Obsidian Wings

Daschle

by hilzoy

What is it with these people and their taxes? First Geithner, now Daschle:

"Thomas A. Daschle, nominated to be secretary of the Department of Health and Human Services, did not pay more than $128,000 in taxes over three years, a revelation that poses a potential obstacle to his Senate confirmation.

The back taxes, along with $12,000 in interest and penalties, involved unreported consulting fees, questionable charitable contributions, and a car and driver provided by a private equity firm run by entrepreneur and longtime Democratic Party donor Leo J. Hindery Jr., according to a confidential draft report prepared by Senate Finance Committee staff.

A spokeswoman for Daschle confirmed last night that he recently paid back taxes in excess of $100,000. She said that Daschle, a former Senate majority leader, and his accountant discovered the error regarding the luxury car service and reported it to the committee after his vetting was completed. (...)

Because of an apparent clerical error by the equity firm, Daschle did not report more than $83,000 in consulting fees in 2007 and has not provided sufficient documentation relating to $15,000 in charitable contributions over three years, according to the panel's report. He and his wife, Linda, gave $276,000 in charitable contributions during the three-year period being studied by the panel, according to a Daschle aide.

His spokeswoman, Jenny Backus, said the presidential transition team "concluded that some of his charitable donations were not properly documented and may have been deducted in error," and the couple paid $5,693 in back taxes."

According to the Post article, Daschle realized that the car might be taxable back in June, and his accountant had intended to correct the error in his next tax filing. Still, I don't understand why people in public life don't just recognize that they should report anything that might even conceivably count as income, and do things right the first time.

What's more, I really don't like this, from the WSJ:

"Mr. Daschle told committee staff that he had grown used to having a car and driver as Senate majority leader and didn't think to report the perquisite on his taxes, according to staff members."

Part of what bothers me about this is the sense of entitlement: the sense that having a car and driver is just one of those ordinary things that happen to a person, not worth noticing or thinking of as compensation or a gift. 

I think Obama should ditch him. But then, while I didn't get down into the weeds and figure out the ins and outs of Geithner's tax situation, I thought he should have ditched Geithner too. And while I see the problem with uncertainty about one's Treasury secretary in the middle of a financial crisis, the fact that Obama didn't drop Geithner will make it a lot harder for him to drop Daschle, and whoever else comes along.

I also have to ask: didn't this come up during the vetting? If not, why not? And if it did, what's up with that?

Gregg at Commerce?

by publius

Let me say that I think Senator Gregg would be an outstanding Commerce Secretary.  There are few people in the entire history of mankind I admire more -- and I think he'd do an excellent job.

Needless to say, I'm thinking only -- only -- about the welfare of the Commerce Department.

A Stimulus for Tomorrow, Part 4 - Improvements

by von

UPDATE:  I have no illusions about this, but I think it's important to do Division A of the current House package right:  More time and debate may not lead to my ideas being adopted, but they will improve the current, Democratic ideas.  Since most of Division A won't take effect until after this year, we can afford to wait a single month examining it.  So that's the proposal:  Split Division A from Division B, pass Division B (the "jolt") in early February, and pass a revamped Division A by the end of March.

A few key points to keep in mind when assessing the stimulus package passed by House Democrats (CBO Report):

• There are two parts to the stimulus package, which the CBO describes as Division A and Division B of the package.
• The infrastructure and other government spending in "Division A" is much less important in the short term and, by and large, won't enter the economy quickly.  It's not the promised jolt.  But Division A is large part of the package and has long-term consequences for the country and the national debt. 
• If the stimulus "jolts" the economy, as promised, it's because of the tax cuts and direct payments in Division B.  (Direct payments include refundable tax credits, payments to unemployed folk, payments to states, etc.)  The "jolt" succeeds if Division B succeeds.

Division A and Division B do not have to be passed together. There is no reason why Division B can't be passed in February and the less-urgent Division A delayed until March. 

