The Commentariat -- February 14, 2012
My column in the New York Times eXaminer is on David Brooks' scary advocacy of Bourgeois Paternalism -- worse than Michele Bachmann's dreaded "re-education camps." The NYTX front page is here. You can contribute here.
The Senate may vote as early as today (Tuesday) to greenlight construction of the Keystone XL pipeline without any environmental or economic review, overriding President Obama's decision to table action. Here are links to petitions telling the Senate to reject the pipeline bill that will be delivered to the Senate by MoveOn.org, the Other 98 Percent, Oil Change International and Democracy for America. Thanks to contributor Dave S. for the links. AND here's one from CREDO.
The New York Times has a fancy interactive graphic on the administration's FY 2012 proposed budget which is worth visiting just as an homage to the people who designed it & input the data. ...
... The budget itself is here; Jeff Zeints, the Acting OMB Director, provides an overview. ...
... New York Times Editors: "President Obama’s 2013 budget ... offers a clear and welcome contrast to the slashing austerity — and protect-the-wealthy priorities — favored by Republican Congressional leaders and the party’s presidential candidates. The president’s budget calls for long-term deficit reduction, but its immediate priority is to encourage the fledgling economic recovery. Instead of trying to stabilize the budget on the backs of the poor, it would raise taxes on the wealthy and on big banks and eliminate many corporate tax loopholes.... Republicans, on the other hand, would cut taxes for the rich and cut almost all of that spending, heedless of the pain that it would inflict on the economy and the millions of Americans still reeling from the downturn’s effects." ...
... Jonathan Cohn of The New Republic has a pretty good take on Obama's proposed budget. It is not all complimentary -- he thinks the proposal does not go far enough to raise revenues, but it sure beats the GOP-Grover Norquist let-'em-die plan.
Jonathan Bernstein, in the Washington Post: only the Democrats are serious about deficit reduction. As of Monday afternoon, GOP House leaders "are now supporting a payroll tax cut extension that isn’t paid for.... In other words, when push comes to shove, they’d much rather increase the federal budget deficit than to raise even a dime of taxes on wealthy Americans."
Igor Volsky of Think Progress: "While GOP senate minority leader Mitch McConnell (R-KY) has pledged to fight the Obama administration’s modified regulation requiring health insurers and businesses to offer contraception coverage without additional cost sharing, the revised rule 'appears to have won over' two of the five Republican women senators. Sens. Olympia Snowe (ME) and Susan Collins (ME) — both of whom have sponsored legislation requiring insurers to offer contraception benefits in all health plans — are in favor of the new compromise."
Joe Romm of Think Progress: Joe Nocera has joined the ranks of the climate ignorati. CW: an excellent takedown. Romm suggests Nocera talk to some actual climat scientists as opposed to, say, Exxon executives.
International lawyer Eric Lewis, in a New York Times op-ed, on the eight-year detention of two Pakistanis who have never been charged with crimes. Picked up in Iraq by British soldiers, the two men are being held in Bagram AFB in Afghanistan "in conditions far worse than those at Guantánamo Bay."
New York Times Editors: "Ten years ago, Cardinal Edward Egan, then the leader of the New York archdiocese, famously apologized to his parishioners for the church’s failure to deal with priests who abused children. Now, three years after his retirement, he suddenly feels moved to renounce that courageous move.... Court records that the church fought to keep secret revealed cases in which then-Bishop Egan did not alert secular authorities in Bridgeport, failed to aggressively investigate allegations, moved offending priests to other parishes and authorized hush-money payments.... Cardinal Egan’s feckless ruminations are Exhibit A on the problem of shepherds hiding from their responsibilities."
Jake Tapper of ABC News: "Tomorrow outside the Westminster dog show at Madison Square Garden at noon the group 'Dogs Against Romney' will protest 'to ensure pet lovers are aware that Mitt Romney is mean to dogs,' according to the group’s press release." ...
