What difference will today’s elections make?

It has been said over and over again that mid-term elections give Presidents heartburn. As a general rule the President’s party loses seats in Congress between Presidential elections.

Add on top of that the fact that Democrats have increased their numbers in both the Senate and the House during the past two elections taking several seats that had been traditionally Republican. That leaves Democrats on the defense in very vulnerable races to begin with.

In addition, while the economy crashed during the Bush administration the effects weren’t really felt until after the Obama administration took office. Twenty-two months into the Obama administration the economy is still a mess. Some economists see flickers of hope but that’s pretty academic to most Americans. So whether the public is unfairly blaming the Democrats for causing the economic downturn or (more fairly) blaming the Democrats for not doing enough to reverse the downturn the bottom line is the majority gets the blame the lousy state of our economy.

So the Democrats are going to lose seats in the Senate and the House of Representatives.

Depending on which poll you follow, the Democratic loss will likely include the majority in the House of Representatives and possibly (although less likely) the majority in the Senate. (It should be noted that the victory of the National League in the World Series is a promising development.) So if the Republicans take majorities in both houses of Congress or if the Democrats retain majorities in both houses but with reduced numbers what will the impact be? Mathew Yglesias thinks the 2010 midterm elections, in comparison to other elections, won’t matter that much:

…. The 2008 elections led, after all, to a very important piece of health care legislation that’s not going to be repealed during the 112th congress. In other words, even after the soon-to-come revival of conservative political fortunes the health policy status quo is going to settle well to the left of where it was before the election. And it seems overwhelmingly likely to me that had Kay Hagan and Al Franken not won their close elections in North Carolina and Minnesota that the Affordable Care Act never would have passed. So as far as elections go, that’s a pretty big deal.

By contrast, looking ahead even if the Democrats defy expectations and eke out a narrow House majority they’re not going to turn around and pass a cap-and-trade bill. And if Republicans defy expectations and pick up 65 House seats instead of 55 House seats, that’s not going to conjure up the votes to scrap the minimum wage. In any remotely plausible range of outcomes, we’ll be looking at an era where either nothing happens or else compromises are reached between the party leaders. The precise numbers matter of course, but they don’t matter nearly as much as they did in the current congress where a couple Democratic “reach” wins in Senate elections transformed the situation.

Yglesias is right – the 2008 election was a trans-formative election and this one will not be. Still, with the nation involved in two wars and Americans struggling in the worst recession since the 1930’s the expectation of Congressional gridlock for the next two years is not reassuring

The “business opportunities” created by Arizona’s immigration law

There’s more to Arizona’s controversial immigration bill (the so called “Support Our Law Enforcement and Safe Neighborhoods Act”) than an effort by a state government to block immigration from Mexico. It seems legislation was written to create business opportunities for private prison companies looking to build detention centers to hold immigrants. The legislation was promoted by ALEC (the American Legislative Exchange Council) – a membership organization of conservative public officials and private corporations and associations. Campaign donations flowed to friendly legislators.

Laura Sullivan reports this at NPR:

The law is being challenged in the courts. But if it's upheld, it requires police to lock up anyone they stop who cannot show proof they entered the country legally.

When it was passed in April, it ignited a fire storm. Protesters chanted about racial profiling. Businesses threatened to boycott the state.

Supporters were equally passionate, calling it a bold positive step to curb illegal immigration.

But while the debate raged, few people were aware of how the law came about.

NPR spent the past several months analyzing hundreds of pages of campaign finance reports, lobbying documents and corporate records. What they show is a quiet, behind-the-scenes effort to help draft and pass Arizona Senate Bill 1070 by an industry that stands to benefit from it: the private prison industry.

The law could send hundreds of thousands of illegal immigrants to prison in a way never done before. And it could mean hundreds of millions of dollars in profits to private prison companies responsible for housing them.

Arizona state Sen. Russell Pearce says the bill was his idea. He says it's not about prisons. It's about what's best for the country.

"Enough is enough," Pearce said in his office, sitting under a banner reading "Let Freedom Reign." "People need to focus on the cost of not enforcing our laws and securing our border. It is the Trojan horse destroying our country and a republic cannot survive as a lawless nation."

But instead of taking his idea to the Arizona statehouse floor, Pearce first took it to a hotel conference room.

It was last December at the Grand Hyatt in Washington, D.C. Inside, there was a meeting of a secretive group called the American Legislative Exchange Council. Insiders call it ALEC.

It's a membership organization of state legislators and powerful corporations and associations, such as the tobacco company Reynolds American Inc., ExxonMobil and the National Rifle Association. Another member is the billion-dollar Corrections Corporation of America — the largest private prison company in the country.

It was there that Pearce's idea took shape.

"I did a presentation," Pearce said. "I went through the facts. I went through the impacts and they said, 'Yeah.'"

The 50 or so people in the room included officials of the Corrections Corporation of America, according to two sources who were there.

Pearce and the Corrections Corporation of America have been coming to these meetings for years. Both have seats on one of several of ALEC's boards.

And this bill was an important one for the company. According to Corrections Corporation of America reports reviewed by NPR, executives believe immigrant detention is their next big market. Last year, they wrote that they expect to bring in "a significant portion of our revenues" from Immigration and Customs Enforcement, the agency that detains illegal immigrants.

In the conference room, the group decided they would turn the immigration idea into a model bill. They discussed and debated language. Then, they voted on it.

"There were no 'no' votes," Pearce said. "I never had one person speak up in objection to this model legislation."

Four months later, that model legislation became, almost word for word, Arizona's immigration law.

They even named it. They called it the "Support Our Law Enforcement and Safe Neighborhoods Act."

"ALEC is the conservative, free-market orientated, limited-government group," said Michael Hough, who was staff director of the meeting.

Hough works for ALEC, but he's also running for state delegate in Maryland, and if elected says he plans to support a similar bill to Arizona's law.

Asked if the private companies usually get to write model bills for the legislators, Hough said, "Yeah, that's the way it's set up. It's a public-private partnership. We believe both sides, businesses and lawmakers should be at the same table, together."

Nothing about this is illegal. Pearce's immigration plan became a prospective bill and Pearce took it home to Arizona.

Pearce said he is not concerned that it could appear private prison companies have an opportunity to lobby for legislation at the ALEC meetings.

"I don't go there to meet with them," he said. "I go there to meet with other legislators."

Pearce may go there to meet with other legislators, but 200 private companies pay tens of thousands of dollars to meet with legislators like him.

As soon as Pearce's bill hit the Arizona statehouse floor in January, there were signs of ALEC's influence. Thirty-six co-sponsors jumped on, a number almost unheard of in the capitol. According to records obtained by NPR, two-thirds of them either went to that December meeting or are ALEC members.

That same week, the Corrections Corporation of America hired a powerful new lobbyist to work the capitol.

The prison company declined requests for an interview. In a statement, a spokesman said the Corrections Corporation of America, "unequivocally has not at any time lobbied — nor have we had any outside consultants lobby – on immigration law."

At the state Capitol, campaign donations started to appear.

Thirty of the 36 co-sponsors received donations over the next six months, from prison lobbyists or prison companies — Corrections Corporation of America, Management and Training Corporation and The Geo Group.

By April, the bill was on Gov. Jan Brewer's desk.

Brewer has her own connections to private prison companies. State lobbying records show two of her top advisers — her spokesman Paul Senseman and her campaign manager Chuck Coughlin — are former lobbyists for private prison companies. Brewer signed the bill — with the name of the legislation Pearce, the Corrections Corporation of America and the others in the Hyatt conference room came up with — in four days.

