Yes, Voters Can Be Wrong

It's a quick and seemingly obvious insight, but it's one that I'm sure you won't see much of over the next few months.

Yes, the voters can be wrong about something. Obviously individuals can disagree with the electorate on normative issues, for example. Anybody who agrees with the majority on everything is a tool who hasn't thought through the issues properly. You're going to disagree, and it's RIGHT to disagree. Non-voters disagree with voters, for example; they tend to be more satisfied with America and its government, as well as being more progressive. (Shame that they won't vote, or America would be a very different place.)

But that's not the point. The point is that the voters can be wrong on the facts; and to the extent that they're wrong on the facts, they can make the wrong decision for their value set. If they value a lower budget deficit, for example, but they think that deficits are going up instead of going down, guess what? They're likely to make the wrong decision. Not out of malice or spite, but simply because they don't know what the facts are.

That's literally what happened to Clinton. He reduced deficits and nobody realized it. They thought deficits had gone up, when they had plummeted. Anybody who punished him for rising deficits made the wrong decision. They should have rewarded him, but they just didn't know.

The same thing has also happened during this cycle for Obama. He passed tax cuts that nobody knew about and nobody noticed, despite being substantial. He was punished by an electorate who were listening to hucksters whinging about how Obama raised their taxes. They were wrong. They didn't know.

It is those hucksters that are the problem, too. Voters don't exist in a vacuum. They have to get their information SOMEWHERE. Because a lot of voters don't have the time, inclination or skills to pore over quantitative statistical data, or even over scholarly research, they have to rely on someone else to do it for them. And since they aren't necessarily equipped to distinguish between interpretations based on facts vs. those based on convenient fictions, they may well gravitate to hucksters spouting superficially-convincing-but-ultimately-factless bullshit.

Hence Beck and Limbaugh.

If voters are convinced by these hucksters, or by corporate advertising, or by email chain letters, or by "that guy at the water cooler" that a bit of nonsense is true, they'll develop the wrong impression on an issue based on that nonsense. If all those bits of nonsense add up to a great LOAD of nonsense, then many of their impressions will be flawed: not due to evil or naive values, but because of the information they're applying those values upon.

And if someone is a great big ball of false impressions and flawed conclusions, then why wouldn't they make "the wrong decision"? If they knew the whole story, they might believe differently and vote different. They'd change their policies, change their parties, and maybe even change their donation patterns. But they don't. So they're wrong.

Can that happen across an entire electorate? Lincoln's old saying is that "you can't fool all of the people, all of the time". But you don't need to. You just need to fool enough of the people, enough of the time. You just need to give them the wrong impression, based on a soup of false, misleading, misinterpreted or selectively omitted information. You laud their values while you provide that false impression, to build a connection between you; and then when they make the wrong conclusion, you support it with all your might. If you're good enough, with a big enough bully pulpit (like, say, an entire TV network and billions in advertising dollars), you can probably get away with it.

And then, afterwards, you'll have an electorate that will have voted against their interests and values—not because either of those changed, but because they weren't given the proper information to use them to make the decision that they WOULD have made. Irony as political philosophy.

So, yeah, they can be wrong. They shouldn't be. But they can be. And, in this case, I honestly do believe that they are.

Dem-Leaning Indies Stayed Home

Greg Sargent reinforces something that I'd seen yesterday in the CBS exit polls: The makeup of the electorate may have changed more than the beliefs of the American people as a whole.

The key finding: PPP asked independents who did vote in 2010 who they had supported in 2008. The results: Fifty one percent of independents who voted this time supported McCain last time, versus only 42 percent who backed Obama last time. In 2008, Obama won indies by eight percent.

That means the complexion of indies who turned out this time is far different from last time around, argues Adam Green of the Progressive Change Campaign Committee. His case: Dem-leaning indys stayed home this time while GOP-leaning ones came out -- proof, he insists, that the Dems' primary problem is they failed to inspire indys who are inclined to support them.
"The dumbest thing Democrats could do right now is listen to those like Third Way who urge Democrats to repeat their mistake by caving to Republicans and corporations instead of fighting boldly for popular progressive reforms and reminding Americans why they were inspired in 2008," Green says.

And, again, a lot of the people who DID switch were almost certainly influenced by their economic troubles.

There's a lot to be said for this. The part about Independents "not being a monolith" is very important to remember. Democrats and Republicans aren't monoliths, either, but at the very least they have shared stated loyalty to a political party. Independents don't even have THAT, and are almost certainly not going to decide to vote or NOT vote as a bloc.

So why did they stay home? Sargent doesn't know. Fair enough. It could be likely that it has a lot to do with enthusiasm. Dem-leaning groups are already less inclined to vote than Rep-leaning groups. If you're a registered Dem, you'll be a little bit more invested in the process; but if you're a Dem-leaning Independent, you probably have nothing invested in the process at all. You won't vote as a matter of course; you need a REASON to get your carcass out to the polling station, wait in line, and pull those levers or push those buttons.

Have the Dems given them those reasons? No, they have not. They didn't even run a fiercely negative campaign about all the damage that the Republicans would do. As far as I can tell, they barely ran a campaign at all. Individual candidates ran campaigns, definitely; but how can that help against national trends?

Even a negative campaign may not have been enough, though. Dem-leaning Independents need a reason to go vote for you in the first place. That's one of the ways that Obama was so successful in 2008: he made a point of ensuring that people had a reason to go vote for him. The Dems never provided those reasons this time. How could they? They couldn't credibly promise a damned thing: Obama had broken many of his—or half-assed their fulfillment—and Congressional Democrats couldn't even marshall the votes of Senate DEMOCRATS, let alone Republicans! Even when they HAD sixty seats, they were being filibustered by their own supposed partisans!

So what the hell is the Congress supposed to promise the American people, exactly? A shitton of decent House bills sitting uselessly in Senate limbo! Dem-leaners won't turn out for that, especially when everything else in their lives is so depressing right now. They may not vote Republican, but they won't necessarily vote Democratic, either.

Kudos to Sargent and the PPP for bringing this up. I can only hope it gets spread quickly and helps challenge the coalescing media consensus that this is about liberalism. It isn't, of course. If it were, then 2006 and 2008 would also have been about conservatism, and the same people who avoided ideological conclusions then would be avoiding ideological conclusions now. The extent to which this is blamed on liberalism just shows the fundamental character of the American media.

Edit: On the other hand, maybe non-voters were satisfied after all?

The "Hold Your Nose" Factor (Along With Economies and ConservaDems' Responsibility)

I've been going over some exit poll results on CBS's website. A lot to digest, but something jumped out at me.

Is your opinion of the Democratic Party:

Favorable (43%)

House Vote Democrat: 91%, House Vote Republican 8%

Unfavorable (53%)

House Vote Democrat: 10% House Vote Republican 88%

So only 10% of people "held their nose and voted Democratic". That's really, really small. Pretty clear that the only way you were going to vote Democratic is if you liked the Dems.

Now the Republicans:

Is your opinion of the Republican Party:

Favorable (42%)
House Vote Democrat: 11%, House Vote Republican: 88%
Unfavorable (52%)
House Vote Democrat: 75%, House Vote Republican: 23%

See the difference? Almost a quarter of people with unfavorable views of the Republican party voted for it anyway! That suggests, to me, that there were a lot of people who pulled the "R" despite themselves. They didn't like the Republicans, and may not have even shared their agenda; but they're ticked off enough about the economy that they decided to punish the Democrats regardless.

Another bit that grabbed me was a possible indicator that this is a different electorate than in 2008 rather than just a change in views in the same electorate: the McCain/Obama numbers. McCain and Obama numbers were evenly split at 45% each. Now this may be people misremembering, but it was only two years ago and a big deal besides. I believe this better shows that these are not all the same people who voted in the last election. More McCain voters showed up because they were energized; Obama voters declined precipitously.

Oh, and one more thing. Look at this. It shows the importance of the economy as a factor.

Do you think the condition of the nation's economy is:

Good (9%) House Dem:79%, House Rep: 20%
Not so good (52%) House Dem: 52%, House Rep: 45%
Poor (37%) House Dem: 26%, House Rep: 71%

The Dems FAR outperformed their average among people who thought the economy was doing well. The farther down, the poorer the evaluation. It carried over to financial situation, too: if you are BETTER off or "about the same", you were more likely to vote Democratic; if you were WORSE off, you were more likely to vote Republican. Which fits the "punishing the Dems for the poor economy" thesis quite well, rather than some kind of wholesale embrace of Republican ideology.

(After all, that very same group punished the Republicans two years ago.)

This isn't a repudiation of liberalism. It was "the economy, stupid". If Obama had delivered a better economy, the group of people who are better off and thought the economy was recovering would have been larger, and delivered more votes for his people on Tuesday.

So, now, the battle appears to be over who gets blamed for the terrible economy in 2012. So far, I'm not optimistic it's going to be the Republicans.

Edit: There's a bit in TAP by Jamelle Bouie that reinforces this point.