Indeed, my main reason for writing this series of posts (1, 2, Hilzoy's response, 3) is to point out it makes sense to do Division A and Division B sequentially, in different bills, and not simultaneously as the House Democrats have.  By focusing on each division in turn, there is an opportunity to improve them both.  (This isn't a von-only view; some Democrats agree with me.) 

I am going to leave the short term spending, Division B, for another day.   I would have preferred that Division B simply enact Obama's promised tax cuts for the middle class while delaying Obama's promised tax increases, along with some non-controversial palliative spending for the unemployed, uninsured, and states. But that didn't happen:   Division B, as it exists today, is a hodge-podge of tax cuts, credits, and payments to individuals and states.  It has some good parts, but it's not particularly coherent.  

Still, we're unlikely to see a radical reshaping of Division B in light of the pressure to get something done.   

If we stop and consider a moment, however, we might make some real improvements to Division A (the long-term part of the package).  If Division B is a hodge-podge, Division  A is a grab bag:   you don't know what will pop out of it next.  The only notable part of Division A is what it doesn't include.  Division A has no grand infrastructure projects that have the potential to effect long-term, structural changes to the economy.  Rather, Division A basically gives a bunch of existing government programs more money.  It's timid, and it reads like it was written by committee - which is was - because it appears to contain something for everyone. 

My suggested changes to Division A?  Throwing more money at existing government agencies is not going to effect a structural change.  Division A needs to be lean and targeted.  It's not how much money you spend, but where you spend it.

Division A, in other words, should be bold.  Here's a start. 

Invest $150 billion in Rep. Mica's (R-Fla.) high-speed rail proposal.  High-speed rail is a good idea for a number of sections of the country.  Drop the $30 billion for new roads and bridges in the current package.  That's going to encourage more pollution and more dependence on foreign oil.  It's not the kind of change we need.

The current investments in green energy are laughably small.  If you're serious about a green economy, triple the money in this section.  It doesn't matter if the projects aren't shovel ready:  Division A should be about the future -- the next challenge, not the present one.  R&D dollars are in sort supply these days; having the government step in is money well spent.

Our military is too small for the wars we're fighting, our fighting men and women are stretched (see Hilzoy's post on suicide for a sad symptom), and the world is growing ever more dangerous.  If Obama's so-call "smart power" truly involves both diplomacy and military might, make a $100 billion investment in modernizing and improving both:  give $25 billion to Homeland Security and the State Dep. and $75 billion Defense Dept.

And that's it:  every other program currently in Division A gets individual consideration.  If those billions in other programs are worthwhile, justify them case-by-case.  They aren't in the package deal. 

Hello? Your Pinstriped Man Of Morning Has Arrived.

by von

So, anyhoo, here's your starter open thread for the weekend.  A few thoughts to kick us off:

Avatar: The Last Airbender was a pretty damn cool cartoon.  It is therefore a bona fide guarantee that M. Night Shyamalan will ruin Avatar with his live-action version.

Trust me, it's not Tigh's wife.  I am the last Cylon.  (Ooops, sorry.  I meant to start this entry with with "Spoiler Alert!")

Although some express doubts, I have passed two separate bar exams for two separate states -- the second exam as a partner in a largish law firm.  Note to self:  don't do that again.

I question whether the lawyer representing Chuck D in "Black Steel in the Hour of Chaos," however, passed the bar.  How bad a lawyer do you have to be to put your client on death row in a state penitentury for a federal violation of the selective service act? (All respect to PE, of course, one of the greatest hip hop groups of all time, but this has been bothering me since 1988.  It took the invention of blogging to get it off my chest.)

I formally propose "The Beirut Scale," running from 0 through 100, as a measure of societal complexity.  Beirut, unsurprisingly, scores a 106.

If you live by the maxim that "We all become what we hate," you'll feel better about yourself.  Or, at least, understand why you hate yourself so much.

We're taking our three-year-old to Disney World at the end of next week.  Pray for us.  Or send gin.

Enjoy the weekend!

