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.

Dahlia Lithwick's irresponsible impugnation of the Supreme Court

Dahlia Lithwick's latest article over at Slate has me confused. In it, she decries three 5-4 decisions from the past Supreme Court term, Wal-Mart v. Dukes, AT&T Mobility v. Concepcion, and Janus Capital Group Inc. v. First Derivatives Traders. What, exactly, is Ms. Lithwick's problem with these decision? In her own words: "The greatest impact of the Wal-Mart decision isn't the blow dealt to class-action suits. It's the guidance it provides employers" (This sentiment permeates the article, and is every bit as applicable to the AT&T and Janus cases as to Wal-mart).

This argument baffles me. The entire point of written opinions, rather than simple judgments, is to expose the court's reasoning and bring clarity to the law. If one disagrees with that judgment or reasoning, then yes, the opinion may well look like a guide to being evil. But to actually ascribe such malicious intent to the court only undermines its legitimacy. That may sound like a good idea when it's issuing opinions you don't like, but it's unlikely to stop at just those.

Democratic SuperPACs and the dark future of campaign finance.

Politico posted an article late last night detailing efforts by the two seniormost democrats in each legislative chamber to raise money for left-leaning 'SuperPACs", and this morning prompted a discussion in its daily "Arena" feature, debating whether or not it is "hypocritical for [democrats to use] the (legal) fundraising tactics they recently shunned." I tend towards agreement with the general consensus that seems to be emerging over at Politico, that the democrats have to win elections before they can reasonably expect to change the rules, but much more cautiously and begrudgingly than most, for reasons outlined below.

It is very easy to decry the outsized role of money in the American political system when that money is being funneled primarily towards one's opponents. Indeed, it should come as no surprise that campaign finance reform has generally been pushed by democrats, when one considers how regularly they are outspent by their republican counterparts who court massive contributions from wealthy-business interests. Once that tide begins to shift, however, the need for changes becomes less and less pronounced. As long as the "right team" continues to win elections and solve those problems, the actual deleterious effect of money on the system (the motivator for reform) begins to recede from the view of those who previously felt unfairly underrepresented. Additionally, there are always other, more pressing issues at hand to be resolved; political capital being finite, legislators will prioritize solving these issues they predict will define the next election, rather than risk failing to move on these issues by instead focusing on reforms that, even absent any political failures, could jeopardize their incumbency advantages for re-election.

One needs to look no further than the Obama campaign and subsequent administration to see this in action. After abandoning public funding in the general election, the President has given given only perfunctory support to substantial reform, and is now courting traditional big-money donors (even from among the "fat cats" of Wall Street). It's very easy to cite this as an example of "power corrupts," and leave it at that before moving on the next false messiah (and in the specific case of President Obama, I might be inclined to agree). Without developing a more specific and nuanced understanding of how that corruption actually occurs, though, proponents of real campaign finance reform can never develop a meaningful political strategy for preventing it from occurring in the next cycle.

Spying for foreign countries is totally cool*

*As long as said country is the United States.

I understand that Pakistan is mind-numbingly dysfunctional. I agree that we should probably stop handing giants burlap sacks with dollar signs on them to people who almost certainly support America's enemies. But are we actually going to criticize Pakistan for punishing people who spy on behalf of a supposed ally, even when we do the exact same thing?

Democrats are Stupid

For the life of me, I cannot understand why senior House democrats such as Nancy Pelosi decided to publicly call for Rep. Anthony Weiner's resignation over the weekend. As I see it, there are two possible reasons why the democrats may have wanted to see Weiner resign at all: A. They in fact found his conduct so appalling as to require a penance, or more likely B. they were concerned that his continued presence in the house would keep the story alive and hurt the party politically. The first option is so implausible as to merit no discussion, but the second justification is actually even dumber. Quite to the contrary of their ostensible intent, Pelosi et al. calling for Weiner's resignation helped to fuel the story.