Almost all districts voted more Republican in this election than in 2008, but much of that shift came from states hit hard by the recession. Republicans made big gains in Michigan (13 percent unemployment), Florida (11.9 percent unemployment), and Ohio (10 percent unemployment). The national unemployment average, by contrast, is 9.6 percent.

Well put. There's another point made there, too: that the Senate might have seriously hurt the house, even on unpopular bills.

So, are liberals responsible for the 15 other seats Republicans won on Tuesday? Yes and no. Congressional liberals were clearly the driving force behind adopting a climate bill in the House of Representatives, with strong support from progressive activists. Passing that bill required hard votes from vulnerable members in rural, conservative districts. If the Senate had passed a climate bill, those members might have been able to make lemonade from lemons. But the Senate failed to act on climate legislation, and the bill became dead weight for a number of rural Democrats. By all accounts, Rick Boucher, a 14-term representative in Virginia's 9th District, wouldn't have faced a serious competitor -- and would have cruised to re-election -- had he voted against cap-and-trade. Likewise, Tom Perriello, a freshman Democrat in Virginia's 5th District, might have edged out his Republican opponent (or come closer to doing so) had he voted against health-care reform or any other piece of major labor.

That said, you can only go so far with this; the economy was the issue for most voters, and had centrist Democrats been willing to support a more liberal stimulus with larger payouts and fewer tax cuts, they might have saved a few of those vulnerable seats. Which is to say that moderate and conservative Democrats -- by reflexively opposing President Barack Obama on so many items -- bear as much responsibility for Tuesday as liberals do.

The parts I bolded are absolutely key, and likely to get overlooked. Voting for legislation that ultimately founders in the other chamber is likely to cripple you. This is ESPECIALLY true for legislation that is going to be easy to caricature, like cap-and-trade. The Senate, by blocking House bill after House bill, just made sure that House members had nothing to show for tough votes. And on the economy, it was ESPECIALLY disastrous, since as we saw people who feel "worse off" voted primarily Republican, and often did it even if they didn't LIKE Republicans.

Dispirited youth and minorities stayed home. Energized, "fuck-you" oldsters went to vote. People who were worse off went (R), and the Senate's "moderates" screwed everybody else. Just another election in America, during the long, slow, brutal slide to irrelevance.

Broder's Ignoring the Republicans' Actions Even As They Run Things

As usual, the media's advice is singularly unhelpful. It's almost certainly because they know that the Dems got beat because the public is impatient and always blames the party of power for economic trouble, but can't say it for fear of the reaction.

(And they call us Internet people "cowards".)

The justifications they get up to to try and AVOID saying that, though, are really funny. Take Broder. He's babbling his usual nonsense about how the Dems aren't centrist enough. That shit should be a non-starter in an election season where the Republicans have clearly and obviously moved to the right. The objection to "centrism" has always been the problem of goalpost-moving. Now that we've seen goalposts getting moved right in front of our eyes, it should be discounted out of turn.

Broder has no better ideas to offer. So he offers the same 'ol, same 'ol anyway.

Still, here's a good example of how far down that rabbit hole he goes:

Somewhere along the way, Obama lost sight of his campaign pledge to enlist Republican ideas and votes. Maybe they were never there to be had, but he never truly tested it. And the deeper he became enmeshed in the Democratic politics of Capitol Hill, the less incentive there was for any Republican to contribute to his success...
...What lessons should Obama draw? The worst mistake would be for him to abandon or reject his own agenda for government. If health care is to be repealed, let it be after the 2012 election when he will have a chance to defend his handiwork - not now.

Instead, he should return to his original design for governing, which emphasized outreach to Republicans and subordination of party-oriented strategies. The voters have in effect liberated him from his confining alliances with Nancy Pelosi and Harry Reid and put him in a position where he can and must negotiate with a much wider range of legislators, including Republicans.

Folks, you know and I know that the Republicans were "never there to be had". They were NOT interested in working with Obama and the Dems. They were NEVER interested in working with Obama and the Dems. And since they won such a handsome electoral reward for obstructionism, they're not GOING to work with Obama and the Dems. They'd have to be idiots. Unlike Broder, they aren't.

It comes down to agency: Broder is taking it away from the Republicans and handing it all to Obama. Obama DID try to reach out to Republicans, over and over again. He did it so much that his legislation was arguably weakened beyond recovery in the attempt. Half the reason why the health care bill is as weak and corporate-friendly as it is is because of all the attempts to bring Republicans onside. Broder knows damned well that the problem was that the Republicans were never going to do it He even implicitly acknowledges it what that "never there to be had" line! What more could Obama and the Dems have done? Maybe they could have simply let the Republicans write the legislation FOR them. But three-quarters of the reason for this election debacle was because Obama's core supporters STAYED HOME!

Broder is doing everybody a disservice by not granting responsibility where it's due. The reason why the Senate didn't pass sweet fuck-all is because the Republicans exploited the filibuster. The reason why they did it is because they guessed, correctly, that the public would punish the Dems, not the Republicans, for the inability to pass decent legislation. That has nothing to do with "left" or "right". It doesn't really have anything to do with the Dems, either; Senate Dems tried to reach out and were rebuffed over, and over, and over again, by an opposition that was never interested in working with them in the first place.

All that opposition wanted to do, from day one, is set up what happened on Tuesday. It wasn't about legislation, it wasn't about "freedom", it wasn't about bullshit linear political scales, and it wasn't about the American People. It was about creating the conditions to revive their lifeless party from the dead. it was political necromancy.

Yet somehow, with that accomplished, it's people that Broder that sound like zombies.

An Obvious Point About Political Ideology That Still Needs Stating

America is not significantly more conservative than it was two year ago.

No. Sorry. It isn't. Political ideology doesn't work that way. You don't whipsaw back and forth. If anything, once somebody fixates on something it's impossible to move them thanks to cognitive dissonance. Again, we'll have to see exit polls and data manipulation over the next few weeks as things settle, but one can safely grant that that wasn't what happened. The same America that tossed out the Republicans four years ago and embraced Obama two years ago is the one that swung Republican now.

What people can become in two years or four years is angry, scared, and frustrated. Most Americans believe that their country is on the wrong track, and haven't seen any benefits from Obama's (poorly crafted and poorly targeted) legislation. They won't have seen any benefit from the health care reforms, they didn't get to keep their house because HAMP never worked properly, and as for the bank bailouts that may have saved the economy, well, the less said the better.

Sure, some sources are saying that the electorate yesterday was more "conservative". That doesn't mean people changed their position. It means what we expected: Democratic partisans were dispirited and barely saw the point of voting, whereas Republican voters were activated by the combination of a deluge of corporate advertising and one of the biggest astroturfing campaigns the world has ever seen. As I said in my last post, the "tea partiers" are the same old white, conservative, well-off males that ALWAYS vote Republican; the only difference is that they were given a standard to rally around.

(Obama provided that for progressives in 2008, and then abandoned it in the dirt. I only wonder whether the Republicans will make the same mistake.)

I think that the big story here may well turn out to be Citizens United and the spending. There's some great research waiting to be made about the amount of spending that corps and their various advocates made in various districts and the succcess of the Republican candidate there. Yes, the Republicans have a better ground game and, yes, the Tea Party activated conservatives. But TV advertising still matters a LOT, especially among the older, white Americans that the Republicans were courting. I suspect that it will have made a big difference.

The only silver lining here is that the Republicans have probably taken the wrong lesson from this. They'll think they've received a mandate for conservatism. They haven't. They, like Obama, received a mandate for change. Since the only changes they can make are disastrous and stupid, I suspect that they won't last very long. I could be wrong, and maybe America will fall back into Republican hands only four short years after the Republicans helped destroy its economy.

But, again, the country that voted for Boehner's bunch tonight voted in Pelosi's crew in 2006, and swept Obama to power in 2008. Never forget that.

Edit: Cenk Uygur makes a good point about the Dems over on FDL:

Did you deliver for the average American voter or did you deliver for Wall Street? Come on, look at the numbers. Wall Street is backing to make record profits and bonuses and we’re at nearly 10% unemployment. People aren’t stupid. They got robbed. The system didn’t get fixed. It’s still rigged in favor of the rich and powerful.

Some liberals, progressives and Democrats will accuse me of party treason for saying that. They’re right, I don’t give a damn about the parties. In this day and age, I would never vote for a Republican in a national election because they have shown themselves to be a completely owned subsidiary of the rich and the powerful. They have demonstrated gross incompetence and are purposely derelict in their duty to the voters. But that doesn’t mean I have to be excited about the Democrats. Who is excited by Blanche Lincoln? Other than corporations who bought her years ago.

The Democrats said they were going to bring change – and they didn’t. That is their fundamental error. And that is why they are being voted out right now. But knowing how Washington works, they will not get that through their thick skulls. Instead, they will probably go further toward the jackals on the right after this election. They will cater to big business, Wall Street and the top 1% of this country even more after this election – and then wonder why people don’t trust them.

