dithering

[another excellent Tom Tomorrow cartoon]

Last month, the Vice President from those missing years, Dick Cheney, interjected himself into President Obama’s deliberations over Afghanistan, accusing him of “dithering.” Emerging from his undisclosed lair, the Dark One sneered:

"The White House must stop dithering while America's armed forces are in danger."

(He went on to attack President Obama for scrutiny of the Dark One’s torture practices.)

The usual practice in presidential transitions is that the outgoing administration gets out of town immediately after the inauguration and allows the new administration to enact its own policies without gratuitous hectoring from the previous regime. Cheney, who was uncommunicative to an extraordinary degree while in office (going so far as to appeal to the Supreme Court to avoid having to reveal the names of the industry task force he put together to determine energy policy), all of a sudden can’t keep his mouth shut now that someone else has to deal with the catastrophe his team left behind.

Let’s review: The worst economic crisis since the Great Depression, trillion dollar deficits, and two wars going badly.

The proper response would have been to slither back under a rock somewhere. But if Cheney were to insist upon saying something the proper response would have been along the lines of: “I’m sorry. Really. I’m very, very sorry for the state of the country. If there is anything – ANYTHING – I can do to help, please let me know. Not that there is any reason you SHOULD seek my assistance. But if you do, I will just be here under this rock.”

As an example of how it should be done: Vice president Gore – part of the team that produced unprecedented economic growth including the creation of over 22 million jobs in eight years, that left behind record budget surpluses, reduced federal civilian employment by over 400,000, led a NATO force that deposed a brutal dictator in Serbia without the loss of a single American life, and … (well, you get the idea) – gracefully left DC and stayed quiet for a respectable period of time despite having garnered over 500,000 more votes than George W. Bush in the 2000 presidential election. And, it is worth pointing out, neither Gore nor Clinton nor any other member of their administration made any attempt to turn the Bush administration’s massive intelligence failure resulting in the 9/11 attacks into a partisan issue. (You might recall from distant history that in May of 2001, Bush named a terrorism task force headed by none other than Dick Cheney. According to the 9-11 Commission, the Cheney Task Force, “was just getting underway when the 9/11 attack occurred.” Which is another way of saying that they never met. They were “dithering,” as some might say.)

[Rather than following the example of Cheney between Bush administrations, retiring to a CEO gig at a company at the center of the military/industrial complex – like, say, Haliburton – Gore headed to Silicon Valley and joined the Google team long before their IPO and joined the Apple board when its share price was $7.47 – it closed today a few cents under $200. That is the kind of mojo that produced record budget surpluses.]

The war in Afghanistan (at least the latest iteration of the war that has been going on for over 30 years), which began over eight years ago (98 months), is now the third longest war in US history after Vietnam (116 months) and the Revolutionary War (100 months). And in both of those other wars the insurgents won – not a good omen. World War II, by contrast, only took 45 months. But, wait. I thought we WON the war in Afghanistan back in … 2002? I know because in September of 2002, George W. Bush assured us that, “The Taliban’s ability to brutalize the Afghan people and to harbor and support terrorists has been virtually eliminated.” He took it even further in September of 2004, boasting that the “Taliban no longer is in existence”. No longer in existence. Pretty definitive. No wonder, then, that when Gen. David D. McKiernan, then the top U.S. commander in Kabul, asked for another 30,000 troops, the Bush administration denied them. They chose to … dither. For eight years. While pursuing a trillion dollar war of choice in Iraq.

The Senate Foreign Relations Committee released a report today that said what we already knew: Osama bin Laden was "within the grasp" of US forces in Afghanistan in late 2001 but escaped because the military’s call for reinforcements was denied by the Bush administration:

"The failure to finish the job represents a lost opportunity that forever altered the course of the conflict in Afghanistan and the future of international terrorism, leaving the American people more vulnerable to terrorism, laying the foundation for today's protracted Afghan insurgency and inflaming the internal strife now endangering Pakistan."

Not that Cheney needs anything of real substance to launch a partisan attack on President Obama. He even took it upon himself to attack President Obama for showing too much deference to the Emperor of Japan, calling the president’s bow to the 75-year old man, “a sign of weakness” and “fundamentally harmful” to the US. Does that mean Japan now goes on Cheney’s list of further wars after Iran? Because everyone knows that the proper response of a US president to a Japanese leader is to throw up on him.

(Joe Klein had a good comment in TIME: “Was his deep bow indicative of anything other than his physical fitness? (My midsection, sadly, prevents the appearance of obsequiousness in such circumstances.)”)

Contrast President Obama’s diplomatic gesture with the sobriety and dignity Cheney showed when seated among heads of state and other dignitaries, including French President Jacques Chirac and Russian President Vladimir Putin, at the 60th anniversary of the liberation of Auschwitz.


So now President Obama is left to deal with the tragic mess in Afghanistan – on top of the worst economy in 70 years and that other war that Cheney was so eager to start. There are no good options in Afghanistan. For better or worse (worse, I fear), President Obama has already more than doubled the number of US troops in that country. He is to be commended for taking his time to challenge the options he was being given and to determine a strategy going forward before further escalating the US commitment in that country. I don’t like what I have been reading about what he will be announcing tomorrow evening. I would prefer we get out as soon as practical (more on that in due course). I REALLY don’t like the idea of further escalation in that graveyard of empires. But I will hear out President Obama with an open mind tomorrow evening knowing that he has been struggling with the difficult hand he has been dealt and that he has given genuine thought to the challenges we face there.

Rather than just cringe before the macho swagger of Republican critics like Dick Cheney who don’t have the basic decency to support their successors who are left to struggle with the unprecedented combination of catastrophes they left behind.

deficits vs. unemployment

Let’s take a little test here to see if you have what it takes to be a political pundit. Look at the following two charts, each of which puts a recent economic metric into historical perspective, and tell me which one appears to indicate an alarming crisis.

The first chart is the yield on the 30-year Treasury bond:



[Note: The 30-year Treasury bond was discontinued for 4½ years – from 10/01 to 2/06 – due to the record budget surpluses bequeathed by the Clinton administration and the Bush administration’s subsequent desire to avoid dealing with the long-term consequences of its return to record budget deficits. Here is the corresponding chart for the yield on the 10-year Treasury.]

