Marco Arment, commenting on the townhall meetings:

Dan, after braving a healthcare town-hall meeting and being overwhelmed by the crazy Republican whackjobs who try to “win” arguments by screaming their illogical, incorrect points more loudly than the people who try to engage in civilized, educated discussion.

Civilized, educated discussion. Hmm, do you mean like this?

I took those at the 2006 May 1st immigration protest in Los Angeles. The sign in the first photo reads “REVOLUTION,” if you can’t read it.

So is that the “civilized, educated” discussion you’re taking about, Marco? Because people with those signs have no interest in that, and I know they are a *little* left of center.

It’s easy to point fingers at the other side and act like your side is angelic, but it’s also delusional. The reality is political discourse hasn’t devolved in this country because of any one side, but because both sides have gone absolutely insane.

Obama in 2003:

I happen to be a proponent of a single-payer universal health care program. I see no reason why the United States of America, the wealthiest country in the history of the world, spending 14 percent of its gross national product on health care, cannot provide basic health insurance to everybody. And that’s what Jim is talking about when he says everybody in, nobody out. A single-payer health care plan, a universal health care plan.

The Obama White House in 2009:

…There are a lot of very deceiving headlines out there right now, such as this one — take a look at this one. This one says, ‘Uncovered Video: Obama Explains How His Health Care Plan Will Eliminate PRIVATE Insurance.’ Well, nothing can be farther from the truth. You know the people who always try to scare people whenever you try to bring them health-insurance reform are at it again. And they’re taking sentences and phrases out of context, and they’re cobbling them together to leave a very false impression.

The only thing misleading about the video mentioned is the title — Obama doesn’t really explain how his plan will eliminate private insurance. But the video quotes from his 2003 speech accurately — Obama said he supports single-payer health care, or a system where the government pays for everyone’s health insurance. This, by definition, means the elimination of private insurance.

Whether you support a single-payer system or not, the administration is being incredibly dishonest. Not that long ago, Obama supported eliminating private insurance, but now the administration claims anyone who says the Democrats are attempting to create a single-payer system are fear-mongering, trying to make them look like they are crazy.

The honest thing to do would be to address Obama’s past position directly. Instead, all the administration has done is smear those that point out his own inconvenient past.

Helen Thomas in Wednesday’s White House press briefing, in discussion over the president’s “town hall” meeting where the questions and audience were preselected:

The point is the control from here. We have never had that in the White House — this White House. And we have had some control but not this control. I mean I’m amazed, I’m amazed at you people who call for openness and transparency and you have controlled…

Here is a transcript of the briefing, but the video captures just how non-responsive Gibbs was to Thomas’s and Reid’s question.

The issue Reid and Thomas raise is important: town halls are intended to be a direct way for the public to ask questions, to eliminate the typical control that public political events have, so politicians are more responsive. But today’s “town hall,” although dressed up to look like one (the TV screens even read “Open for Questions”), wasn’t. It was a means for the president to get his message to the public in precisely the way he wanted.

Here is why that is so wrong: today’s event is as defined and controlled an event as any other, but it is presented to look like it is open and transparent. Good politics maybe, but certainly not honest.

William McGurn on Obama’s “saved or created” rhetoric:

It’s not only former Bush staffers such as Messrs. Fratto and Mankiw who have noted the political convenience here. During a March hearing of the Senate Finance Committee, Chairman Max Baucus challenged Treasury Secretary Timothy Geithner on the formula.

“You created a situation where you cannot be wrong,” said the Montana Democrat. “If the economy loses two million jobs over the next few years, you can say yes, but it would’ve lost 5.5 million jobs. If we create a million jobs, you can say, well, it would have lost 2.5 million jobs. You’ve given yourself complete leverage where you cannot be wrong, because you can take any scenario and make yourself look correct.”

Martin Feldstein on the cost of cap-and-trade:

The Congressional Budget Office recently estimated that the resulting increases in consumer prices needed to achieve a 15 percent CO2 reduction — slightly less than the Waxman-Markey target — would raise the cost of living of a typical household by $1,600 a year.

Keith Hennessey, using the NHTSA’s analysis to see what effect Obama’s proposed emissions and fuel efficiency standards will have:

• Both options would reduce the global mean surface temperature by one-thousandth of one degree Celsius by 2030.  The Obama option would reduce the global temperature by seven thousandths of a degree Celsius by the end of this century.
• The effects on sea level are too small to measure by 2030.  By 2100, the Obama proposal (technically, the TC=TB proxy) would reduce the sea-level rise by six hundredths of a centimeter.  That’s 0.6 millimeters.