The bit I bolded couldn't have been better stated. Americans don't just want a change in how they're governed. They NEED a change. The Republicans sort of understand that, which is why Boehner kept blubbering on about change last night. It isn't a change in ideology, it's a change in structure and attitude.

The ironic thing is that Americans WOULD have gotten that change, had the Republicans not blocked it and had Reid and Obama not coddled them while doing so. We'll never know how they would have voted had Pelosi had the votes she needed in the Senate.

Precisely the Wrong Interpretation

Oh, Harry Reid. Why couldn't Sestak have won and YOU been tossed out?

Reid gets exactly the wrong lesson from this. From the Times:

In an early morning appearance on NBC’s “Today” show, Mr. Reid said it was time for the parties to cooperate. “The message to America today is that we’ve got to start working together,” he said. “The only way we can have progress is by working together. If that means legislative compromise, we’ve got to do that.”

Did the Republicans EVER say this? Ever? Even when they had gotten their butts kicked, they'd always talked about being a voice for conservatism, and their obstructionism benefited them handsomely in this election. Now you want to REWARD them for that by passing batshit-insane right wing legislation?

What, you think YOU will get the credit for that? In this media environment? Give me a break.

The Democratic Party of the United States of America are poorly named. They aren't Democratic. Not Liberal either. There's only one party name that TRULY fits this lot:

The Know-Nothings.

Yglesias Makes a Good Point on "Overreach"

I liked this bit quite a bit.

It’s inevitable that “liberal overreach” will be blamed for Democratic losses if they’re large tonight and also blamed if they’re small. But what I think overreach analysis always requires is more of a marginal approach.

For example, granting ad arguendum that the 111th Congress engaged in liberal overreach, which Senators who win today would have lost had the Affordable Care Act included a public option linked to Medicare? The answer seems to me to be nobody. Which Senators who win today would have lost had the 111th Congress passed a cap-and-trade plan through reconciliation? Here, it looks like Patty Murray. Would a “scaled back” health care plan have saved Blance Lincoln? Clearly not.

The ConservaDems extracted concession after concession from the President, leadership and caucus and still got their asses kicked. The party would have honestly been better off had it swung for the rafters; it would still have lost independents, but at least the enthusiasm gap wouldn't have been so crippling.

Edit: It also comes back to that disengagement problem. One of Yglesias' commentators said that "people might think that Obama, Reid and Pelosi went too far with that 'socialized medicine'". And, yes, they might. But there was absolutely nothing that the Dems could have done about that. It was the most corporate-friendly, conservative-friendly health care reform bill you could ask for. The only reason it's called "socialist" is because it was labelled as such by the Republicans, BUT THEY WOULD HAVE CALLED IT THAT NO MATTER WHAT.

There was no point to reaching out to the conservatives and blue dogs. It didn't help, and was never going to help. Maybe good legislation would have. But I suppose we'll never know.

Re-Edit: And once again, the public doesn't give a damn about right v. left "linear" politics. They don't punish "moving to the left" any more than they punish "moving to the right". They vote based on their lives, beliefs and identity. So the attempt to "move the bill to the right" would never have moved them.

Lessons from the 2010 Election

So there seem to be, in absence of detailed exit poll data, certain things that we CAN take away from this debacle.

First, to misquote Gordon Gekko, obstructionism WORKS. Obstructionism is GOOD. The American people voted in the Dems in 2006 and in 2008 to enact real, positive change. The Republicans made damned sure that wouldn't happen by posing a united front in the Senate. The Dems tried, over and over again, to try to pin the Senate's failure to enact cloture on the Republicans. It never stuck. It was never GOING to stick; the press was too busy focusing on horse races, and the public doesn't give a damn. They'll blame whomever is in power.

That also goes for the Republicans' negotiation tactics. Playing at being convincible when talking with the President and Congressional leadership, extracting concession after concession with no concession in turn, and then walking away at the end worked SPECTACULARLY well for the Republicans. It might not have if they ended up getting blamed for the resulting legislation, but they never, ever did. Part of that was due to Obama's own overly-concession-prone negotiation style, and the Dems' inability to create and stick to a message. But I think a lot of it is just the simple fact of politics, and something the Dems should remember going forward when they work to frustrate the Republican house.

Second, Citizens United paid off BIG for the Republicans. I don't think there's any doubt about that. Dems were yelling that they were getting HAMMERED with corporatist advertising in State after State. Obama tried to tie the ads to big money; but, again, the public was simply not in the mood for justifications or excuses. It's only going to get worse; I think that 2012 may be the first election that is basically bought-and-paid-for if things go badly.

Third, I also think that the teabaggers paid off for the Republicans, too. Sure, they lost Nevada, but Rand Paul managed to pull it off, along with others. More importantly, they did what they needed to do to relabel their party. The teabaggers are really just the same old, white, upper-middle-class conservative males that have ALWAYS been the backbone of both the conservative movement and the Republican party. What's changed is that now they have an identity to look at, and that the media can freak out over. That's something the progressives don't have, and have never really had. Partially it's because of their tendency to splinter, but I think it also has to do with our fourth reason.

Fourth, the Dems completely destroyed their electoral machine. OFA is a sad shadow of what it used to be. It was never going to be as big as it was in 2008, of course. But as one of the people on CNN pointed out, Reagan made sure that he kept his young Republican groups engaged throughout the term, instead of just trying to rally them when election time rolled around. The rest of the progressive groups were if anything WORSE off, thanks to the combative, hostile relationship the Obama administration had with its own base. The enthusiasm gap was dramatic throughout the race, and I expect that in the days ahead we'll find out just how dramatic it was. But I think it didn't need to be, and that it's Obama's own fault that it

And finally, the combination of the hatred of BOTH parties and the results, along with the economic situation, shows that the American people still want change and not necessarily what the Republicans are peddling. This may be the Republicans' undoing, since their policy prescriptions will NOT make thing batter. The best they can hope for is a slight spike from businesses and investors who assume that their party will be pro-business, but I suspect that the fundamental problems will likely reassert themselves soon enough. The Republicans' plans are economically suspect at best, and likely catastrophic; they would be best buried by the Democratic president and Senate. But since I doubt the Dems will have that kind of sense, it's likely that they'll try to "work with the Republicans" in enacting part of the Republican agenda. Then, when things get WORSE, the finger-pointing will begin.

This isn't what I would have wanted. THIS SHOULD NOT HAVE HAPPENED. The Dems and the President should have known that this would be the ultimate end of their frustrated, inadequate, poorly-focused efforts over the past two years. THIS is what happens when you listen to people like Rahm Emanuel. THIS is why they need real victories to show the American people. THIS is why catering to the blue dogs to the exclusion of all else doesn't work. (They got hammered tonight.) THIS is why you don't abandon the networks you built up. And THIS is why you need to develop a strong identity and pay close attention to your Supreme Court nominees.

But I suspect that they'll get the wrong message. They'll think that they've "moved too far left" or some such nonsense. It's not about left and right. It never was. It's about people wanting some security and prosperity in their lives. And when the Republicans fail at providing it, things are going to get a whole lot uglier.

Election Day!

No, I don't expect it to go well. No, I don't think the Dems have proven their case. (I don't think the Republicans have, either, but they aren't in power right now.)

And I'm with Krugman; I suspect that the next few years will bring little good. The chance was Obama and the Dems' to waste: and sure enough they wasted it. They did SOME good, of course. Health Care may well be better than nothing, as is FinReg. But only barely, and considering the outsized majorities they had, well...

In any case, the frustrating part will be if the Republicans DO win back the Senate. Because when they pass bill after bill, counting on the Dems to let them get cloture, I can guarantee all of you that neither the Dems nor the media will make a peep about the fact that the Republicans convinced all of them that a Democratic Senate needed a sixty-seat majority to pass legislation, while a Republican Senate does not.

In any case, go vote. It may or may not help. But there ARE good Dems out there; your Feingolds and Graysons and whatnot. They DO deserve your support. Even the Blue Dogs might, barely, if the alternative is one of those "Tea Partiers" snug in the pockets of the Koch brothers.

But while you vote, stop and think about how the Republicans were given up for dead two years ago. Think about what changed. And think about why.

Rent is Too Damn High Party (Update: Now With More Hasidim!)

Edit: fixed malformed link.

Now THIS is how you do "single-issue candidate". Jimmy McMillan of the "Rent is Too Damn High Party" absolutely stole the show at the New York State Gubernatorial debate last night.

Gawker called him "crazy"; HELL no, he isn't crazy. He's cogent, on-message, has a striking appearance that helps get him attention (which you need as an issue candidate) and the sort of emphatic, impassioned delivery that'd make a preacher cry.

I'm sure a ton of people would (will?) happily vote for him; Cuomo would be insane not to leverage this.

Edit: Ah, or perhaps Cuomo should leave well enough alone. McMillan is trending high right now, but already people are noticing that he found a target for his ire back in 2005. That would be, *ahem*, "the Jews". Utter ethical dubiousness aside, I don't think it's a terribly wise position for a gubernatorial candidate in New York, of all places.

