Liability, not Culpability

Rolling Stone writer Tim Dickinson appears to be in the middle of something of a tiff with the Koch brothers. After publishing a scathing article detailing the environmental record of Koch Industries and the businesses' myriad transgressions in the most recent issue of Rolling Stone, the Kochs have fired back with a bullet-point rebuttal detailing various of what the inaccuracies in what they called a "dishonest and misleading article." Mr. Dickinson, for his part, is undaunted, and has offered a point-by-point rebuttal to the criticisms advanced by the Koch brothers. 

Mr. Dickinson's response is almost certainly bullshit. But leave that aside, because his response is also entirely beside the point. The real point is that Mr. Dickinson, like many reporters, utilizes court records and judicial holdings in his reporting, despite appearing to not have the first idea of how the law actually works. Not just at the specific level—the nitty-gritty of legal minutiae for which attorneys are specially trained—but at the broad level of what a judicial holding says about the underlying facts. Anyone seeking to hold his- or herself out as a journalist who relies on legal documents for the stories should make the effort to understand what they actually say, within the context in which they were written—just as one would expect a journalist to familiarize him- or herself with the basics of the scientific method before becoming a science reporter. Mr. Dickinson's misunderstanding (or worse, willful misrepresentation) of how the legal process works grossly undermines his credibility as a journalist. 

The centerpiece of Mr. Dickinson's response is a rebuttal to what he calls "The chief 'gotcha' point in Koch's write up" (because "gotcha" points are always the third of fourteen bullet points): a dispute of the facts underlying the closure of a facility in North Pole, Alaska. Before the Kochs purchased the facility, and for some time thereafter, sulfolane leaks from the facility contaminated local groundwater (which is bad).  The Koch brothers contend that after discovering the problem, they "voluntarily began providing alternative water to the community" (which is good. If probably motivated more by risk mitigation than by charity) and eventually shut down refining operations (which is . . . ambiguous? Yes the leaks stopped but . . . also people lost jobs? I digress). 

Irrelevant, says Mr. Dickinson. A "state judge in Alaska [twice ruled] that Koch is solely responsible for the 2.5- by 3-mile plume of the refining solvent sulfolane that has fouled the groundwater for hundreds of residents there. . . . [t]he judge ruled that Koch's failure to seek redress from the previous owner within the statute of limitations have made the pollution at North Pole Koch's problem, alone," so clearly they are morally culpable. 

Except, y'know, that last part (that isn't in quotes) is probably not what the judge said, and for Mr. Dickinson to glean it from the court's rulings probably entails a misunderstanding of how law works. See, a basic tenet of corporate law is that the purchase of assets (the valuable part) presumptively includes a purchase of liabilities (the not-valuable part). So, when Koch industries purchased the North Pole facility, it assumed liability for any environmental damage caused by the facility's operations, unless it could show that the previous owner was liable because, e.g., he or she had failed to disclose the problem. Koch Industries claims to have eventually (if lackadiasically) discovered the problem and immediately taken remedial action. The court, according to Mr. Dickinson's own reporting, said that Koch Industries was liable because the claim against the previous owner was too late, which is another way of saying "not soon enough to get a ruling on who was morally responsible," which is another-nother way of saying "the court expressed no opinion on who was culpable, but just stated who was liable." 

To translate away for a moment, imagine you buy a car, and five years later discover the car has been leaking motor oil the entire time, because the duct tape the dealer used to hide the problem fell off quickly. You point out that you didn't try to poison the environment, but the court doesn't care, because something happened 3 years ago that you should have investigated which would have led to you discovering the problem and bringing suit against the dealer—since you didn't, it's your problem now. 

That appears to be what happened to the Kochs in this instance. Which is fine, because our laws are set up to make sure someone pays when things go wrong, based on a variety of factors—someone is liable, even if they aren't culpable. But far too often, journalists misapprehend this distinction, and use liability as evidence of culpability. Mr. Dickinson did that to try to prove he was right, and that he isn't culpable for any misrepresentation. 

And he isn't! He (probably?) did not commit conscious wrong. But he sure as hell is liable for journalistic malpractice. 

Ezra Klein just (inadvertently) admitted republicans are right.

In a post critiquing James Pethokoukis' recent article in Commentary magazine (analyzing whether or not the stimulus worked, or in fact made things worse), Mr. Klein makes an admission.

The Bernstein-Romer calculations were conducted in December 2008 and released in January 2009. In December 2008, the Bureau of Economic Analysis was projecting (pdf) that in the fourth quarter of 2008, the economy would contract at a 3.8 percent annualized rate. That would later be upgraded to 6.2 percent, and then, earlier this year, to 8.9 percent. In other words, Bernstein and Romer were building their estimates — and their policy — off numbers that underestimated the economic contraction in the fourth quarter by 5.1 percent of GDP. And they weren’t alone. Every private-sector forecaster — from Macroeconomic Advisers to Moody’s to Goldman Sachs — was making the same mistake. In December of 2008, no one had any idea how bad things really were. Indeed, we didn’t really know the depth of the damage until a few months ago, when the BEA updated its estimates.

In other words...

