a narrowly targeted tax, I think it's worth asking the more general
question: Is it possible to design a retrospective and narrowly focused
tax that is constitutional?
I'm not a lawyer, so I asked Laurence Tribe of Harvard -- who, in addition to being one of President Obama's law professors, also argued one of the most important Bill of Attainder cases at the Appellate level: SBC Commnications v. FCC. (As far as I know the Supreme Court has not considered the attainder issue in reference to economic regulation.) I will have more to say about this issue later, but for now I've posted Professor Tribe's response to my inquiry, which is after the jump. I've also posted a short and helpful Harvard Law Note from Professor Thomas Lee of Fordham, which helped me clarify some of the attainder issues.
I'm not a lawyer, so I asked Laurence Tribe of Harvard -- who, in addition to being one of President Obama's law professors, also argued one of the most important Bill of Attainder cases at the Appellate level: SBC Commnications v. FCC. (As far as I know the Supreme Court has not considered the attainder issue in reference to economic regulation.) I will have more to say about this issue later, but for now I've posted Professor Tribe's response to my inquiry, which is after the jump. I've also posted a short and helpful Harvard Law Note from Professor Thomas Lee of Fordham, which helped me clarify some of the attainder issues.
Mar 17 2009, 8:13AM
We Already Restricted AIG's Compensation
Elise had an interesting observation
in the comments yesterday: Congress has restricted the compensation of
AIG once already, since compensation limits for any recipient of TARP
funds were inserted into the stimulus bill, and AIG has received TARP funds.
As far as I know, AIG has followed the letter of the compensation requirements. But will the administration follow them? The compensation restrictions preclude TARP recipients from "paying or accruing any bonus, retention award, or incentive compensation during the period in which any obligation arising from financial assistance provided under the TARP remains outstanding." But the restrictions also say that this clause
As far as I know, AIG has followed the letter of the compensation requirements. But will the administration follow them? The compensation restrictions preclude TARP recipients from "paying or accruing any bonus, retention award, or incentive compensation during the period in which any obligation arising from financial assistance provided under the TARP remains outstanding." But the restrictions also say that this clause
shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary.My understanding is that AIG contracts in question were all executed before February 11. No one in the administration is claiming they aren't valid (even if the administration is claiming the contracts are an outrage). I suppose that doesn't prevent Geithner or a Geithner-designee from suddenly claiming they aren't valid in the future, but that would be pretty mendacious. At the very least this is evidence that Congress intended to avoid retrospective tinkering with compensation.
Mar 13 2009, 5:11PM
Accountability for State Use of Stimulus Funds, ctd
I worried about it this morning. Now one White House official tells the Atlantic:
This is obviously possible for a huge amount of grant money (though I'd like some more details), but I'm not sure it's the same as what Obama and Biden were talking about yesterday. POTUS and VPOTUS implied that there would be retroactive consequences for the misuse of funds -- that is, once the money had been handed out, the administration would hold state and local governments up to a high bar on its use. But this answer implies that a bar will only apply to how the money is handed out.
The rules are on how federal money is spent by the states. Put another way, the rules concern what sort of state and local projects we will fund under the Recovery Act. The enforcement is that we won't fund projects that don't meet the standard.
This is obviously possible for a huge amount of grant money (though I'd like some more details), but I'm not sure it's the same as what Obama and Biden were talking about yesterday. POTUS and VPOTUS implied that there would be retroactive consequences for the misuse of funds -- that is, once the money had been handed out, the administration would hold state and local governments up to a high bar on its use. But this answer implies that a bar will only apply to how the money is handed out.
Mar 13 2009, 3:30PM
Summers Defends Geithner, Warns Against "Illusion of Specificity" and "Rush to Action"
I wrote up some notes about Larry Summers' Brookings speech over at the Business Channel, but I wanted to highlight his comments about Timothy Geithner. He was asked the first question by Martin Neil Baily, who pursued two concerns: Shouldn't solving the problems in finance sector be the administration's top priority? And is there some hesitation about coming up with a plan for action? Summers first responded by noting that it's possible to work on more than one problem at the same time. But then he went on to say the following about Geithner (continued after the jump):
I think Secretary Geithner has handled this in a difficult and courageous way. The easy thing to do would be -- and anybody who's worked in Washington knows how to do it -- would be to lay out a nine-point plan with the illusion of specificity and a sense of certainty about what the future would bring. We actually saw this -- it's so easy that we actually saw half a dozen of them -- from the previous administration. It's just that they were different each month.
