Archive for October, 2009

Turning the Corner

By , 30 October, 2009, 1 Comment

The wise minds at the BEA say the economy has turned a corner, posting GDP growth at a relatively robust rate (3.5%) in the third quarter, just like Ben Bernanke promised it would.

Still, the fact that we’re rising from rock bottom doesn’t tell us how long it will take to get back to where we were, or what the recovered economy will look like. For that, we need to dig deeper into the numbers, and, simply put, the picture isn’t pretty.

Health Care: A Reader Request

By , 27 October, 2009, 1 Comment

A reader emailed yesterday asking what I made of Harry Reid’s decision to bring the public option back from the dead, and whether I could explain the politics and policy in lay terms. Here’s what I wrote [some day-after edits in parens]:

Basically, the various committees in the Senate and the House have each developed their own bills, which have passed the committee’s own votes. Harry Reid, as Senate leader, gets to take those bills and combine them into a NEW bill, which the whole Senate then votes on. It has to get 60 votes to pass a [procedural] barrier called cloture. Basically, 60 Sens vote for it, and after that, the Senate has 30 hours before it has to pass the bill or not. During those 30 hours, they can consider amendments relevant to the bill but cannot consider any other policy matters. And on those amendments, only 51 votes are needed.


Once the full Senate passes the bill, that version goes back to the House, where they can either pass it as is, OR if they tweak it too, the full Senate has to re-vote on it. That can be dangerous, because the House is further left than the Senate and is likely to add things the Senate won’t pass. So Reid is likely to try and manage the negotiations such that the Senate votes on the bill in a form the House can quickly pass and send straight to the Prez. It seems that the Schumer opt-out version of the pub-op is the one that can potentially get through both House and Senate.

How can it get through the Senate? Two ways–either Reid knows of a few senators who will vote for it but haven’t said so yet, in which case, he writes it INTO the bill he brings to the floor and it gets 60 votes at cloture, after which they tweak/amend some and its over. OR he can only get the 50+ votes for it we know about right now in which case he DOESN’T put it in. They get 60 votes cloture on a bill sans public option, and then introduce the pub-op AS an amendment, at which point they only need to get 51.

On the policy of this [opt-out] version of the pub-option: I’m not a fan but it’s better than the Snowe trigger compromise.
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The Future of Europe

By , 21 October, 2009, 1 Comment

As some readers of this blog may know, I have a large soft spot for the Watery Isle. I have visited friends and family there roughly once a year for as long as I can remember, and I lived there as a student, twice, in 2003 and 2006-7. So when I comment on events there, I do so with something more than an outsider’s concern. But today, I comment as an American.

Let me explain. Despite all the hoopla about ‘David Cameron the conservative reformer.’ his policies are identical to the Thatcherite Tories of three decades ago. That is, shrinking the size of government through upper-income tax cuts and slashing spending, and focusing what’s left of government on supporting ‘traditional values.’ [Especially egregious is his subtly concealed scheme to cut welfare payments to poor single moms--a group that correlates with immigrants-- while increasing the tax breaks to married couples, essentially paying middle-class white women to stay home and have babies. 'Lie back and think of England,' much?]

Together, as one journalist has already noted, these add up to a government that helps southern England at the expense of the North: the South is London financiers, Oxbridge academics, doctrinaire Anglicans and well-kept lawns. The North used to be factories, mines, sheep farms, and Protestant dissent, but Thatcherite labor reforms took the Northern economy and culture apart (as globalization necessitated, I admit). The result is that Britain is overly reliant on its financial sector and took a harder hit than most developed nations when the finance world collapsed last year. Granted, New Labour has done a whole lotta nothing to give the de-industrialized North something else to live on, but given that the North remains Labour’s consituency, the chances of Britain’s lack of economic diversity being addressed are much higher with Labour than with the Tories. Especially now that the financial crisis has made it possible for Labour to make a market-based argument for why Britain needs to start doing something besides banking again instead of the old socialist arguments that they rightly left behind 10 years ago.

All of this matters when it comes to understanding the two parties’ attitudes to foreign policy.

Apocalypse 31: What’s in a Name?

By , 15 October, 2009, 1 Comment

Not much, I hope. Since a favorite publication–BusinessWeek–is about to add “Bloomberg” to its title page. Bloomberg BusinessWeek (BBW for short!) doesn’t quite roll off the tongue.

That said, Bloomberg buying BusinessWeek is about the best thing that could have happened, given that the alternatives all involved some kind of private equity entity, and as I’ve previously articulated, those kinds of mergers are bad news. Still, there are reasons to worry, because there’s a lot of uncertainty about HOW Bloomberg plans to use BusinessWeek.

Bloomberg could take two approaches:

Obama Plays Institutionalist?

By , 9 October, 2009, No Comment

Two weeks ago, I mentioned that I was frustrated with Obama’s approach to big international issues like climate change, because it followed his preference for decentralized consensus governance over the institutions and realpolitik of great power diplomacy. (Worse still is the extent to which others seem to buy into his vision.)