Print media like the Washington Post and Roll Call gave front page real estate to the senior democrats who wanted to publicly lambaste Rep. Weiner. Online outlets such as Politico gave it top-of-the page billing when it first broke. Democrats turning on each other is a story unto itself, even if it fits within a larger story about some particular scandal. Maybe these public admonitions wouldn't have fed the fire quite so much had they been made a week earlier, while the story was getting top billing anyways, but waiting for the story to settle down a little bit before coming out just restarts the whole frenzy.

Additionally, coming out at all opens up the democrats to the charges of hypocrisy that have played out among the the punditry, comparing this to Clinton's affair with Monica Lewinsky. That's a silly comparison, since the resignation of the President is much more disruptive to the nation than that of a congressman who doesn't even hold a leadership position, but it's also an obvious one that could have easily been avoided by keeping these calls for Weiner's resignation private. I of course don't mind seeing the democrats shoot themselves in the foot, but I would prefer to see it come through something more interesting than this amateurism.

UPDATE: The White House has been forced to weigh in, with Press Secretary Jay Carney calling the episode "a distraction" while refusing to call for Weiner's resignation. Currently, Politico notes this as the latest post from one of the blogs on its sidebar, while the New York Times doesn't seem to have anything at all on it. Had the House democrats taken this same low key approach, you can bet they would have merited the same (lack of) coverage.

Meanwhile, Eric Cantor clearly smells blood in the water.

What Trump (kinda sorta) had right

Today's news of OPEC's failure to reach consensus on new production quotas reminds me of one of the more popular news clips used to disparage Donald Trump's supposed flirtation with a Presidential run. In it, Trump claimed he would simply demand that Saudi Arabia raise oil production to help us lower gas prices; when pressed as to what leverage he might use to attain such a result, Trump simply asserted that he would get what he wanted.

Now, far be it from me to defend Donald Trump's mockery of the political process (or satire, depending on how one views things), but embedded in that word salad of narcissistic cliché was a point, even if one Trump accidentally stumbled upon. The United States currently provides substantial arms and/or security guarantees to the Saudis, as well as other OPEC members Kuwait, Qatar, and the United Arab Emirates (and, obviously, Iraq, though that's a different relationship). The U.S. also has smaller-scale deals with other OPEC members such as Algeria, who last year announced a plan to start focusing more on Russian purchases. U.S. arms and personnel provide the regional stability needed by roughly half of OPEC to operate, and people want to imply there is nothing we can do to influence their policies? What, then, is even the point of providing that security, if not to coerce higher oil production figures in order to subsidize or consumption habits?

Luckily, though, even if we are't willing to apply this leverage (publicly, anyways), our Middle Eastern allies seem to get the point. The 4 Gulf states mentioned above were the ones who supported higher production quotas, and in fact have already been operating well above the current quotas for some time. Even if Americans and our leaders are unwilling to be realists about our interests, it seems like states who share our interests still can be.

Austan Goolsbee to depart

Bloomberg broke the news of Mr. Goolsbee's impending departure from the Obama administration. Some commentators are chalking this up to the common concern academics in government have, of being stripped of tenure for taking too long a leave. I don't mean to single out Mr. Goolsbee at all here, but that is nonsense. He is already well beyond the 1 year of leave outlined in the Chicago faculty handbook, and even if the University of Chicago were in fact shortsighted enough to fire one of their most prolific professors for staying with the administration through an entire term, what school (or business) wouldn't immediately hire him?

The simple fact is, working for the government sucks. The pay is relatively low (Goolsbee's salary in his last year at Chicago was more than double what he makes in government) while the stress is insanely high (while I always enjoyed Mr. Goolsbee's appearances on media programs, he was always there to take flak on the President's behalf). Almost no one lasts a full 4-year term; it's just not just academics like Goolsbee and Summers, but also guys like Orszag and Emanuel who have no other employer they need to get back to.