December 2002 Archives

Paul Krugman today observes that concern over deflation is on the rise. He writes:

Some fuzzy math: In the first 30 days of December 2000, according to Nexis, only six articles in major news sources contained both the word "deflation" and the phrase "United States"; none of those articles suggested that deflation in this country was a real possibility. In the same period last year there were 292 hits; this past month there were 566.

Xu Wenli writes about his first hours of freedom in the United States after a second stint in China's political prisons.

E.J. Dionne worries that the federal government is likely to make policy decisions in 2003 that will make our nation's long-term fiscal situation even worse.

Given that the White House will push to make its irresponsible tax cuts permanent, the need for a strong countermessage from Democrats and moderate Republicans is obvious. Whether they will stand up to this fiscal madness (something they failed to do with the original Bush tax cut votes) or capitulate again to a Bush Administration fear campaign will prove to be one of the most important issues of the new year.

The National Football League has the worst, most idiotic, and pathetic television coverage rules devised in humanity's history.

Gregg Easterbrook has been on a campaign to expose this idiocy in his excellent Tuesday Morning Quarterback column. Today he explains why people in the Washington, D.C., area were not allowed to see one of the best NFL games in recent years.

So the year in which the NFL renewed the DirecTV monopoly on Sunday Ticket, denying the chance to watch any game to the majority of the U.S. taxpayers whose taxes fund the stadiums that make NFL profits possible, concludes with the NFL denying the nation's capital permission to watch one of the most dramatic NFL games ever.

Eric Alterman deconstructs the White House's new $60 billion cost estimate for a war with Iraq. (Office of Management and Budget Director Mitch Daniels does not have much credibility in Washington for a reason.)

Alterman also reminds his readers about a serious study released earlier this month that pegs the possible cost of an Iraqi war and its aftermath at a higher -- and potentially spectacularly higher -- figure. The Associated Press explained:

Researchers concluded in a study released Thursday that war with Iraq could cost the United States from $99 billion to more than $1.9 trillion over a decade.

The lower figure assumes a successful military, diplomatic and nation-building campaign; the higher figure assumes a prolonged war with a disruption of oil markets and a U.S. recession, the authors say in a study by the American Academy of Arts and Sciences.

But we remain unprepared for the high cost and complications that will be associated with the rebuilding to follow our military success.

The Washington Post's John Mintz reports that intelligence sources believe Al Qaeda controls at least 15 cargo freighters. The article includes a summary of possible terror opportunities through the water.

Slate's Daniel Gross wishes the Bush Administration would stop lying about when the recession began.

This Financial Times of London financial review of 2002 paints a bleak picture of the past 12 months. Michael Morgan and Deborah Hargreaves report:

"This is a crisis unfolding as badly as the Great Depression," said Albert Edwards, head of global asset allocation at Dresdner Kleinwort Wasserstein. "The economy doesn't feel like it yet but, in a year or so, it may do."

Cumulative losses for the FTSE World index since the start of 2000, after the bursting of the technology, media and telecoms bubble, total 43 per cent.

That was the worst three-year performance since 1929-31 when world markets fell 58.8 per cent, according to indicative indices calculated by researchers at London Business School. By comparison, world markets lost 39 per cent in 1973 and 1974 at the height of the world oil shock.

Ronald Brownstein writes about the health care "perfect storm" that is brewing across the nation.

From one side, the sagging economy and skyrocketing costs of insurance are pressuring more employers to drop health-care coverage for their workers. From the other side, the cavernous deficits in state budgets are forcing governors and legislators to slash Medicaid, the joint state-federal health program for the poor. As these two trends meet, the result could be a tidal wave in the number of Americans without access to health care.

The Bush Administration last summer opposed a Senate plan (supported by a majority of the chamber's Republican members) to provide a temporary $6 billion for the Medicaid program. The supposedly compassionate conservatives in the White House should rethink their position on this issue.

It is also important to remember that our economy's long-term health remains at risk as long as people find their health coverage tied to their jobs. Workers will eventually not accept the market's "creative destruction" if their health benefits are part of the cost.

It is, however, going to be hard for the GOP to develop a better environmental record since its new chairman of the Senate Committee on Environment and Public Works -- Sen. James M. Inhofe (R-Okla.) -- is a man who has referred to the Environmental Protection Agency as a "Gestapo bureaucracy."

Washington Post reporter Eric Pianin reports that the Bush Administration is preparing new regulations for emissions from off-road diesel powered vehicles.

No, not in the way you are thinking. The White House actually seeks to reduce these dangerous emissions. Pianin writes:

The proposed rules -- to be formally announced next spring -- would slash off-road diesel emissions by as much as 95 percent and bring them in line with newly adopted standards for heavy-duty diesel trucks and buses that traverse the nation's highways. Off-road diesel engines have been held to a much weaker standard than on-road vehicles since 1977.

The Daily Kos makes an excellent observation about this story of an Georgia high school senior who is upset because she is not allowed to wear Confederate themed tee-shirts to school:

At a time when any criticism of Bush's war effort is met with charges of anti-Americanism, how do Southerners get away with celebrating the Confederacy?