As you can see from this chart, the yield on the 30-year Treasury bond dropped steadily from the early/mid-‘80’s until the early part of this decade and has held pretty steady since (with the exception of a big dip during last year’s financial crisis as money sought a safe haven in Treasuries). As I write this, the yield is 4.24% (3.28% for the 10-year Treasury), close to the lowest it has been in 50 years with the exception of that dip last year. (By contrast, it was 8.9% when Ronald Reagan left office.) Basically, the US government is enjoying just about the easiest time it has had financing its debt in generations.

Now for the second chart: The rate of job loss during the current Great Recession compared with the rate of loss in all previous post-WWII recessions:


The unemployment rate, at 10.2%, is the highest it has been since the Great Depression. By the broader measure that includes the underemployed and those who have dropped out of the labor force, it is 17.5%. And we continue to shed jobs. (Check out this fascinating time-lapse map showing the increase in unemployment by county by month since the Great Recession began two years ago.)

There you have it, aspiring pundits. Can you guess which is the alarming crisis: a/ the ability of the US government to finance its debt, or, b/ unemployment?

If you guessed, “a/ the ability of the US government to finance its debt,” congratulations! You, too, could be a political pundit for the New York Times, Wall Street Journal or any number of other publications or networks.

You would expect an op-ed in the Wall Street Journal from the chief economist for John McCain’s presidential campaign, Douglas Holtz-Eakin, to hype the deficit threat. But earlier this week, the New York Times published a front-page piece by Ed Andrews (probably that paper’s worst business writer), on the subject (“Wave of Debt Payments Facing U.S. Government”). It quotes legendary Pimco bond fund manager, Bill Gross, but fails to note that Gross has increased his fund’s holdings of US government-related debt from 48% last September to 63% now – the highest portion he has held in US government debt in five years and not exactly the position the world’s greatest bond fund manager would be taking if he expected interest rates on that debt to explode (which would cause the value of his holdings to plummet).

Currently, the US government’s net interest expense as a percentage of GDP is the lowest it has been in 30 years. But Andrews notes that it is projected to increase dramatically over the next ten years – to roughly the level it was when Bill Clinton took office in 1992. That’s certainly undesirable. But as front-page crises go, it doesn’t compare to the immediate problem of unemployment.

And it doesn’t remotely suggest anything like the looming prospect of a US government default on its obligations or a return to hyper-inflation as some of the more alarmist commentary suggests could happen. Take, for instance, a recent op-ed by Robert Samuelson in the Washington Post (“Could America Go Broke? ”), which included bits like this:

“Deprived of international or domestic credit, defaulting countries in the past have suffered deep economic downturns, hyperinflation, or both. The odds may be against a wealthy society tempting that fate, but even the remote possibility underlines the precariousness and the novelty of the present situation. The arguments over whether we need more ’stimulus’ (and debt) obscure the larger reality that past debt increasingly constricts governments’ economic maneuvering room.”

Samuelson cites Japan as an example of government debt out of control, which actually disproves his alarmist rhetoric – Japan’s government debt has increased to over 200% of its GDP (about three times the US level) while the interest rate on its 10 year bonds has actually decreased from over 7% in 1990 to 2.1% now.

Let’s compare the prospect of continuing high unemployment with the risk of a big increase in inflation. Paul Krugman points to the Philadelphia Fed survey of professional economic forecasters. Inflation is forecast to remain comfortably below the Fed’s 2% target while unemployment persists at stubbornly high rates – over 8% well into 2012. The current spread between 10-year Treasuries and the 10-year TIPS (Treasury inflation-protected securities) indicate that the market is forecasting 10-year inflation averaging 1.5%.

That's why it is troubling to read reports like this:

The Obama administration, mindful of public anxiety over the government's mushrooming debt, is shifting emphasis from big-spending policies to deficit reduction. Domestic agencies have been told to brace for a spending freeze or cuts of up to 5 percent as part of a midterm election-year push to rein in record budget shortfalls.

With unemployment still rising and nascent economic growth anemic, premature focus on near-term deficit reduction risks a repetition of FDR’s spending cuts and tax increases in 1937 that plunged the economy back into a steep decline before the country had fully recovered from the Great Depression.

While unemployment should be the priority in the short term, deficit reduction should be a long-term priority. Toward that end, it is worth revisiting how we got into our current mess and what that suggests for how we get out of it.

As I have pointed out before, the real explosion in the federal debt began under Ronald Reagan who cut taxes while increasing government spending to levels previously exceeded only during the four years of World War II. (After six years with spending over 22% of GDP and two years over 23%, Reagan left office with federal spending running at over 21%. By contrast, President Clinton left office with spending at 18.5% of GDP.) The result was that the national debt increased more than 400% from less than a trillion when Reagan took office to over $4 trillion when President Clinton and a Democratic Congress finally increased taxes again in 1993. The deficits during those years are even more dramatic when you state them in current dollars. In 2009 dollars (using the OMB year-end debt figures and the St. Louis Fed GDP deflator), Reagan and the first Bush ran up cumulative deficits of roughly $5 trillion. (This despite favorable demographics that resulted in entitlement spending to decline temporarily from 11.9% of GDP in 1983 to 10.1% in 1988. Last year, by contrast, the figure was 12.5%.)

The turning point in this deficit story was the 1993 Budget Act, about which I have written before, which was designed to eliminate the record budget deficits inherited by President Clinton. It included a large overall increase in taxes and extended the pay-as-you-go budget rules. It passed without a single Republican vote in Congress by the closest possible margin – by one vote in the House and with Vice President Gore breaking a 50-50 tie in the Senate. Republicans predicted that the economy would collapse as a result. Instead, it produced record budget surpluses and the strongest economy in a generation. But the Democrats paid a price, as they were crushed in the 1994 elections and lost control of Congress. Unfortunately, the lesson that was learned in Congress was that fiscal responsibility doesn’t pay politically.

George W. Bush inherited record budget surpluses but quickly turned that around. Together with a Republican Congress, he enacted over $2 trillion in tax cuts, increased the military budget even before counting the trillion dollar cost of two wars, and passed the largest increase in entitlement spending (Medicare Part D) since the creation of Medicare in the 1960’s with a ten-year cost of almost a trillion dollars. At least when LBJ created Medicare he also enacted taxes to pay for it. Bush and Congressional Republicans never even discussed any means of paying for their budget-busting initiatives. To pull that off, they had to let the pay-as-you-go budget rules lapse. That left them free to increase spending and cut taxes at will – which they did. The result, predictably, was an increase of over $5 trillion in the federal debt, almost doubling it in just eight years. Together with the quadrupling of debt under Reagan and Bush’s father, that accounted for almost 80% of all debt that had been accumulated in the history of the US government up to that point.