In the fourth quarter of 2008, our economic inputs were wrong. So forecasts using those inputs to make predictions about the future produced answers that were also wrong.

Now, Mr. Klein is hardly the first liberal pundit to make this admission, nor will he be the last. I can't recall having ever before read someone claim that, because the administration was working with faulty numbers, they shouldn't be judged too harshly for putting together a faulty package, but that is actually beside the point. There is a much more subtle admission here, one that I think Mr. Klein would vehemently deny in most other contexts: even when filled with an array of intelligent, experienced, highly-qualified experts, the government basically had no better idea what is was doing than you or me.

That assumption, that government fails not because of stupidity, but because of good-faith ignorance, is the essence of conservatism. The economy is simply too massive a thing to be closely tracked in real time, and without that accurate data government cannot effectively direct its resources towards productive ends. Only by putting purchasing power into the hands of individuals, who are closest to the infinitesimal transactions that aggregate into the full economy, can you hope to jolt it into action.

Certainly, the government can do some things: massive spending will of course lead to at least some money being put to productive use. But it also tends to lead to lots to money being wasted, which is the other dramatic flaw with the stimulus that Mr. Klein et al. seem unwilling to contend with. Money wasted on unprofitable green energy initiatives or Indian Casinos is a disgrace to begin with, one that no one has ever effectively extricated from the political process. But it's also a vacuum sucking money away from more productive uses.

Even if one accepts that stimulus was, in some measure, necessary to the economy, it's hard to believe the one that passed is even remotely acceptable.

Jennifer Rubin makes no sense.

The Washington Post’s Jennifer Rubin has a series of posts on the performances of certain key presidential contenders at today’s Palmetto Freedom Forum in South Carolina, and while I appreciate her highly positive recounting of Mitt Romney’s display, I am absolutely flabbergasted by her commentary on Michele Bachmann. To wit:

Her home run came when she was asked if America is still the shining city on the hill. She noted its biblical origin (the book of Matthew), the sermon in which it was famously used (John Winthrop) and even the year (1630). No history errors there.

Now, I did not attend or otherwise watch the Freedom Forum. Nor have I read a transcript of what was specifically said by each of the candidates in attendance. It is entirely possible that Congresswoman Bachmann provided a cool, rational, compelling narrative rooted in America’s traditions and identity.

But you wouldn’t know if from reading Jennifer Rubin.

No, Ms. Rubin seems to believe that the Congresswoman’s statement was most compelling for the fact that she avoided historical inaccuracy. Is this what qualifies as notable achievement in the republican primary? A candidate publicly commits to igniting a constitutional crisis (something Ms. Rubin praised Romney for avoiding, I might add), but it’s fine, because she’s "merely" wrong on that point, and at least avoided factually incorrect statements this time around?

The fact of the matter is, Michele Bachmann has demonstrated time and time again that she is not only misinformed on simple facts, but on the substance of the law and policy that undergirds her entire identity. The states DO have wide-ranging police powers under the Constitution; how can we look past her thinking otherwise? The Supreme Court IS the ultimate arbiter of the law; how can we take seriously anyone who says otherwise? There are intelligent, accomplished, capable candidates willing and ready to serve as the standard-bearer of the republican party in the 2012 election, so can we please stop wasting time on clowns?

Kerry?

Senate Majority Leader Harry Reid has announced his selections for the debt-reduction panel, and one of these names is not quite like the others. Though he serves on the Senate Finance Committee, Kerry is hardly considered a budget expert along the lines of some of the other Senators rumored to have merited consideration, such as Kent Conrad. Additionally, one of Washington's worst-kept secrets is Senator Kerry's desire to one day serve as Secretary of State; the Obama administration's penchant for employing him as an emissary in Afghanistan suggests he could have that wish granted if the President wins reelection. By accepting this appointment, Senator Kerry can only risk losing stature, and making any potential confirmation process infinitely more difficult if the negotiations become especially embittering.

Despite my initial confusion, though, the logic of Kerry's appointment is surprisingly persuasive when one considers things from the perspective of the democratic leadership. Through his aforementioned work in foreign policy, the Senator seems to have a strong working relationship with the administration; since the President was not afforded any appointments himself under the debt-ceiling deal, it's not actually terribly surprising to see Reid, who has a better working relationship with the President than Pelosi, use one of his picks to give the White House an inside man.

Even more compelling, counterintuitive though it may be, is exactly what stoked my initial skepticism: Kerry is a foreign policy guy, not a budget wonk. The number-crunchers can play all the games they want, but eventually, they are going to have to propose cuts affecting substantive policy abilities. Paul Ryan could be the next Pythagoras, and it wouldn't equip him any better to judge whether an F-22 is a more effective tool for American security than AIDS vaccine funding for African-based NGO's - that's where Kerry comes in. If you expect (as most do) that the Republicans are going to stack their side of the table with numbers guys, Senator Kerry immediately becomes the most credible voice on shaping just which areas of security spending (broadly defined to include State and USAID, on top of DoD) get the axe, helping to subtly advance democratic foreign policy goals through the budgetary process. Even better, by placing a member of the foreign policy establishment on the panel, Reid has ensured that the conversation will be turned to that section of the budget as often as possible, giving the republicans less time to focus on gutting social spending.