What can be more un-American than wearing the symbol of the rebel group that sought to destroy the United States, and build a new nation based on the subjugation of an entire race?

The BBC reports:

Police have arrested a baggage handler at Paris' Charles de Gaulle airport, after two automatic weapons, plastic explosives and a detonator were found in his car.

The man, who is reportedly of Algerian origin, was arrested late on Saturday after a tip-off from a member of the public who saw a weapon in a car boot at the airport.

San Francisco Chronicle economics reporter Sam Zuckerman observes that the Federal Reserve has declared victory in the 20-year war against inflation and is now preparing to fight an even more dangerous economic enemy: deflation.

At a time when the economy is stalled, it makes sense for the federal government to consider running a deficit to help stimulate growth.

Few will argue this point. Even deficit hawks like me.

The problem with current policy, however, lies not in the short-term. It is with the long-term assumption that the federal government will run large deficits well into the future because of its tax cut and spending policies.

A recent study by the Urban-Brookings Tax Policy Center's William Gale and Peter Orszag explains the long-term costs associated with a lack of fiscal discipline:

Based on the literature, a reasonable estimate is that a reduction in the projected budget surplus (or increase in the projected budget deficit) of one percent of GDP will raise long-term interest rates by between 50 and 100 basis points. These findings suggest that the costs of increased deficits are significant over the long run, and need to be compared carefully to the potential benefits of the tax and spending programs that result in larger long-term deficits.

Some, however, will accept deficits as long as they also serve one political party's narrow ideological desires.

This White House would never stoop to politicizing the war on terror or homeland security. Heaven forfend.

Except when they are the top signature issues on which the White House plans to run for reelection.

The New York Times is going to profile freshmen Congressional Representatives Candice Miller (R-Mich.) and Raúl M. Grijalva (D-Ariz.) over the coming months to highlight some of the issues that arise during their transition to Washington.

The first days on the Hill, of course, are about hiring staff, setting up office space, securing important committee decisions, and finding a place to live.

Rep. Miller is finding one aspect of her transition somewhat surprising. As the New York Times' Sheryl Gay Stolberg explains:

When Mrs. Miller discovered she would inherit the antiquated computers that belonged to Mr. Bonior, she promptly decided to spend $50,000 on new ones. Because the House requires each member to stick to a budget of roughly $1 million, the decision means less money for salaries. "It's going to cost me a staff person," said Mrs. Miller, who as secretary of state supervised an agency with 180 branch offices and 2,100 employees. "I hadn't anticipated that."

Welcome to Washington.

Tort reform is a favorite Republican campaign issue. But before you jump on the GOP's bandwagon on this issue, make sure you understand some of the behind-the-scenes agenda. Jim VandeHei reports:

Republicans also want to provide new protections to asbestos manufacturers -- including a subsidiary of Halliburton Co., which Vice President Cheney used to head -- and to HMOs as part of bigger legislative packages, party officials say. Carleton Carl of the Association of Trial Lawyers of America said Republicans can't muster the 60 votes needed to break a Senate filibuster unless they continue to insert the provisions in bills dealing with homeland security.

Yet in a sign that some trial lawyers see an unstoppable train coming, some plaintiffs suing Halliburton and other companies in asbestos-related cases started talking about out-of-court settlements right after the GOP sweep last month, according to the Wall Street Journal.

First, protecting the Vice President from a horrible business decision is seen by the GOP as a Congressional priority. How nice. Second, homeland security measures sure are convenient vehicles for scoring points with corporate donors.

Our government leaders can insert tort reform language into bills at the last minute, but cannot come up with a terrorist alert system that provides usable information for citizens.

Priorities, you know.

Why does the CIA insist on downplaying reports of Al Qaeda's ties to the African diamond trade? The Washington Post's Douglas Farah reports:

The diamond-buying operation appears to have been hatched in response to a move by the United States in 1998 to freeze al Qaeda assets after attacks on two U.S. embassies in Africa that were blamed on the organization. Senior European intelligence sources said they have been baffled by the lack of U.S. interest, particularly by the CIA, in their recent findings. The CIA, which in the past has downplayed reports of al Qaeda's diamond connections, declined to comment.

Manhattan District Attorney Robert M. Morgenthau makes an important argument today about the need to improve enforcement of our tax laws.

Lax tax enforcement is unacceptable at a time when the national, state, and local governments face fiscal crises. Morganthau writes:

Government at every level must start now to take steps to ensure that tax enforcement agencies are beefed up to fight evasion and fraud, which have become increasingly complex and sophisticated. There is a perception that it is mainly drug dealers, terrorists and mobsters who take advantage of offshore tax havens. That is wrong. Recently my office convicted a prominent Canadian lawyer and a British solicitor, who was also a magistrate, of running a scheme to provide offshore shell corporations for the use of a wide range of clients in New York, Canada and Russia. The annual losses from evasion in the tax havens is estimated to be about $70 billion.