Brewer and her spokesman did not respond to requests for comment.

In May, The Geo Group had a conference call with investors. When asked about the bill, company executives made light of it, asking, "Did they have some legislation on immigration?"

After company officials laughed, the company's president, Wayne Calabrese, cut in.

"This is Wayne," he said. "I can only believe the opportunities at the federal level are going to continue apace as a result of what's happening. Those people coming across the border and getting caught are going to have to be detained and that for me, at least I think, there's going to be enhanced opportunities for what we do."

Opportunities that prison companies helped create.

ALEC, by the way, includes as part of its mission statement a commitment to free markets and small government – the same organization promoting legislation for the government to “create business opportunities” for corporations to build more prisons at taxpayer’s expense and to use the power of the state to fill those private prisons.

You can read and listen to the entire NPR story here.

Taking our country back to what?

Nostalgia for a past removed from historical context can be a dangerous thing. It is the tool of demagogues. Tea Party activists wanting to return to a time of shared prosperity without understanding how it came about and how it disappeared are prime examples of people ripe to be manipulated to act against their own self-interest.

Harold Meyerson examines the Tea Party’s loose grasp of history and the growing concentration of wealth in the United States during the past 30 years:

As battle cries go, the Tea Party's "Take our country back" is a pretty good one. It's short and punchy, and it addresses a very widespread sense that the nation that Americans once lived in has changed, and not for the better.

When the Tea Partyers get around to identifying how America has changed and to whose benefit, however, they get it almost all wrong. In the worldview of the American right -- and the polling shows conclusively that that's who the Tea Party is -- the nation, misled by President Obama, has gone down the path to socialism. In fact, far from venturing down that road, we've been stuck on the road to hyper-capitalism for three decades now. The Tea Partyers are right to be wary of income redistribution, but if they had even the slightest openness to empiricism, they'd see that the redistribution of the past 30 years has all been upward -- radically upward. From 1950 through 1980, the share of all income in America going to the bottom 90 percent of Americans -- effectively, all but the rich -- increased from 64 percent to 65 percent, according to an analysis of tax data by economists Thomas Piketty and Emmanuel Saez. Because the nation's economy was growing handsomely, that means that the average income of Americans in the bottom 90 percent was growing, too -- from $17,719 in 1950 to $30,941 in 1980 -- a 75 percent increase in income in constant 2008 dollars.

Since 1980, it's been a very different story. The economy has continued to grow handsomely, but for the bottom 90 percent of Americans, it's been a time of stagnation and loss. Since 1980, the share of all income in America going to the bottom 90 percent has declined from 65 percent to 52 percent. In actual dollars, the average income of Americans in the bottom 90 percent flat-lined -- going from the $30,941 of 1980 to $31,244 in 2008.

In short, the economic life and prospects for Americans since the Reagan Revolution have grown dim, while the lives of the rich -- the super-rich in particular -- have never been brighter. The share of income accruing to America's wealthiest 1 percent rose from 9 percent in 1974 to a tidy 23.5 percent in 2007.

Looking at these numbers, it would be reasonable to infer that when the Tea Partyers say that they want to take the country back, they mean back to the period between 1950 and 1980, when the vast majority of Americans encountered more opportunity and security in their economic lives than they had before or since. Reasonable, but wrong. As the right sees it, America's woes are traceable to the New Deal order that Franklin Roosevelt, working in the shadow of the even more sinister Woodrow Wilson, imposed on an unsuspecting people.

In fact, the New Deal order produced the only three decades in American history -- the '50s, '60s and '70s -- when economic security and opportunity were widely shared. It was the only period in the American chronicle when unions were big and powerful enough to ensure that corporate revenue actually trickled down to workers. It marked the only time in American history when, courtesy originally of the GI Bill, the number of Americans going to college surged. It was the only time when taxes on the rich were really significantly higher than taxes on the rest of us. It was the only time that the minimum wage kept pace (almost) with the cost of living. And it was the only time when most Americans felt confident enough about their economic prospects, and those of their nation, to support the taxes that built the postwar American infrastructure.

Since the ascent of Ronald Reagan, though, America's claim to being a land of opportunity has become a sick joke. Unions have dwindled; colleges have become unaffordable; manufacturing has gone abroad; taxes on the rich have plummeted; our infrastructure has decayed.

But the country the right wants to return to isn't the America that the Greatest Generation built. Judging by the statements of many of the Republican and Tea Party-backed candidates on next Tuesday's ballots, it's the America that antedates the New Deal -- a land without Social Security, unions or the minimum wage. It's the land that the Greatest Generation gladly left behind when they voted for and built the New Deal order. All of us should want our country back, but that country should be the more prosperous and economically egalitarian nation that flourished at the time when America was not only the world's greatest power, but also a beacon to the world.

Why are the French so angry?

It is easy to get the impression from the U.S. media that the French are acting like spoiled children asked to clean up their rooms. Strikes have left garbage uncollected, trains and buses idle, and mail undelivered. Students have demonstrated in large numbers around the country. Fuel depots and refineries have been blocked leading to a fuel shortage across the country. All of this, we are told, because the government is planning on raising the retirement age from 60 to 62.

Yet, if you suspect there may be more to this story than is summarized in most newspaper stories you are right. The often cited reason for this widespread turmoil – raising the retirement age from 60 to 62 – is only partially true and somewhat misleading. The proposals about changing the French retirement system are much more complex. But more importantly, these protests represent a widespread disgust with corruption in the Sarkozy government at a time when the French public are told they must make sacrifices. Ullrich Fichtner explains in Der Spiegel:

…the French are protesting against a flawed, unfair and poorly executed pension reform, and they are angry about more than what is being touted as a number of ridiculously minor changes. At the same time, however, the resistance against this concrete reform project by a very broad, only loosely cohesive protest movement offers a welcome excuse for the French to finally vent their long-simmering frustrations with their general situation. In fact, France is currently witnessing a veritable popular uprising against a government which has been shaken by scandals and which is already over the hill after only half of its term in office. The real target of the protesters' anger is Nicolas Sarkozy, the most unpopular French president of the last 30 years.

The Widespread Deterioration of a Once-Proud Republic

The parade of minor and major mistakes and scandals of the past summer provides an indication of where all this anger in the country is coming from, and of the extent of French citizens' disenchantment with their politicians today. During the football World Cup in South Africa, the outspoken secretary of state for sports, Rama Yade, criticized the French Football Federation for choosing an excessively luxurious hotel for its national team, before it was revealed that Yade herself would be staying at one of the most expensive luxury hotels in South Africa during her visit.

Soon afterwards, it became known that Christian Blanc, secretary of state for the Greater Paris region, had spent €12,000 of his budget on Cuban cigars within 10 months -- and Blanc didn't even understand what all the fuss was about. Other administration officials, including Industry Minister Christian Estrosi, allowed family members to use their official residences, paid for with taxpayer money, for private purposes. Did they feel guilty? Not at all. Did anyone apologize? What on earth for?

It's little short of a miracle that Labor Minister Eric Woerth, the man behind the highly controversial pension reform, still has his job and isn't in prison awaiting trial instead. In his previous job as budget minister, Woerth saw no conflict of interest in the fact that his wife worked for the holding company that managed the fortune of the wealthy L'Oréal heiress Liliane Bettencourt, and to this day Woerth still hasn't been able to rebut the accusation that he deliberately steered his wife into the job. Woerth, in his capacity as treasurer of the ruling party, the Union for a Popular Movement (UMP), is also accused of having accepted illegal political contributions, in the form of cash-filled envelopes, from the very same Madame Bettencourt. Woerth denies everything.