Mar 13 2009, 7:52AM
Obama and Biden Will Shame You
Obama and Biden both gave stern warnings yesterday about misuse of stimulus funds. "If we see money being misspent, we're going to put a stop to it," Obama told a gathering of state officials at the White House. How? Obama says "we will call it out and we will publicize it." Biden, meanwhile, scolded: "If we don't get this right, folks, this is the end of the opportunity to convince Congress that anything should go to the states."
If this counts as accountability, color me unimpressed. "Accountability" surely implies the likelihood or possibility of real consequences. The governor of Arkansas is accountable to the people of Arkansas. The managers of a company are accountable to the shareholders and the board. (Or at least to Carl Icahn.) But the managers of Pfizer aren't accountable to the shareholders of Microsoft, and Bobby Jindal isn't accountable to the moral indignation of Barack Obama. So when Obama and Biden start talking about holding states accountable for their stimulus spending, I'm left a little confused about what they mean.
If this counts as accountability, color me unimpressed. "Accountability" surely implies the likelihood or possibility of real consequences. The governor of Arkansas is accountable to the people of Arkansas. The managers of a company are accountable to the shareholders and the board. (Or at least to Carl Icahn.) But the managers of Pfizer aren't accountable to the shareholders of Microsoft, and Bobby Jindal isn't accountable to the moral indignation of Barack Obama. So when Obama and Biden start talking about holding states accountable for their stimulus spending, I'm left a little confused about what they mean.
Mar 12 2009, 11:21AM
The Dire State of the Lobbying Industry
If you are capable of summoning an ounce of sympathy for K Street lobbyists, this is the moment to do so. According to the Wall Street Journal, the number of active lobbyists declined by 2% in 2008, to 15,900.
Some portion of this decline should not come as a surprise. With charming understatement, the Journal notes that "Two financial-services lobbying titans, Fannie Mae and Freddie Mac, saw their lobbying offices disbanded by the federal government." (It does seem slightly redundant to lobby the federal government when you are the federal government, doesn't it?) But the Journal nonetheless assures readers that lobbyists "in every major sector" have seen cutbacks.
Still, there is good reason to fight back the tears over the state of lobbying, if you can.
Some portion of this decline should not come as a surprise. With charming understatement, the Journal notes that "Two financial-services lobbying titans, Fannie Mae and Freddie Mac, saw their lobbying offices disbanded by the federal government." (It does seem slightly redundant to lobby the federal government when you are the federal government, doesn't it?) But the Journal nonetheless assures readers that lobbyists "in every major sector" have seen cutbacks.
Still, there is good reason to fight back the tears over the state of lobbying, if you can.
Mar 11 2009, 2:50PM
Karma (and Charles Freeman) on the Bus
On Monday I recorded an episode of blogging heads with Brian Beutler on the subject of
Charles Freeman. I took the position that, since Freeman had managed to
become Chairman of the National Intelligence Council, AIPAC's ability
to crush its critics must be exaggerated. Of course, a couple of hours
after after the episode appeared, Freeman went and resigned. The timing
could not have been worse.
I now know that Karma does not work in subtle ways. A few stops after I got on the 42 bus this morning, Charles Freeman plunked down across from me. He was reading an old paperback copy of Colleen McCullough's The Thorn Birds, and looking more like a high school English teacher than an existential threat to the state of Israel.
I introduced myself and told him I was sorry that he resigned. He recoiled only slightly when I mentioned I worked for the Atlantic, then smiled broadly. "Shit happens." He added a little wistfully: "I wasn't so eager to go back to the government, anyway."
I now know that Karma does not work in subtle ways. A few stops after I got on the 42 bus this morning, Charles Freeman plunked down across from me. He was reading an old paperback copy of Colleen McCullough's The Thorn Birds, and looking more like a high school English teacher than an existential threat to the state of Israel.