It is a rather weird case. His specific complaint was, from what I can gather, that Hasidim (ultra-Orthodox) Jews living in the Williamsburg area of Brooklyn were systematically refusing to rent to outsiders. Considering that's a common complaint about the so-called "black hats" in Israel, it's plausible that he might not understand the distinction. But, then again, he also blamed "the Jews" for the 2001 WTC attack. That is, uh, a wee bit less plausible.

On the other hand, he claims that he's renounced that stuff:

There have been comments that I have attempted to label me anti-semitic or anti-Jewish. This has been nothing more than "kill the messenger" and "character assignation" politics as usual which was spread by opponents that have nothing better to say. It may sound trite in this matter but even in this campaign I rely on Jewish close friends and advisors.

However, if I have ever made any biased remarks toward anyone or any group I heartfeltly apologize. Further, I apologize to the Jewish community for having to suffer the boorish bias of anyone. Even the reminder that there is still bias in America bias is painful; as a Black-American Man I empathize fully with the Jewish-American community.

Hey, they forgave Bob Byrd.

Wall Street's Pathologies

While I'm KrugPostin', here's a KrugLink to a piece in the NY Observer about, well, just what kind of asshats are working on Wall Street these days.

"The first thing that needs to happen, I think, is to get these people out of their homes," a man wearing a bespoke blue-striped shirt, a Hermés tie patterned with elephants and Ferragamo loafers said recently. "Correct! I'll explain," the veteran member of a bank restructuring and advisory team said.

Amid evidence of sham documents and widespread paperwork gaffes, if not systemic fraud that increasingly looks like it may be terrifically deep, Bank of America recently halted all foreclosure proceedings around the country. That followed similar announcements from the home-loan giants JPMorgan Chase and GMAC.

But Wall Street does not sympathize. "You had people putting zero down to get massive houses they couldn't afford to be in," he said Monday morning, "but now they want to stay. And the government wants to let them stay, because they're voters." A few hours later, the Goldman Sachs arm Litton Loan Servicing said it had suspended certain foreclosure proceedings, too. "Talk about a financial scandal," a Wall Street Journal editorial this weekend joked. "A consumer borrows money to buy a house, doesn't make the mortgage payments and then loses the house in foreclosure—only to learn that the wrong guy at the bank signed the foreclosure paperwork. Can you imagine?"

"The problem is they don't deserve to be in that place. They probably deserve to be there less than they used to," the source continued, referring to incomes lower now than they'd been when the loans were made in the first place. "You do need to foreclose, and you need to go back to people living in houses that are consistent with their income levels."

At this point, I'd like to remind readers that there are reports all over the place about people getting foreclosed upon that paid in full and paid in cash. Including in the Observer. Moving on...

In order to understand Wall Street's shrug during this foreclosure crisis, which as many as 40 attorneys general are expected to announce an investigation into this week, the key is to appreciate just how deeply connected the gesture is to Wall Street's view of who's to blame for the financial crisis.

The feeling, the idea at the bottom of all the others, is that even if Wall Street aggravated the crisis by bundling and betting on mortgage-backed securities that turned out not to live up to high ratings, it was not a matter of, as Citi chairman Richard D. Parsons told The Observer this summer, "bad people trying to do bad things." The loans wouldn't have been there in the first place if American home buyers, driven by what The Weekly Standard calls immediate gratification without personal responsibility, hadn't overstepped their bounds.

So when Ken Bentsen, the executive vice president for public policy and advocacy at Wall Street's largest trade group, the Securities Industry and Financial Markets Association, talks about this foreclosure fraud crisis, he points out that the homeowners arguing about administrative problems are the ones who've gotten themselves tied up in the foreclosure route in the first place, regrettably. "No one has raised the question that anyone who's going through this process shouldn't have been in the foreclosure process," said Mr. Bentsen, who, as a congressman from Texas, helped write the Sarbanes-Oxley and Gramm-Leach-Bliley acts.

"Look, I think it's just human nature. People want to have a bogeyman," Ralph Cioffi, the former Bear Stearns hedge fund manager, who was found not guilty of fraud, said in a recent Observer profile about anger at banks and bankers. "People don't want to take responsibility for their own actions."

Apparently not.

So, the Wall Street titans, having screwed up so badly that they needed to be rescued from their own financial crapulence by the American people, are right back to blaming absolutely everything on poor people. Let the borrowers suffer. I have a tee time to get to!

Never mind that the wealthy are more likely to play the "jingle-mail" card than the poor are. Never mind that the professionals involved all signed off on this nonsense. And never mind that everybody said that the crash couldn't happen, that home prices couldn't go down, and that anybody who said otherwise was a crank. And never mind that the institutions that these guys work for were more precariously leveraged than a thousand insolvent homeowners. No, it all comes back to the OTHER guy.

And why?

"Because people don't want to take responsibility for their own actions".

No, Government Hasn't Gone Up

Yeah, Krugman's been banging on this one for a while, but he linked to a great post by Menzie Chinn that shows the situation.

I've been lecturing on the government sector in my macro course. In updating my lecture notes, I plotted out some interesting graphs, which link up nicely with this previous post. The following four figures highlight: (1) normalized Federal outlays are not much higher than in 1986; (2) government consumption to GDP is back up to 1991 levels; (3) the cyclically adjusted budget deficit is only 2 ppts larger than that recorded in 1987; and (4) Federal consumption remains far below the previous peak in 2007.

One of the topics stressed in the textbook and lecture notes is the endogeneity of the budget balance, and especially the transfer and tax components. This leads to the first graph, of transfers normalized by nominal GDP, and transfers normalized by potential GDP...

...Notice that government transfers as a share of GDP looks particularly high because of the collapse of GDP in the Great Recession which started in 2007Q4. Normalizing by potential GDP highlights the fact that, while the ratio is the highest over the last forty three years, it is only slightly higher than that recorded in the mid-1980s, during the Reagan administration.

Normalizing government consumption and investment illustrates that overall spending by the government in purchases of goods and services is not particularly high. Even dividing by nominal GDP indicates that we are only (almost) back to the levels of 1990. Normalizing by potential GDP indicates that we are still only back to the levels of the early 1990's (this spending includes defense)...

...So, it is true that the Federal government's role in terms of spending and transfers has increased against the backdrop of a massive decline in output starting in 2008Q4 -- but some of the movements in various indicators are distorted by the large negative output gap that has opened up.

That latter bit is why I liked the post so much. Focusing on spending as a percentage of GDP is really prone to distortion. That measurement of spending as a percentage of potential GDP neatly removes that problem. It reinforces what I've known for a while: that you don't need to cut social spending. Just end the damned wars, end the Bush tax cuts, and end the recession. Do those things, and the budget falls neatly into place.

Obama Hit by Foreclosure Scammers?

Holy Hell. From ZeroHedge:

Just like we have been saying all along, this is so much bigger than  "affidavits."

Here is another piece of the puzzle, without bringing up the REMIC issues...

Now that YOU are effected personally in this, Mr. President, what are you going to do about it?

Let's get off the whole CNN Axelrod signals White House opposition to foreclosure moratorium BS...

"The Obama administration opposes a moratorium on home foreclosures, but wants problems involving improper paperwork resolved as quickly as possible, senior adviser David Axelrod said Sunday."I'm not sure about a national moratorium,"

Like my dear friend at the Hamlet puts it

It’s not the foreclosure affidavits only. Hello? It’s the whole kit-n-caboodle. it’s the fabricated assignments of mortgage, fake allonges, robo-stamped endorsements in blank, and satisfactions of mortgage, ignoring SEC and IRS regulations, disregard for the steps required by the REMIC rules. It’s all the top national banks and their servicing arms. The whole of it is a sham. Don’t believe the propaganda that insists otherwise.

Got it?

Now for the fireworks...

I won't quote the whole thing, but the post (appears to be Michael Redman from 4closurefraud.com) gets into how it's quite likely that multiple people were posing as Marshe Craine, the same "vice-president" from Chase Manhattan, in the same sort of documents that Obama put up. "Marshe" had one signature in one form, and an entirely different signature in Obama's forms. And wasn't with Chase to begin with, but another (sketchier) outfit called Mortgage Electronic Registration Systems, or MERS.

Whoops.

Of course, the whole thing relies on photos that I haven't reproduced here, so you should check it out yourselves. And it's not exactly unlikely that this would happen, because it has apparently happened to half of the damned country!

But it does put things in perspective:

So you see, this whole Foreclosure-Gate crisis has nothing to do with the "deadbeat" borrowers, it never has.

It has to do with the complete lack of the respect of the law by the banking industry.

They got away with it up until now and are trying their damnedest to paper over their crimes.

It is time to say no more...

They tricked all of us, even you Mr. President, and completely disregarded the basic laws of this country to make a buck.

I have been beating this drum, along with a few others, for years now and it is time to come to an end.

Mr President, now that you have had the fraud perpetrated on you personally, what are you going to do about it?