Right Wing World
Lydia Saad of Gallup: "Mitt Romney and Rick Santorum are now statistically tied for the lead in Republican registered voters' preferences for the 2012 GOP nomination -- 32% to 30%, respectively. Newt Gingrich, who led the field as recently as late January, is now third, favored by 16%, while Ron Paul's support has dwindled to 8%, the lowest level yet seen for him in 2012." ...
... Public Policy Polling: "Rick Santorum's taken a large lead in Michigan's upcoming Republican primary. He's at 39% to 24% for Mitt Romney, 12% for Ron Paul, and 11% for Newt Gingrich. Santorum's rise is attributable to two major factors: his own personal popularity (a stellar 67/23 favorability) and GOP voters increasingly souring on Gingrich. Santorum's becoming something closer and closer to a consensus conservative candidate as Gingrich bleeds support." Willard's father George was a popular governor of Michigan. ...
... Greg Sargent: "In November, Romney was beating Obama among these voters, 53-41. Now those numbers are upside down: Obama is beating Romney among them, 51-42. That’s a net 19 point swing of independents in Obama’s direction in three months." ...
... Ezra Klein: "The mounting danger for Romney is that his candidacy will lose its central justification: That he’s the most electable Republican in the field." ...
... David Frum in the Daily Beast: "In his charmingly blunt way, [during his CPAC speech, Grover] Norquist articulated out loud a case for Mitt Romney that you hear only whispered by other major conservative leaders; to wit: Romney will be a weak president who will do what congressional Republicans tell him to do. "This is ... not a very realistic political program: congressional Republicans have a disapproval rating of about 75%. If Americans get the idea that a vote for Romney is a vote for the Ryan plan, Romney is more or less doomed." Thanks to contributor Jack Mahoney for the link.
Frank Bruni: "To understand voters’ bottomless cynicism, look no farther than politicians’ boundless revisionism. Republicans have no monopoly on it [CW: examples of Obama lies, please, Frank], but they occupy center stage at the moment, shedding culpability for past deeds even as they ask us — as leaders do and should — to take responsibility for our own."
News Ledes
New York Times: "Members of a House-Senate committee charged with writing a measure to extend a payroll tax reduction and provide added unemployment benefits reached a tentative agreement Tuesday evening, with Republicans and Democrats claiming a degree of political victory in a fight with significant election-year implications."
New York Times: "The health care products giant Johnson & Johnson continued to market an artificial hip in Europe and elsewhere overseas after the Food and Drug Administration rejected its sale in the United States based on a review of company safety studies. During that period, the company also continued to sel in this country a related model, which earlier went on the market using a regulatory loophole that did not require a similar safety review."
New York Times: "A proposed wireless broadband network that would provide voice and Internet service using airwaves once reserved for satellite-telephone transmissions should be shelved because it interferes with GPS technology, the Federal Communications Commission said Tuesday. The F.C.C. statement revokes the conditional approval for the network given last year. It comes after an opinion by the National Telecommunications and Information Administration, which said that 'there is no practical way to mitigate the potential interference at this time' with GPS devices."
New York Times: "A team of European and American mathematicians and cryptographers have discovered an unexpected weakness in the encryption system widely used worldwide for online shopping, banking, e-mail and other Internet services intended to remain private and secure."
Guardian: Chinese Vice President "Xi Jinping, the man destined to lead China in the coming decade..., arrived [in the U.S.] on Monday, and the highlight of his full four days in America will be an Oval Office meeting on Tuesday with president Barack Obama." Reuters story here.
ABC News: "After a relatively quiet weekend that saw nearly 50 people killed, heavy shelling resumed this morning in the neighborhood of Bab Amr in the city of Homs, Syria. Tuesday marks the tenth day of the Syrian Army's assault on Homs, and activists tell ABC News that over 500 people have been killed since February 4th."
Haaretz: Israeli "Defense Minister Ehud Barak said Tuesday that the attempted bombing in Bangkok proves that Iran and its proxies continue operating in the ways of terror.... Earlier on Tuesday, a man thought to be an Iranian national was seriously wounded in Bangkok when a bomb he was carrying exploded and blew his legs off. Shortly before, there had been an explosion in a house the man was renting in the Ekamai area of central Bangkok."