I introduced myself and told him I was sorry that he resigned. He recoiled only slightly when I mentioned I worked for the Atlantic, then smiled broadly. "Shit happens." He added a little wistfully: "I wasn't so eager to go back to the government, anyway."
Mar 6 2009, 9:27AM
Treasury Takes Its Time
The fact that there are still 17 unfilled spots at Treasury -- including the top deputy position -- is not great. But the fact that Robert Gibbs chalks this up to a "very rigorous process" of vetting is also a bit odd. Or at least it assumes we have the memory span of a chipmunk. When Timothy Geithner's confirmation hit the rocks, the argument you heard over and over again was that we couldn't waste time on nettlesome tax questions because the nation's economy was in urgent peril. At Geithner's confirmation, for instance, Obama said:
Can we waste days now?
Tim's work will begin at once. We can't waste a day.
Can we waste days now?
Mar 2 2009, 7:10PM
Nice work, if you can get it
The publishing industry has suffered a lot in this recession, but it has enough life to extend a six-figure book contract Rod Blagojevich. The deal is with an independent publisher called Phoenix, which seems like a nice metaphor for what Blago probably wants to be.
"The governor chose to go with a large independent company because he wanted to tell his story without any restrictions over content that might've come with a major publishing house," says the former governor's publicist.
"The governor chose to go with a large independent company because he wanted to tell his story without any restrictions over content that might've come with a major publishing house," says the former governor's publicist.
Feb 26 2009, 10:34PM
Joe the Betrayer?
I see Joe the Plumber has some harsh words for his one-time sponsor, John McCain:
More wisdom from Wurzelbacher here.
"He doesn't care about what's best for America," Wurzelbacher said. "He only cares about what's best for John McCain."
More wisdom from Wurzelbacher here.
Feb 26 2009, 12:16PM
Budget ironies for Tim Geithner
From the administration's summary (pdf):
The scope, complexity, and sheer magnitude of the international financial system pose significant enforcement challenges for the IRS in carrying out its tax administration responsibilities. The 2010 Budget includes funding for a robust portfolio of IRS international tax compliance initiatives...Significant enforcement challenges indeed!
Feb 25 2009, 7:04AM
America invented everything
Two of Obama's claims from the SOTU:
and
After a period of prolonged study and meditation (ie, I consulted Wikipedia for 45 minutes after the speech), I have concluded that these claims are questionable at best and false at worst. Not quite sixteen words, we-invaded-Iraq-on-the-strength-of-this-information false. But probably false. Here is my evidence:
An English scientist by the name of Willoughby Smith first discovered that selenium was photoconductive, and a French scientist named Alexandre-Edmond Becquerel discovered the photovoltaic effect. That was the basis of "solar technology." That, and the English Chemist Edward Weston apparently holds the first American patent for a solar cell.
The history of automobiles is more complicated, but Wikipedia has the rundown here. In a nutshell: The British, French and Russians (!) had all developed some form of steam-powered automobile in the 18th century. (The British were apparently doing pretty well until something called the Locomotive Act of 1865 came along: It required that any motorized vehicle be preceded by a man waving a red flag. Talk about stifling innovation.) Anyway, here's the kicker: "It is generally acknowledged the first automobiles with gasoline-powered internal combustion engines were completed almost simultaneously by several German inventors working independently." German inventors, it must be observed, are not American.
So who cares? Well, I'm a little bit irked by Obama's claim for two reasons. First, it's gratuitous, unappealing boosterism. Yes, America is great and its people are highly inventive. God bless America! But it just happens to be true that, in the case of solar technology and the automobile, the Europeans got there first. Claiming otherwise is both desperate and unnecessary, like copying homework in kindergarten. We should learn to settle for the atom bomb.
Second, as an argument for why we should we should continue to support certain technologies, Obama's point is laughable. The value of technical innovation isn't nationally contingent. In fact, one of the best things about technical innovation is that it's so easy to steal: a great invention in Luxembourg is still a great invention in Cleveland. We should be investing in the technologies that are most useful or with which we have the most comparative advantage, not the ones that happen to come out Cleveland. Even if Cleveland is a great city with highly inventive people.