The worst of it is that in France today, it is unlikely that such offenses will be investigated or that the alleged culprits will face punishment. In the Sarkozy era, judges and prosecutors are carefully weighing which cases they are willing to take on, and the parliament has also become a blunt weapon. Under Sarkozy, the French have witnessed the widespread deterioration of a once-proud republic and its values. In the years before the "omni-president," it would have been unthinkable for a French leader to give an inflammatory speech on national "insecurity," as Sarkozy did this summer. It would also have been inconceivable for an earlier administration to pursue a policy of expulsion like Sarkozy's treatment of the Roma.

The list of failings of the Sarkozy government is long, and their political consequences become more palpable with each new opinion poll. In a reliable new poll conducted last week, only 6 percent of respondents said that Sarkozy was doing a "very good" job, while 69 percent said that they considered Sarkozy to be a "bad" or "very bad" president. In other polls, some two-thirds of respondents have said that they approve of the strikes and protests against the pension reform. But in the end Sarkozy is even to blame for that.

A Declaration of War against the Unions

The word has spread in France that the contributory pension system can only remain viable if it is modified to conform to demographic and financial necessities. The current situation is, roughly speaking, comparable to the situation in Germany before the changes of recent years. The legal retirement age is 65 (and is expected to increase to 67), and the contribution period is 40.5 years (and is expected to increase to 41.5 years). The fact that the numbers 60 and 62 are constantly appearing in news reports is the result of confusing terminology, cultural differences and an attempt to stultify the positions of the unions and the Socialists.

In fact, 60 is merely the earliest possible retirement age for workers who have been paying into the system for at least 40 years. Anyone who retires at 60 in France without having completed the full contribution period must accept substantial reductions in benefits. The only problem is that Sarkozy clearly has no interest in initiating a socially accepted reform that has the support of the unions. In fact, such a reform has hardly been discussed at all. Basically, the outcome was announced before the beginning of any debate on the issue. The bill was endorsed by Sarkozy's cabinet at a meeting on July 13, in the middle of the country's summer vacation. Since then, its key points have been portrayed as non-negotiable.

In other words, the government -- and in recent months Sarkozy alone is ultimately France's government -- never sought the possibility of a sustainable, widely accepted solution. Instead, it used pension reform as a declaration of war against the unions, the Socialists and other adversaries. The intended message, from the very beginning, was that the administration was unwilling to collaborate with these elements, and that it was not going to allow anyone to water down its plans. There was certainly also a hope that the left would become radicalized again, which would deprive it of some of its appeal in the coming elections.

The outcome is now one-sided and warped. Workers, particularly civil servants, are taking on virtually the entire burden of the reform, while employers emerge largely unscathed. Worst yet, workers with extremely long contribution periods are penalized, women are put at a disadvantage and hardship cases are not sufficiently taken into account. It is, in a nutshell, a socially unjust reform. The manner in which it was (not) negotiated is, in a political sense, perhaps the greatest scandal of all, while the current turmoil is the logical consequence.

It was former President François Mitterrand who once noted that the exercise of the office of president in France amounted to a "permanent coup." Sarkozy is taking Mitterand's words at face value, as he tenaciously expands his power. His team of ministers has long been little more than an arm of the Elysee Palace, while Sarkozy's majority group in the French parliament has deteriorated into a club of presidential yes-men. Edwy Plenel, the head of a news website called Mediapart, now refers to Sarkozy as a "Caesar-like hyper-president," a man who gets his way "at any price, as fast as possible and, if necessary, by force."

Fears of a Misguided Transformation of French Democracy

The current strike and protest movement began on Sept. 7. Since then, millions have taken to the streets on a series of national action days, and by no means all the protestors were organized by unions, opposition parties and other organizations. Some of the people who are now getting involved have never taken part in protest marches before. They are the freshly politicized and unorganized who fear a misguided transformation of French democracy and are deeply suspicious of the supposed common sense that the French government prefers to invoke in place of the constitution today.

The opposition movement, the overwhelming majority of which is peaceful, is now being regularly joined by representatives of the disoriented youth of the low-income suburbs -- the same people that Sarkozy, when he was interior minister, referred to as "scum," and who Sarkozy, as president, has treated as scum. Now it seems that everything he had promised them, in the form of his so-called "Marshall Plan for the suburbs," has dissolved into lies and vanished into thin air. Now, not surprisingly, they are seeking the tumult of the street -- to set cars on fire, loot shops and smash windows. And it wouldn't be surprising if scenes like those that unfolded during the 2005 riots were repeated in the near future.

Nowadays, the uncomfortable truth in France is that everyone is constantly anticipating new eruptions, and that Sarkozy can never find a conciliatory word. He never even attempts to bring calm to the situation -- instead, he constantly manages to escalate things even more. And each new outbreak of violence is subsequently used as ammunition against the protesters.

You can read the entire article here.

Stimulating hypocrisy

The Center for Public Integrity has uncovered the grab for stimulus funds by Senators and Congressmen who are campaigning on opposing the 2009 stimulus spending package and earmarks. This from an article by John Solomon and Aaron Mehta in today’s Washington Post:

The behind-the-scenes grab for stimulus dollars is a particularly sensitive topic for Republicans, who have wooed the tea party movement with an incessant attack on stimulus spending as wasteful and ineffective. The House GOP's Pledge to America campaign manifesto promises to rescind all unspent stimulus dollars if Republicans regain control of Congress in the November elections.

But several of the architects of the GOP's anti-stimulus campaign tried to secure money from the program, including Senate Minority Leader Mitch McConnell (Ky.) and Rep. Mike Pence (Ind.), a member of the Republican House leadership who helped craft the Pledge to America.

At least one of McConnell's requested projects was accepted, with $20 million being earmarked from the Transportation Department for a bridge replacement between Milton, Ky., and Madison, Ind.

All told, five members of the GOP's leadership - McConnell, Pence, Sessions, Sen. Lamar Alexander (Tenn.) and Rep. Cathy McMorris Rodgers (Wash.) - sent letters requesting that funds be funneled to more than a dozen projects. Even McCain, who made running against pork a key plank of his 2008 presidential campaign, sent a letter offering his "conditional support" for Energy Department funds for Phoenix Sky Harbor International Airport. The grant was not awarded. McCain also wrote three letters endorsing stimulus applications pending at the Commerce Department.

Such letters dismay tea party activists and conservative advocacy groups such as Americans for Tax Reform, which see a touch of hypocrisy among candidates they thought were conservative champions of spending cuts.

"The GOP should not be taking this money and spending it regardless of where it came from," said Rob Gaudet, national coordinator for Tea Party Patriots. "They should be fighting against it with every fiber of their elected beings."

Over the past year, isolated reports of lawmakers and governors seeking funds from a single agency handing out stimulus money have surfaced in the news media. Using the Freedom of Information Act, the Center for Public Integrity collected nearly 2,000 requests from lawmakers in both parties to secure funding from the $814 billion American Recovery and Reinvestment Act.

When the bill was signed into law in February 2009, President Obama boasted that it was free of earmarks, which have been used by lawmakers for years to steer federal money to their pet projects.

"We're not having earmarks in the recovery package, period," the president said, promising that the process would create a "new higher standard of accountability, transparency and oversight."

While the legislation went through Congress without any traditional earmarks, lawmakers - including some Democratic leaders - went to work afterward, cajoling agencies to secure stimulus money for their favored projects for constituents and donors.

You can read the entire article here.

