Matt Yglesias

Palin Claims She Reads All Newspapers

Katie Couric asks Sarah Palin which newspapers she reads and Palin replies “um, all of them.”:

COURIC: But what ones specifically? I’m curious.

PALIN: Um, all of them, any of them that have been in front of me over all these years.

COURIC: Can you name any of them?

PALIN: I have a vast variety of sources where we get our news.

Bizarre. I mostly read The New York Times and secondarily The Washington Post as well as individual articles that I find being recommended by others, with The Wall Street Journal, The Los Angeles Times, The Financial Times, USA Today, and The Guardian coming up frequently. But there are an awful lot of newspapers and even though reading stuff is a big part of my job I certainly don’t read “um, all of them.”

Cry CRA and Let Slip the Dogs of Deregulation

Tim Westrich ads additional debunking of the “blame the CRA” myth. He also makes this observation:

Moreover, the Bush administration could have taken steps in this decade to further regulate subprime mortgage practices. It wasn’t until July 14 of this year that the Federal Reserve finally cracked down on “unfair, abusive or deceptive home mortgage lending practices” and restricted “certain other mortgage practices,” power given to it under the Home Ownership and Equity Protection Act of 1994. The Fed finally prohibited practices that they had ignored for years, such as so-called “stated-income loans,” in which the lender makes a loan without verifying a borrower’s ability to repay from income and assets, or charging exorbitant prepayment fees.

And even more generally, nobody from the Bush administration said or did anything all throughout 2003, 2004, and 2005 as the housing bubble was building. Not so much, in this case, out of ideological zeal but simply because it was in their political interests to go along with the idea that everything was fine and these increases were sustainable.

Former Ambassador to Pakistan Milam: “I had a pretty good idea of what failed states look like, and it was not one.”

During Friday’s presidential debate, John McCain tried repeatedly to portray Barack Obama as an inexperienced empty suit who didn’t “understand” major issues. One such issue which, according to McCain, Obama didn’t understand was the 1999 coup that brought General Pervez Musharraf to power in Pakistan. According to McCain, Pakistan was a failed state in 1999. But William Milan, US Ambassador to Pakistan at the time of the coup, told me via email that it’s McCain who doesn’t understand. “Having come to Pakistan from Liberia a year before the takeover,” he told me “I had a pretty good idea of what failed states look like, and it was not one.”

Speaking at the debate, McCain made the very strong claim that “everybody who was around” knew that Pakistan was a failed state, and that disagreement on this point wasn’t merely a matter of opinion. “I don’t think that Senator Obama understands that there was a failed state in Pakistan when Musharraf came to power,” he said “everybody who was around then, and had been there, and knew about it knew that it was a failed state.”

I asked Ambassador Milam about that as he was certainly “around then” and “had been there” and so I figured he’d be in a position to know. His response, in full:

There are a number of interesting books, including a forthcoming one by me, that cover the 1999 coup by the Musharraf-led army. You might want to look at those already published by Steve Cohen, Hasan Abbas, Hussain Haqqani (long before he became the present Pakistani Ambassador), and especially Ian Talbot’s updated history of Pakistan.

I think that all of them would agree that, while there were a lot of things wrong in Pakistan during the years leading up to the 1999
military takeover, Pakistan was not a failed state as we normally define such states. I am on record as stating publicly that, having come to Pakistan from Liberia a year before the takeover, I had a pretty good idea of what failed states look like, and it was not one.

This leaves McCain’s attacks looking more than a little threadbare.

BRT Done Right

So-called “bus rapid transit” — basically upgraded bus services — is a very promising transit option. It’s cheaper than rail and, perhaps more importantly, can be put into place faster. It’s not an adequate substitute for rail, but it is a very useful addition to the toolkit. But one major problem with BRT is that really excellent BRT systems exist on a continuum with plain old buses, which can encourage cities to wind up cutting corners and rolling out a substandard product while claiming to be embracing BRT. Streetfilms takes an interesting look at le Mobilien, an excellent Paris BRT system that provides a good example of what BRT done right would look like.