Hennessey served during the Bush administration and coordinated Bush’s fuel efficiency standards. It is worth reading his entire entry; it is an apolitical look at Obama’s proposal.

This underscores just how difficult having a significant effect on global warming would be. Obama’s proposal is quite aggressive — Hennessey calculates it will require about a 5.8 percent increase in fuel efficiency per year through 2016 — but its short and long term effects on the environment are not significant. Costs borne by consumers, and job losses (the NHTSA estimates around 150,000 jobs lost in the auto industry, resulting from more expensive cars and thus less cars sold) are rather significant.

So the economic effects of this policy are significant, but the environmental effects are not; imagine what it would take to seriously retard global warming. It makes clear the trade off in doing anything of note to slow global warming: significant economic loss, and therefore suffering for people across the globe.

This does not mean that this policy should not be implemented — but it does mean justifying it on its environmental effect does not seem reasonable. Reducing the United States’ dependence on oil is certainly a proper goal.

(Via Alex Tabarrok.)

Harvard professor Niall Ferguson:

It is more than a little convenient for America’s political class to blame deregulation for this financial crisis and the resulting excesses of the free market. Not only does that neatly pass the buck, but it also creates a justification for . . . more regulation. The old Latin question is highly apposite here: Quis custodiet ipsos custodes? — Who regulates the regulators?

Or: who watches the Watchmen?

(Via Marginal Revolution.)

The Wall Street Journal on Obama’s plan to reduce foreign income deferral:

Yes, we know: Few major U.S. companies pay 35% of their profits in taxes because of the foreign tax-deferral and other deductions, credits and loopholes. But that’s precisely why Mr. Obama should want to take the better path to corporate tax reform by reducing the rate and removing loopholes. America now has the worst of both worlds — a high statutory rate and a tax code so riddled with complexity that it is both expensive to administer and inefficient at collecting revenue. And yet Mr. Obama’s proposal to limit deferral only layers on the complexity.

U.S. companies are taxed twice on foreign income — once by the foreign nation at their income tax rate, and then in the U.S. at the corporate income tax rate, 35 percent. Taxing U.S.-based companies twice reduces the incentive to be U.S.-based, because it means paying even more taxes.

The deferral for reporting foreign income and tax credit exist to reduce this incredible disadvantage. Most European nations do not tax foreign-derived income, because it is a mess to enforce and discourages business in their nation.

The deferral and tax credit solution we have is a poor solution for reducing the effect of our insistence on taxing foreign income. So Obama is right in saying it needs reform — but he is implementing precisely the wrong kind of reform. He is trying to weaken it and make U.S. companies pay taxes on foreign income.

What he should do is 1. eliminate taxing foreign-derived income, 2. reduce the corporate rate to be in line with Europe’s corporate tax rate (we have one of the highest in the world), and 3. remove loopholes and some deductions in the tax code which allow companies to pay lower rates.

This would not only make us competitive with the rest of the world, but would also reduce complexity in the tax code, which is an absolute mess. There are so many rules for what can and cannot be deducted, under what conditions, with these exceptions and exceptions to the exceptions that it is monumentally difficult to figure out how much is owed. It should not be that difficult to figure out how much you owe the federal government.

He is coming at it from the wrong end. Rather than reduce complexity, reduce the corporate rate and eliminate loopholes, he wants to layer on more complexity and increase the effective rate.

Tuesday’s episode of the Daily Show included a debate between Jon Stewart and Cliff May on torture, but the full debate was too long to fit in the show.

Here’s the unedited version of the debate, which is one of the better discussions I’ve heard.

Jon argued that we should consider captured al Qaeda militants as prisoners of war under the Geneva Convention (even though they do not meet the requirements), which effectively means we cannot interrogate — at all — al Qaeda militants, no matter their position and knowledge of planned terrorist attacks.

The Geneva Convention says in regard to prisoners of war:

No physical or mental torture, nor any other form of coercion, may be inflicted on prisoners of war to secure from them information of any kind whatever. Prisoners of war who refuse to answer may not be threatened, insulted, or exposed to any unpleasant or disadvantageous treatment of any kind.