What’s the problem with the U.S.-Mexican border? Define your terms

Mathew Yglesias discussed the term “illegal immigrant”:

… it’s generally a bit misleading to write about US-Mexico border crossings primarily through a frame of immigration. If you look at this wall on the border near Tijuana, it hardly captures the full scope of the issue to say that this is a barrier to prevent Mexicans from immigrating to the United States and permanently settling there. It’s also a barrier to prevent Americans from walking on the beach into Mexico and buying some tacos. Or to prevent Mexicans from waking walking across the border to sell some beach towels and umbrellas to Americans and then walking back home with pockets full of money. The increasing militarization of the US-Mexico border has tended to increase the duration of time that Mexicans who come to the US to work illegally spend in our country, but both traditionally and under a saner policy most people who cross the border would probably just go back.

People should remember that not only are wage levels higher in the United States, the price level is higher too. Consequently, the best way for Mexicans willing to migrate to maximize their real wealth is to come to the US to work and then take their money back to Mexico. Temporary labor migration of this kind has traditionally been the goal of most work-oriented border crossing and the easiest way to prevent it from turning into illegal labor and semi-permanent settlement is to create a legal channel.

None of this per se answers the terminological issue, but it’s just to gesture in the direction of the idea that we should try to get more specific about what it is we’re talking about. There are laws governing crossing the border, laws governing employment, laws governing citizenship, etc. When I was camping and paddling down the St Croix River, I crossed the US-Canada border without authorization a number of times and probably broke some kind of laws but I was never an “illegal immigrant to Canada,” I was a kid on a canoe trip.

The politics pertaining to the U.S.-Mexican border is based more and more on hysteria and the resources thrown at trying to block movement back and forth between the two nations seems way out of proportion to any real problem free movement creates. Countries have every right to control their borders but when common people are prohibited from legally crossing a line on the map to work then they will start crossing borders at any point they can, they will be forced to live outside the law, and they won’t leave because of the difficulty of returning at a future date. Sometimes government policies play a role in aggravating the very problems they were created to resolve. There really is such a thing as the self-fulfilling prophecy.

Yglesias is right – terminology and definitions are important. (I remember a college professor who continually reminded us during class debates to “define your terms.”) So is the problem that people cross the southern U.S. border looking for work without going through the formal process of applying for citizenship or some sort of work permit?

Maybe rather than trying to recreate the border between North and South Korea with walls, barbed-wire, and armed personnel we should establish centers on the border where those seeking employment in the U.S. can go to apply for and receive the necessary work permits in an expedited manner. If the problem is defined as Mexicans entering the country illegally and never leaving then it makes more sense to make it easy to enter legally and to leave easily without fear of not being able to return.

With TARP so unpopular how will Americans deal with the next financial crisis?

Jeremy Hobson of public radio’s Marketplace program looks back on the Troubled Asset Relief Program (TARP) and its unpopularity despite success at stabilizing American banks and preventing the unemployment situation from becoming worse.

Let's go back to Sept. 24, 2008.

Then-President George W. Bush: Good evening. This is an extraordinary period for America's economy.

The nation's largest banks were failing. AIG, Fannie Mae and Freddie Mac had been seized by the federal government. The stock market was on the fritz and credit was drying up. All because the mortgages, or troubled assets, being held by banks were losing value fast.

President George W. Bush addressed the nation from the White House.

Bush: Our entire economy is in danger. So I propose that the federal government reduce the risk posed by these troubled assets and supply urgently needed money, so banks and other financial institutions can avoid collapse and resume lending.

The original plan for TARP was to buy those toxic mortgages from the banks so they'd have nice clean balance sheets and could operate normally. In the midst of a presidential election, though, members of both parties were uneasy about the plan.

Jonathan Alter is the author of the new political book "The Promise."

Jonathan Alter: Barack Obama told me in an interview that he knew that it would be toxic politically for him to back the TARP bailouts, but he also knew that it was necessary to prevent a depression.

Even the House Republican Leader John Boehner, who now decries TARP, pleaded with his members to vote for it.

John Boehner: If I didn't think we were on the brink of an economic disaster, it would be the easiest thing in the world to me to say no to this. But I believe the risk in not acting is much higher than the risk in acting.

But Congress wasn't swayed, and voted TARP down at first. By the time a package was passed, buying up mortgages would have been too time-consuming. So the government decided to temporarily pump money directly into the banks.

And Mark Zandi of Moody's Analytics says that turned out to be a slam-dunk success.

Mark Zandi: The banking system stabilized. If it had not gotten that equity, it would have collapsed and taken the economy with it. We'd be in a measurably worse place.

Zandi, who advised John McCain in 2008, has actually done the measurements. He did a study with a former Clinton Administration economist on where we'd be without TARP. It found there would be 8.5 million fewer jobs than there are now and the unemployment rate would exceed 15 percent.

Zandi: By bailing them out, we bailed ourselves out.

And Zandi says we're likely to make money on the bank bailout part of TARP. As for the parts of TARP that have nothing to do with Wall Street? Well, there were about $80 billion in loans to the auto industry. It's not clear if that will be repaid in full. And about $45 billion is slated for assistance to home owners to modify loans and prevent foreclosures.

As Mark Zandi says:

Zandi: That money is gone. We won't get that money back and we'll lose money on that.

Bottom line, out of the all the money initially made available for TARP, only about $475 billion were used. And the Congressional Budget Office expects we'll get all but $66 billion back. But maybe that's not the whole story.

Kenneth Troske is a University of Kentucky economist who sits on the congressional panel that oversees TARP. He says looking at the TARP in isolation ignores other emergency actions by the Treasury and by the Fed that made it easier for banks to repay their loans.

Kenneth Troske: If you take a very narrow view of TARP, and say "Hey, we made our money back," well a lot of the cost of tarp were shifted to other programs that have received much less attention and much less government oversight.

Still, Troske says that TARP did save our banking system. And that's why he worries for the future. Since TARP has become so unpopular, he says:

Troske: In the next financial crisis, and I do believe that there will be a next financial crisis, we will not see another TARP. And if you felt that that was a valuable way to stem a financial crisis, we've lost that policy instrument.

Though it looks like it will be front and center for the next month, since government bailouts are about the most popular thing to run against.

Iranian blogger sentenced to 19.5 years in prison

Iranian blogger, Hossein Derakhshan, has been sentenced to 19.5 years in prison and banned from participation in political parties and the media by an Islamic Revolutionary Court in Iran. Mr. Derakhshan was arrested in 2008 for his blogging activities, detained for the past two years, tried in July and sentenced this week. The arrest and harsh sentence was despite his increasingly favorable assessments of the Iranian government before his arrest.

The fuller story from CNN:

An Iranian court has sentenced the so-called "blogfather" of Iran to 19½ years in prison, the semi-official Mashregh news website said Tuesday.

Hossein Derakhshan was "convicted of cooperating with enemy states, making propaganda against the Islamic system of government, promoting small anti-revolutionary groups, managing obscene web sites and insulting Islamic sanctities," Mashregh reported.

The 35-year-old Canadian-Iranian blogger and activist was also banned from journalistic endeavors and from joining any political parties for five years.

Derakhshan was arrested on November 1, 2008, and is being held at the Evin Prison in Tehran, reported the International Campaign for Human Rights in Iran.

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Hadi Ghaemi, executive director of the International Campaign for Human Rights in Iran, condemned the sentence.

"This is the longest sentence issued against a blogger in Iran, and it is solely because of his opinions and blogging. The sentence is meant to send a chilling message to the Iranian youth to stay away from the internet in practicing their freedom of expression," Ghaemi said.