McCain: “Is this guy, Laden, really the bad guy that’s depicted?”

Interesting 1998 interview with John McCain conducted by Jason Vest for Mother Jones (ellipsis in original):

You not only have had combat experience in Vietnam, but you were also a prisoner of war. When you look at terrorism right now, with people like Osama bin Laden, do you have any reservations about watching strikes like that?

You could say, Look, is this guy, Laden, really the bad guy that’s depicted? Most of us have never heard of him before. And where there is a parallel with Vietnam is: What’s plan B? What do we do next? We sent our troops into Vietnam to protect the bases. Lyndon Johnson said, Only to protect the bases. Next thing you know…. Well, we’ve declared to the terrorists that we’re going to strike them wherever they live. That’s fine. But what’s next? That’s where there might be some comparison.

Not that many people were ahead of the curve on al-Qaeda in the 1990s, and we see here that John McCain was no exception. 9/11 made a lot of people think, though, that we should get more serious about fighting al-Qaeda. It made McCain think that we should invade Iraq.

The Self-Destructing GOP

This has been implicit in what a lot of folks have said, but it’s worth observing that the congressional conservatives who spiked the bailout deal yesterday have, among other things, dealt a devastating blow to their own party’s electoral prospects. Not only does John McCain look foolish in a news cycle sense, but economic dislocation plays strongly in the Democrats’ favor at both the presidential and the congressional levels. They would never say so in public, of course, but serious economic problems are the best shot folks like Jeff Merkley, Kay Hagin, Al Franken, and Ronnie Musgrove have. Over the summer, the prospects for a huge Democratic Senate sweep started looking bad, but if things get worse the better those odds look. I’m less familiar with the House situation, but this is like shooting Chris Shays in the back of the head.

Meanwhile, the GOP’s decision to spend the past 24 hours fighting a spin war against the Democrats on cable is bizarre. It’s an extension of John McCain’s preference for winning the news cycle over winning the election. But good though the right-wing spinmeisters may be, you can’t un-spin the vote count — it was a Republican administration that mislaunched the rescue package and it was congressional Republicans that killed the modified package. What the GOP leaders need to do is convince enough of their members to change positions, as quickly as possible, so as to minimize the amount of time this story dominates the news and to minimize the economic fallout. That’s not just the right thing to do it’s in their self-interest.

Third Term for Bloomberg

Looks like Michael Bloomberg is going to try to get the rule changed to allow him to run for a third term as mayor of New York City. I think Bloomberg’s been a good mayor, but I’m not very familiar with the alternatives so I wouldn’t want to express a view on the underlying merits of re-electing him even if that were the sort of thing that’s allowed on this blog.

But in a broader sense, term limits have never struck me as a policy with an especially strong theoretical or empirical justification. Term limits are more interesting insofar as there’s no duller story in politics than “popular incumbent cruises to re-election” but why shouldn’t popular incumbents cruise to re-election? Term limits for the state legislature haven’t improved governance in California, and I think the country would have been better served in both 2008 and 2000 by a more clear-cut choice about whether or not to continue on the current direction.

UPDATE: As Atrios points out the right way to do this would be to eliminate term limits for your successors rather than for yourself. At a minimum, I’d say it would be strongly preferable to be on record as against term limits before you ever took office.

Where’s Corporate America? Part II

Brian Beutler has, I think, the right answer to my question from this morning — business lobbyists from outside the financial services industry were probably complacent that the bailout was going to pass, and recalcitrant House conservatives were just engaged in a bit of the old cynical posturing. This is why I’m still assuming that the additional votes will be found soon enough — now that it’s clear that complacency was the wrong strategy, I highly doubt that important businesses are going to let a credit crunch devastate their operations while their local member of congress sticks to a “no” vote.