We invented solar technology, but we've fallen behind countries like Germany and Japan in producing it.
and
I believe the nation that invented the automobile cannot walk away from it.
After a period of prolonged study and meditation (ie, I consulted Wikipedia for 45 minutes after the speech), I have concluded that these claims are questionable at best and false at worst. Not quite sixteen words, we-invaded-Iraq-on-the-strength-of-this-information false. But probably false. Here is my evidence:
An English scientist by the name of Willoughby Smith first discovered that selenium was photoconductive, and a French scientist named Alexandre-Edmond Becquerel discovered the photovoltaic effect. That was the basis of "solar technology." That, and the English Chemist Edward Weston apparently holds the first American patent for a solar cell.
The history of automobiles is more complicated, but Wikipedia has the rundown here. In a nutshell: The British, French and Russians (!) had all developed some form of steam-powered automobile in the 18th century. (The British were apparently doing pretty well until something called the Locomotive Act of 1865 came along: It required that any motorized vehicle be preceded by a man waving a red flag. Talk about stifling innovation.) Anyway, here's the kicker: "It is generally acknowledged the first automobiles with gasoline-powered internal combustion engines were completed almost simultaneously by several German inventors working independently." German inventors, it must be observed, are not American.
So who cares? Well, I'm a little bit irked by Obama's claim for two reasons. First, it's gratuitous, unappealing boosterism. Yes, America is great and its people are highly inventive. God bless America! But it just happens to be true that, in the case of solar technology and the automobile, the Europeans got there first. Claiming otherwise is both desperate and unnecessary, like copying homework in kindergarten. We should learn to settle for the atom bomb.
Second, as an argument for why we should we should continue to support certain technologies, Obama's point is laughable. The value of technical innovation isn't nationally contingent. In fact, one of the best things about technical innovation is that it's so easy to steal: a great invention in Luxembourg is still a great invention in Cleveland. We should be investing in the technologies that are most useful or with which we have the most comparative advantage, not the ones that happen to come out Cleveland. Even if Cleveland is a great city with highly inventive people.
Feb 19 2009, 5:02PM
The Cost of the Reagan Centennial
Eager for stimulus news, I have tried to obsessively follow the release of Congressional Budget Office cost estimates. And I see that the CBO released a bunch of new estimates last night, though they had nothing to do with the stimulus package. There was, for instance, a cost estimate of House concurrent resolution 37 (pdf) -- a resolution "authorizing the use of the Capitol grounds for the Greater Washington Soap Box Derby." The CBO estimates that this would "result in no significant cost to the federal government." Who knew?
One cost estimate that I thought was interesting, however, was for H.R. 131 (pdf) -- which would would "establish a commission to plan, develop, and coordinate the commemoration of the 100th anniversary of the birth of former President Ronald Reagan on February 6, 2011." Setting up this commission will apparently cost the federal government $1 million. How would Ronald Reagan feel about that?
One cost estimate that I thought was interesting, however, was for H.R. 131 (pdf) -- which would would "establish a commission to plan, develop, and coordinate the commemoration of the 100th anniversary of the birth of former President Ronald Reagan on February 6, 2011." Setting up this commission will apparently cost the federal government $1 million. How would Ronald Reagan feel about that?
Feb 17 2009, 1:06PM
Recovery.Gov: It's Alive!
I see that recovery.gov -- the administration's website for tracking stimulus dollars -- has gone live. From the website's welcome note:
Recovery.gov is a website that lets you, the taxpayer, figure out where the money from the American Recovery and Reinvestment Act is going. There are going to be a few different ways to search for information. The money is being distributed by Federal agencies, and soon you'll be able to see where it's going -- to which states, to which congressional districts, even to which Federal contractors. As soon as we are able to, we'll display that information visually in maps, charts, and graphics.There is an interactive map with state-by-state estimated job effects and a chart on the areas to which the funds are allocated.
Feb 13 2009, 8:17PM
Stimulus Meets Obama's Standard
A few weeks ago the Obama administration released a stimulus metrics report
(pdf) promising that 75 percent of the stimulus would pay out in the
first 18 months. Fiscal stimulus, said team Obama, should to be timely.