Derakhshan's blog, titled Editor Myself on i.hoder.com, gained worldwide notoriety. He got particular attention for helping other Iranians start their own blogs with step-by-step start-up guides published in Persian.

Derakhshan also blogged on many political issues including freedom of expression, the Islamic Republic of Iran and Israeli relations in the Middle East.

In 2006 Derakhshan shocked his followers when he visited Israel on his Canadian passport.

"He was reporting his trip minute by minute on his blog ... in both English and Persian. It was the first time that an Iranian was reporting the real life in Israel," Hamed Derakhshan said.

Shortly before his imprisonment Hossein Derakhshan began writing in support of Iranian President Mahmoud Ahmadinejad.

"He felt Ahmadinejad was doing good for Iran. At that point many Iranian bloggers didn't like his ideas. He believed in the system. He did not believe it was perfect, but he thought he could work with the system and make it better," Hamed Derakhshan said.

Despite his recent favorable writings on Ahmadiejad, the authorities still did not trust him and considered him a “counter-revolutionary blogger.” This is quite consistent with the Iranian elite’s intolerance of any dissent and attempts to crack down on independent blogging.

A Facebook group advocating for Derakhshan’s freedom can be found here.

The high price of the war in Iraq

As President Obama fulfills his campaign promise to end the combat role of U.S. armed forces in Iraq it is worth taking time to consider the high price of that conflict which began with the U.S. invasion in March of 2003. Aside from the very real costs in blood and treasury, Anne Applebaum examines some of the casualties:

America's reputation for effectiveness. The victory was swift, but the occupation was chaotic. The insurgency appeared to take Washington by surprise, and no wonder: The Pentagon was squabbling with the State Department, the soldiers had no instructions and didn't speak the language. The overall impression, in Iraq and everywhere else, was of American incompetence—and, after Abu Ghraib, of stupidity and cruelty as well. Two years ago, a poll showed that vast numbers of our closest friends felt that the "mismanagement" of Iraq—not the "invasion" of Iraq—was the biggest stumbling block for allies of the United States.

No wonder, then, that America's ability to organize a coalition has also suffered. Participation in the Iraq war cost Tony Blair his reputation and the Spanish government an election. After an initial surge of support, the Iraqi occupation proved unpopular even in countries where America is popular, such as Italy and Poland. Almost no country that participated in the conflict derived any economic or diplomatic benefits from doing so. None received special U.S. favors—not even Georgia, which sent 2,000 soldiers and received precisely zero U.S. support during its military conflict with Russia.

It will be a lot harder to get any of the "coalition of the willing" to fight with us again. Indeed, "Iraq" is part of the reason why there is so little enthusiasm for Afghanistan and why it is so difficult to put organized pressure on Iran.

Another victim of the conflict was America's ability to influence the Middle East. Admittedly, we were never as good at this as we would like to be, but the chaos in Iraq has clearly strengthened Iran. It has had no positive impact on the Israeli-Palestinian conflict. By helping raise the price of oil for a few years—this was supposed to be a "war for oil"; remember that?—it has also strengthened Saudi Arabia, the regime that produced 15 of the 19 Sept. 11 hijackers.

Of course, the high oil price also strengthened Russia and Venezuela—not that anyone has much noticed—because another casualty of the Iraq war has been America's ability to think like a global power. Even if we eventually pull out of Iraq altogether, we will have been bogged down in that country for the decade that also saw China's rise to real world-power status, Latin America's drift to the far left, and Russia's successful use of pipeline politics to divide Europe—all trends that commanded hardly any attention from the Bush administration and so far even less from Obama.

Finally, there are few domestic items that are often overlooked. One worries me in particular: America's ability to care for its wounded veterans. In historical terms, the number of U.S. fatalities in Iraq has been low—some 4,400, as compared with nearly 60,000 in Vietnam. But thanks, in part, to extraordinary advances in medical technology, the number of severely wounded veterans—men and women who will need the highest level of medical and psychological care for the rest of their lives—is far higher than ever before. We need innovative programs—programs like Musicorps, which I described last year—but high levels of bureaucratic energy are required to create and fund them. And the bureaucracy is understandably tired.

All of which is a roundabout way of saying that the assessment of the Iraq war is a project for the next decade, not the next week. Before speaking on Tuesday, Obama might ponder the words of Chou En-lai—who, when asked to assess the long-term impact of the French Revolution, allegedly told Nixon, "It's too soon to tell."

Ideas have consequences and Kilpatrick's legitimized the worst behavior

Garrett Epps on the late James J. Kilpatrick:

Americans honor history not so much by forgetting it as by turning into a Disney movie. Nothing too scary, nothing ambiguous, above all nothing shameful. The Civil War was a big mistake that really had nothing much to do with slavery. The internment of the Japanese and Japanese American was a forgivable burst of enthusiasm. Segregation was a slight breach in manners; Martin Luther King was a jolly cross between Polonius and Santa Claus.

I thought of this national foible this week when American journalism gave a tender sendoff to conservative commentator James J. Kilpatrick, who died Sunday at the age of 89. The Washington Post called him "one of the most popular and eminent conservative writers of his generation." The New York Times said that "when he was not tackling national issues, he took aim at flabby prose and bureaucratic absurdities." His main contribution to national life, one would think from reading the obituaries, was "in-your-face, conservative bickering with liberal commentator Shana Alexander" that gave rise to Dan Ackroyd's famous line, "Jane, you ignorant slut."

To be sure, most obituarists rather diffidently praised Kilpatrick for moving away from his earlier segregationist views, which were then forgotten in a burst of admiration for his writings on grammar and usage.

Almost none of the obituaries noted that he did terrible damage to the United States Constitution--damage for which he never even weakly apologized, and which continues to do harm to the national dialogue today.

Kilpatrick's death comes in the midst of a new burst of pseudo-constitutional ugliness--with attacks on religious freedom, birthright citizenship, and federal civil-rights protections increasingly dominating the right-wing airwaves and the blogosphere. As I watch governors "reclaim" their state's "sovereignty" and legislators attack newborn children as "anchor babies," I am flooded with a sick déjà vu. I lived through this once before; and in that earlier cantata of hate, Kilpatrick was one of the choirmasters.

Jack Kilpatrick was my hometown newspaper editor during my childhood in Richmond, Virginia. I never met him and have been given to understand that he was a genial soul. But in print he was a racist dragon. His writings were hateful, but more than that, they were effective. Almost single-handedly, Kilpatrick laid the intellectual foundations for "massive resistance," the extremist Southern strategy of defying the Supreme Court by closing public schools to thwart court desegregation orders.

When Brown v. Board of Education was decided in 1954, a remarkable number of Southern leaders quietly expressed a willingness to comply. As segregationists, they weren't pleased; but the rule of law called for obedience to the Court.

A few, the most dedicated racists, would have none of it. "Segregation today, segregation tomorrow, segregation forever!" George C. Wallace memorably proclaimed. Wallace was a vulgarian; but the intellectual leader of the "segregation forever" movement was James J. Kilpatrick. Using the editorial columns of The Richmond News Leader, he made Virginia and then the South too hot to hold any white leader who talked of compromise.