Embrace the Pocket Square

Like Spencer Ackerman I only rarely read GQ and when I do the results are invariably disturbing. The latest issue exhorts me to, among other things, “embrace the pocket square.” I, for one, refuse to embrace the pocket square. Rep Thaddeus McCotter (R-MI) embraces the pocket square and I’m comfortable leaving it to him:

And then look at this slideshow about how I should dress at work:

• $3,500 suit.
• $760 shoes.
• $360 sunglasses.
• $4,400 watch.
• $515 wallet.
• $1,500 messenger bag.

Who buys this stuff? I’m hardly impoverished but can’t imagine spending that kind of money on this stuff. Even John McCain’s shoes don’t cost $760 and he owns so many houses he can’t keep track of them all. If there’s really a market for this kind of thing, then we definitely need to make the tax code more steeply progressive at the high end.

Obama’s Challenge

I’ve mentioned my former boss Bob Kuttner’s book, Obama’s Challenge: America’s Economic Crisis and the Power of a Transformative Presidency before, but it’s not only a very interesting read, it’s obviously been given a new resonance by recent events. It’s increasingly clear that Obama is likely to take office amidst some very troubled times. Times that create the opportunity for bold strokes that could do the country an enormous amount of good, but that also raise the prospect of a Carter-esque situation in which a well-intentioned leader is swamped by unfavorable circumstances. It looks increasingly unlikely, by contrast, that a “responsible stewardship” model in which you manage things well and improve many policies at the margin will be viable.

Fortunately, a discussion of the book is starting within minutes downstairs from my office, so I’m going to go check it out.

What Is To Be Done?

Michael Ettlinger talks about what happened yesterday and what the best way to move forward would be:

Tell your friends.

Against the League of Democracies

This has obviously gotten pretty lost in the bailout shuffle, but at Friday’s debate John McCain went back to touting his notion that the United States ought to form a “League of Democracies” that, allegedly, could supplant the UN as the major multilateral actor in international crises. CAP Senior Vice President Nina Hachigian did a great post yesterday highlighting the major problems with this idea. I thought, though, that I might also take the opportunity to point out some less-major problems with it:

– Who wants to join? I see no sign whatsoever that major non-NATO democracies have any interest whatsoever in signing up for a venture like this. One could imagine Australia joining and presumably Israel and maybe a few others would. But India? South Africa? Brazil? New Zealand? Argentina? I don’t see it.

– Who decides on eligibility? Some countries are uncontroversially democracies (Norway) and others are uncontroversially not democracies (North Korea) but there’s this vast middle ground. The convention in the United States is that a penumbral case that’s geopolitically aligned with the United States is a democracy, whereas one that’s perceived as “anti-American” in its geopolitical orientation is not, but that hardly holds as a universally applicable standard.

These aren’t the main problems with the LOD concept, but the total failure to think them through tells you something about the intellectual heft behind latter-day neoconservative thinking about grand strategy. Meanwhile, back when I was working on Heads in the Sand I was pretty worried that a number of progressive thinkers seemed inclined to adopt a variant on the LOD idea. One beneficial impact of McCain’s embrace of this idea, is that I think it’s led some folks on the left to rethink their previous positions and move away from this unsound vision.

The Housing Bubble

Tyler Cowen debunks the “blame the CRA” theory of the economic crisis and then observes, “You can, however, cite the general obsession with extending home ownership as strong evidence that putting Democrats in charge does not suffice to solve our regulatory problems.”

This seems true enough to me, and long before I had any inkling of the magnitude of the crisis I was of the view that this was a dumb idea. But it should be said that as of when Bill Clinton left office, house prices hadn’t reached any unsustainable peaks. Since the nature of the crisis is, in many ways, very complicated it seems natural to think that the right regulatory fix would necessarily have been a complicated one as well. But I wonder how much of the current problems could have been avoided if, back in February of 2004, instead of touting the alleged wonders of ARMs Alan Greenspan had said something like “many people seem to be taking out mortgages based on the assumption that house prices will continue to appreciate indefinitely, but that’s a bad idea as is making loans that are based on that premise, as is buying securities backed by mortgages that were undertaken based on that premise. Everyone should be more careful.”