But the trajectory was even worse. Economists have a concept known as “fiscal space.” For example, if you are running a $500 billion surplus during an unsustainable bubble, when the crash comes the budget can take a $1 trillion hit (as a result of a decline in tax revenue and an increase in spending on "automatic stabilizers" like unemployment insurance) and still have a manageable deficit of $500 billion. You have some "fiscal space." But if you are already running a $500 billion deficit during boom times (as Bush did), then when the crash comes, you have a $1.5 trillion deficit. NOT a good thing. That is basically what happened during the fiscal year that ended last September.

As former Reagan official and Wall Street Journal op-ed writer Bruce Bartlett noted recently:

According to the Congressional Budget Office's January 2009 estimate for fiscal year 2009, outlays were projected to be $3,543 billion and revenues were projected to be $2,357 billion, leaving a deficit of $1,186 billion. Keep in mind that these estimates were made before Obama took office, based on existing law and policy, and did not take into account any actions that Obama might implement.

Therefore … a deficit of $1.2 trillion was baked in the cake the day Obama took office. …

Now let's fast forward to the end of fiscal year 2009, which ended on September 30. According to CBO, it ended with spending at $3,515 billion and revenues of $2,106 billion for a deficit of $1,409 billion.

To recap, the deficit came in $223 billion higher than projected, but spending was
$28 billion and revenues were $251 billion less than expected. Thus we can conclude that more than 100 percent of the increase in the deficit since January is accounted for by lower revenues. Not one penny is due to higher spending.

It should be further noted that revenues are lower to a large extent because of tax cuts included in the February stimulus. According to the Joint Committee on axation, these tax cuts reduced revenues in FY2009 by $98 billion over what would otherwise have been the case. This is important because the Republican position has
consistently been that tax cuts and only tax cuts are an appropriate response to
the economic crisis.

According to the Council of Economic Advisers, as of August the actual budgetary effect of the February stimulus was to reduce revenues by $62.6 billion and raise spending by $88.8 billion. Of the spending, the vast bulk went to transfers such as extended unemployment benefits and aid to state and local governments, which may have prevented cuts in spending that would otherwise have occurred but probably didn't do anything to increase spending. Only $16.5 billion in stimulus funds went to investment outlays for things such as public works. This is a trivial amount of money in a $14 trillion economy.

[I highly recommend these other two pieces that Bartlett wrote in Forbes on budget matters. Also, last June, David Leonhardt -- one of the New York Times' best writers on economic subjects -- had a good in-depth piece on how Clinton's record budget surpluses turned into our current trillion dollar deficits. Very little of it was the result of spending increases after President Obama took office.]

Last March, the Obama administration forecast a $1.8 trillion deficit for the fiscal year that began almost four months before they took office. The actual figure came in at $1.4 trillion, largely because the financial sector recovered faster than expected which reduced the taxpayer cost of last fall’s bailout.

As a result of the Bush tax cuts and the Great Recession, by fiscal 2009, federal revenue as a percentage of GDP had fallen to 14.9%. That is a staggering figure. That is the lowest it has been since 1951 – 58 years ago. By contrast, it was over 20% when President Clinton left office. The simple fact is that we will never get anywhere close to a balanced budget with today’s tax structure. We barely did it with the much higher tax structure President Clinton left behind (and with 2000 spending at 18.4% of GDP – it’s lowest level since 1961).

Which brings us to the subject of how to reduce the deficit.

Getting back to the earlier discussion, short term the deficit should be larger. We have, as Paul Krugman phrased it, “Fifty Little Hoovers” as tax revenue has fallen off a cliff and state (and local) governments are drastically slashing budgets and raising taxes. Raising taxes and cutting spending during the worst economic downturn since the Great Depression is a REALLY bad idea. For no other reason, 70% of our economy is consumer spending and it isn't going to revive as long as incomes are plummeting and unemployment is increasing. But states have no choice -- their constitutions required balanced budgets. Only the federal government can make up that gap without making the problem worse.

As this graph shows, state governments face almost $500 billion in budget shortfalls over the next three years. Local governments are expected to add another $100 billion or so to that total. That is nearly $600 billion of "anti-stimulus" in the pipeline. So at least to this extent, federal stimulus just offsets the contractionary actions of the “Fifty Little Hoovers.”

But when it does come time to close the federal budget gap again, there are really only three big targets:

1/ Taxes,
2/ Health care spending; and
3/ Military spending.

Everything else is noise. TOTAL non-military discretionary spending -- everything from the entire judicial branch, the entire legislative branch, the Department of Homeland Security, immigration and naturalization, our nationals parks, education, public health, highways, air traffic control, the FBI, water projects, prisons, NASA, state aid, etc. -- is running at around $600 billion a year, less than half the federal deficit and less than military spending alone (which should top $700 billion this year -- even before any escalation in Afghanistan). Realistically, you can’t cut domestic discretionary spending enough to make a serious dent in the deficit.


Taxes: Let's start with taxes because that was the source of thegreatest erosion in the federal budget under both Reagan and Bush and it was the primary means by which the budget was subsequently brought into balance under President Clinton. Almost every Republican member of Congress (172 of 177 Republicans in the House and 33 of 40 Republican Senators) has signed Grover Norquist’s pledge to never raise taxes by ANY amount at ANY time for ANY reason. So right there you can count out any Republican role in any serious deficit-reduction effort. But it gets worse. Not only will no Republican vote to raise taxes, they continue to urge further tax CUTS in the face of trillion dollar deficts and revenue at its lowest level since 1951. Earlier this year, for example, 35 Republican Senators voted for an alternative to the stimulus plan that would permanently cut taxes at a ten-year cost of $3 trillion. This was not a temporary stimulus measure, but a further permanent reduction in revenue that would add $3 trillion to the deficit over the next 10 years. .