This move could well turn out disastrously for Senator Kerry's ambitions; for Senator Reid and the democratic party, though, it was a surprisingly astute move.

Austan Goolsbee on "The Daily Show"

Austan Goolsbee went on The Daily Show (video link) last night, and boy did he seem excited to be leaving government.

Wealth, Populism, and Obama's Credibility

Watching the speech President Obama gave last night on the deficit cum debt ceiling debate, in addition to noticing how tone deaf to the reported state of the negotiations, I was struck by one specific line. While castigating the republicans for seeking to unfairly heap the burdens of deficit reduction on the poor and middle class, he rhetorically asked "How can we slash funding for education and clean energy before we ask people like me to give up tax breaks we don't need and didn't ask for?" (emphasis added).

"People like me," obviously, refers to the "millionaires and billionaires" earning $250,000+ annually, who the President would like to see start to carry an increased tax burden. A curious group for the President to name himself a member of while he tries to rally the support of those well outside that tax bracket. Nor is this the first time that Obama has drawn attention to his own personal affluence: During one of the primary debates back in 2007, he cracked a joke related to his book sales. At the time, it was an amusing and refreshing way to couch the tax argument he was making, lending himself credibility on understanding the personal finances of the wealthy and peremptorily deflecting accusations of class warfare. Almost four years later, the charm and originality has worn off.

Instead of lending credibility, it seems that constantly reminding the American people that he is substantially wealthier than most of them will ever be saps Obama of it. The upper classes with whom he identifies in those moments has, by and large, rejected his entreaties, and considering that he earned his money through activities that don't trickle down much (book writing versus, say, running a sales business), he can't effectively rebut the main argument lodged against his tax position, that it would overly burden job creators. All that's left, then, is a reminder for the average Joe that the President identifies with a different class, feeding into the charges of elitism that have dogged him ever since he first ran for the Presidency.

What makes this approach so mystifying is that the Obama earned much of that money telling the story of how he was once much like the middle class voters he so desperately wants to connect with. He demonstrated during the health care debate that he is capable of drawing upon his own personal narrative to further the cause (even if that narrative might be embellished). Yet on the deficit and the economy, on the issue where he can do the most good for the people he professes to want to help, there he is, constantly reminding the people that he is no longer like them, that he has already risen above their level. But why?

Democrats should pass the balanced-budget amendment

As the doomsday clock ticks down on America's debt limit, some members of the republican party - whether on account of pre-existing delusions or simply being emboldened by concessions offered thus far - have taken their demands to another level, insisting that any debt-limit increase be predicated ont he passage of a balanced budget amendment that would cap federal government spending at 18% of the previous year's GDP. As the Washington Post's Ezra Klein has amply eplained, this is a magnificently terrible idea, and congressional democrats are understandably anathema to the thought of crippling the government's ability to provide for an aging population. But being opposed to the plan doesn't have to entail voting against it. Quite to the contrary, were I a democrat, I would insist on passing a simple one-for-one trade of raising (or, ideally, abolishing) the debt limit in exchange for passing the amendment currently under consideration.

If this seems odd, remember how amending the Constitution works: Congress, via a 2/3 majority, can propose amendments to the Constitution, which are then sent to the states to be considered by the individual states either in their legislatures or in special ratifying conventions, where 3/4 of the states (38 total, for those who don't have a calculator on hand), must vote in favor of the amendment. Does anyone actually have any concern that may happen? Between the democratic bastions on the West Coast and in the Northeast, you have already have 14 states that would in all likelihood vote against - 2 more than are needed to block any amendment. One can also realistically expect purplish states such as Colorado, Missouri, and maybe even Virginia to vote against such a radical proposal. So not only would the democrats get their debt limit increase for free, they could also let the tea party republicans walk into a embarrassing defeat at the hands of the people if and when a majority of states vote against them.

The more substantive concern is one of intraparty politics, and what kind of blowback congressional democrats would face from the left if they voted for a measure so abhorrent to their party identity. Yet with proper messaging, this sort of tumult can be pretty easily sidestepped. It would be most entertaining to see the democrats simply admit they were voting in favor of the amendment to watch republicans stumble at the ratification stage, but that's not really a viable approach since the right could use that as an excuse to scuttle the deal. More plausibly, one can look the ratification of the 18th amendment for guidance: many lawmakers who were ambivalent towards, or even outright opposed to prohibition were cajoled into voting in favor of its submission to the states on the grounds that their vote was not for the amendment, but for letting the people make their voice heard. Obviously, given the vehement opposition to the amendment provided thus far, the democratic caucus can't simply pull an about-face, but framing the compromise as giving voice to the American people rather than gutting their government should be a perfectly adequate post hoc justification when the time comes to deflect challenges from the left.

The tea party caucus, in its seemingly unending naivete, is offering the democrats a magnificent opportunity. Too bad they're just as reflexively shortsighted as their counterparts on the right.

UPDATE: President Obama is apparently threatening to veto the balanced budget amendment is passed as part of a debt limit deal, so it looks like my idea is even more moot than it was when originally posted.