Kilpatrick supplied a constitutional theory to justify defiance, and it is one that will seem familiar to anyone who follows the Tea Party movement today. The Supreme Court's interpretations of the Constitution were wrong--not just in Brown, he explained, but ever since 1803. "The sovereign states," not individuals, were the only important citizens of the Union. When the federal government, or the Supreme Court, overstepped its bounds, states could simply "interpose" their authority and nullify their orders. The Fourteenth Amendment (which was probably not valid anyway) did not provide for racial equality. The Tenth Amendment guaranteed state "sovereignty." The United States of 1954 was the United States of John C. Calhoun, "unchanged by John Marshall, unchanged by the Civil War, not altered in any way since the Constitution was created in 1787."

Kilpatrick's concern was not simply purity of principle though; he was frank to say it was the purity of the white race. "What has man gained from the history of the Negro race?" he wrote in 1957. "The answer, alas, is 'virtually nothing.'" When the founders of the segregationist Prince Edward Academy fell short in assembling a library needed for state accreditation, Kilpatrick donated his own books to make sure that the all-white school could open on schedule. As late as 1964 he wrote an article for The Saturday Evening Post arguing that "the Negro race, as a race, is in fact an inferior race." Mercifully, in view of violence against black people in the South, the editors spiked this piece.

Which brings us to Kilpatrick's legacy. "Kilpatrick, by propagating a whole vernacular to serve the culture of massive resistance -- interposition, nullification, states' rights, state sovereignty -- provided an intellectual shield for nearly every racist action and reaction in the coming years," Pulitzer Prize-winning authors Gene Roberts and Hank Klibanoff wrote in their 2006 book, The Race Beat.

Ideas have consequences, conservatives like to say. Kilpatrick's racist ideas legitimized the worst kind of hatred, and his constitutional doctrines gave cover to defiant Southern governors like Orval Faubus and George Wallace.

But Kilpatrick never quite faced up to his. In later years he admitted that his racism was a bit much. But he rewrote his own history to make himself a moderate. ("I ardently supported [the Voting Rights Act of 1965] because I knew, as only a white Southerner can know, what chicanery my people had employed to prevent blacks from voting," he wrote in 1988. In 1965, however, he was actually denouncing that Act for striking "with the brute and clumsy force of a wrecking ball at the very foundations of American federalism.")

The evil that men do lives after them. Kilpatrick's ideas echo in the rhetoric of figures like Arizona state Sen. Russell Pearce, Texas Gov. Rick Perry, and Virginia Atty. Gen. Ken Cuccinelli. They want to break the nation into 50 kingdoms, where local majorities can stigmatize and segregate the groups that they don't like, where the federal commerce power cannot protect citizens' health and safety, where federal civil rights laws cannot reach intransigent local sheriffs and mobs.

We've been here before, not just once but several times. After the Civil War, we let ourselves forget the agony that "state sovereignty" had inflicted. After "massive resistance," we rewrote the history to make Martin Luther King a toothless windbag and Jack Kilpatrick a beloved uncle. Now it may be happening a third time. The constitutional dialogue has turned toxic; we need to remember that where "sovereignty" and "interposition" appear in public discourse, they are usually quietly escorted by racism and intolerance.

Historical memory is our only protection. Sadly, that requires some harsh words in an old man's obituary. But the alternative is worse.

Social Security and the inventing of a crisis

Since it was first enacted in 1935, Social Security (i.e., the federal Old-Age, Survivors, and Disability Insurance program) has been the target of conservative Republicans. There have been different reasons for their opposition to the program that provided relief to families who, prior to Social Security, had to financially support their elderly loved ones but generally it is because they support abolition of Social Security through some variation of privatization of the system.

However, privatization for the sake of privatization has been a tough sell to the American people and outright abolition is non-starter so they look for other reasons to attack the system and try to pare it back little by little.

Paul Krugman looks at the most recent invented crisis in Social Security:

Social Security turned 75 last week. It should have been a joyous occasion, a time to celebrate a program that has brought dignity and decency to the lives of older Americans.

But the program is under attack, with some Democrats as well as nearly all Republicans joining the assault. Rumor has it that President Obama’s deficit commission may call for deep benefit cuts, in particular a sharp rise in the retirement age.

Social Security’s attackers claim that they’re concerned about the program’s financial future. But their math doesn’t add up, and their hostility isn’t really about dollars and cents. Instead, it’s about ideology and posturing. And underneath it all is ignorance of or indifference to the realities of life for many Americans.

About that math: Legally, Social Security has its own, dedicated funding, via the payroll tax (“FICA” on your pay statement). But it’s also part of the broader federal budget. This dual accounting means that there are two ways Social Security could face financial problems. First, that dedicated funding could prove inadequate, forcing the program either to cut benefits or to turn to Congress for aid. Second, Social Security costs could prove unsupportable for the federal budget as a whole.

But neither of these potential problems is a clear and present danger. Social Security has been running surpluses for the last quarter-century, banking those surpluses in a special account, the so-called trust fund. The program won’t have to turn to Congress for help or cut benefits until or unless the trust fund is exhausted, which the program’s actuaries don’t expect to happen until 2037 — and there’s a significant chance, according to their estimates, that that day will never come.

Meanwhile, an aging population will eventually (over the course of the next 20 years) cause the cost of paying Social Security benefits to rise from its current 4.8 percent of G.D.P. to about 6 percent of G.D.P. To give you some perspective, that’s a significantly smaller increase than the rise in defense spending since 2001, which Washington certainly didn’t consider a crisis, or even a reason to rethink some of the Bush tax cuts.

So where do claims of crisis come from? To a large extent they rely on bad-faith accounting. In particular, they rely on an exercise in three-card monte in which the surpluses Social Security has been running for a quarter-century don’t count — because hey, the program doesn’t have any independent existence; it’s just part of the general federal budget — while future Social Security deficits are unacceptable — because hey, the program has to stand on its own.

It would be easy to dismiss this bait-and-switch as obvious nonsense, except for one thing: many influential people — including Alan Simpson, co-chairman of the president’s deficit commission — are peddling this nonsense.

And having invented a crisis, what do Social Security’s attackers want to do? They don’t propose cutting benefits to current retirees; invariably the plan is, instead, to cut benefits many years in the future. So think about it this way: In order to avoid the possibility of future benefit cuts, we must cut future benefits. O.K.

What’s really going on here? Conservatives hate Social Security for ideological reasons: its success undermines their claim that government is always the problem, never the solution. But they receive crucial support from Washington insiders, for whom a declared willingness to cut Social Security has long served as a badge of fiscal seriousness, never mind the arithmetic.
And neither wing of the anti-Social-Security coalition seems to know or care about the hardship its favorite proposals would cause.

The currently fashionable idea of raising the retirement age even more than it will rise under existing law — it has already gone from 65 to 66, it’s scheduled to rise to 67, but now some are proposing that it go to 70 — is usually justified with assertions that life expectancy has risen, so people can easily work later into life. But that’s only true for affluent, white-collar workers — the people who need Social Security least.

I’m not just talking about the fact that it’s a lot easier to imagine working until you’re 70 if you have a comfortable office job than if you’re engaged in manual labor. America is becoming an increasingly unequal society — and the growing disparities extend to matters of life and death. Life expectancy at age 65 has risen a lot at the top of the income distribution, but much less for lower-income workers. And remember, the retirement age is already scheduled to rise under current law.

So let’s beat back this unnecessary, unfair and — let’s not mince words — cruel attack on working Americans. Big cuts in Social Security should not be on the table.