This leaves Democrats with the choice of doing nothing on taxes or doing what they did in 1993 -- raise taxes with no Republican support and get crushed in the next election. President Obama, as he does on most issues, has attempted to strike a middle ground, pledging no tax increases on those earning less than $250,000. Unfortunately, that may end up being the worst of both worlds -- an inadquate response to the long-term deficit while still giving Republicans the "tax increase" cudgel.

Health Care Spending: Long-term, health care spending is the biggest problem in the federal budget. Medicare, Medicaid and the State Childrens Health Insurance Program account for about 20% of the federal budget. That doesn't count other federal health care spending on veterans, Indians, military personnel and the health insurance of other federal employees and retirees. Nor does it count the revenue lost from the deductibility of employer-provided health insurance and health savings accounts. Add it all up and it dwarfs any other element of the budget. And the growth in health care costs greatly outstrips inflation. This isn't a government spending problem per se. It is a health care cost problem that affects our entire economy. It is bankrupting businesses and individuals and making our economy less competitive in world markets.

President Obama and Congressional Democrats, to their credit, have taken on this challenge as their top legislative priority after the stimulus. But, as with taxes, they have to do it with no Republican help. Even when the Senate Finance Committee stripped out a public health insurance option and an employer mandate -- the elements that Republicans most object to (and which would actually reduce the cost to taxpayers) -- they were able to secure only one lone Republican vote.

Ron Brownstein had a good piece at The Atlantic site this week where he details the cost-saving measures in the Senate health care bill. It is worth reading the whole thing. He notes:

[Jonathan] Gruber is a leading health economist at the Massachusetts Institute of Technology who is consulted by politicians in both parties. He was one of almost two dozen top economists who sent President Obama a letter earlier this month insisting that reform won't succeed unless it "bends the curve" in the long-term growth of health care costs. And, on that front, Gruber likes what he sees in the Reid proposal. Actually he likes it a lot.

"I'm sort of a known skeptic on this stuff," Gruber told me. "My summary is it's really hard to figure out how to bend the cost curve, but I can't think of a thing to try that they didn't try. They really make the best effort anyone has ever made. Everything is in here....I can't think of anything I'd do that they are not doing in the bill. You couldn't have done better than they are doing."

Gruber may be especially effusive. But the Senate blueprint ... also is winning praise from other leading health reformers like Mark McClellan, the former director of the Center for Medicare and Medicaid Services under George W. Bush and Len Nichols, health policy director at the centrist New America Foundation.

The Republican response to these efforts has been to manufacture lies about "death panels" that will "kill granny". Apparently they were so pleased with the traction they got scaring seniors that they have now made their opposition to efforts to control the long-term growth of Medicare spending the official party position. In August, Republican National Committee chairman, Michael Steele wrote a Washington Post op-ed where he proposed a "Seniors' Health Care Bill of Right":

The Republican Party's contract with seniors includes tenets that Americans, regardless of political party, should support. First, we need to protect Medicare and not cut it in the name of "health-insurance reform."

It was reported a couple of days ago that Republican leaders are circulating a list of ten policy positions that any Republican candidate would need to commit to in order to secure the support of the party (a so-called "purity pledge"). Among the required positions is "opposing health care rationing".

So now the Republican Party has become the defender of unconstrained growth in Medicare spending.

Military Spending: Even though we now spend more on the military than the rest of the world combined -- over $700 billion in the current year -- for Republicans, it is never enough. The ten-year cost of the Democratic health care bill, which among other things would extend health insurance coverage to 30 million Americans who currently lack it, is not much more than what we spend on the military in just one year. Defense Secretary Gates and President Obama have begun efforts to trim the most blatantly wasteful military spending -- but, for the most part, without Republican help. For example, earlier this year, when Congress voted on cutting off further funding for the $65 billion F-22 fighter program, a majority of Republicans voted against those cuts despite the fact that the Secretary of Defense (originally appointed by President Bush) and the Joint Chiefs of Staff want to terminate the program after 187 aircraft (the aircraft has never been used in either Iraq or Afghanistan). Republicans are also urging President Obama to send another 40,000 troops to Afghanistan (on top of the 30,000 additional troops he has sent since taking office). That would add $40 billion a year to what we are already spending on that war. Republicans believe in "supporting the troops" -- as long as the cost can be added to our national debt. Forget any tax increase to pay for it.

Where does that leave us? After leaving behind trillion dollar deficits, the worst economy since the Great Depression, and two wars going badly, Republicans are now complaining about the deficit. But they don't want to raise taxes. Or cut the growth in Medicare spending. Or cut military spending. In other words, they don't really want to do anything about the deficit except use it as a partisan weapon.

As Dick Cheney famously said as the Bush administration was squandering our budget surpluses: “Reagan proved deficits don’t matter”. IOKIRDI (“It’s OK if Reagan did it”).

Should the Democrats tackle deficit reduction even without Republican support? As the only party serious about governance, they don't have much choice. But to shift the focus to deficit reduction now, while unemployment is still rising, would be economically unwise and politically suicidal. As it is, Democrats have reinstated the pay-as-you-go budget rules that Republicans abandoned and are working to ensure that new initiatives, like health care reform, don't add to the deficit. And much of the deficit will turn around as the economy eventually recovers. But unemployment is likely to still be over 10% on election day next year. If Democrats don't do a lot more to try to bring that figure down, the economy will still be in horrible shape and voters won't care how much progress Democrats have made on long-term deficit reduction. Earning the praise of political pundits who see deficits as the bigger problem will be of little solace to Democratic members of Congress when they have joined the ranks of the unemployed.

hannibal lecter's zombie army invades new york

I started writing these blog posts (and their email predecessors) to keep my head from exploding during the Bush years. I thought I could get on with my life and largely ignore politics with President Obama and a Democratic Congress in control. Not that there wouldn't still be ego, idiocy and corruption and the inevitable frustrations and compromises of the legislative process. And President Obama was bound to disappoint the stratospheric expectations of him. But at least the crazy right could largely be ignored as essentially inconsequential.

But I underestimated the crazy right and its deafening noise machine. In retrospect, the fullness of its craziness had been constrained over recent years by the need to defend the actions of the Worst President in History. Paranoid conspiracies and fantasies of Nazi communists under your bed are harder to sustain when your team controls all the branches of government (including the secret prisons and torture chambers). Now liberated from any actual responsibility for governance, the crazy right has become crazier than ever. If the peace, prosperity, record budget surpluses and small-government deregulatory policies of the Clinton administration caused the right to become totally unhinged, we should have known that it would only escalate with an African-American president coming to office during the worst economic crisis since the Great Depression, inheriting trillion dollar deficits and two wars going badly.