And they received a bit of a drubbing for saying so: early reports
suggested that the House version of the bill would pay out at a tardier
rate than promised.
Well, earlier today the CBO released its cost estimate (sorry, another pdf) of the conference version of the bill. According to the CBO, the deficit will increase by $584.3 billion in the first 18 months, out of a total $787.2 billion deficit increase. By my math that's a 74.2251 percent payout rate. So unless someone wants to be awfully punctilious about the missing .7749 percent, I think it's safe to say that the stimulus bill meets the standard of timeliness that Obama set for himself.
On the other hand, if you substract the silly $70 billion for the AMT patch -- and I do want to be annoyingly punctilious about that -- the payout rate drops a couple of percentage points. Still, it's not bad.
Well, earlier today the CBO released its cost estimate (sorry, another pdf) of the conference version of the bill. According to the CBO, the deficit will increase by $584.3 billion in the first 18 months, out of a total $787.2 billion deficit increase. By my math that's a 74.2251 percent payout rate. So unless someone wants to be awfully punctilious about the missing .7749 percent, I think it's safe to say that the stimulus bill meets the standard of timeliness that Obama set for himself.
On the other hand, if you substract the silly $70 billion for the AMT patch -- and I do want to be annoyingly punctilious about that -- the payout rate drops a couple of percentage points. Still, it's not bad.
Feb 11 2009, 11:25AM
Bank CEOs In The House
The House Committee on Financial Services is now holding its hearing
on Tarp Accountability. Eight CEOs of the biggest banks that received
TARP money have been called to testify, including Lloyd Blankfein of
Goldman, Jamie Dimon of JPMorgan and Ken Lewis of Bank of America. For
the CEOs it is a chance to go an an "image offensive"
and make the case that their institutions have been lending far more in
recent months than they would have in absence of TARP funds. For
Committee Chair Barney Frank it is an opportunity to call the bankers
to the carpet for doing tacky things with taxpayer dollars.
Feb 9 2009, 4:32PM
"The Overlap is 90-plus Percent"
That was Larry Summers' argument for why we shouldn't worry too much about the differences between the House and Senate stimulus bills. But it's worth noting that the psychological threshold of 90 percent doesn't apply in lots of other situations. Observing that "92.4 percent of the of the labor force was employed in January" will reassure no one. And the fact that there is 90 percent overlap between the House and Senate bills shouldn't be reassuring either.
Feb 6 2009, 12:58PM
The return of William Donaldson
A short while ago Barack Obama signed an executive order creating an Economic Recovery Advisory Board, staffed by outside experts and headed by former Fed Chairman Paul Volcker. According to the White House, "The board will bring a diverse set of perspectives and voices from different parts of the country and different sectors of the economy to bear in the formulation and evaluation of economic policy":
The members will include former Securities and Exchange Commission Chairman William Donaldson, former Fed Vice Chairman Roger Ferguson, UBS Americas Chairman and Chief Executive Officer Robert Wolf, General Electric Co. Chief Executive Officer Jeffrey Immelt and Service Employees International Union Secretary-Treasurer Anna Burger, according to an administration official.
Feb 3 2009, 8:39AM
The Senate's stimulus and the CBO
The Senate's version of the stimulus bill is out and posted here. The finance committee's summary is here. And the CBO's scoring of the bill, via their director's blog, is here.
And here's a mystery about the bill: There has been some controversy in the past couple of weeks over how quickly the money in the stimulus bill will actually hit the economy. The administration has said it wants to ensure that 75 percent of the final bill's spending and tax-cut provisions are paid out in the rest of fiscal year 2009 and in fiscal year 2010. But the CBO's scoring of the House version found that it would only pay out 65 percent during that time period.
And here's a mystery about the bill: There has been some controversy in the past couple of weeks over how quickly the money in the stimulus bill will actually hit the economy. The administration has said it wants to ensure that 75 percent of the final bill's spending and tax-cut provisions are paid out in the rest of fiscal year 2009 and in fiscal year 2010. But the CBO's scoring of the House version found that it would only pay out 65 percent during that time period.
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