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March 17, 2004

FORWARDING ADDRESS....As promised � assuming you take a generous view of "a day or two" � starting today I will be blogging for the Washington Monthly magazine's new blog, Political Animal. Here's the new address:

www.washingtonmonthly.com

I will probably still post a few personal items here occasionally, but basically my entire blog is being transplanted to the Washington Monthly's site. Nothing much will change, really, at least at first. It will still be me doing the same thing I do here, unedited and unplugged. We may add some guest bloggers in the future, but the details are a bit murky at the moment. We'll work it out as we go.

So please add Political Animal to your bookmark list, and if you're a blogger please add it to your blogroll. See you there!

NOTE: The link above is a direct link to the blog. It will be right smack in the middle of their newly redesigned homepage. It should become active around 7 am Eastern time on Wednesday.

UPDATE: Honest, I really am blogging over there now. Go read all the new posts. Go now!

And add Political Animal to your bookmarks. Just click on the link above with your right mouse button and then click "Add to Favorites...." It's easy!

Posted by Kevin Drum at 07:00 AM | Permalink | TrackBack (5) | Comments (139)

March 16, 2004

THE TIMES BACKS OFF....I'm a little late on this, but I blogged on Saturday about Robert Cox's New York Times parody and the heavyhanded response from the Times, which ordered him to take it down and threatened to have his entire site shut down via a DMCA complaint. Yesterday the Times withdrew its objection and sent Cox the following email:

Thank you for responding to our complaint. By adding the bold-faced disclaimer at the top of the faux Columnist Corrections Page, you are no longer confusing readers and as a result of this change, we agree that the page is now a parody which is protected under the First Amendment. We are copying Verio on this e-mail in order to inform them that we no longer have any objections to your site.

Good for them. It's the right thing to do on a whole bunch of different levels.

What's also interesting is that I got an email from their new Public Editor (or, rather, from "The Office of the Public Editor") telling me about their change of heart. Presumably they sent this email to anyone who blogged about this, which means they were eager to get the word out that they had backed off. That's also the right thing to do, once again on a whole bunch of different levels.

Posted by Kevin Drum at 08:07 PM | Permalink | TrackBack (2) | Comments (184)

March 15, 2004

WHY THE SOCIALISTS WON....I haven't been following the news or reading blogs much for the past couple of days, and I now realize that my Spain post on Sunday night attracted so much attention because I was wading into one of those issues that had already become a blogosphere free-for-all.

Since I still haven't caught up with the minutiae of the appeasement charges and the warmonger countercharges, I guess I should just keep quiet. But I don't feel like it. Into the breach!

Randy Paul at Beautiful Horizons has an email today from a Spanish friend that fairly convincingly makes the case that the vote turned against Aznar and the PP not because of any sense of appeasement � decidedly not, in fact � but because it had become so transparently clear that Aznar was playing an unusually cynical game of politics with the bombings:

The PP knew that their antiterrorist policy (against ETA) was one of its main winning cards, and they didn't hesitate to blatantly manipulate the 11-M attack, suppressing information, calling people to demonstrate against ETA, knowing all the while that the Antiterrorist Information Brigade had as good as discarded ETA authorship a few hours after the attack. The antiterrorist police heads even threatened to resign at the madness of it all, and this was leaked to the opposition and the press.

And all the while the state TVE showing documentaries about ETA activities right until late Saturday night, on the eve of the election, and failing to report live on Minister Acebes informing about the Al-Q line of investigation which he had been forced to acknowledge � forced by his own angered police heads and by the media which had all the information but was withholding it just long enough for the Minister to do the decent thing. This heartless manipulation of the dead for political gain clinched it....

Yesterday I wrote that I thought this explanation probably accounted for most of the change in sentiment among the Spanish electorate. Today I'm getting steadily more willing to discard the "probably" and the "most" from that sentence.

As Randy's correspondent puts it, "we will only put up with so much lying and manipulation." This is a salutary lesson for certain other world leaders, I think: if (if!)the Spanish vote really did represent any kind of victory for al-Qaeda, the fault lies with those leaders who lost the trust of their electorate through sustained and cynical deceit. It is a warning they should not ignore.