Now that the Republic has survived the existential crisis of President Obama urging school children to work hard and stay in school, the grievous insult to America represented by President Obama's Nobel Peace Prize, and the great debates over whether President Obama's gift to the Queen of England was insufficiently respectful or his greeting to the Emperor of Japan too respectful, we can return to the real passion of the paranoid right -- fear mongering.

Did you know President Obama is planning on bringing Hannibal Lecter to New York City to stand trial? He goes by the name Khalid Sheikh Mohammed these days, but his latest disguise can't fool us. No maximum security prison can hold him. The moment he steps foot in the United States, he will use the hypnotizing, x-ray telepathic superpowers he honed in the caves of Afghanistan to overpower his guards, flee to Iowa and gnaw on the bones of elderly white Faux News viewers. His legions of zombie soldiers will march in to New York from ... somewhere and ... do something. Hannibal Mohammed and his zombie army have restrained themselves over the past six and a half years while he was being tortured in secret prisons, just waiting for the ultimate provocation -- access to the American judicial system. That was the final straw -- now they are really mad.

Or something like that.

(I guess we should have seen this coming when President Obama ended the practice of torture. Legal due process and public trials were only a matter of time. That’s just the kind of thing a fascist socialist would do.)

Once again, New Yorker Jon Stewart has risen to the occasion. It is hard to improve on this segment. This clip really is a must-see.

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Law & Order: KSM
http://www.thedailyshow.com/
Daily Show Full Episodes Political Humor Health Care Crisis

(Stewart had another good take on the subject here at about 3:25 into the segment .)

I particularly like his exchange with Samantha Bee, including this bit:

Stewart: You fear then for the safety of New Yorkers?
Bee: Of New Yorkers? Listen, those guards aren't there to protect us from Khalid Sheikh Mohammed.
...
Bee: I don't trust the media. They lose their [deleted] during trials that don't matter. They are not ready for this.
...
Stewart: Maybe they learned a lesson. Maybe they won't get so obsessive.
Bee: Yes, I imagine they will keep themselves flexible because you never know when they'll have to drop everything to follow a balloon that may or may not have a boy in it.

Stewart also does a great job contrasting recent statements by fearmonger-in-chief, Rudy (“a noun, a verb and 9-11”) Giuliani with those he made in 2006 supporting the Bush administration’s successful prosecution of the “20th hijacker” (one of several “

20th hijackers” actually) Zacarias Moussaoui in federal court in Virginia. Indeed, this is ultimately the most concise refutation to the parade of fears now coming from the right: We are not operating in a void of experience here. This has been done before. Moussaoui was convicted in a civilian court in the US and now sits in the “supermax” prison in Florence, Colorado (along with 1993 World Trade Center bomber Ramzi Yousef, attempted shoe bomber Richard Reid, Unabomber Ted Kaczynski, Atlanta Olympics bomber Eric Rudolph, Oklahoma City bomb conspirator Terry Nichols, FBI traitor Robert Hanssen, Jose Padilla, and a host of other charming folks). The world didn’t come to an end. But, of course, the right didn’t come unhinged then because Bush was president and the right-wing noise machine (e.g., Faux News, the Wall Street Journal editorial page, Weekly Standard, National Review, Washington Times, etc.) and Republican politicians weren’t engaged in any of the fear mongering they are now.

New Yorker Josh Marshall had a good post on the subject . He respectfully notes the three main lines of attack on the decision to try KSM and others in New York:

Let's start with the idea that civilian trials have too many safeguards and create too big a risk these guys will go free. This does not hold up to any scrutiny for two reasons. First, remember all those high-profile terror prosecutions where the defendants went free? Right, me neither. It just does not happen. The fact is that federal judges are extremely deferential to the government in terror prosecutions. And national security law already gives the government the ability to do lots of things the government would never be allowed to do in a conventional civilian trial.

He then dissects each of those arguments:

Let's start with the idea that civilian trials have too many safeguards and create too big a risk these guys will go free. This does not hold up to any scrutiny for two reasons. First, remember all those high-profile terror prosecutions where the defendants went free? Right, me neither. It just does not happen. The fact is that federal judges are extremely deferential to the government in terror prosecutions. And national security law already gives the government the ability to do lots of things the government would never be allowed to do in a conventional civilian trial. ...

Finally, even in the extremely unlikely case that any of the five were acquitted of these charges, the government has a hundred other things it can charge them with. Indeed, the government could as easily turn them over to military commissions or indefinite detention post-acquittal as it can do those things with them now. That may not make civil libertarians happy. But it is the nail in the coffin of any suggestions that these guys are going to be walking out of the federal courthouse in lower Manhattan saying they're headed to Disneyland. It's simply not going to happen.

(Some might say so what if KSM is acquitted. Just set him free in Times Square with some advance publicity.)

Marshall goes on to the second argument:

Next we have the question of danger to the people of New York City. ... [J]ust on the facts I don't think al Qaeda terrorists are holding off on attacking New York now because they lack an incentive or feel we haven't pushed things far enough yet to merit another hit. The symbolic value of hitting New York might increase a bit. But it's already so high for these people that the increase seems notional at best. And more to the point, I choose to trust the people already charged with keeping the city safe.

On a more general level, however, since when is it something we advertise or say proudly that we're going to change our behavior because we fear terrorists will attack us if we don't? To be unPC about it, isn't there some residual national machismo that
keeps us from cowering even before trivially increased dangers? As much as I think the added dangers are basically nil, I'm surprised that people can stand up and say we should change what we do in response to some minuscule added danger and not be embarrassed.

Finally, there is the fear of what KSM and other defendant's might say:

I cannot imagine anything KSM or his confederates would say that would diminish America or damage us in any way. Are we really so worried that what we represent is so questionable or our identity so brittle? (Some will say, yes: torture. The fact that some of these men were tortured is a huge stain on the country. But it happened and it's known about. To the extent that it is a stain it is the kind of stain that is diminished not made worse by an open public accounting.) Does anyone think that Nuremberg trials or the trial of Adolph Eichmann in Jerusalem in 1961 or the war crimes trials of Slobodan
Milosevic and others at the Hague advanced these mens' causes? Or that, in retrospect, it would have been wiser to hold these trials in secret?