Open Thread...

by Eric Martin

For your assorted idiosyncratic pleasures and other odds and ends that don't quite fit anywhere else.  The Island of Misfit Threads if you will.  With stop motion animation of course.

UPDATE: Um, Von's open thread is kind of fancier what with all its plumage, so feel free to ignore this jalopy.

Yes, but Can They?

by Eric Martin

The first round of provincial elections in Iraq since 2005 are slated for tomorrow, January 31.  The always insightful Joost Hilterman of the International Crisis Group has a nice summary of some of the issues in play (the ICG's full report (pdf) can be found here).  These elections could lead to major shifts in Iraq's political alignment - at least on the local level - since the last provincial elections were boycotted by Sunni and Sadrist elements who may now seek to make their votes heard.  It should be noted, however, that the Sadrists will not be competing as a party in these elections either, but rather have decided to endorse a handful of independent, technocratic candidates instead. 

While there is widespread disenchantment with the performance of religious parties and other parties that have thus far manned the local governing institutions, it remains unclear to what extent that discontent will translate into electoral success for the candidates not aligned with these parties - or, even if such changes occur, to what extent that will represent trends to watch in upcoming national elections many months down the road. 

The entrenched parties have been able to wield patronage dollars, and access to security forces, in order to expand their levels of support.  As a couple of Iraqis interviewed by Anthony Shadid put it:

"We'd like to vote for someone who doesn't have to put blast walls around his house," Tamimi said. Only independent candidates don't, he added -- technocrats and secular candidates, whom he termed intellectuals. Those people should rule, he insisted.

Jaafar Abdullah, a cousin, shook his head, dismissing what he deemed naivete.

"But the independents don't have their own gangs behind them that can kill."

Which serves to underscore the point that even in Post Surge Victorious Iraq!, the state still does not possess a monopoly on the use of violence - so much so, that even the Prime Minister has taken to establishing a base of militia power (Tribal Support Council's and a special Counterterrorism Force that report directly to him).  In terms of ongoing bloodshed, roughly 300 Iraqis a month have been killed in political violence since July (this, a marked improvement over preceding months), not to mention a coalition soldier every other day (again, a vast improvement).  Conditions are still so unsettled that six candidates in the upcoming elections have already been assassinated.

Depending on the election results, and how the various factions in Iraq view the legitimacy of the outcomes, violence could spike - especially in the northern regions where Kurdish factions are competing with Sunnis, Turkomen and, increasingly, the Maliki government to determine the fate of Kirkuk, Mosul, Nineveh as a whole, and other provinces and locales adjacent to the Kurdish region.  Clashes could also flare up in the Sunni regions that do not directly abut Kurdistan, where the incumbent Sunni parties are seeking to fend off challenges from Awakenings groups looking to increase their share of the political pie.

Which says nothing of the Shiite south, where the major Shiite factions (Dawa, ISCI, the Sadrists and Fadhila) remain locked in an ongoing power struggle.  Matt Duss and Peter Juul have recently compiled a must-read report (pdf) that provides a lucid, concise history of the Shiite political movement in Iraq, an accounting of the current players, and what to watch for going forward.  An excellent primer, that goes beyond the sloppy media narratives that plague the reporting on several issues, for those looking to gain an understanding of this facet of Iraq's political life.

Let us hope that these elections go off without any more violence, and that they can mark yet one more small step in the direction of reconciliation and a return to normalcy in Iraq.  The Iraqi people deserve that and so much more after all they've endured.  I'm probably somewhere between cautious optimism and pessimistic resignation in terms of the prospects.

They Just Don't Work

by publius

A common critique I get in the comments (h/t Brett) is that I ascribe bad faith to Republicans too often.  That is, I should acknowledge that most Republicans favor policies because they think those policies will ultimately help people (regardless of their redistributive effects).   And that’s a fair critique – the Bush years have radicalized me on that front.

So I’ll try to approach it more substantively.  Even putting aside all bad faith accusations, I would argue that the GOP's policies simply don’t work – and have been proven by history not to work. 