Posted by Kevin Drum at 06:53 PM | Permalink | TrackBack (12) | Comments (504)


MISCELLANEOUS NOTES....My internet access is still inconvenient enough that I don't feel like blogging very much, but here are a few quick comments:

  • That post last night about Spain sure attracted a lot of attention, didn't it? Who knew? Without going into a boatload of detail on this, here are a couple of suggestions: (a) don't read more into the post than is really there, and (b) keep in mind that lots of people connect support for the Iraq war with support for strong anti-terrorist policies. Some people do this for good reasons and some do it for bad reasons, but a lot of people do it. This presents a political reality that's independent of whether this connection is actually true.

  • A lot of people have emailed me a link to this story in the Spokane Spokesman-Review about George Bush's National Buard record. It describes something called the Human Reliability Program, a military program that screened military personnel before they were allowed access to nuclear weapons and delivery systems. National Guard pilots were covered by HRP rules, but there are no HRP documents in Bush's record. Why?

    At first glance, I'm not sure this tells us anything new. We don't know for sure that Bush was covered by HRP rules, and in any case it's just one more among many documents that seem to be missing from his file. I'll read the Spokesman-Review article more closely when I get home, but my tentative opinion is that while it adds yet another reason to be suspicious of Bush's record, more definitive documentation is needed for this to be very meaningful.

  • Wolf Blitzer asked Donald Rumsfeld last night if we should have given the UN inspectors more time. Rumsfeld answered, "Well, the U.N. inspectors were not in there. The U.N. inspectors were out."

    Huh? Can't these guys even be bothered to make up decent lies anymore? They were only out because we told them to leave so that we could start the war.

That's it for now. See you tomorrow.

Posted by Kevin Drum at 01:55 PM | Permalink | TrackBack (2) | Comments (173)

March 14, 2004

THE SPANISH ELECTIONS....Just time for a quick note on the Spanish elections. Although Jose Maria Aznar's PP party was ahead until recently, it looks like the Socialists have come from behind to win. Why?

  1. If it was simply a show of displeasure with Aznar's support of the Iraq war, it doesn't mean much except that the voters threw him out because they didn't like his policies. Not a big deal, really. Unfortunately, this doesn't seem likely since PP was ahead until just a few days ago and the Socialists only surged ahead after Thursday's bombings.

  2. Evidence has also been piling up that it really was al-Qaeda behind the bombings, not ETA. So another possibility is that the voters (or at least some of them) were upset that Aznar's support for the Iraq war was responsible for al-Qaeda targeting Spain, which seems to be the theme of this Washington Post story. This would be a considerable victory for al-Qaeda and would reflect very poorly indeed on the Spanish electorate. It also doesn't smell right to me.

  3. The third possibility is that the electorate was upset with Aznar because they thought he was playing politics with the bombings by insisting ETA was responsible even as the evidence mounted that al-Qaeda was behind it. If it turns out that Aznar was indeed doing this, then he simply got what he deserved.

For now, my suspicion is that there's a little bit of #2 and a lot of #3. I don't have any special evidence for this, but it's my gut feeling at the moment.

UPDATE: In comments, lots of people are asking why I think #2 would be a victory for al-Qaeda. Sorry, I thought that was obvious.

The goal of terrorism is to affect public opinion and to scare people into not opposing the terrorists' aims. If (if!) the Spanish electorate was punishing Aznar solely because they perceived his actions as being anti-terrorist enough to provoke an al-Qaeda attack, the terrorists have accomplished their goal: the Spanish public has shown that if they are attacked they will vote against a politician who strongly opposed the terrorists.

Remember, this is all about perceptions and it's all hypothetical. But if (if!) it's true it gives al-Qaeda reason to think that they can affect elections simply by committing a terrorist attack. Sounds like a victory to me.

Posted by Kevin Drum at 08:23 PM | Permalink | TrackBack (33) | Comments (481)


MADRID BOMBING UPDATE....Is the Spanish government deliberately covering up Islamic involvement in Thursday's bombings because they think it would hurt them at the polls? Apparently suspicion is growing. Maria Farrell has the story.