At the end of the day, what are we afraid these men are going to say?

What we seem to be forgetting here is that trials are not simply for judging guilt and meting out punishment. We hold trials in public not only because we want a check on the government's behavior but because a key part of the exercise is a public
accounting and condemnation of wrongs. Especially in great trials for the worst
crimes they are public displays pitting one set of values against another. And I'm troubled by anyone who thinks that this is a confrontation in which we would come out the worse.

Two top officials in the Bush justice department, deputy attorney general Jim Comey and assistant attorney general Jack Goldsmith, have a good piece in today’s Washington Post defending the decision to try KSM and others in New York.

In fairness, the right has not been unanimous in its fear mongering on this subject. To my considerable surprise, anti-tax godfather Grover Norquist joined David Keene, founder of American Conservative Union, and former Republican representative and presidential candidate Bob Barr in a public statement saying that moving suspected terrorists to as US prison, "makes good sense," and that, "The scaremongering about these issues should stop." (Grover Norquist has now joined Newt Gingrich and Pat Buchanan as a voice for moderation within the Republican Party? Is it only a matter of time until someone outflanks Sarah Palin and Glenn Beck?) It's hard to improve upon their statement :

As it moves to close Guantanamo and develop policies for handling terrorism suspects going forward, the government should rely upon our established, traditional system of justice. This includes our system of federal prisons, which have repeatedly proven they can safely hold persons convicted of terrorism offenses.

We are confident that the government can preserve national security without resorting to sweeping and radical departures from an American constitutional tradition that has served us effectively for over two centuries.

Civilian federal courts are the proper forum for terrorism cases. Civilian prisons are the safe, cost effective and appropriate venue to hold persons convicted in federal courts. Over the last two decades, federal courts constituted under Article III of the U.S. Constitution have proven capable of trying a wide array of terrorism cases, without sacrificing either national security or fair trial standards.

Likewise the federal prison system has proven itself fully capable of safely holding literally hundreds of convicted terrorists with no threat or danger to the surrounding community.

The scaremongering about these issues should stop.

...

But most of all it makes sense for America because it is a critical link in the process of closing Guantanamo and getting this country back to using its tried and true, constitutionally sound institutions.

Somehow the Republic has managed to survive for 230 years with due process of law. In fact, until a few years ago, who knew that indefinite imprisonment without legal due process at the unchecked discretion of the president was really an option?

UPDATE:

Leave it to Tom Tomorrow to sum it up in a few cartoon panels:

[click to enlarge]

election 2009

So, what are the big lessons to draw from this week’s off-year election?

Despite all the inane media chatter, one lesson you SHOULDN’T draw is that this represented some kind of stinging rebuke to President Obama or his policies. Obviously, that is the lesson Republicans would like you to draw. And the media have to frame the election in some kind of mega-narrative – why else would anyone west of Buffalo care about the outcome of an election in New York’s Northern-most Congressional District? And with few actual data points – primarily two gubernatorial races and two Congressional races – opinion flows in to fill the factual void. Let me contribute to that vacuous opinion.

As Gail Collins wrote Thursday:

There seems to be a semiconsensus across the land that the myriad decisions voters made around the country this week all added up to a terrible blow to the White House. If that’s the way we’re going to go, I don’t think it’s fair to dump all the blame on gubernatorial contests in New Jersey and Virginia. …

We have a dramatic saga story line brewing here, and I do not want to mess it up by pointing out that Obama’s party won the only two elections that actually had anything to do with the president’s agenda. Those were the special Congressional races in California and upstate New York.

What lessons can we draw? I think we can safely conclude that during the worst economic downturn since the Great Depression, when states and local governments are being forced to slash budgets and raise taxes to fill the gap left by plummeting revenue, and with the narrow measure of unemployment running over 10% nationally and much higher in many local areas, it’s not a great time to be an incumbent politician, especially a chief executive. (It doesn’t help if you are the former Chairman and CEO of Goldman Sachs or a Wall Street billionaire.)

Let’s look at the individual races, starting with the two governor’s races.

Here’s Collins again:

The defeat of Gov. Jon Corzine made it clear that the young and minority voters who turned out for Obama will not necessarily show up at the polls in order to re-elect an uncharismatic former Wall Street big shot who failed to deliver on his most important campaign promises while serving as the public face of a state party that specializes in getting indicted.

Corzine is one of the most unpopular governor’s in the country. As far back as April 2006, his approval rating was an abysmal 35% -- and that was long before the financial crisis and the Great Recession (and, I might add, ten months before Barack Obama even declared his candidacy for president). By June of this year it was still languishing at 36%. Under the circumstances, the fact that he lost his bid for reelection by less than five percentage points is actually rather remarkable. In fairness to the Republican Party, his opponent, Chris Christie, was also a weak candidate. A better candidate should have crushed Corzine.



As you can see from this chart, Corzine with 45% of the vote significantly outperformed his 37% approval rating. For that matter, Christie failed to get even 50% of the vote. (Independent Chris Daggett – no relation – got 6% of the vote.)

Christie made no attempt to “nationalize” the election (unlike Corzine who benefitted from campaign appearances by President Obama). Not once in any of Christie’s campaign ads did he ever mention Nancy Pelosi or Harry Reid or the Democrats' health care plan or the stimulus package. Not only did he not attack President Obama, he actually ran TV ads featuring positive references to the Obama campaign and invoking his message of “Change.” (And check out Christie’s obsequious “Message to President Obama” welcoming him to New Jersey.) Obviously, that is a smart tactic in a heavily-Democratic state. But it makes it hard for Republicans to subsequently claim that it was a referendum on President Obama (well, it doesn’t make it hard from them to do it – just hard to do it credibly).

Then there are the exit polls. Among those who actually voted in the New Jersey election this week, President Obama’s approval rating was 57% -- identical to his share of the New Jersey vote last year. This is impressive given that New Jersey voters this year were older and white than last year’s voters, suggesting President Obama’s approval rating is actually up in that state. According to a CNN exit poll, 60 percent of New Jersey voters said that President Obama played no role in their gubernatorial vote, 19 percent said that their vote was one in support of the President, and 20 percent saying that their vote was in opposition to President. The 17% of New Jersey voters who identified health care as their most important issue went for Corzine by a 4-to-1 margin (not exactly consistent with the notion that this was a vote protesting health care reform in DC).