Guardian: "News Corporation executives could be vulnerable to individual prosecution by US anti-bribery authorities under the so-called 'willful blindness' clause that holds company chiefs culpable if they chose to be unaware of any specific wrongdoing by their employees. The FBI and other law-enforcers are probing Rupert Murdoch's media empire under the Foreign Corrupt Practices Act that seeks to punish US-based companies engaging in bribery abroad. News Corp is headquartered in New York."
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Reader Comments (17)
Marie:
I really "heart" your complex and interesting columns.
I am really "heartened" by the videos and images which show (by way of dogs) Romney's absolute lack of empathy. It looks like people are finally getting it about what it is that they don't like about him.
No, he definitely isn't even fit to run for dog catcher.
Marie, I loved reading your comments in the old days and I can't wait to read your new stuff these days. Great love to you and to NYTex for giving you a multi-user forum.
In other news, have you seen Frum's dismissal of a Romney presidency as a human rubber-stamp for the most virulent forces on K Street and in Congress (hint: Grover Norquist and Paul Ryan)?
http://www.thedailybeast.com/articles/2012/02/13/grover-norquist-speech-cpac.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+thedailybeast%2Farticles+%28The+Daily+Beast+-+Latest+Articles%29
Marie, I loved reading your comments in the old days and I can't wait to read your new stuff these days. Great love to you and to NYTex for giving you a multi-user forum.
In other news, have you seen Frum's dismissal of a Romney presidency as a human rubber-stamp for the most virulent forces on K Street and in Congress (hint: Grover Norquist and Paul Ryan)?
http://www.thedailybeast.com/articles/2012/02/13/grover-norquist-speech-cpac.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+thedailybeast%2Farticles+%28The+Daily+Beast+-+Latest+Articles%29
"The Senate may vote as early as today (Tuesday) to greenlight construction of the Keystone XL pipeline without any environmental or economic review, overriding President Obama's decision to table action"
There has been environmental review.
The US State Department's final environmental impact statement, released in 2011, is here.
The State Department recommended on 1/18/2012 that President Obama deny the permit because they do not "have sufficient time to obtain the information necessary to assess whether the project, in it current state, is in the national interest".
FYI: The State Department has also published a 9 page "memorandum" that disagrees with the paper by Philip Verleger, "The Tar Sands Road to China" referenced on this site a day or two ago. The State Department's memorandum is here.
@Marie Burns--
NYT's interactive graphic on the 2012 budget is indeed brilliant! I will have to spend a great deal more time playing with it—if only because it's fun!—but one thing stood out immediately for me when examining the budget as viewed in the first format, “All Spending.”
The third largest circle there is “Interest on the Public Debt, $472 billion, +4.8%”
Since one-third of the public debt is owed to foreigners, that's $157 billion that's simply leaving the country.
http://en.wikipedia.org/wiki/United_States_public_debt#cite_note-103
That's a lot of money that could have been spent elsewhere, or, at least, we could have owed to ourselves instead of to China & Co.
@ Zee. Bear in mind that much of the private debt goes the other way; that is, foreigners owe American entities. I think we discussed this some while back. See this Krugman post. Since, in a recession, private debt is necessarily transferred to the public, I find the public debt to foreigners less worrisome than you do. Ideally, tho, I wish it were all in U.S. Treasuries owned by small American ma-and-pa investors; something that is unlikely to be during a recession, when Ma & Pa don't have the $$$ to put into Treasuries -- or anything else.
@Zee
You are right. The New York Times interactive budget graphics are great. To your point about interest. What I find disturbing is the trend. The annual interest expense on the public debt has nearly doubled between Obama's 2011 budget proposal and his 2013 proposal.
The NYT 2011 budget graphic is located here.
And notice that 2011's interest expense is up 33.5% in one year (from 2010 FY).
At the present rate, it looks to me that the interest on the public debt may well exceed the defense budget by 2015. (Can't be sure because interest expense is up by "only" 4.8% between FYs 2012 & 2013. Not sure why it slowed down so much.)