UPDATE: More from CNN.

Posted by Kevin Drum at 10:28 AM | Permalink | TrackBack (1) | Comments (227)

March 13, 2004

OUT OF TOWN....I'm going out of town today to visit friends in Northern California, so I'll be posting infrequently for the next few days � or possibly not at all, depending on the state of their broadband connection. If the technology gods smile on us, we'll make the long awaited transition of Calpundit to the Washington Monthly site when I get back.

See you then.

Posted by Kevin Drum at 09:10 AM | Permalink | TrackBack (3) | Comments (158)


THE SOCIAL SECURITY NON-CRISIS....At my soon-to-be new home, Phillip Longman argues this month that Social Security is in big trouble due to the aging of America. It's a familiar argument, and one that provokes a lot of peculiar thinking among otherwise rational people. Over on the political right, for example, Larry Lindsey suggests a "free lunch" approach that assumes that big returns on stock market investments can fix things up. On the left, Robert Gordon says that if we assume higher economic growth the problem magically disappears.

Of course, lots of problems go away if you simply make convenient growth assumptions, a favorite tactic of forecasters everywhere. On other fronts, private accounts are all the rage, or perhaps swinging cuts in benefits. After all, we all know that Social Security is going bankrupt soon, right? Gotta do something fast.

This is a tiresome refrain. The numbers are actually pretty straightforward and the facts are simple: Social Security is not in crisis, and fixing it isn't really that hard or that painful.

The chart on the right, adapted from this report from the Social Security trustees, shows plainly what's happening. Right now Social Security is in fine shape. In 2010 costs begin to rise sharply due to the baby boomers retiring. In 2018 the system begins running deficits. The sharp rise in costs ends around 2035, followed by very modest increases for the next 50 years.

The chart shows income and outgo as a percentage of national income, and as you can see, the shortfall is just under five percentage points in 2050. So starting in 2018 we need to phase in a combination of revenue increases and cost decreases that add up to about five percentage points. This document from the Social Security Advisory Board shows how to do it:

  1. Today, the payroll tax applies only to earnings up to $87,000. If you phase in a removal of this cap beginning in 2018 and make the payroll tax into a flat tax, revenues increase by 2.13 percentage points.

  2. Under current law, you can retire at age 62, 65, or 67 (the longer you wait, the higher your benefits). If you phase in a change to 65, 67, and 70, costs are reduced by .59 percentage points.

  3. Means testing, which reduces retirement benefits for high earners, reduces costs by 1.65 percentage points.

These three reforms pretty much fix the problem. "Pretty much" because there's too much uncertainty in long-term financial estimates to allow us to solve this problem with perfect precision 50 years in the future. Economic growth might be slightly higher or lower than we think, demographic changes might not match our predictions, and technological changes could make the whole thing moot. Social Security is an issue that needs to be revisited every 20 or 30 years, not one that can be solved permanently.

Note that my point here is not to suggest that these three reforms are the only way to go. You may have a different basket of changes you prefer � check out the table on page 25 of the SSAB document if you want to put together your own plan. Nor is it to fire up the endless debate about the Social Security trust fund and whether it's "real" or not. All I'm demonstrating here is that even if you assume the trust fund is meaningless, Social Security can still be fixed with relatively minor and fairly painless adjustments.

Bottom line: Social Security is not going to crumble away before our children retire. It is not only possible to keep Social Security solvent for the rest of the century, it's not even that hard. If legislators were willing to get together like adults and simply address the problem, it could be solved quickly and easily. The numbers don't lie.

Posted by Kevin Drum at 09:09 AM | Permalink | TrackBack (8) | Comments (130)


THE THIN-SKINNED TIMES....In case you haven't been following this, a guy named Robert Cox produced a parody version of a New York Times correction page a few days ago and was promptly served with legal notice from the Times to take it down because of copyright violation. Parody is a well known fair use exception to the copyright rules, but whether Cox exceeded fair use or not is something I can't judge.

(Cox took the parody down after the Times asked him to, but some other bloggers have picked it up in the meantime. You can see it here.)