Maybe everyone would have ignored him, but he had something like God-like status in the press at the time.

Seeing the Pain

CAP’s Ed Paisley explains the trouble down the road if congress can’t pull itself together and organize something to ease credit markets.

Blaming Nancy

Over at ThinkProgress they’ve compiled a neat video of conservatives backing off the ludicrous claim that Nancy Pelosi’s speech somehow forced people to vote “no” on the bailout:

Good for them.

“Valerie Plame”

New Decemberists track:

Pretty good. Metric’s “Succexy” is still the best political tune of the Bush era.

Brooks: House ‘Wingers Are Destroying the GOP

David Brooks is not a happy camper:

House Republicans led the way and will get most of the blame. It has been interesting to watch them on their single-minded mission to destroy the Republican Party. Not long ago, they led an anti-immigration crusade that drove away Hispanic support. Then, too, they listened to the loudest and angriest voices in their party, oblivious to the complicated anxieties that lurk in most American minds.

Now they have once again confused talk radio with reality. If this economy slides, they will go down in history as the Smoot-Hawleys of the 21st century. With this vote, they’ve taken responsibility for this economy, and they will be held accountable. The short-term blows will fall on John McCain, the long-term stress on the existence of the G.O.P. as we know it.

This is noteworthy, though I think a little naive of Brooks. The House conservatives who sank the bailout didn’t do so because they were listening to loud and angry voices. They sank the plan by accident. They were trying to double-cross the Democrats. First, they wrung lots of concessions out of Democrats at the negotiating table as the price for delivering 80 votes. Then, by not delivering 80 votes and forcing Pelosi to pass the bill as a partisan Democratic bill, they were going to wage a demagogic anti-bailout campaign. But Pelosi refused to be played for a sucker and so the conservative inadvertently sank a bill that, all evidence suggests, they actually wanted to pass. They just wanted to vote “no” on it for short-term political gain.

Expertise Matters

I think Chris Bowers makes a lot of good points here about the offensive, unwarranted, counterproductive tone of sneering contempt and bullying that bailout proponents have had for opponents and the American public. But he follows that up with a very bad point:

Besides, if there is one subject where everyone in America is something of an expert, it is the economy. Everyone is forced to live in it, everyday, and so we all have on the job training and experience in how it works.

That’s just bullshit. We all live our lives subject to the laws of physics, but that doesn’t mean that we all pick up intuitive understanding of how physics operates. In fact, just the reverse. Our personal experience of the operation of gravity, air resistance, friction, etc. is deeply misleading and leads to all kinds of wrong folk-physics notions about heavier objects falling faster than light ones. Similarly, most people in their personal lives aren’t aware of making any dramatic decisions based on small changes in interest rates. Therefore, they may conclude that small across-the-board changes in interest rates couldn’t possibly have dramatic impact on their lives. And yet, anyone who thinks that is wrong. But to see that that’s wrong, you need to acquire some expertise in the subject.

I think some populism is very much a good thing, but this kind of “who needs experts?” thinking is, I think, best left to the conservatives who’ve managed to run the country into the ground by using it as a guiding philosophy.

In Case You Were Wondering

I’ve been a bit confused as to how the failure of a bill supported by Nancy Pelosi, and Harry Reid, and Barack Obama, and a majority of House Democrats, and a majority of Senate Democrats but opposed by a majority of House Republicans could possibly be laid at the feet of Pelosi, but if you’re interested in exploring this alternate universe in which Pelosi controls the behavior of House Republicans Megan McArdle “explains” the whole thing. It’s strange that such delicate souls are in the rough-and-tumble business of electoral politics.