@Karl Thompson
Your assertion that an environmental impact statement has been done is correct but fails to account for legislation by the State of Nebraska in a special legislative session that reached a compromise with the Keystone XL pipeline folks to compromise the route outside of the Ogallala Aquifer provided Nebraska pay for an environmental impact study once the pipeline people determined the new route. The current environmental impact statement was completed before the agreement was reached to keep the pipeline out of one of this nations national treasures.
A simple google of the issue leads to a Reuters article which states
"One bill puts into law a compromise agreed with Keystone pipeline builder TransCanada to move the route away from the Sandhills and the Ogallala aquifer. The second bill approves state funding for an environmental study for a new pipeline route not to exceed $2 million.
By law, the governor now has the final say in state government on the new route. The U.S. Secretary of State has the final say nationally." See, http://www.reuters.com/article/2011/11/22/us-oil-pipeline-nebraska-idUSTRE7AL1M120111122
All of this present legislation by congressional repubs is simply grandstanding. There is no present workable route from both the perspectives of the pipeline company itself and the Nebraska voters via the Nebraska Legislature and our Governor.
@ Karl Thompson. Re: the memorandum you cite, it was prepared last June by the oil & gas consulting firm EnSys, as part of the Keystone XL-friendly EIS you also cite, also an EIS production. As FromtheHeartland explained, the EIS is no longer viable because of Nebraska state legislation, for one thing. At the time if its publication, the EnSys EIS was slammed by environmentalists as "an insult to anyone who expects government to work for the interests of the American people."
Some of the pricing observations of both Verleger & EnSys are probably out of date also. No matter which side of the argument you're on, all the "experts" seem to agree that any pipeline from Canada to the Gulf Coast would cause U.S. fuel prices to rise somewhere in the U.S., likely in the Northeast, possibly also in the West & for the short-term anyway in the Midwest. Of course that might not be a bad thing if we want to cut fuel emissions here.
The Tar Sands pipeline (Keystone sounds too contrived) will be better in the future due to the scrutiny and conflict of today. The reason you don't hear much about the Alaska pipeline is the people who care about Alaska made the oil drillers do a better job. The oil drillers would do a one-off job to get the oil to market one day sooner because they don't care about the beauty of where they are.
Don't believe me? I saw how much these people trashed the town of Valdez when they "cleaned" Exxon's spill. Do the math: 4-500,000 barrels per day at $100/per is a lot of incentive to finish a little faster and cut more corners.
All this discussion is a work around to cut corners so the environmental laws can be subverted. Oil companies know where all the water is: they pass it as they drill looking for oil. Just like alternative energy, oil companies have every incentive to screw up public water supplies. They will screw up public water and then sell you the water they own rights to. The difference between the oil patch of Texas, Oklahoma and Louisiana and Saudi Arabia is less than you think. What do you think will happen to the sleepy burgs of Alberta and North Dakota? Corrupted by oil money?
@Marie--
I do indeed remember our discussion about the magnitude of the debt that we owe to ourselves versus the debt that we owe to foreigners, which is why I qualified my statement with the words “or, at least, we could have owed to ourselves instead of to China & Co.”
But the new link you provided to the Krugman article is pretty enlightening. I had no knowledge of the size of the debt that is owed to us by foreigners, which puts things in a somewhat better light. Thank you.
Still, non-economist that I am, I am still a little puzzled by your remark that “Since, in a recession, private debt is necessarily transferred to the public, I find the public debt to foreigners less worrisome than you do.”
I think I understand the first phrase, but correct me if I'm wrong: In a recession, the government buys up bad private debt as part of its effort to boost the economy. That transfers private debt to the public.
But it's not clear to me why that makes you worry less about the public debt owed to foreigners.
And I agree with you: it would be better if those Treasuries were owned by Mom and Pop investors.
With regard to the extension of the Soc Sec wage tax cut:
Jonathan Bernstein, in the Washington Post: only the Democrats are serious about deficit reduction. As of Monday afternoon, GOP House leaders "are now supporting a payroll tax cut extension that isn’t paid for.... In other words, when push comes to shove, they’d much rather increase the federal budget deficit than to raise even a dime of taxes on wealthy Americans."