The Times also made a DMCA complaint to Cox's ISP asking them to take his site down, which he received a copy of yesterday. Now, their first action was moronic enough, providing vast amounts of publicity to a site that otherwise wouldn't have gotten much, but this action is almost beyond belief. The complaint includes a bunch of screen captures of Cox's site, and as near as I can tell there's nothing there that even remotely infringes on the Times' copyright.

This goes beyond mere bullying and descends into paranoid � and hypocritical � lunacy. The Times certainly has the right to protect its copyright, but at the same time you'd think the publisher of the Pentagon Papers would show a little more respect for free speech and a little more tolerance for criticism.

They should be ashamed of themselves.

UPDATE: I also see that on Thursday Cox contacted his ISP, who told him that "under the terms of the DMCA their hands are tied. They were willing to give me a one-day extension but until The New York Times withdrew their complaint to Verio my site would be shut down for 10-14 days pending a review of my counter-claim."

I never liked DMCA much in the first place, but is this really true? All you have to do is make a complaint and a website is shut down for 10-14 days?

Especially in cases of free speech, shouldn't the burden be on the plaintiff to prove infringement? Does DMCA really allow a corporation to shut down a website merely on their say so, without so much as an injunction or a public hearing?

UPDATE: The Times has backed off. Details here.

Posted by Kevin Drum at 08:31 AM | Permalink | TrackBack (5) | Comments (106)

March 12, 2004

CORLEONE FAMILY UPDATE....Remember the Medicare actuary who was ordered to shut up about his cost estimate for the administration's Medicare bill? Knight Ridder finally managed to talk to him directly today and he confirmed the whole story:

Richard Foster, the chief actuary at the Centers for Medicare and Medicaid Services, said Friday night that he received a handwritten note from [Thomas] Scully, then the centers' administrator, in early June ordering him to ignore information requests from members of Congress who were drafting the drug bill.

....The note was Scully's first threat in writing, Foster said, and came after at least three less formal threats. They "came in different forms," he said. "Sometimes he would make a comment that 'I think I need another chief actuary,' or 'If you want to work for the Ways and Means Committee (which was drafting the bill) I can arrange it.' It was that sort of thing."

Bill Frist's spokesman said, "If an individual's job was threatened and if they were trying to shield information from Congress, that could be an issue of concern."

Ah, yes, an "issue of concern." I suppose it would be at that, wouldn't it?

UPDATE: In comments, dbc points to this AP story that ran last year while all this was happening. Apparently the higher cost estimate wasn't the only reason Scully didn't want Foster's analysis released. It was the reason for the higher estimate:

An earlier analysis [by Foster] suggested that a Republican plan to inject market forces into Medicare could increase premiums for those who stay in traditional programs by as much as 25 percent. If that's still the case, it could help Democrats who argue that the GOP plan is risky for those who want to stay in traditional Medicare, where they can pick any doctor, rather than move to a managed care plan.

...."The administration is resisting the release of it because it's not good news for the Republican House plan," said House Minority Leader Nancy Pelosi, D-Calif.

No, not good news at all. But we wouldn't want to let the facts get in the way of ideology, would we?

Posted by Kevin Drum at 08:24 PM | Permalink | TrackBack (3) | Comments (242)


ETA OR AL-QAEDA?....The Spanish Interior Minister thinks the evidence is mounting that ETA was reponsible for Thursday's bombing, not al-Qaeda:

[Angel] Acebes said the bombs consisted of satchels filled with 20 to 30 pounds of dynamite, set off by a cell phone. He said the dynamite chemically matched 1,100 pounds of explosives seized in February from an ETA van heading toward Madrid, and that the satchel and cell phone setup matched that found on two ETA members when they were arrested at a northern Madrid commuter rail station on Christmas Eve.

....Asa Hutchinson, the [U.S.] Homeland Security Department's undersecretary of borders and transportation, said American intelligence agencies had detected no spike in "chatter" among al-Qaida-related groups before the attacks. Other U.S. officials stressed that the group that claimed responsibility for the bombings, the Abu Hafs al Masri Brigades, is thought to exist in name only and has made implausible claims of responsibility before.