Returning to majority rule

The filibuster has long been a tool for minority rule (or misrule) in the United States Senate but only recently has come to represent an ongoing symbol of non-stop blockage of majority rule. The AFL-CIO makes the case for reforming the system:

Despite the election of a Democratic President and large congressional majorities, Senate filibusters have prevented Congress from addressing many of our most pressing problems. Over and over, we have seen House-passed bills blocked by a minority of Senators – refusing even to allow an up or down vote on important legislation or to confirm nominees to critical posts. In fact, since January 2009, the House of Representatives has passed more than 400 laws, and most of them will never be considered in the Senate because a filibuster – or a “hold” or other threat of a filibuster – will permit the minority to block the majority from ever getting to a vote.

Many Americans believe that the Senate has always lived with filibusters and that the current Senate logjam has its roots in 200 years of Senate history. In fact, during the entire 19th Century, there were only 23 filibusters. From 1917 (when the Senate first adopted cloture rules for cutting off debate) until 1969, there was an average of less than one filibuster a year. In the 1970 and 1980s, the annual average rose to around 17.. It was not until the Republicans lost control following the 2006 election that the number of filibusters exploded (as measured by the number of “cloture” motions that the minority forced). In the 110th Congress, there were 139 cloture motions, the record by far, and in 2008 alone one out of every five Senate votes was a cloture vote. In the current 111th Congress, coinciding with the arrival of the Obama Administration, there already have been 113 to date. Today, holds and filibuster threats have become such a routine matter that no bill or nomination can move forward until the Majority Leader can demonstrate that there are 60 votes – a super-majority – for passage.

Even one Senator can tie up the Senate for days by threatening to filibuster. Senators can filibuster motions to proceed to legislation – preventing even the debate from getting underway. By placing a hold on a nominees – a signal that 60 votes will be needed for confirmation – even one Senator can keep a critical Administration post from being filled. Currently, there are holds against 80 nominations, 20 of which are for judgeships, a record number. More importantly, filibusters have made it virtually impossible for the Congress to address the jobs crisis, energy policy or immigration reform. The cloture statistics alone – dramatic as they are -- actually understate the degree to which the Senate is now effectively controlled by a minority that is dedicated to obstruction and delay.

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The Founders may have believed that making it possible for the Senate to engage in extended debate would keep the majority from acting in haste, but the Framers considered and rejected the notion that a supermajority should be required for any votes other than those on constitutional amendments, impeachment, treaties, veto overrides and expulsion of members. In fact, the filibuster evolved in order to guarantee adequate debate, not to empower a minority to block substantive consideration of a measure or nominee entirely or hijack the Senate from majority rule. Tragically, the abuse of the Senate Rules has allowed the current Republican Party in the Senate to behave as if 51 votes is no longer the benchmark for the passage of legislation or to confirm an Administration nominee. The abuse of the filibuster doesn’t just threaten our progressive agenda; it threatens our democracy and must be challenged.

The fallacy of linking unemployment to immigration

Are immigrants a significant cause of unemployment? Would their deportation open up jobs for native Americans?

David Frum writes:

… here’s a crucial fact that Brookings omits: that 125,000 per month increase in the US labor force is not a law of nature. In fact, during the Bush years, more than half the growth in the US labor force was due to the arrival of immigrant labor.

Immigrants now make up some 15% of the US labor force. They are concentrated in the less skilled portion of the labor force and in industries hardest hit, especially construction.

If immigration levels were curtailed, the job gap would be a lot smaller. And if illegal immigrants returned home, rather than being put on a “path to citizenship,” the problem of putting the unemployed back to work would be smaller and easier.

Karl Smith responds to Frum’s “lump of labor fallacy”:

The US population and thus the number of job seekers has fairly grown remarkably over the last 200 years. Why is it that unemployment hasn’t grown steadily as well?

Because every worker is also a consumer. When you send a immigrant worker packing you are sending his consumption packing with him. For those who have trouble with the abstract interwovenness of the economy think about it this way: Is the one thing our economy really needs right now fewer residents and thus less demand for housing?

If anything we have a construction industry which is predicated on a large and growing population. Perhaps faster growing than we can maintain, but in any case, slowing down growth is not likely to improve matters.

Immigrants – documented or undocumented – create jobs. First, by willing to work for low pay and at often menial tasks (e.g. gardeners, domestic servants, etc.) jobs are created where done existed before due to higher priced domestic labor. Second, as Smith points out above, every worker is a consumer. U.S. dollars paid to an immigrant as wages does not suddenly disappear. It gets poured back into the U.S. economy as payment for rent, the purchase of food, the purchase of a car, etc. thus creating (or maintaining) jobs for others elsewhere in our complex economy.

And lets not forget how immigrant farm labor makes our food purchases affordable thus stretching our spendable cash for nonfood purchases creating jobs elsewhere in the labor market.

Whatever other considerations there are to take into consideration regarding the issue of immigration, forcing immigrant workers/consumers to return to their native lands is not a positive step to take in regards to its impact on our struggling economy. In fact, it would be hurtful.

Cutting taxes and slashing spending to deliberately keep the fiscal crisis alive

Republicans hope to seek advantage in this fall’s midterm elections by stoking fears about federal budget deficits while at the same time pandering to voters with appeals to lower taxes. Assuming their concerns about the deficit are real (and they aren’t) then how can they advocate lower taxes at the same time? There are two possibilities. The first is that despite the facts and common sense a majority of the leadership of the modern Republican Party is clinging to a cut-taxes-at-any-cost-ideology regardless of whatever the consequences its impact has had and will continue to have on our economy. The second possibility is the “starve the beast” scenario. In other words, they are well aware tax cuts will only deepen the federal deficit but their real motive is to keep the financial crisis alive in order to slowly dismantle government program by government program they dislike despite the consequences for our society.

Paul Krugman explains:

… Ronald Reagan said that his tax cuts would reduce deficits, then presided over a near-tripling of federal debt. When Bill Clinton raised taxes on top incomes, conservatives predicted economic disaster; what actually followed was an economic boom and a remarkable swing from budget deficit to surplus. Then the Bush tax cuts came along, helping turn that surplus into a persistent deficit, even before the crash.

But we’re talking about voodoo economics here, so perhaps it’s not surprising that belief in the magical powers of tax cuts is a zombie doctrine: no matter how many times you kill it with facts, it just keeps coming back. And despite repeated failure in practice, it is, more than ever, the official view of the G.O.P.

Why should this scare you? On paper, solving America’s long-run fiscal problems is eminently doable: stronger cost control for Medicare plus a moderate rise in taxes would get us most of the way there. And the perception that the deficit is manageable has helped keep U.S. borrowing costs low.

But if politicians who insist that the way to reduce deficits is to cut taxes, not raise them, start winning elections again, how much faith can anyone have that we’ll do what needs to be done? Yes, we can have a fiscal crisis. But if we do, it won’t be because we’ve spent too much trying to create jobs and help the unemployed. It will be because investors have looked at our politics and concluded, with justification, that we’ve turned into a banana republic.

Of course, flirting with crisis is arguably part of the plan. There has always been a sense in which voodoo economics was a cover story for the real doctrine, which was “starve the beast”: slash revenue with tax cuts, then demand spending cuts to close the resulting budget gap. The point is that starve the beast basically amounts to deliberately creating a fiscal crisis, in the belief that the crisis can be used to push through unpopular policies, like dismantling Social Security.

The myth of conservative opposition to deficits

In politics there is a constant struggle between reality and perception. Nowhere is there a better example of the latter often becoming confused with the former than the belief that the right-wing of the Republican Party (which these days essentially is the Republican Party) opposes federal budget deficits. Despite what they may say it is simply untrue that the modern conservative movements through its representatives in the Republican Party oppose deficits. Mathew Yglesias explains:

1) There have been two presidents who were members of the modern conservative movement, Ronald Reagan and George W Bush, and they both presided over massive increases in both present and projected deficits.