I am not sure if Jon knew what the implications are of designating al Qaeda militants as prisoners of war. It would mean that we cannot subject al Qaeda leaders, like Khalid Sheikh Mohammed (who organized the September 11th attacks) to any interrogation tactics whatever — if he did not wish to talk, then he would have been free to go back to his cell.

That is ludicrous. These are not normal soldiers on a battlefield — people like Khalid Sheikh Mohammed have dedicated their lives to murdering as many innocent people as possible. That is their life goal, and he (and others) have done as much as possible to realize that goal. They should not be afforded the same protections as an honorable foot soldier of a standing army whose only goal is to get home alive to his wife and kids.

I do not think that waterboarding should be used. It is terrible. But in our obsession with waterboarding, we have also eliminated other methods — such as sleep deprivation and subjecting the individuals to loud music (sounds absurd that this is considered torture) — that certainly (in my mind) do not go beyond the line of a reasonable tactic to use on high-level terrorists to gain intelligence necessary to save innocent lives.

That is the important debate: where do we draw the line between justified coercive techniques, and torture? How much physical and mental discomfort should be used? Jon’s (stated) position, that no coercive techniques should be used at all, is as reactionary as the far right’s belief that any tactics should be on the table.

Unfortunately, we haven’t had this debate. We’ve only debated whether intelligence agents and lawyers should be prosecuted. We’re missing the point here: what is and isn’t torture? It isn’t such a simple question.

The Pay for Performance Act:

The new legislation, the “Pay for Performance Act of 2009,” would impose government controls on the pay of all employees — not just top executives — of companies that have received a capital investment from the U.S. government. It would, like the tax measure, be retroactive, changing the terms of compensation agreements already in place. And it would give Treasury Secretary Timothy Geithner extraordinary power to determine the pay of thousands of employees of American companies.

The legislation, passed by the House on April 1st, applies to all employees of all firms who have taken any TARP funds, and gives the Treasury Secretary the power to define what is “reasonable” compensation.

The (ostensible) idea behind providing capital to banks was: to temporarily remove pressure from their balance sheets until the crisis ended. The “Pay for Performance Act” is a blatant power grab by the government, to take full control of financial companies. If this bill passes the Senate and is signed into law by President Obama, the Federal government will be deciding how much employees are paid for a wide variety of companies.

Making this even clearer, Obama said this during a meeting with top financial executives after one executive said he’d like to return TARP funds as soon as possible:

Dimon also insisted that he’d like to give the government’s TARP money back as soon as practical, and asked the president to “streamline” that process.

But Obama didn’t like that idea — arguing that the system still needs government capital.

The president offered an analogy: “This is like a patient who’s on antibiotics,” he said. “Maybe the patient starts feeling better after a couple of days, but you don’t stop taking the medicine until you’ve finished the bottle.” Returning the money too early, the president argued could send a bad signal.

Several CEOs disagreed, arguing instead that returning TARP money was their patriotic duty, that they didn’t need it anymore, and that publicity surrounding the return would send a positive signal of confidence to the markets.

Many companies were forced to take TARP funds — some by threat — and now when they want to return them because of the government’s all-too-obvious power play, they are told they can’t. They aren’t allowed to pay the loan back, because if they did, the government would have no claim over them anymore.

This is what happens when passions are aflame, and government is free to do as it chooses: the government uses crisis and anger as pretext to grab complete control.

Henry Blodget:

Thanks to our stupidity bailouts, we now own major stakes in these firms–at mind-boggling expense. So it’s not clear why we want to destroy them. But that’s what we seem determined to do.

Believe it or not, hidden inside these companies are thousands of decent, competent people whose households bring in more than $250,000 a year. Many of these folks had NOTHING to do with the gambling addiction that bankrupted their firms. Many of them still have a choice where to work. And now that they’ve learned that their family’s pay will be capped at $250,000 indefinitely, many of them will quickly decide that now is a good time to pursue their careers elsewhere. (That is, unless their firm takes the easy and obvious step of just paying them a fatter salary, which just renders the whole thing a farce.)

…

The real lesson here, unfortunately, is that it’s a disaster for the government to run private companies.  We used to understand that.  But ever since we started telling ourselves that we had to save bankrupt institutions by taking them over and pretending not to ‘nationalize’ them, we have apparently forgotten.

David Moffett, the man hired to run Freddie Mac after it was placed in conservatorship in 2008, already quit because of the politicization of his job. But no one cared.