....Interior Minister Acebes was adamant that the evidence pointed to ETA. He noted that ETA has a history of creating havoc in the days before a national election.

He also said the explosives used - Goma II Eco - were made in Spain and that ETA had used the same brand in previous attacks.

But the same article also summarizes the evidence favoring al-Qaeda involvement:

A caller claiming to represent ETA denied that the group had been involved in the attack. Journalists here said ETA never had rejected responsibility for an attack before.

....Many Spaniards, particularly those who support the Socialist Party in Sunday's elections, suggested that Aznar's government might not be willing to disclose an al-Qaida link until after the vote, for fear of hurting the chances of Aznar's Populist Party holding on to power.

"Listen, ETA has never done a bombing like this without calling and warning the government beforehand," said Olga Gonzalez, a 32-year-old secretary. "Ninety percent of Spaniards were against the war in Iraq. If al-Qaida is involved and not ETA, this changes everything for the elections. It will only help to elect the Socialist Party."

In other words, we still don't know.

UPDATE: The New York Times has more here, including a statement from a Spanish antiterrorism official that Goma II has been linked to ETA "only rarely" since the 1980s.

Posted by Kevin Drum at 08:16 PM | Permalink | TrackBack (2) | Comments (137)


OCTOBER SURPRISE?....This is pretty remarkable. Channel 4 in Pittsburgh is running an AP dispatch suggesting that Tom Ridge "didn't answer the question directly" when asked if Osama bin Laden was already hemmed in and ready to be captured, and next to it they're running one of those ever popular reader poll.

Now, I'm assuming this poll hasn't been deliberately targeted by a blog or talk show host trying to sandbag the results, but instead is an honest reflection of the opinion of Channel 4's viewers. And 56% of them think that either Osama has already been captured or that the Bush administration will deliberately time his capture for close to the election.

This is ridiculous. I can't stand the guy, but even I don't think that. Let's get a grip folks.

I mean, they'll obviously do this right before the Republican convention, right? Great visuals, gives them something newsworthy to talk about, reminds everyone of 9/11 without seeming crass about it. It's perfect.

But right before the election? Nah. That's wingnut territory.

Posted by Kevin Drum at 06:19 PM | Permalink | TrackBack (4) | Comments (256)


QUORN....The latest target of the food police is apparently something called Quorn: "good enough to eat, won't taste of anything, very bland." Yum!

I don't actually have any comment about this, but I found today's LA Times article about the great Quorn battle pretty entertaining. Personally, though, I think I'll remain faithful to food that sticks to your arteries.

Posted by Kevin Drum at 05:51 PM | Permalink | TrackBack (2) | Comments (103)


NEW PENTAGON PAPERS?....I guess I might as well get this out of the way. I've gotten a deluge of email pointing me to this piece in Salon and asking why I haven't commented on it.

In a nutshell, the article is about the neocons who ran the Pentagon's Office of Special Plans and how they hijacked the intelligence process before the Iraq war. It's mostly stuff we've all heard before, but what makes it noteworthy is that it was written by someone who is presumably a disinterested military professional: an Air Force lieutenant colonel who was on the inside and actually saw all this stuff as it was unfolding.

Unfortunately, that's also one of the reasons I didn't link to it: the lieutenant colonel in question is Karen Kwiatkowski, a hardcore libertarian opponent of the Bush administration who has since retired and taken to writing endless screeds about the neocons for LewRockwell.com and Pat Buchanan's magazine, among others. (In fact, the Salon piece is a light rewrite of her American Conservative article from earlier this year.) Needless to say, none of this makes her wrong. But it does at least give you pause for thought.

The other reason I didn't link to it is that despite Kwiatkowski's insider status, the article contains almost no firsthand reporting at all. If you read it carefully it turns out that about 99% of it is stuff that I could have written myself. There are one or two direct quotes ("don't say anything positive about Palestinians," "Anthony Zinni is a traitor") and a few suspicions and rumors, but that's about it. The rest mostly revolves around her disdain for the neocons on both a personal and policy level and her conviction that they were wrong about going to war.