The system is broken and the foreclosures need to be stopped NOW.

It is actually worse than you can imagine...

What's that old line? Look at any great fortune, and you'll find a great crime?

Well, we knew what the fortune was. And now we're discovering the crime.

Israel Requires Loyalty Oath to "Jewish, Democratic State"

The Israeli Cabinet has apparently approved a bill requiring non-Jewish immigrants to swear loyalty to the "Jewish, democratic state". Yep, Yisrael Beitenu managed to push it through. Not exactly going to endear them further in the Muslim world, especially when the initial effects involve, you guess it, West Bank Palestinians.

Were the bill to be passed by the Knesset, the people immediately affected would be Palestinians in the West Bank and Gaza who either want to marry a Palestinian-Israeli citizen or have already married and are waiting on their papers to be processed, she said.

Earlier, Ahmad Tibi, an Arab member of the Knesset, told Al Jazeera that the bill was aimed at Palestinians - and not at Jewish newcomers to Israel since they already enter on Israel's Jewish Law of Return.

"Palestinians will have to say that this country is for Jews, and Palestinians are only guests. If you are saying you are democratic, you should treat citizens with equality," Tibi said.

He said that Israel was trying to impose this on the Palestinian Authority (PA) as a pre-condition for peace talks.

Direct peace talks between Israel and the PA, under the leadership of Mahmoud Abbas, are currently at an impasse due to Israel's refusal to extend the 10-month freeze.

Recognition of Israel as a Jewish state is one of Netanyahu's principal demands in any eventual peace deal with the Palestinians...

...Palestinians have repeatedly rejected Netanyahu's condition as it would amount to an effective renunciation of the right of return for Palestinian refugees.

"The new citizenship law will make it impossible for Palestinian refugees and their descendants to return to their homeland," Marwan Bishara, Al Jazeera's senior political analyst, said.

Theoretically, this doesn't change that much. Israel IS a Jewish Democratic state. What bothers me is that little comma there, since it implies that people have to swear to loyalty to Israel as a Jewish state in particular. Israeli Arabs are already feeling more than a little put-upon; this is only going to cement it.

And, as the AJ analyst said, this preempts one of the most important elements of any peace negotiation between Israel and the Palestinians: the question of Palestinian refugees. Requiring them to swear loyalty to the Jewish character of the state of Israel is not going to happen, not after they were pushed out in the first place. It's clearly a move to create "facts on the ground"; and the Palestinians are not going to look kindly on Israel pulling that tactic again.

Not that the negotiations are going anywhere. I'm not convinced that Netanyahu gives a damn about them in the first place. But if there's some future prime minister that is interested in peace and reconciliation, he or she is really going to have their hands tied.

Jailed Chinese Dissident Wins Nobel Peace Prize

Yep, you heard me right. Liu Xiaobo, an imprisoned Chinese democratic activist, has just won the world's most prestigious award. Huffpo:

Imprisoned Chinese democracy campaigner Liu Xiaobo on Friday won the Nobel Peace Prize – an award that drew furious condemnation from the authoritarian government and calls from world leaders including President Barack Obama for Liu's quick release.

Chinese state media blacked out the news and Chinese government censors blocked Nobel Prize reports, which highlighted Liu's calls for peaceful political change, from Internet websites. China declared the decision would harm its relations with Norway and promptly summoned Oslo's ambassador to Beijing to make a formal protest.

In Oslo, China's ambassador to Norway met with a state secretary at Norway's Foreign Ministry, ministry spokeswoman Ragnhild Imerslund said.

The Norwegian officials explained that the peace prize committee is independent of the government and that Norway wants to maintain good relations with China, Imerslund said.

This year's peace prize followed a long tradition of honoring dissidents around the world and was the first Nobel for China's dissident community since it resurfaced after the Communists launched economic but not political reforms three decades ago...

...The Nobel committee praised Liu's pacifist approach, ignoring threats by Chinese diplomats even before the announcement that such a decision would result in strained ties with Norway. Liu has been an ardent advocate of peaceful, gradual political change.

The Nobel committee cited Liu's participation in the Tiananmen Square protests in Beijing in 1989 and the Charter 08 document he recently co-authored, which called for greater freedom in China and an end to the Communist Party's political dominance.

Obama said in a statement that Liu "has sacrificed his freedom for his beliefs" and is "an eloquent and courageous spokesman for the advance of universal values through peaceful and nonviolent means."

"We call on the Chinese government to release Mr. Liu as soon as possible," Obama said.

No surprise that Obama said he should be released. They ARE Prizebuddies.

But this is a serious black eye for China. Just as they're starting to get a wee bit belligerent in the region, squabbling with Japan over the Senkaku/Diaoyu Island chain and with Vietnam over the Spratlys, here comes the Nobel Prize committee saying "hey, folks, remember how China is kind of an oppressive regime? You may have forgotten, but look at this guy! He's amazing, an utter pacifist, and they tossed him in a hole!"

It's going to embolden their external and internal critics, and it's going to be damned near impossible for their Great Firewall to block discussion of all this.

On the other hand, at least now the Chinese and the neo-conservatives have something they can finally commiserate about: how much they loathe the Peace Prize.

"Thin Strips of Objectivist Jerky"

John Scalzi absolutely knocks it out of the park on the whinging by the wealthy about their supposedly (read: not at all) high taxes. He notes that many don't even seem to understand how marginal taxation works, but then goes on to talk about another group...

There is another answer as well, which can be paired with the above or stand on its own, and it’s that there’s a certain sort of person who believes that all taxation (or all taxation outside of one or two very specific things of which they approve) is theft. Naturally that sort of person will fly to the defense of any who bleat about their taxes being too high, even if in point of fact, the wealthy in the US are currently being taxed at historically low rates (“but they’re still too high!”).

I really don’t know what you do about the “taxes are theft” crowd, except possibly enter a gambling pool regarding just how long after their no-tax utopia comes true that their generally white, generally entitled, generally soft and pudgy asses are turned into thin strips of Objectivist Jerky by the sort of pitiless sociopath who is actually prepped and ready to live in the world that logically follows these people’s fondest desires. Sorry, guys. I know you all thought you were going to be one of those paying a nickel for your cigarettes in Galt Gulch. That’ll be a fine last thought for you as the starving remnants of the society of takers closes in with their flensing tools.

Sure, we've all heard it before. "If you want to live in Libertopia, move to Somalia" and suchlike. Damned if Scalzi doesn't make it vivid, though.

I don't want to live in libertopia—and rest assured, neither do you.

Taibbi on the Tea Party: "They're Full of S**t. All of Them."

Here, have a Taibbi:

After Palin wraps up, I race to the parking lot in search of departing Medicare-motor-scooter conservatives. I come upon an elderly couple, Janice and David Wheelock, who are fairly itching to share their views.

"I'm anti-spending and anti-government," crows David, as scooter-bound Janice looks on. "The welfare state is out of control."

"OK," I say. "And what do you do for a living?"

"Me?" he says proudly. "Oh, I'm a property appraiser. Have been my whole life."

I frown. "Are either of you on Medicare?"

Silence: Then Janice, a nice enough woman, it seems, slowly raises her hand, offering a faint smile, as if to say, You got me!

"Let me get this straight," I say to David. "You've been picking up a check from the government for decades, as a tax assessor, and your wife is on Medicare. How can you complain about the welfare state?"

"Well," he says, "there's a lot of people on welfare who don't deserve it. Too many people are living off the government."

"But," I protest, "you live off the government. And have been your whole life!"

"Yeah," he says, "but I don't make very much." Vast forests have already been sacrificed to the public debate about the Tea Party: what it is, what it means, where it's going. But after lengthy study of the phenomenon, I've concluded that the whole miserable narrative boils down to one stark fact: They're full of shit. All of them. At the voter level, the Tea Party is a movement that purports to be furious about government spending — only the reality is that the vast majority of its members are former Bush supporters who yawned through two terms of record deficits and spent the past two electoral cycles frothing not about spending but about John Kerry's medals and Barack Obama's Sixties associations. The average Tea Partier is sincerely against government spending — with the exception of the money spent on them. In fact, their lack of embarrassment when it comes to collecting government largesse is key to understanding what this movement is all about — and nowhere do we see that dynamic as clearly as here in Kentucky, where Rand Paul is barreling toward the Senate with the aid of conservative icons like Palin.

This is just the beginning. There is LOTS more. But that's the crux of it. It's hard to make sense of the Tea Party because it doesn't make sense. It's not logical. It is, as Taibbi discovered, "deep down and psychological". It's a reaction to the subconscious knowledge that they're being exploited by someone, but they've been deceived as to who. They blame "radical leftists", and don't even consider that they might be being exploited by people who putatively share the same ideology they do. People who essentially bought and paid for their "grassroots movement", which is as neat a bit of AstroTurfing by the Koch Corporation (and other corps) as you could ask for.