2) The major deficit reduction packages of the modern era, in 1990 and 1993, were both uniformly opposed by the conservative movement.

3) When the deficit was temporarily eliminated in the late-1990s, the mainstream conservative view was that this showed that the deficit was too low and needed to be increased via large tax cuts.

4) Senator Mitch McConnell says it’s a uniform view in his caucus that tax cuts needn’t be offset by other changes in spending.

5) The deficit reduction commission is having trouble because they think conservative politicians won’t vote for any form of tax increase.

In sum, there are zero historical examples of conservatives mobilizing to make the deficit smaller. What is true is that most conservatives oppose increases in non-military spending when those increases are proposed by Democratic presidents. A minority of conservatives are more consistent opponents of increases in non-military spending. But the key element of conservative fiscal policy is that tax revenue as a percent of GDP should be made as low as possible. This isn’t a goal they pursue that stands in some kind of balance with concern about the deficit, it’s the only goal they pursue. You can like that or not, but every single journalist who writes articles about the deficit debate that doesn’t highlight the conservative movement’s deep, decades-long hostility to deficit reduction is being grossly irresponsible.

Death and taxes (but not for the wealthy)

The late George Steinbrenner, who built upon a fortune he inherited from his father, will pass on to his heirs not only a fortune but a tax-free fortune thanks to the campaign against the so-call “death tax” and the compromise in the adjustment of tax rates. Michael Tomasky opines:

I do not mean to say with the above headline that George Steinbrenner's heirs and assigns aren't mourning the scion's death yesterday at age 80, as undoubtedly they are.

What I do mean to say is that Steinbrenner's passing points us to an odd quirk in US estate-tax law.

In 2008, Forbes put Steinbrenner's net worth at $1.3 billion. And because he died in 2010, not 2009 or 2011, his heirs won't pay a penny of federal estate tax.

This is how the compromise was worked out in Congress when Republicans began agitating about the "death tax" in the early 2000s. You can see a graph here. In 2001, the "exclusion amount" - the level of taxable estate value (gross value minus various deductions) was $675,000. The R's gradually increased it over the decade until last year it was $3.5 million (for individuals that is, and $7 million for couples - that is, married couples, needless to say, heaven forbid not gay ones).

But this year and this year only, there's no federal tax at all. That's because it goes back up next year, with a much lower exclusion amount ($1 million) and a higher rate (55% rather than 45%). So Steinbrenner, who inherited a quite grand shipping fortune from his own father and to his credit turned it into a grander one, and then enjoyed the benefit of a presidential pardon from Ronald Reagan for funneling illegal campaign contributions to Nixon, has seen fate smile on him again.

As for the estate tax, nothing so represents the GOP's true agenda as its campaign to eliminate this tax. I would agree that $675,000 was far too low a threshhold, and I'm the first to say (I've said it) that the Democrats erred in not changing it themselves first. When the GOP seized on the issue, they were able to forge an alliance between the wealthy and the middle class, because by 2001 many middle-class people were sitting on estates worth $675,000. That's an alliance that never loses. The Democrats were dumb not to raise it to something like $2.5 million.

But eliminating it altogether as Republicans want...you know, I guess I'd only say that these people (and their children) made their money in the United States of America, and somewhere and somehow along the way the US helped them make their fortunes, and although it's very quaint to talk about things like citizenship and civic responsibility, it doesn't seem unreasonable to me that they owe some portion of their success to their country.

It's the old story about the self-made man who never took a dime from anyone until someone pointed out to him all the many ways in which the civic and regulatory infrastructure of the country made it possible for him to earn far more than he might have earned if fate had plopped his soul inside the womb of a woman in Nigeria or Costa Rica. But we're not supposed to speak of such things these days.

The estate tax serves to prevent the perpetuation of wealth, free of tax, in wealthy families or, as Winston Churchill argued, estate taxes are “a certain corrective against the development of a race of idle rich”.

The problem with McChrystal is not just the remarks but his pursuit of Afghan policy

By the time you read this the decision about the future of General Stanley A. McChrystal’s command of U.S. forces in Afghanistan may have been made. The General is to be meeting with President Obama later this morning following quotes attributed to him and his staff mocking the White House and civilian decision makers on the Afghan conflict. McChrystal will reportedly offer this resignation and there is speculation he will be relieved of duty for insubordination.

However, Peter Beinart argues that the problem with McChrystal goes beyond intemperate remarks he and his aides made about the civilian leadership of the United States. Rather he argues the problem is with the General pursuing a policy of trying to win the war in Afghanistan at any cost contrary to the stated foreign policy of the United States of limiting the conflict and not allowing it drain U.S. resources and distract it from other important tasks at home and abroad. He writes in the Daily Beast:

For close to a year now, it’s been painfully clear that McChrystal, with the backing of David Petraeus and the rest of the top military brass, wants America to make an unlimited commitment to the Afghan war. Counterinsurgency, they believe, works; all it requires is an unlimited amount of money and time. As Jonathan Alter details in his book, The Promise, McChrystal and company spent last summer waging a media and bureaucratic campaign aimed at forcing Obama to make that unlimited commitment. Obama resisted, insisting on a timeline for beginning America’s withdrawal. But the fight goes on. In his book, Alter quotes Biden as pledging that “In July of 2011, you’re going to see a whole lot of people moving out. Bet on it.” Confronted with that quote last weekend, Robert Gates shot Biden down, declaring that “that absolutely has not been decided.”

Obama’s problem isn’t that McChrystal is talking smack about him. His problem is that McChrystal isn’t pursuing his foreign policy. McChrystal wants to “win” the war in Afghanistan (whatever that means) no matter what it takes. Obama believes that doing whatever it takes will cost the U.S. so much money, and so distract the administration from other concerns, that it will cripple his efforts to stabilize America’s finances and rebuild American economic power. That’s the struggle that Hastings exposes: between a single-minded general who will stop at nothing to fulfill his mission and a president who believes that even if that mission saves Afghanistan, it could bankrupt the United States. It’s a struggle about whether America is going to adjust to the new limits on its power or pretend that they don’t exist.

That’s the real relevance of the Harry Truman-Douglas MacArthur analogy. Truman didn’t just fire MacArthur because the general treated him with disrespect. He fired him because MacArthur wanted to do whatever it took to liberate the Korean peninsula, including bombing mainland China, whereas Truman came to realize that Korea must be a limited war, fought merely to preserve South Korean independence. In insisting that America’s Cold War strategy be the containment of communism, not the rollback of communism, Truman kept the pursuit of military victory from destroying American power.

Now Obama must do the same. Last summer, he tried to split the difference—surging in Afghanistan while simultaneously pledging to retreat on the theory that within eighteen months the U.S. could so weaken the Taliban that they would sue for peace. Six months in, that strategy looks increasingly absurd. As its most honest proponents concede, counterinsurgency is a long, messy business, especially when the president whose country you’re trying to save is indifferent, if not hostile, to the effort. In all likelihood, when the deadline for troop withdrawal arrives a year from now, Obama will be forced to choose between something that looks like an unlimited commitment and something that looks like defeat. He’ll be forced to make the choice that he avoided last year.

Obama should make it now. He should use McChrystal’s transgression to install a general who will publicly and unambiguously declare that America’s days in Afghanistan are numbered. He should use this moment not just to show that he won’t tolerate insubordination, but to take control of his foreign policy, as Truman did in 1951. Calling McChrystal on the carpet isn’t the point; the point is ending a war that could wreck Obama’s presidency. That would be the best revenge.