The Paulson Crisis

One issue that I don’t think has been adequately explored yet is the extent to which our current predicament is attributable to Hank Paulson’s mismanagement of the situation ten days ago. After underreacting to problems at Lehman Brothers and bringing us close to brink, Paulson abruptly reversed months of (false) reassurance that everything was fine and decided that dramatic action was needed. The smart thing to do would have been to privately alert key congressional leaders that he thought the ad hoc approach wasn’t sustainable and they and their staffs should expect to spend the weekend in sequestered talks with him and Ben Bernanke to work something out. They could have announced to the public that bipartisan discussions were underway to think out a comprehensive approach to problems in the financial system. I bet something could have been worked out.

Instead, Paulson unilaterally unveiled a plan that, in its initial form, was completely unacceptable to legislative leaders in either party. And then, in a misguided effort to ramrod a bad bill through congress, he did the equivalent of strapping a bomb to the entire US economy by dramatically announcing that the entire banking system was on the verge of imminent failure.

Naturally, this had the effect of taking whatever real problems were growing and making them much more severe by creating a sense of panic. It did not, however, have the effect of transforming an unacceptable plan into an acceptable one. So congressional leaders wound up needing to meet privately and negotiate with Paulson anyway. Which is what he should have done in the first place. But in the interim, justified criticism of Paulson’s initial plan helped poison opinion against the (better) bill that eventually emerged. Had Paulson proceeded in a more reasonable manner from the get-go, I think it’s very possible that we wouldn’t be in this situation.

Where’s Corporate America?

Here’s what I don’t understand about either the politics or the policy of the bailout failure. If the situation is as dire as Kevin Drum says then where’s corporate America? That swathe of American business that isn’t in the finance and housing sectors. ExxonMobil, Wal-Mart, Proctor & Gamble, Johnson & Johnson, Microsoft, Google, Chevron, etc. I mean this as a genuine question, not as an “aha! one lonely blogger has used his powers to prove that there’s no crisis.” But, seriously, where?

A lot of the underlying discussion here seems to take the view that it’s just super difficult to get House Republicans to cast unpopular votes. But it’s not difficult at all! Whenever the House takes up the subject of a minimum wage increase, the majority of House Republicans buck public opinion and vote “no.” In part, that’s a vote of conscience, and in part it’s because there are business lobbies that scream bloody murder about the looming demise of the US economy whenever such a vote is on the table. So where are those lobbies now? Suppose the House were debating the Employee Free Choice Act. We’d be hearing, I think, from the Chamber of Commerce. And from the National Federation of Independent Businesses. And just to keep things bipartisan, not only do conservative legislators regularly cast unpopular votes on behalf of business lobbies, progressive legislators sometimes cast such votes too and also sometimes cast unpopular votes on behalf of union lobbies. And surely if the economy goes into a steep recession that’s no better for Big Labor than it is for Big Business.

But especially on the right, normally when there’s an issue that’s perceived to be important to American business, corporate America makes its views known and conservative legislators, when asked to jump, say “how high?” I mean, when was the last time House conservatives bucked the interests of large oil companies? And wouldn’t a steep recession be much worse for large oil companies than an offshore drilling moratorium? It’s very difficult to get congress to act when the heavy hitters don’t want to put any skin in the game. I think that is in many ways the big story here. Meanwhile, the failure of this sort of effective lobbying scheme to materialize just feeds left-wing suspicions about the bailout deal — it looks and feels very funny to be saying this bailout serves interests beyond Wall Street when political leaders can’t produce concrete non-Wall Street interests clamoring for it. None of Arizona’s members of congress (four Democrats and four Republicans) voted for the bill, for example. But surely if large Arizona employers like US Airlines, Honeywell, Intel, and Raytheon were on the phones with these guys saying their businesses were going to tank unless they voted “yes” some minds would change.