So they're being used. They're being exploited. But it's hard to care when they're calling you a communist:

It would be inaccurate to say the Tea Partiers are racists. What they are, in truth, are narcissists. They're completely blind to how offensive the very nature of their rhetoric is to the rest of the country. I'm an ordinary middle-aged guy who pays taxes and lives in the suburbs with his wife and dog — and I'm a radical communist? I don't love my country? I'm a redcoat? Fuck you! These are the kinds of thoughts that go through your head as you listen to Tea Partiers expound at awesome length upon their cultural victimhood, surrounded as they are by America-haters like you and me or, in the case of foreign-born president Barack Obama, people who are literally not Americans in the way they are.

It's not like the Tea Partiers hate black people. It's just that they're shockingly willing to believe the appalling horseshit fantasy about how white people in the age of Obama are some kind of oppressed minority. That may not be racism, but it is incredibly, earth-shatteringly stupid. I hear this theme over and over — as I do on a recent trip to northern Kentucky, where I decide to stick on a Rand Paul button and sit in on a Tea Party event at a local amusement park. Before long, a group of about a half-dozen Tea Partiers begin speculating about how Obamacare will force emergency-room doctors to consult "death panels" that will evaluate your worth as a human being before deciding to treat you.

"They're going to look at your age, your vocation in life, your health, your income. . . ." says a guy active in the Northern Kentucky Tea Party.

"Your race?" I ask.

"Probably," he says.

"White males need not apply," says another Tea Partier.

"Like everything else, the best thing you can do is be an illegal alien," says a third. "Then they won't ask you any questions."

An amazing number of Tea Partiers actually believe this stuff.

Full of shit, narcissistic as hell, utterly delusional, probably racist (though they'd never admit it)...and if you disagree you're a commie bastard who hates America.

This is the group dominating American politics, folks. This is who Obama's going to be conceding things to next year, since conceding to wingnuts is all that he's turned out to be good at. This is the group that's going to be driving policy. People who think that white males are going to be executed by the Death Panels.

America in 2010: It's like something out of a bad SF novel.

The Blogger Editor is TERRIBLE Now

No, really, it is. I'm getting really, really tired of the insertion of random empty spaces before and after every quoted paragraph. Even if I edit this in HTML, they still creep in. The old editor didn't do this; I'm honestly wishing there was a way to go back to it.

I can see why so many people have left for WordPress or TypePad or the like.

Kocherlakota v. DeLong('s commentators)

Well, okay, not just DeLong. Also Atrios and, well, J. Bradford DeLong's commentator.

The president of the Minneapolis fed—you may remember him as the "interest rates cause inflation" guy—is now saying that the lack of employment demand is structural:

This estimate is based on a rather aggregative view of the labor market. It is important to dig deeper to get a better understanding of the problem, and there is a considerable amount of research under way exploring the quantitative importance of the various forms of mismatch. For example, the International Monetary Fund has recently released a special study based on a new state-by-state measure of the gap between demand and supply for workers with different levels of educational attainment. The study examines the impact of this variable and the foreclosure rate on state-level unemployment. It estimates that 1.5 percentage points of the national unemployment rate is due to these two sources and their interaction. Thus, according to this study, these two types of mismatch alone can account for a significant fraction of my estimate of 2.5 percentage points.

Good economic policy is about using the right tool for the problem at hand. The mismatch problems in the labor market do not strike me as readily amenable to the kinds of monetary policy tools currently available to the Fed.

A DeLong commentator named "Neal" provided the perfect response. What's the top four fields with job openings?

Top 50 job openings 2008-2018
1 Cashiers, except gaming
2 Retail salespersons
3 Waiters and waitresses
4 Customer service representatives

An "education gap"? For cashiers? Uh, no. Over-education, perhaps. Employers may be a bit unwilling to hire highly educated people for jobs that don't even require high school, since they'll (correctly) assume that they're gone the nanosecond they get a better opportunity. But Kocherlakota isn't saying that. He's saying that there are people who are under-qualified for the available positions, and that just ain't the case if you aren't talking about health care.  That's ludicrous.
Another brings up this salient point:

Mismatch is a cruel hoax. To quote Larry Summers before the bubble burst: "Nor can education be a complete answer at a time when skilled computer programmers in India are paid less than $2,000 a month."

Education doesn't help if cost of living differences overwhelm it.

And then there's Robert Waldmann, who decries Kocherlakota's confusion about structural unemployment:

The quoted passage from MinnFed is nonsense, because it is based on double counting. MinnFed first claimed that structural unemployment caused 2.5% of the difference between current unemployment and normal unemployment. MinnFed gave no theory of normal unemployment (up there it is assumed to be exactly zero and subtracting 5 % from the data is normal practice).

Everyone who has ever addressed the question, identifies the natural rate of unemployment with structural unemployment, so the number to hit is 7.5% not 2.5%. Note the quote "It estimates that 1.5 percentage points of the national unemployment rate is due to these two sources and their interaction." that is "It estimates that 1.5 percentage points of the 9.6% is due to these two sources and their interaction." 1.5/9.6 1 so if you count something twice you overestimate.

DeLong makes it clear that he thinks the guy should be canned. He may be right. This bizarre comment and the interest rate thing just show that he's completely out of touch. If not completely out to lunch. Saying that there's a skill gap when it's Cashiers that people want is just ridiculous, and Waldmann has now called his basic economic acumen into question. I don't know what they're doing over at the Minneapolis Fed—wanking over DSGE models, I'm led to believe—but it clearly isn't anything useful.

Germany and the Eurozone

Good piece by Martin Wolf in the Financial Times (article's behind a paywall, but a google search for "Germans are wrong" and Martin's name might see you through) talking about Germany. They aren't too fond of the Euro right now, since they feel like it's forcing them to prop up their European counterparts.

Wolf said that Germany benefits from the Eurozone. It's got loads of captive markets who use the same currency as it does, for example, and it needs them since most of its exports head to European destinations. But take a look at this:

More important, imagine what would have happened, in the absence of the euro. The exchange rate of the D-Mark would have exploded upwards, as currency crises savaged the European economy, as happened in the 1990s. In peripheral Europe, currency depreciations would have been at least as big as, if not bigger than, sterling’s. The absence of such shocks has greatly enhanced the prospects for the German recovery. The creation of the eurozone was, for this reason alone, much more than a favour Germany did for its partners. It was also a big economic (not to mention political) gain for Germany. German industrialists are clear on this, as is the government.

Wolf said that some economists disagree, thinking that investment flowed out of Germany and into the European "periphery". Fine. But what's going on right now isn't a problem of investment, now, is it? The issue is lack of demand, and how much more depressed would the demand for German goods be if their currency was through the stratosphere? Sure, that very lack of demand would probably bring down the value of said currency, but compared to the other countries in Europe it would still be uncompetitive. People would be buying German bonds, but not German goods, and I doubt the average German would be too keen on that.

Meanwhile, everybody else in Europe would arguably be better off than Germany would. Yes, their currency would have depreciated, and their foreign debt loads been much more onerous. But because their currency would have depreciated, their goods would have been amazingly cheap, so much so that demand would have already picked up and stabilized things a bit. That's what floating currencies are FOR, and it's still amazing how many people tend to forget that. That sort of automatic stabilization is what the Euro countries gave up when they joined Germany in their little currency experiment. They counted on the Germans to understand that, and to put the interests of Europe over the interests of their own little corner of it.

Perhaps that was naive. Perhaps Wolf is right, and the Germans aren't as committed to Europe's future as previously thought. Perhaps the Euro is in serious trouble. But we shouldn't pretend that it's Germany that would benefit from its dissolution.

Blame the Progressives

Well, this was inevitable. As highlighted over on Kos by Joan McCarter, Time's Michael Scherer is pre-blaming the results of the 2010 election on progressives.

Yes, despite the fact that progressives were not listened to—when not openly mocked—and the fact that the White House basically bent over backwards to appease the Republicans, Scherer is blaming them.

even as Obama aides were aware of a growing disconnect, it didn't seem to worry their boss. Instead, the ambitious legislative goals usually trumped other priorities. Both in the original stimulus package and then in the health care and energy measures, the White House ceded most of its clout to the liberal lions who controlled the Democratic majorities in the House and Senate. That maneuver helped assure passage of reforms, but it also confirmed some of the worst fears about how Washington works. "I'd rather be a one-term President and do big things than a two-term President and just do small things," he told his team after Republican Scott Brown was elected Senator in liberal Massachusetts and some in the Administration suggested pulling back on health reform.

Not that anybody couldn't have seen that happen. It's the village. They love punching hippies.

Here's Joan:

It's obviously not just the way the right wants to tell the story--it's how the Village wants to tell the story. The evil liberals got their way and forced Obama to overreach on all these policies--never mind that there is no public option, that the energy bill is a shell of what it should have been to either address energy independence or climate change, and the stimulus was about half a billion less than most liberal economists (and WH advisor Christina Romer) thought was necessary and less than what the more liberal House wanted.