The CNN exit poll showed the same thing in Virginia: A 55 percent majority of voters said that the President was not a factor in their vote, and an additional 18 percent indicated their vote in Virginia was one of support in the President. Just 24 percent of voters indicated that their vote was one of opposition to President Obama. In Virginia the change in the make-up of the electorate was particularly stark. As Ruy Teixeira wrote in the New York Times:

In Virginia, while the president’s 2009 approval rating was 5 points less than his 2008 voting result, the 2009 electorate was also far more conservative than last year’s. Besides being far older and whiter than in 2008, the voters in Virginia on Tuesday said they had supported John McCain last November by 8 points, meaning they were not favorably inclined toward President Obama to begin with. In fact, given that only 43 percent of these voters said they supported Mr. Obama last November, his 48 percent approval rating among them does not indicate a shift away from him but rather toward him.

It’s hard to see how a vote against the Democratic candidate in Virginia, Creigh Deeds, was a vote against Democrats in Washington – he did everything he could to distance himself from any position that might actually inspire the Democratic base to turn out. From ThinkProgress:

[On energy policy:] By the end of his campaign, Deeds was running ads attacking Obama’s clean energy agenda, saying Obama’s “cap and trade bill” would “hurt the people of Virginia.” Other ads carried the same message: “Creigh Deeds says no to any new energy taxes from Washington.” Instead of disputing his Republican opponent’s false attacks on climate legislation, Deeds amplified them. … During the primary season, Deeds defended the despicable practice of mountaintop removal, telling a reporter in March, “The coal industry calls it surface mining.” .

[On health care policy:] During the final gubernatorial debate, Deeds stressed that health reform must “reduce costs so more people can afford insurance” and “increase coverage,” but argued that creating the option of a public health care plan “isn’t required.” “I don’t think the public option is necessary in any plan…I would certainly consider opting out if that were available to Virginia,” he said. …

Deeds also tacked right on labor (opposing the top legislative priorities of organized labor) and immigration issues (among other things, voting to designate English as the state’s official language). The result, predictably, was an absolutely horrible Democratic turn out. Interestingly, despite the heavy GOP tilt to the 2009 electorate, the 24% of Virginia voters who cited health care as their main issue still went for the Democrat Deeds by a 51 to 49 margin. And the 42% of Virginia voters who described themselves as “moderate” also broke for Deeds, 53 to 47. But conservatives outnumbered liberals 40 to 18% -- reflecting a more motivated turnout on the right. That was the key to Republicans success.

Virginia, which holds its gubernatorial race in the off-year after presidential election, has a history going back 32 years to 1977 of always electing a governor of the party opposing the president elected (or re-elected) the previous year. For example, in November 2001, Virginians elected Democrat Mark Warner (now a US Senator) to be governor. At the time, George W. Bush enjoyed an 86% approval rating (due entirely to 9-11 two months earlier – just days prior to 9-11 his approval rating was 51%). No one was claiming at that time that Warner’s election represented a rebuke to Bush. And, yes, even the year after Ronaldus Magnus was elected president in 1980, Democrat Chuck Robb was elected governor of Virginia (and Democrat Gerald Baliles was elected in 1985, the year after Reagan’s re-election). Reagan’s presidency managed to survive. (In an interesting aside, Reagan’s approval rating in October 1981 was 56% -- identical to President Obama’s 56% last month.)

None of this is meant to suggest that it was actually a good thing for Democrats to lose those two governor races. They represent genuine gains for Republicans and Republicans are to be congratulated for running better campaigns than the Democrats in those states. Deeds, in particular, was a weak candidate who ran a miserable campaign. But it is a stretch to argue that either race was a mandate on President Obama. Indeed, both Republican candidates resisted efforts to “nationalize” their races and focused, instead, on local issues.

The only two Federal races on Tuesday were the special elections in New York’s 23rd Congressional District and California’s 10th Congressional District. Let’s start with the easy one.

Did you even hear about this race? Democrat John Garamendi won by 10 points in the district formerly represented by Ellen Tauscher, whom President Obama named to a State Department position. Although this is a pretty safe Democratic district, Tauscher was a “New Democrat” who tended to frustrate progressives by voting as if she represented a swing district. Garamendi, by contrast, is a whole-hearted progressive. To take one particularly timely example, he not only supports a robust public option, he supports a single-payer health care system.

NY-23, by contrast, has been represented only by Republicans pretty much ever since there has been a Republican Party – going back to 1872. As you no doubt heard, the Democrat, Bill Owens, won the race to fill the seat vacated by Republican John McHugh, whom President Obama named to be Secretary of the Army. His opponent, Don Hoffman, was a far-right, third-party candidate who had become the darling of the Rush Limbaugh/Glenn Beck crowd. As it appeared to become a two-man race between Hoffman and Owens, the official Republican candidate, Dede Scozzafava, dropped out and endorsed the Democrat. This is the one race that Republicans clearly framed as a referendum on DC Democrats, as Sarah Palin, Minnesota Governor Tim Pawlenty and a host of other national Republicans came into the district to campaign for Hoffman. This teabagger insurgency ended up putting a safe Republican district into the Democratic column on election night. (Had Scozzafava not received 6% of the vote as a result of early absentee ballots, Owens probably would have had a margin even bigger than his eventual 4% win.) Owens has already been sworn into office and will be on hand for the vote on the House’s health care bill today, or whenever it takes place. He has said he plans to vote for the bill.

Admittedly, the circumstances of the NY-23 race were so bizarre that it is hard to generalize the results to other races. (The Urban Dictionary now recognizes “scozzafavaed” as verb meaning “purged of moderation.”) More from Collins today:

Meanwhile, there’s nothing but confidence and serenity among the right-wing tea-party types. They cannot get over the triumph in upstate New York, where thanks to their really extraordinary efforts, a completely safe Republican seat went to the Democrats. Think how far their movement has come! Only a few months ago, they barely had the power to disrupt a town meeting. And soon they will be able to destroy anything in their path, including their own party, like conservative locusts.

The bottom line from Tuesday’s election is that Nancy Pelosi has two more votes for health care reform than she had a week ago. (Republicans have now lost five consecutive competitive special elections in Republican-friendly territory.)