Consider this NYT post providing stimulus recommendations from various experts.  There’s a good entry, for instance, from James Galbraith outlining his recommendations.  Scroll down and you’ll eventually see an entry from Heritage’s Stuart Butler.  He’s very worried about the lack of tax relief – so here are his main proposed additions to the stimulus:

– Extend the 2001 and 2003 marginal rate reductions for at least 5 more years, preferably permanently.

– Do not reinstate the estate tax after 2010. It discourages older business owners from expanding.

– Cut America’s high corporate tax rates for at least 10 years, and preferably permanently, to boost our international competitiveness. The rate needs to go down to 25 percent or lower.

For the record, these policies would have the effect of transferring a boatload of money to the very very rich.  But hey – that’s fine.  I’m stipulating that Butler is recommending this course because he thinks it will ultimately help the economy.

But where’s the evidence of that eventual success?  Looking strictly at historical results, when have these policies ever worked?  I mean, it’s hard to look at the history of the past 5 years and come away thinking “the real problem is that really rich people need more money to invest.”  Butler is basically advocating trickle-down economics – and I don’t see any evidence that those policies have helped the public as a whole.  In fact, concentrating wealth at the top has done just the opposite these past few years.

Trickle-UP, by contrast, seems to work better.  While the sample size is limited, I think it’s significant that GDP growth has been consistently higher during Democratic presidencies than Republican ones.  One theory is that Democratic administrations put a bigger emphasis on “trickle up” economics – i.e., strengthening wages and reducing inequality, which produces a positive ripple effect across the economy.  (I’d also note that America’s period of strong postwar growth coincided with high levels of union membership).

At the end of the day, I think the strongest argument against Heritage/Pence-style policies is simply that they’ve proven very ineffective for most of the country.  You don’t really even need accusations of bad faith.

Suicide In The Army

by hilzoy

I don't know what to say about this, other than that it's just awful:

"Stressed by war and long overseas tours, U.S. soldiers killed themselves last year at the highest rate on record, the toll rising for a fourth straight year and even surpassing the suicide rate among comparable civilians. Army leaders said they were doing everything they could think of to curb the deaths and appealed for more mental health professionals to join and help out.

At least 128 soldiers committed suicide in 2008, the Army said Thursday. And the final count is likely to be even higher because 15 more suspicious deaths are still being investigated.
"Why do the numbers keep going up? We cannot tell you," said Army Secretary Pete Geren. "We can tell you that across the Army we're committed to doing everything we can to address the problem." (...)

The new suicide figure compares with 115 in 2007 and 102 in 2006 and is the highest since current record-keeping began in 1980. Officials expect the deaths to amount to a rate of 20.2 per 100,000 soldiers, which is higher than the civilian rate -- when adjusted to reflect the Army's younger and male-heavy demographics -- for the first time in the same period of record-keeping."

It's not the most important detail, but for some reason what really gets to me, just now, is the thought of these soldiers' friends and family members, who have been hoping against hope that their loved ones don't get shot or blown up, having to come to terms with the idea that even though they managed to escape enemy fire and IEDs, they killed themselves. Having been through the plain vanilla version of grieving, I cannot imagine what that extra twist must do. Nor, frankly, do I want to. My heart goes out to them.

I'm OK, You're OK

by publius

It’s easy – very easy – to ascribe bad motives to the House GOP’s united opposition to stimulus.  And bad motives are certainly part of the picture - but not all of it.  It’s just implausible to think that the entire caucus is voting in bad faith.

That's why we should also see the vote through a more ideological – and even psychological - lens.  The GOP is attempting to reaffirm its political self-image by voting against the stimulus. 

As regular readers know, I have rather profound policy disagreements with most Republicans.  That said, I don’t think that most of them subjectively see their policies as attempts to enrich the top income brackets.  Most of them presumably see their actions in ideological terms – e.g., they are promoting liberty; they are promoting small government; they are protecting the real creators of wealth in the American economy.