The Solution

This from Rex Nutting seems a little over-dramatic to me:

Now we shall see if Paulson and Bernanke were right when they said the credit crisis could worsen and inflict dire consequences on the global economy…. Rejection of the plan means there’s no political solution to this financial crisis on the horizon. As it now stands, the markets are on their own. The next six weeks will tell whether the coup d’etat in the House on Monday has created a political crisis to match the financial one.

Isn’t the most likely scenario that as the House takes the day off for the Jewish Holiday, the GOP leadership rounds up ten new votes from safe incumbents that are then routinely matched by ten new Democratic votes and basically the same thing that failed on Monday passes on Wednesday? The House conservatives who killed the bill have no plan B so I have a hard time seeing them staying firm. In the interim, folks should be exploring the possibility of writing a bill that could pass the house with exclusively progressive votes, since the progressive side does have a plan B. But it seems unlikely that it’ll actually come to that.

Bad News From the Rainforest

After three years of declining rates of deforestation in the Amazon, Brazilian officials acknowledged that deforestation is occurring at three times last year’s rate. In addition to its biodiversity implications, deforestation in the Amazon is the important secondary source of global warming. And what we really need is not to slow the rate of deforestation, but actually halt it and partially reverse it. In some respects, figuring out how to get the job done is an even bigger challenge than curbing carbon emissions simply because enforcement and compliance issues are difficult to figure out.

Still, one clear step in the right direction would be to have an American administration that’s prepared to acknowledge that the problem is real. Instead, the Bush administration will leave office with the most shameful part of a very shameful record probably being their eight years of not just failing to act, but actively obstructing action — screwing around with the EPA and international meetings, new subsidies for oil and gas companies, etc. — while the planet boils around them.

No Alternative

Back from Rosh Hashanah services, one striking thing about the rejection of the bailout is that the deal’s conservative opponents don’t seem to have any real alternative in mind. By contrast, the deal’s critics on the left mostly have a pretty clear critique — the want more equity, tighter controls on CEO pay, more mortgage modifications, and more direct economic stimulus. In fact, they mostly want the same things that the deal’s supporters on the left want — they’re just making a different judgment call about the relative weight of various factors, the contours of feasibility, etc.

But the deal’s critics on the right have . . . an irrelevant capital gains tax cut? And perhaps a plan to suspend “mark-to-market” accounting so as to allow financial institutions to recapitalize themselves through handwaving and cooking the books. I’m fully in sympathy with people who have their doubts about the desirability of the bill that was brought to the floor today, but surely one has a responsibility to lay out some alternative course of action. Even spelling out “we should do nothing, let large banks fail, assume money will flow elsewhere, etc.” could qualify you to participate in the conversation. But just bleating vaguely about socialism and saying mean ol’ Nancy hurt your feelings doesn’t really cut it.

With Great Comedy, Comes Great Potential for Comic Book Tie-Ins

In the day’s really important political news, Steven Colbert will be coming to a Spider-Man book near you in the near future:

While “Colbert for President” signs have been popping up in the background of random Marvel comics lately, the publisher has announced that Colbert himself will show up working side-by-side with Spider-Man in October.

“Well, it’s kind of a team-up,” laughed comic book scribe Mark Waid, who wrote the eight-page story that will appear in Amazing Spider-Man #573. “Let’s put it this way: Stephen Colbert thinks it’s a team-up. Spider-Man keeps telling him it’s not a team-up.

“Without giving away too many of the surprises,” Waid continued, “essentially what’s happened is Stephen Colbert has been convinced by J. Jonah Jameson that the people of New York don’t love him enough to swing the election. And he needs New York as a state, so he throws his suit and his tie into a trash can and stalks up from an alley proclaiming, ‘Stephen Colbert no more!’”

Pretty awesome. That’s via reader J.S. who speculates that perhaps a DC crossover is also in the works wherein Colbert will take on the Green Lantern Theory of international relations.