Let me be clear: this is not about “getting back” at the people who supposedly caused the financial crisis.¹ Nationalizing A.I.G. and providing aid to other firms is, at its best, a means of saving firms which were thought to be integral to the financial system. This is about saving these firms to save the system.

I did not support “saving” A.I.G. and other firms for precisely this reason: when government becomes involved in the economy, it inevitably politicizes it and fucks it up. I cannot get more blunt than that. This is what is happening now. President Obama and Congress (both Democrats and Republicans) were embarrassed by the bonuses paid by A.I.G., and so they are creating a magnificently-stupid tax to save themselves from people’s anger. They are not doing this for the country. They are doing it to save their political careers.

This is what happens when governments create messes: they try to shift blame to others. They create scapegoats. This isn’t a joke, this isn’t a game, and this isn’t justice. These are the first steps of the destruction of our economy.

(Via Marginal Revolution.)

1. And let me be even more clear: Although A.I.G. and other firms deserve blame for the crisis, if you want to blame someone, the federal government is your prime candidate. [↩]

Despite the financial crisis, caused in part by the Federal government’s requiring Fannie Mae and Freddie Mac to support subprime mortgages, the Federal government has learned nothing:

Most important, by taking over the companies, lawmakers have gained a lever over the housing market and national economy that many — particularly Democrats — are loath to discard, legislators say.
…
Moreover, the takeover has provided legislators with a long-sought ability to influence the mortgage marketplace directly and pursue social goals like low-income housing.

Absolutely insane, but these are the times we live in. This is the economic and political equivalent of touching a hot stove, and rather than learning not to touch hot things, embracing it like a long-lost lover.

Robert Barro on the multiplier effect:

A much more plausible starting point is a multiplier of zero. In this case, the GDP is given, and a rise in government purchases requires an equal fall in the total of other parts of GDP — consumption, investment and net exports. In other words, the social cost of one unit of additional government purchases is one.

This approach is the one usually applied to cost-benefit analyses of public projects. In particular, the value of the project (counting, say, the whole flow of future benefits from a bridge or a road) has to justify the social cost. I think this perspective, not the supposed macroeconomic benefits from fiscal stimulus, is the right one to apply to the many new and expanded government programs that we are likely to see this year and next.

Not only is that a more reasonable and rational standard to apply to government projects than the assumption many are making — that the multiplier is more than one (up to 1.5 times), which justifies nearly any government spending as “stimulus” and thus as reasoning for passing any spending desired — but Barro estimates past multipliers to be much less than 1. At its height during World War 2, he estimates it to be .8x; during peace time, he estimates it to be “insignificantly” different than zero.

If we use a multiplier of zero standard, which we should because it insures the value created by spending overcomes its social costs, then many parts of the bill passed Friday would be unjustified.

From Time Magazine:

Traumatized by layoffs that have cost more than 1.2 million jobs during the slump, U.S. consumers have fallen into their deepest funk in years. ‘Never in my adult life have I heard more deep- seated feelings of concern,’ says Howard Allen, retired chairman of Southern California Edison. ‘Many, many business leaders share this lack of confidence and recognize that we are in real economic trouble.’ Says University of Michigan economist Paul McCracken: ‘This is more than just a recession in the conventional sense. What has happened has put the fear of God into people.’

In one of history’s most painful paradoxes, U.S. consumers seem suddenly disillusioned with the American Dream of rising prosperity even as capitalism and democracy have consigned the Soviet Union to history’s trash heap. ‘I’m worried if my kids can earn a decent living and buy a house,’ says Tony Lentini, vice president of public affairs for Mitchell Energy in Houston. ‘I wonder if this will be the first generation that didn’t do better than their parents. There’s a genuine feeling that the country has gotten way off track, and neither political party has any answers. Americans don’t see any solutions.’

The deeper tremors emanate from the kind of change that occurs only once every few decades. America is going through a historic transition from the heedless borrow-and-spend society of the 1980s to one that stresses savings and investment. In the short run, this helped trigger the cyclical recession, which is likely to run its course in the next few months. But when it’s over, America will not simply go back to business as usual.

From Time, in 1992, that is. Sound familiar?

Just saying.

(Via Marginal Revolution, which has been smartly comparing this recession to past ones.)

Barack Obama:

In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of short-cuts or settling for less. It has not been the path for the faint-hearted – for those who prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things – some celebrated but more often men and women obscure in their labor, who have carried us up the long, rugged path towards prosperity and freedom.