One has the feeling that Michael Scherer wouldn't recognize a liberal lion if it bit him on the ass. Say what you will about the stimulus, health care reform, the as-of-yet unpassed energy reform bill, you can't say that they ended up looking like the proposals progressives put forward.

Scherer doesn't CARE if they're actually liberal lions or not. That's not the game. The game is to reinforce the prevailing narrative and, by doing so, cement your status as a "serious journalist". Fame (and well-advertised book releases) will follow.

No, if he cared, he would have had to have addressed progressives' sense of resignation and betrayal, and realized that "overreach" wouldn't properly explain that. He'd need to look to reasons why Obama disappointed everybody, which is quite a bit tricker than simply wanking on and on about those filthy hippies in the Democratic Senatorial caucus.

(The truly bizarre thing is that the guy acknowledged that the stimulus was too small on his blog. Yet not a word of this appeared in the piece.)

The real story here was, is, and will remain the fact that the Republicans understand just how well obstinacy works. That they can block whatever they please, and it's the Dems that will catch hell for it. That the media is lazy, and will listen to whoever has the loudest voice and repeats the most instead of doing actual reportage. And that the deep pockets of secretive ideological zealots can make all the difference.

But that won't make you friends in Washington. It's just the truth. And who gives a rat's ass about that?

Oil Well Explosion in Gulf of Mexico

You have GOT to be shitting me.

An offshore oil rig has exploded in the Gulf of Mexico, west of the site of the April blast that caused the massive oil spill.
Coast Guard Petty Officer Casey Ranel says the blast was reported by a commercial helicopter company about 9:30 a.m. CDT Thursday. Seven helicopters, two airplanes and four boats are en route to the site, about 80 miles south of Vermilion Bay along the central Louisiana coast.

ARE ANY OF THOSE DAMNED THINGS SAFE?

Wrong on the Bubble, Wrong on Stimulus

Oh, now this is beautiful. Simply beautiful. Economics of Contempt posted a list of all the prominent housing bubble deniers from around 2005 or so. An endless list of AEI and Cato and Wall Street Journal "limelights" all insisting that the economy is fine, that housing is fine, and that anybody who is complaining about it is just an idiot.

Nice, but that's not the fun part.

The fun part is when Krugman revealed that all of these guys are stimulus opponents too! In fact:

There turns out to be a quite strong correlation between denying the existence of a housing bubble a few years back — and jeering at those who said there was — and insisting, now, that fiscal stimulus doesn’t, can’t work.

The question is, why do such people command such attention? As I’ve pointed out before, the same people who denied the existence of a housing bubble also told investors that budget deficits would send interest rates soaring; in other words, anyone who believed these people in the past, and acted on that belief, has lost a lot of money.

It's the same sort of Very Serious Person that was wrong on Iraq, wrong on Afghanistan, and (going back farther) wrong on the Cold War and on Vietnam. It's hard to see what these guys are RIGHT about, actually; they're so reliably wrong that you could probably make a fortune betting against their predictions!

The problem...the significantly less funny part...is that by the time their allies in Congress are done, you're going to NEED a fortune. Because once they're done with Social Security and Medicare, it's the only way you'll spend your retirement doing anything but eating cat food and wondering whether that lump will go away on its own.

Chait's being a dolt

Sorry, but gotta call 'em as I see 'em, and how else to describe this?

Moreover, I happen to think that liberals should be open to Social Security cuts as part of a balanced package of deficit reduction.

WHY? Is this one of those "truth lies in the middle" things?
Social Security isn't the problem; the Bush tax cuts, the recession, and two expensive overseas wars  are the problem. He KNOWS this. He's seen more than enough liberals explain exactly why and how this is the case. But he's ignoring them and taking potshots at them (seriously, read the whole post) in order to prop up Republican shibboleths and relegate seniors to an all-Whiskas diet. 


If that ain't a dolt, what the hell is?

So Apparently Dems Are Worried That They'll Lose the House

More so than they were, that is.

Funny thing how focusing on the deficit and on "bipartisanship" didn't pay any dividends, huh? We now know for a fact that the stimulus wasn't big enough (though most of us knew beforehand). We also always knew that stimulating job growth at all costs was the #1 job of the Democratic Congress, and what they'd be ultimately judged on.

We also knew that the Republicans were going to do whatever they could to block that, because it'd pay off for them. Doesn't matter how crazy they are. It's the Dems that are under the gun, not the Reps, and no amount of impassioned reminders that the Republicans' terrible governance was responsible for this will help.

But the Dems have done practically nothing, thanks principally to the Senate "blue dogs" that they protect so jealously, and time is running out. A whole lot of 'em are probably going to lose their jobs thanks to all this.

Appropriate, that, considering how they haven't given a damn about anybody else's jobs. Except, maybe, bond traders.

Witness The Face of the Teabaggers

Red, bloated, racist as hell and screaming at black men:

My favorite bit is probably around 3:30, when somebody started yelling "Mohammed's a pig". Repeatedly.

Duverger's Law is Dead

Well, so much for the idea that two-party systems produce stable governments. Canada and the UK had already beaten it senseless, but Australia just fired a shotgun round in its temple.

(Or, as was so eloquently and clearly said by the Australian electorate, "mbgffhf and also gghg vvjjv jmmbmbmbff". Words to live by.)

In any case, a lot of this is because the Greens apparently had a breakthrough. So, hey, maybe Nader's old crew should step it up. Looks like America might have the only two-party system left.

Edit: Yes, yes, technically Duverger's is about straight-up FPTP systems, and Australia's lower house uses IRV. Even so. 

You Gotta Be Kidding Me

Hey, Barry? Got a tip for you.

If you take a stand on something, even something controversial, don't take it back a day later. The people who did support you will feel betrayed—for good reason!—while the people who were mad at you will stay mad at you. Everybody else will just think that you're spineless, which is the last thing a Dem needs. 

Bad policy I can understand, especially by now. Bad politics is just shameful. 

Gibbs Just Keeps Getting Better

Instead of backing off, like a sane man would do, Gibbs is doubling down on this "professional left" crap. Yet he's saying that "he fully expects liberals to vote".

Why, exactly? There's a big enthusiasm gap between liberals and conservatives, and it's only getting worse. Liberals aren't going to be cowed into either silence or support by the whole "vote for us or you'll get the Republicans" line, especially when the White House itself installed a center-right candidate in Arkansas that can't possibly win.

I honestly don't even understand the point of this. Attacking the left isn't going to shut them up. Hasn't before, won't now. It won't endear the government to the right, either; the right ain't gonna vote for you, no matter how many liberals you piss off. The press might say some nice things about you because of how much they despise your typical "DFH", but that fleeting support will be long-gone by the time the election rolls around. They'll be distracted by a new shiny, and the left will still be pissed.

What the hell happened to "no-drama Obama"?

"Why I'm Not Hiring"

So there's a WSJ piece that people are talking about; it's from the POV of one "Michael Fleischer" from Bogen Communications, talking about why he isn't hiring people. Supposedly it's because of health care and benefits and all that horrible stuff that employees need to, you know, live.

Here's the thing, though. If you actually look into Bogen, you find out that there are far better reasons for why Fleischer isn't hiring. Like the stock price absolutely cratering last year. Or the settlement that they reached with a contractor who alleged "multiple causes of action for breach of contract and various torts"; a settlement that came after the contractor had already been awarded a cool $12.5 mil in "compensatory and punitive damages."

It also didn't mention that Mr. Fleischer's own compensation includes a cool half a mil a year in direct compensation and stock options, or that he's getting this money despite the stock price cratering under his watch. Hell, it was delisted from the NASDAQ in 2003. And it's losing money this quarter to boot. It did in 2009, too, if I'm reading this financial report correctly.

The best part, though, is that for all that he's railing against taxes, his company appears to have benefited from the current tax structure. $5.5 million in tax benefits, as a matter of fact, that they can carry forward to reduce tax liabilities against future profits. (Assuming, of course, that they turn a profit.)

So the answer to "why he's not hiring" turns out to be really simple: his company ain't doing so well. It's understandable, and I hope that Bogen pulls out of this intact. But it's sure as hell not the answer that he's pushing, and it's more than a wee bit dishonest to pretend otherwise.

5-Year TIPS Rates Are Now NEGATIVE

So sayeth the Krug-man:

Look at the lower left-hand corner: the real interest rate on 5-year inflation-protected securities is now negative. In other words, prospects for other investments are so poor that some investors prefer a safe asset that doesn’t quite keep up with inflation.

Yet to maintain employment, we need to sustain spending, one way or another. One way is to have the government take advantage of its low financing costs to spend on useful things; but the deficit peacocks in Congress are blocking that solution. Another is to get real interest rates low enough to get the private sector spending; but that, as we can see, means that the real interest rate on medium-term government debt has to be negative.

The only way you can do that is by having the Fed credibly promise to deliver significant inflation.

Oh, and the invisible bond vigilantes continue their invisible attack: nominal 10-year bonds at 2.71%.

I imagine that they are buying into an asset that doesn't keep up with inflation because they don't expect there to be inflation. And I expect that they'll be right.