Politics aside, it is not clear that it is a good idea to "pay for" the FICA tax cut. The principle in support of a cut in the wage tax is that it puts money into the pockets of all workers, which should stimulate consumption. As I understand it, the mechanics of this tax cut involve transfer from general revenue into the Social Security Trust Fund, so in that respect it is "paid for". Thus, the real question to consider is whether it makes sense to raise revenue from high income taxpayers to compensate for the transfer out of the general revenue.
Philosophically, I agree that it makes sense to transfer the burden to those who can best afford to carry it, but I think that the question of whether paying for the wage tax cut with other taxes is stimulatory (which is the stated intent of the temporary wage tax holiday.)
@ tim turner. Thanks for writing. Paying for the tax cut by dinging the same people who are getting a tax break of course does not make sense. But rich individuals and corporations are sitting on their ass-ets. The money isn't stashed under the mattress, of course, so it's doing something, but the something it's doing -- since it's not being put into much productive use (and some is being kept in overseas bank accounts or otherwise used to boost businesses based in other countries) -- would be well-used to pay for a middle-class tax break. This would be what Republicans call a "redistribution of wealth." But when they start wailing about that, remember that for the last several decades we have been "redistributing wealth" upward.
Most of those who receive the break, I should add, will be putting the money back into the economy, because they need to buy stuff.
@ Zee. I worry less about public debt owed to foreigners because, on balance -- considering both private and public debt -- we don't owe "them" much more than they owe "us," AND our net foreign debt has not risen much over the years. Once again, Krugman is the "explainer." These two line graphs will help. As you can see, the big increase was in the Bush II years, not the Obama years.
Before the recession, the American private sector was way overextended. Now it is much less so, partly because the recession scared the beejezus out of Mom & Pop & partly because some of them went bankrupt/lost their homes, the latter of course being a less-than-optimal way to clear a debt.
But that constriction of private debt also meant the private sector had little money to spend on stuff. Ergo, the government stepped in to do some spending -- they "printed" money. So the overall size of the debt has risen only a little; it's just been transferred from the private to the public sector. This is our advantage over, say, Greece, and why Greece can't buy its way out of its recession/depression. Greece can't print money. Bernanke can. And he does.
MB,
It is true that the consistently overlooked, under-reported reality is that federal revenue is at an historical low according to OMB data:
http://www.whitehouse.gov/omb/budget/Historicals
Federal revenue in 2011 was about 14.4% of GDP, which is a post WWII low, and about 25% below the historic average of ~18%. If budget deficits do matter (sorry, Mr. Reagan), then a large part of the problem is inadequate revenue.
However, during a recovery where we can borrow at less than 2% (for 10-yr treasuries), it may be deficits truly are irrelevant, and that the wage tax holiday really ought to be "borrowed" in order to stimulate consumption.
The separate, and equally important consideration is whether increasing taxes on top earners would counteract the stimulatory effect of the wage tax holiday. It may be, as you suggest, that increasing taxes on high earners would have little impact on consumption. I'm no economist, but I think that is a problem worthy of study. But politically, I think the unpaid tax break to all workers is a win-win, and it appears to me that the questions about increased taxes on high earners will be tested with the expiration of the Bush II tax cuts at the end of this year.
@ tim turner. Taxing the rich is a problem worthy of study, and it has been studied. I don't have time to look it up, but the assertions I made above did not come out of my hat of mean librul tricks. The rich are not doing their fair share to stimulate the economy. You can look up the research and report back.
The argument about the effect on the economy of taxing the rich, like all other Republican arguments makes no sense (to put it politely). Exactly how many jobs did Mitt's money sent to storage overseas create? The fact (sorry to be annoying) is that the super rich don't spend a huge chunk of their money. And explain to me the difference between Mitt hiring 20 people to build his umpteenth house vs. the Federal government taking the money to hire 20 people to build a highway? Other than the fact that the highway does more than just create jobs. My apologies for using basic logic and facts. I know that this is not part of American politics.