As it happens, I agree with many of her views on this. Still, the question is whether her story deserves special attention because of her insider status, and after reading the article and failing to see much evidence of actual insider reporting I had my doubts. You can, of course, judge for yourself. Just click on the link.

Posted by Kevin Drum at 03:58 PM | Permalink | TrackBack (1) | Comments (108)


BUSHWORLD....Dick Meyer is the editorial director of CBSNews.com. He's not too impressed with "Bushworld":

All presidents, all administrations, all politicians, all columnists and, indeed, all people selectively pick and chose facts and figures to win arguments.

What's different is that the Bush administration stands accused of politicizing and bullying processes of the government that are designed to be above the fray of partisanship and ideology, such as intelligence gathering and science policy-making. Put bluntly: they don't much care about facts, science and truth.

This will not come as a surprise to Calpundit readers, especially those who also follow Chris Mooney's blog, but no they don't.

Posted by Kevin Drum at 11:48 AM | Permalink | TrackBack (1) | Comments (132)


PROBLEMS IN THE RANKS....Via Altercation, it looks like Dennis Hastert is none too pleased with the White House these days. First there was that little Kabuki dance over the 9/11 commission where they hung him out to dry, and now there's a bit of a tiff over the highway bill:

Q You met with the administration yesterday. Did they say they would support the target number [for highway funding]?

Speaker Hastert. We need to go forward, we need to go to conference with the Senate, and then if they want to be involved in that conference, they certainly will be able to be involved in it.

Q But did they say they would sign?

Speaker Hastert. They didn't make a commitment.

Q Did they say they would veto it?

Speaker Hastert. They didn't say they would veto it.

Q Is that with the President or with the people?

Speaker Hastert. That is with the President. I don't deal with his people anymore.

.....

Q Sir, what did you mean by that last comment: That was with the President; I don't deal with his people anymore?

Speaker Hastert. Well, we weren't getting straight numbers from his people, and they changed their mind in the middle of the process. So we are going to do what we feel we need to do.

Q Just on this issue or on �

Speaker Hastert. On this issue.

Q Or in general?

Speaker Hastert. On this issue.

Q Sir �

Q What kind of numbers were you getting from them?

Speaker Hastert. Different numbers.

Q Different from?

Speaker Hastert. Where they added up.

Moments later, by the way, Hastert expressed his dismay at John Kerry's statement that Republicans were "crooked"....

Posted by Kevin Drum at 11:32 AM | Permalink | TrackBack (1) | Comments (202)


DRESS-UP DEFENSE....It's been increasingly obvious for a while that deployment of our first missile defense system is being timed to coincide with the election. After all, it's a good photo-op and a good chance for the president to declare that he's working hard to keep America safe from terrorists with ICBMs.

By now, in fact, the election-driven schedule is so transparently obvious that even the guy who was in charge of the Pentagon's operational test and evaluation office until 2001 knows it:

"Ever since the president made his decision, the priority of the program has been on deployment, not on understanding whether the system works," said Mr. Coyle, now a senior adviser at the Center for Defense Information, a private research group. "Most people don't appreciate how complicated this system is, nor how much all of the tests so far have been artificially scripted to be successful."

Bill Clinton was eager to deploy the system too during the 2000 election, but he listened to the science and realized that it just wasn't ready. It still isn't, but George Bush doesn't care. As far as he's concerned, a pretend defense is just as good as the real thing as long as it looks good in a campaign brochure.

Posted by Kevin Drum at 10:14 AM | Permalink | TrackBack (0) | Comments (241)


PARTISAN POLITICS....Here in the United States, a president can nearly get impeached for being indiscreet about his sexual life. In retrospect, many of us think things might have gotten a little out of hand during that episode.

In South Korea the president has just been impeached � really impeached � for saying "I want to do everything within legal boundaries to support the Uri Party."