For Republicans who view themselves through "small government" narratives, the cognitive dissonance of the Gingrich/Bush era probably became unbearable.  After all, it's pretty hard to square Jack Abramoff and Tom DeLay and Ted Stevens with the ideological self-image most Republicans have. 

That’s why pork is such a cause célèbre among conservatives lately – it serves the psychological need of easing this dissonance.  We’ll basically ignore large spending increases and rank corruption – but we’ll make ourselves feel better by raising a big cathartic stink over 0.000000001% of the budget.

And that’s exactly what’s going on with the stimulus.  I frankly don’t really know what being a conservative means anymore.  And a lot of conservatives share this confusion these days.  But there’s at least some widespread consensus in the idea of limited government and lower taxes. 

To be sure, this ideological self-image bears little relation to economic reality (and is in tension with the extremely wide political consensus for “big government” in practice – see, e.g., Social Security).   But the self-image is there – and it’s been neglected and abused these past few years.

The stimulus, then, provides a way for the guilty rank-and-file to absolve themselves of the Bush sins they tolerated and even promoted -- actions they privately regret.  And while achieving mental harmony and inner peace are good things, we're still in the middle of a major financial emergency that demands quick action.

The problem, then, with the GOP opposition isn’t necessarily that they’re acting in bad faith, but that they’re choosing to work through their personal demons rather than help pass legislation the country desperately needs.  Even now, Bush is apparently still ever-present in their political lives.  The united opposition is as much a belated rejection of him than it is of Obama. 

But it’s a little late for all that.  If the House Republicans wanted to stand on their principles, there was a time for that – and they chose power over principles.  The Ring of Power looked too good to toss away.  But the current legislative debate -- over a bill designed to prevent economic collapse -- isn’t the place to focus on improving your self-esteem. 

Let's hope Senate Republicans don't hold the country hostage just because they feel guilty about selling out in the Bush years.  There's too much at stake.

The RedState Strike Force Strikes!

by hilzoy

Erick Erickson of RedState has a message for the RedState Strike Force about their latest triumph (and may he enjoy many more victories like this one):

"Persevere. And relish victories like we had last night – the House Republicans heard us and stood united against Barack Obama’s socialist stimulus plan."

He seems to be a bit more concerned about Mitch McConnell, though, and so he has come up with a new plan of action for the Strike Force:

"So here’s what we need to do. I’ve said he lost his testicles and is now spreading a cancer of capitulation throughout the Senate Republican Conference. We need to send Mitch some balls.

Seriously.

We’re teaming up with the Don’t Go Movement to do just that. Go here and send Mitch some balls. The House GOP can hold the line. Mitch and the Senate GOP should do the same and oppose the stimulus bill.

Mail the balls to Mitch’s Louisville Office (...)

The Senate GOP Leadership needs to stand up for the GOP, not kowtow to the Democrats."

The DontGo Movement is more colorful about what sorts of things people might send to Senator McConnell:

"These items could be golf balls, novelty items (think Spencers, eBay, Amazon for inspiration), or real items such as various “dried scrotum” products found in grocery stores (make sure we can actually ship this sort of thing first)."

I'm trying to imagine the look on one of Mitch McConnell's staffers' face when he opens the package, takes out a shriveled bit of skin or desiccated flesh, tries to figure out what it is, and realizes that it's a bit of dried genitalia. What, I wonder, will he say to Senator McConnell? "Um, Senator, in addition to these letters from your constituents, you also received eight dried scrota, three cans of prairie oysters, twenty-six golf balls, eighteen ping-pong balls, two basketballs, and one testicular tumor preserved in formaldehyde. They're from people calling themselves -- let me check -- 'The RedState Strike Force'. No, I don't know what it's about, but I've called security to be on the safe side."

That should really win McConnell over.

Still, the general concept is not entirely devoid of interest. Do you think we should start a campaign to send Erick Erickson a clue?