On the environment, the opportunity to throw some real institutionalist punches and ram climate legislation through the Senate passed us by in June, when the House passed the bill and the health care debate hadn’t taken over everyone’s attention spans. Being individualists, the Obama-ites failed to think about the institutional structure of the Senate and the fact that it doesn’t take on more than one big bill at a time, as well as about the institutions of other governments who would not, despite their general admiration for Obama, be duped into taking a handshake from him in December instead of real policy commitments to reduce emissions.

That said, there are occasional fleeting moments where it seems that Obama has grown savvy to these problems with his radical individualism. That’s why, as I reported in Fortune today, he’s using the institutions he still has power over (the executive agencies) to regulate individual industries in lieu of getting a comprehensive bill. In some ways, discretionary regulation beats Congressional oversight–career bureaucrats tend to be less beholden to lobbyists. On the other hand, discretionary regulation tends to be less economically efficient in the policies it produces, because industries are considered piecemeal and without proper attention to the way they interact in the macroeconomy. Furthermore, discretionary regulation is, well, discretionary, and doesn’t have any value once power changes hands. Congressional policies, on the other hand, are very hard to undo once they’re in place. Still, is this better than nothing? Hell, yeah.

Must See TV

By , 8 October, 2009, No Comment

I have mixed feelings about cable opinion anchors. I find their shouting and character gimmicks infuriating, on left and right, but I think at least in the world of American TV news, they do longer segments that let them spend more time on issues they care about than their ‘straight’ news counterparts and I value that in a soundbyte era. [I also agree with Dan Drezner that talking head shows were actually better when left and right yelled at each other than they are now, yelling at themselves]

That said, I don’t watch Olbermann or O’Reilly, Matthews, Dobbs or Kudlow unless I’m at the gym and need distraction. However, I heard on the grapevine that Olbermann would be devoting a whole hour to an opinion talk—a ‘special comment’—on health care last night. Since I’m rather obsessed with the issue at the moment, I set my DVR and just watched the results. Summary: he’s wrong about a LOT, but this is powerful and eloquent stuff. Worth watching.

Visit msnbc.com for Breaking News, World News, and News about the Economy

Washington’s Cognitive Dissonance

By , 5 October, 2009, No Comment

I wrote a news item for Fortune today on the FTC’s new guidelines for advertising and consumer endorsements on the web. Basically, the guidelines require disclosure of any material connections–money changing hands–between companies and bloggers.


 

“The issue here,” says Cleland, “is whether, if the consumer knew of the relationship between the advertisers and the blogger, would it affect the credibility of the blogger’s statements?” If so, the new guidelines would permit the FTC to demand that the blogger disclose the connection, with failure to comply resulting in fines as high as $11,000.

The problem, critics contend, is the lack of clarity in the FTC Guides on what will constitute a violation. Beyond direct payments from companies to reviewers in exchange for specific coverage, the guidelines seem to extend to consumer and personal websites where advertising content and editorial content overlap.

Read the rest here.

One thing that came up in my reporting that I didn’t get a chance to address in the piece is the question of whether blogs are a publishing medium where conflicts of interest are a form of commercial corruption, or just equivalent to individual speech, in which case the government can’t regulate them at all. In this case, the FTC is treating blogs as a publishing medium, at the expense of the many individuals who use the platform simply to carry on personal conversations.

Meanwhile, the FCC seems to be approaching the internet as a form of speech and therefore pushing net neutrality on the grounds that all speech must be treated equal. That approach takes away all the specific protections that commercial content is premised upon (like intellectual property rights), even as that publishing is about to move online.

Meanwhile, Congress, which oversees both agencies, is trying to draw a line in the middle of the blogosphere between those who use blogs as a publishing form–and get special rights but also stricter rules as a result–and those who are just speaking. The Congressional shield bill may be doomed now that it’s lost White House support, but I think in principle, some way of distinguishing commercial from non-commercial content online is going to be necessary.

What frustrates me most, however, is how easy it is for the two agencies to put into law two conflicting definitions of the same space–the net–without anyone raising questions about the inherent contradictions between their approaches. It’s a clear case where some regulatory consolidation is needed.

I Stand Corrected

By , 1 October, 2009, No Comment

Three weeks ago, I thought we were moving towards a coherent piece of health care legislation. I was wrong. Let me review this one more time:

A. If your primary goal is achieving universal insurance coverage, you can: 1. Have a single payer system where the government provides insurance; 2. Have an employer mandate with a super-strong public option where the government might as well provide insurance; or 3. Have a universal individual mandate with aggressive regulatory reform and generous subsidies.

Of these three, the first, single-payer, hasn’t ever been on the table. The third—otherwise known as the Wyden-Bennett bill—would be the easiest on the public fist, as well as the most conducive to medical innovation. On those grounds, it’s my favorite.

B. If your primary goal is reducing the cost of medical treatments, you can: 1. Have a single-payer system where the government centralizes and rations care; 2. Have a super-strong public option where the government might as well provide it; 3. Have aggressive reform of our medical profession and training, with incentives for people who set up small community clinics, say, or better tuition grants for folks who go to med and nursing schools.

Of these two, the first has never been on the table. The second would undermine medical innovation (see point a, above). The third, which I support, isn’t something that can be legislated, but has to be pursued long term.

If this is still confusing, watch the awesome animation below.