Presidents are supposed to stay neutral in South Korea and the National Electoral Commission deemed this to be a minor infraction. But when the opposition asked Roh to apologize, he refused. They asked again, he still refused. On Friday he finally did, but it was too late:

With the decorum of a kindergarten class, some of the nation's leading politicians � mostly middle-aged men in somber suits � pushed and shoved and threw paper and furniture. Roh supporters screamed that the assembly was staging a "coup d'etat."

One legislator fainted. Others burst into tears. Pro-Roh legislators joined hands and sang the national anthem as they were dragged out.

Later, the Uri Party issued a statement saying that all of its 42 members in the assembly were resigning.

Remember this the next time you think politics in America has gotten too partisan and bitter.

Posted by Kevin Drum at 08:17 AM | Permalink | TrackBack (3) | Comments (115)

March 11, 2004

CONTRARIAN ECONOMICS....Here's an odd thought: is it possible that the economy is about to get better? The Law of Economic Conventional Wisdom says it might be.

Let me explain. Usually, you can tell that a trend has hit its peak when it becomes the conventional wisdom that the trend is permanent. For example, in the late 90s, after a few years of high growth, it became conventional wisdom that this wasn't merely cyclic, but was the result of structural changes in the economy (better inventory control, IT investment finally paying off, the internet) that meant high growth would continue forever and the stock market would continue to rise. Sure enough, shortly thereafter the economy tanked and the stock market bubble burst.

The same thing happens to real estate markets after several good years in a row, commodity markets, fine art markets, and pretty much every other market. People have short memories, and after things have gone well for a few years they find ways to convince themselves that what's happening isn't cyclical, but rather a reflection of some new and permanent underlying change in the laws of economics. What's more, they usually manage to produce remarkably sophisticated and genuinely persuasive rationales for their new theories.

The same thing happens in reverse, too. After a few years of bad times, people start to get overly pessimistic and the conventional wisdom turns. This downturn isn't merely cyclical, it's a reflection of a permanent underlying change in the laws of economics.

By happenstance, in the past couple of days I've run across three separate articles that make this case for our current sluggish job market:

I don't take this seriously enough that I'd be willing to put money on it or anything, but when lots of people start to become convinced that an economic cycle has become permanent, that often means the cycle has reached its limit and is about to turn. Is it possible that's what's happening right now?

Posted by Kevin Drum at 10:06 PM | Permalink | TrackBack (1) | Comments (161)


CHANGING THE TONE, BABY, CHANGING THE TONE....Question: who wrote this email and when did he write it?

This whole episode which has now gone on for three weeks has been pretty nightmarish. I'm perhaps no longer in grave danger of being fired, but there remains a strong likelihood that I will have to resign in protest of the withholding of important technical information from key policy makers for political reasons.

Answer: Richard Foster, the chief Medicare actuary, on June 26 of last year.

Ah, but why did Foster feel he was in danger of being fired? Because his estimate of the cost of the administration's "$400 billion" Medicare bill was $551 billion � an estimate that the administration now admits is correct. However, revealing it back then would have endangered their bill.

Is Foster telling the truth? Was he really pressured? Here's what the various actors say in Knight-Ridder's account of this story:

  • Cybele Bjorklund, Democratic staff director for the House Ways and Means health subcommittee, says: Foster's boss, Thomas Scully, admitted to her that he ordered Foster to withhold information.

  • Scully says: That's a bunch of crap, and Liz Fowler, the chief health lawyer for the Democrats on the Senate Finance Committee, can back him up.

  • Fowler fails to back him up: "He's a liar."

  • Tommy Thompson, Scully's boss, says: "I may have been derelict in allowing my administrator, Tom Scully, to have more control over it than I should have...."

And what does Foster have to say about all this? Nobody knows. "Health and Human Services Department officials turned down repeated requests to interview Foster."

These guys really do act like Vito Corleone, don't they? They knew their estimates were bogus five months before the bill was passed, they refused to let their chief actuary tell anyone about it, and one of their stooges basically told him to either shut up or sleep with the fishes. Then, a mere few weeks after the bill is passed, they fess up to the higher cost and pretend they didn't know about it before.

Are these guys a piece of work or what?

Posted by Kevin Drum at 07:43 PM | Permalink | TrackBack (3) | Comments (124)
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