The anti-incumbent mojo was at work in New York City, as Michael Bloomberg had to spend over $100 million of his own money – more than either Bush or Kerry spent on their general election campaigns in 2004 – to barely vanquish his Democratic opponent, securing only 50.6% of the vote. (Quick: Name Bloomberg’s Democratic opponent.) At least he didn’t buy any more votes than necessary. (That reminds me of the apocryphal story of the cable John F. Kennedy received from his rich father, Joseph P. Kennedy, during his first run for Congress: “Don't buy a single vote more than necessary. I'll be damned if I'm going to pay for a landslide.”) Bloomberg’s spending worked out to around $180 per vote. Too bad voters didn’t have the option of just taking the money and skipping all the campaign ads. (A bit of trivia: Did you know the population of New York City at 8.3 million is higher than that of Virginia at 7.7 million and only slightly less than that of New Jersey at 8.6 million? At least this wasn’t being touted as a big defeat for President Obama.)

One of the biggest disappointments on Tuesday night was the passage of Maine’s Referendum 1 which overturned the state’s gay marriage law. Conan O’Brien had an interesting observation:

"Voters in the state of Maine voted no to gay marriage, but yes to medical marijuana. That’s right---people in Maine believe marriage should be a sacred institution between a really stoned man and a really stoned woman."

In the glass-half-full department, the good news is that over 47% of Maine voters supported gay marriage. And Maine isn’t California … or even Vermont. It is a pretty conservative place (you might have heard that it has two Republican Senators). Who could have imagined this result five years ago, let alone ten years ago? Young voters overwhelming have no problem with the idea of two people of the same sex entering into a committed lifetime relationship. It’s only a matter of time. On the same night, Washington State voters defeated a referendum that would have repealed the state’s “everything-but-marriage” law. (Stephen Colbert had a good segment on Referendum 71, if you happened to miss it.) In so doing, Washington became the first state in the country to approve a gay-equality measure not by court fiat or legislative action, but by the direct will of the people. And Houston (of all places) may become the largest city in the country with an openly gay mayor (Annise Parker was the top vote-getter on Tuesday heading into a run-off next month).

Washington State and Maine also both decisively defeated ballot measures modeled on Colorado’s disastrous “Taxpayers Bill of Rights (TABOR)” measure (which Colorado voters later largely repealed after their state fell to #49 nationally in per capita state spending on education among other things). If Tuesday was supposedly a big victory for anti-government teabagger types, the voters of Washington and Maine apparently didn’t get the memo.

What does all of this portend for 2010? Not much, I think. But I don’t think Democrats have any reason to be sanguine. A bad economy tends to overwhelm just about everything else and the US economy will almost certainly still be very bad a year from now. Unemployment is now over 10% and is unlikely to be much lower next November (I hope to come up with a post on unemployment in the next few days). Tax revenue is plummeting – at the federal level it has fallen below 15% of GDP, its lowest level since 1950 (!). At the state level, that means huge spending cuts and/or tax increases. In that environment, I wouldn’t want to be a governor running for reelection.

There are 37 governor’s seats up in 2010 with the current occupants almost evenly split between Democrats (19) and Republicans (18). After Tuesday’s election, the Cook Report designated another seven of those seats as being in peril for the incumbent party (four Republican and three Democratic). Overall, Cook considers eight Democratic seats and nine Republican seats at risk, but with Republicans having the edge in four of those and Democrats in none.

After two blow-out elections, Democrats almost certainly will lose seats in the House – the question is just how many. Democrats picked up 27 House seats (and no Senate seats) in Reagan’s first mid-term election in 1982; Republicans picked up 54 House seats and eight Senate seats in Clinton’s first mid-term in 1994. (Bush’s first mid-term in 2002 was a bit of an aberration because of his continuing post-9/11 bump – Republicans actually picked up seven House seats and two Senate seats in that election.)

In the Senate, 38 seats are up in 2010, evenly split between Democrats and Republicans. Cook currently has 6 Democratic seats and 5 Republican seats in the “toss-up” category. Until likely opponents are defined, it is too early to have either leaning toward a pick up by one party or the other. At this point, if I had to guess, I think it is likely the Democrats will lose anywhere from one to three Senate seats. The best case scenario at this point is probably Democrats holding their own – a net Democratic pick up is unlikely. But it is still too early to be making even educated guesses.

While the bad economy is a virtual certainty, favoring Republicans and challengers generally, the wild card is the fanaticism on the right. If I were a Republican I would be worried that the forces that were at work in NY-23 this year could result in successful primary challenges to Republican incumbents and a lot of candidates from the far right of the political spectrum ending up on the ballot. This dynamic could at least partially neutralize the advantages that Republicans should have as the out-of-power party in a mid-term election with a horrible economy.

And there are other reasons for optimism among Democrats.

The percentage of Americans identifying themselves as Republicans is at a record low. The pollster.com average of polls currently has that number at 22% (vs. 34.6% for Democrats). While that is significant, I wouldn’t read too much into it. A lot of folks who used to call themselves Republicans now prefer to identify as Independents – and many of them are actually to the right of the Republican Party, not somewhere in the center. Also, people tend to jump on the winning bandwagon – with Democrats in control of everything, there is a natural tendency for Republican self-identification to decline. Still – 22% is pretty miserable.

And for what it is worth, a CNN poll this week continues to show Democrats with a six-point edge (50-41) on the generic ballot among registered voters (i.e., asking voters which party they would rather see controlling Congress). An Ipsos/McClatchy poll gives Democrats a seven-point edge (48-41) on the generic ballot test.

Much will depend on what President Obama and Congressional Democrats are able to actually accomplish over the next year. Like an off-year election, a mid-term election is all about turnout. There is little likelihood that Democrats will be able to generate the kind of turnout among young voters and minority groups for a mid-term election that they did for the general election in 2008. But if Democrats are seen as delivering on their promises and making genuine progress, they could do OK.

I think the populist anger is real and it is big, particularly against the financial bailout – and that is not necessarily partisan or right or left. If Democrats don’t deliver on meaningful financial reform, I think there will be a big backlash, including among Democratic voters. Democrats will also suffer if they don’t deliver on meaningful health care reform. If Democratic members of Congress revert to form, get scared of their own shadows and pull back from any meaningful accomplishments, the story of the 2010 election could be all about turnout on the right (the Virginia governor race writ large).

And that is not a pretty picture.