Gibbs Railing Against "Professional Left"

Just another day:

The White House is simmering with anger at criticism from liberals who say President Obama is more concerned with deal-making than ideological purity.

During an interview with The Hill in his West Wing office, White House press secretary Robert Gibbs blasted liberal naysayers, whom he said would never regard anything the president did as good enough.

“I hear these people saying he’s like George Bush. Those people ought to be drug tested,” Gibbs said. “I mean, it’s crazy.”

Why, yes, those filthy dirty hippies should be drug tested, am I right?

("Right" indeed:)

The press secretary dismissed the “professional left” in terms very similar to those used by their opponents on the ideological right, saying, “They will be satisfied when we have Canadian healthcare and we’ve eliminated the Pentagon. That’s not reality.”

Of those who complain that Obama caved to centrists on issues such as healthcare reform, Gibbs said: “They wouldn’t be satisfied if Dennis Kucinich was president.”

The White House, constantly under fire from expected enemies on the right, has been frustrated by nightly attacks on cable news shows catering to the left, where Obama and top lieutenants like Chief of Staff Rahm Emanuel have been excoriated for abandoning the public option in healthcare reform; for not moving faster to close the prison at Guantánamo Bay; and for failing, so far, to end the ban on gays serving openly in the military.

A Democratic president and his mouthpiece taking shots at their own base in a fashion almost identical to the right. I can almost hear Gottfried's Iago the Parrot yelling "I may have a heart attack and die from the surprise!" as I read that.

In any case, all of those bits cited above are legitimate criticisms of the president's policies; far more than that "president Kucinich" stuff. I expect that that's part of the problem. It's easy to deflect the right's attacks, because they are utterly insane. They're based on ideas that are proven to be completely ludicrous, and aren't being presented in good faith in the first place. Liberals are far more dangerous. They have a point. Plus, I don't think Obama was really thinking about his own theoretical base when he was talking about "no red or blue America" and "teams of rivals" and all that. He, like so many Dems, assumed that the effective spectrum was between them and the right. That he might get criticism from non-conservatives may well have never occurred to him. Especially with all the Obamamania at the time.

So, who's Gibbs angry at?

While visibly frustrated, Gibbs did not specifically name any of the White Houses’s liberal detractors by name.

Oh. It figures that he'd never name any of them. That might get a bit inconvenient. The article mentions the Progressive Change Campaign's Adam Green, but he's just one of many. A lot of progressives are pissed these days.

Gibbs’s tough comments reflect frustration and some bafflement from the White House, which believes it has done a lot for the left.

In just over 18 months in office, Obama has passed healthcare reform, financial regulatory reform and fair-pay legislation for women, among other bills near and dear to liberals.

Obama is also overseeing the end of the Iraq war, with the U.S. on schedule to end its combat operations by the end of this month.

He’s also added diversity to the Supreme Court by nominating two female justices, including the court’s first Hispanic. Yet some liberal groups have criticized his nominees for not being liberal enough...

...The lack of appreciation or recognition for what Obama has accomplished has left Gibbs and others in furious disbelief.

Larry Berman, an expert on the presidency and a political science professor at the University of California-Davis, said he has been surprised that liberals aren’t more cognizant of the pragmatism Obama has had to employ to pass landmark reforms.

“The irony, of course, is that Gibbs’s frustration reflects the fact that the conservative opposition has been so effective at undermining the president’s popular approval,” Berman said.

“And from Gibbs’s perspective, and the White House perspective, they ought to be able to catch a break from people who, in their view, should be grateful and appreciative.”

See, this is what people like Gibbs (and Berman) just don't get. Progressives and liberals do understand that there needs to be a level of pragmatism. They do understand bargaining and negotiation. But as Green said in the article and as a lot of people have said elsewhere (including myself), this administration rolls over for Conservatives without bothering to negotiate. They aim too low to start with, and then trade off everything else worthwhile in exchange for practically nothing. They aren't willing to take a stand, aren't willing to pick issues to attack Republican intransigence on, and (as we see with this story) attack their own side at every opportunity.

The big problem is that progressives believe that the administration and this Congress (principally the Senate) is alternately weak and too willing to be bought-and-paid for by whichever corporation has the biggest pockets. They believe this because Obama and the Congressional Dems have given them every reason to believe it. Whining and moaning in the media won't change that, and won't make it go away. You have to prove to progressives that you have their best interests in mind. You have to show them that you ultimately respect their beliefs and will honor them as your core supporters.

But, instead, progressives get smeared with this nonsense.

Hell with 'em.

You Don't Say

Jonathan Chait on Journolist:

For people like me, the national debate mostly revolves around a liberal-moderate-conservative axis, and more hard-left or even traditional liberal views are fairly marginal. Journolist brought people like me into contact with a lot of those sort of liberals, and my main response was to realize that I'm a lot less liberal than I had thought.

No kidding!

Funny. I read material by—and interact with—people to the left of me all the time. It certainly hasn't made me "realize that I'm a lot less liberal than I had thought". If anything, it makes me recognize that they might have a point.

But, then again, I don't work for Marty Peretz, and I'm not drenched in every B.S. consensus that Washington has to offer. As one of Chait's commenters pointed out:

As the "senior editor" of a biweekly magazine Jonathan Chait presumable understands full well why Eric Alterman is arriving late in writing a story for The Nation. The sentence in Alterman's article that Chait really needs to take to heart is:
-- As a collective we held people's feet to the fire, encouraged excellence, bemoaned administration wimpiness and took numerous opportunities to remind New Republic editors and authors that they work for a reactionary racist lunatic.

A while back in one of these incidents where Chait yet again defends Martin Peretz from criticism Spencer Ackerman reminded us:

-- Everyone who works at TNR knows Marty is a racist.

But, hey, he signs the paychecks. Where You Stand, once again, Depends On Where You Sit. And since Chait sat with all the people who were cheering on Bush's Iraqi Adventure, is it any wonder that he got all uncomfortable when exposed to those disgusting Dirty F**king Hippies?

The Best Part About WikiLeaks

Edit: Ugh. When I wrote that piece, I hadn't counted on Thiessen's site being a festival of terrible HTML. Invisible post fixed.

Honestly, the best part about the whole Wikileaks phenomenon is the spectacle of Mark Thiessen saying that America should invade Iceland to kill or capture Julian Assange:

Assange seems to believe, incorrectly, that he is immune to arrest so long as he stays outside the United States. He leads a nomadic existence, operating in countries such as Sweden, Belgium and Iceland, where he believes he enjoys the protection of "beneficial laws." (He recently worked with the Icelandic parliament to pass legislation effectively making the country a haven for WikiLeaks). The United States should make clear that it will not tolerate any country -- and particularly NATO allies such as Belgium and Iceland -- providing safe haven for criminals who put the lives of NATO forces at risk...we do not need permission to apprehend Assange or his co-conspirators anywhere in the world.

So, what, you're going to send the troops into Reykjavic? Do you even know what the charge would be? It's not illegal to publish sensitive information in the United States, after all. There's no Official Secrets Act, Robert Novak isn't in the slammer, and there's no way that you could justify extradition on this.

But it gets better.

Arresting Assange would be a major blow to his organization. But taking him off the streets is not enough; we must also recover the documents he unlawfully possesses and disable the system he has built to illegally disseminate classified information.

This should be done, ideally, through international law enforcement cooperation. But if such cooperation is not forthcoming, the United States can and should act alone. Assange recently boasted that he has created "an uncensorable system for untraceable mass document leaking." I am sure this elicited guffaws at the National Security Agency. The United States has the capability and the authority to monitor his communications and disrupt his operations.

Monitor, perhaps. But how are they going to stop it, exactly? We know that the Wikileaks people are both very paranoid and very, very careful. They'll have distributed this stuff all over the place, and I doubt that any of them know exactly where all of it is. Much of it will almost certainly be in countries that would take a very dim view of the United States attempting to cut off their access to the Internet. And "attempt" is the key word. What is the US supposed to do to, say, keep this stuff from being disseminated on servers in Europe? Are they going to DDOS the ISPs? Are they going to try to hack in there and delete it off the servers? Are they going to send the Green Berets in to blow up the server farms?

Does Thiessen not think that the Wikileaks guys would have thought of that and spread the data out? Does Thiessen even know how the Internet WORKS?

No, Mark, they aren't going to start a war with Europe over Wikileaks. They aren't going to try a DOS attack, or nuke Iceland from space, or any of this other crap. They aren't even going to send a black-bag squad to arrest Assange, either, because it'd instantly become the most important, embarrassing story in the World and just raise questions about why Novak and the Pentagon Papers guy walk free. Stop pretending that this is a Clancy novel.

Prop 8 Overturned

Was there ever any doubt? It was hilariously unconstitutional.

Onward to the Supremes, I guess.

The big question is whether or not it's going to be a campaign issue this fall. My guess is "no". People have bigger things to worry about. Gay marriage is irrelevant when you're underwater and unemployed.