The Los Angeles Times rightly wonders why our tax code gives a bigger tax break to those people who purchase a gas guzzling car instead of a gas-efficient hybrid vehicle. Especially at a time when the United States is importing oil from states like Saudi Arabia and Iraq. As the editorial points out:

Businesspeople who buy the least efficient mass-market car, a Hummer H2 (average miles per gallon: 11) can reap $13,476 in tax breaks one year after purchase. By contrast, those who buy or lease one of the most efficient cars, the Toyota Prius (average miles per gallon: 48), get only $3,729.

The Brookings Institution's Michael O'Hanlon writes that the Bush Administration's North Korea policy is failing. He offers a bold, Reaganesque alternative that is far better than what the White House as so far developed.

Democrats would do well to heed the warning in contained within this Washington Post editorial. While it is appropriate to make the Bush Administration's poor record on preparing the nation against terror an issue, Democrats must back up their criticism with substantive alternatives.

The Bush Administration will prevail if the American people see this as "just politics." When it comes to national security, Democrats clearly do not get the benefit of the doubt from voters. So, the burden on Democratic candidates is higher.

That extra burden could prove a plus over time. Democrats, in fact, could start their policymaking with this Post editorial observation:

We should know what to do when we hear of red and yellow alerts, just as we've learned what to do in case of an earthquake or a snowstorm. An anthrax attack would require a different response than a smallpox attack. Are potassium iodide pills a good idea only if you live next to a nuclear power plant? Americans want to know, and there's a way to tell them that would encourage a practical rather than hysterical -- or indifferent -- response.

USA Today urges those who are flying during the holidays to remember that there are certain items -- like boxcutters for goodness' sake -- that cannot be brought aboard airplanes. The editorial correctly argues:

Forget the college SAT. As airports gear up for the end of the holiday travel season, air passengers might consider taking the FAT, or Fliers Aptitude Test.

Its need is prompted by the federal government's jaw-dropping disclosure that during the heavily traveled Thanksgiving weekend, fliers tried to carry 17,624 knives, 110 box cutters, five guns, one brick and a toy cannon complete with ammunition on to planes across the nation.

For those who've been asleep since Sept. 11, 2001: Those items aren't allowed.

In a year where measures that cost nothing will have added cachet because of the state's fiscal crisis, a financial privacy protection bill has been reintroduced in the California State Senate as SB 1. That gives it a priority status it deserves.

As the San Jose Mercury News editorializes today:

Last year Speier's bill passed overwhelmingly in the Senate but failed by a small margin in the Assembly. This time around, Assembly members would be wise to listen to voter sentiment and work constructively with Speier, Burton and others to enact strong privacy protections for California consumers.

Paul Krugman explains why he does not see a happy economic year ahead. Krugman looks at a disappointing Christmas retail season, turmoil in Iraq that has the markets worried, and the severe fiscal crises facing state governments, and writes that "[i]t's getting harder to tell a tale with a happy ending."

Freedom continues to spread around the globe. Steve Chapman rightly sees this as a result worth celebrating.

H.D.S. Greenway explains the danger of following the advice of those in the Bush Administration who seek to revisit in Iraq the glorious country rebuilding ways of General Douglas MacArthur in post-war Japan.

Democracy is best promoted by persuasion and not imposed, especially by American forces. The failure resulting in such an imperial overreach would be a major catastrophe. A long-term American occupation would be seen as an imperial grab to the secularists in the Muslim world, and a crusader assault against Islam to the fundamentalists. Relations with the Arab world and Iran, which we are going to need to fight Al Qaeda, would crumble, and the good that will come from deposing Saddam Hussein would be thrown away.

The Instapundit makes an excellent observation about why the United States gets less credit than many here believe it should for its contributions to other countries. He makes this point while trying to explain why Sen. Patty Murray (D-Wash.) is not getting the Lott treatment from the media for her recent comments about why Osama bin Laden is popular in the Arab world. He writes:

But one thing I hear from people who've spent a lot of time in countries where there's a substantial Islamic population is that the Saudi money is there year in and year out. The U.S. may come in and do things for a few years, but we get distracted and our interest dries up. The Saudis' interest doesn't. They build mosques, they build schools, they provide a lot of medium-influential folks with a secure livelihood and some money to spread around that lets them build up local patronage webs of their own.

We could learn from that. Not only should we work to formulate a reputation for steadfastness instead of flightiness (which we'll have to do, over time, by actually being steadfast instead of flighty) but we should also seek to make the Saudi money less reliable by interdicting it -- either at the source, or somewhere along the line.

(Like that promised Marshall Plan for Afghanistan. Or how we will support the Kurds in Iraq should they rise up against Saddam. Or our promise to ensure that genocides are never again permitted--like the present one in Zimbabwe.)

This is a bipartisan failure. One requiring immediate correction.

Will the United States really let the Europeans get to Mars first?

Ultimately such a mission will require a global effort. But the United States should lead it. It is time for our nation to get a handle on the vision thing.

Talkleft explains why some people are worried about this New York Times headline: Expecting a Vacancy, Bush Aides Weigh Supreme Court Contenders.

Our government is making steady but slow progress in hiring Arabic linguists to analyze intelligence data in the war on terrorism. Finding qualified people with security clearance has proven difficult.

"It takes 10 people in the front door to get one person out the other end," said Margaret Gulotta, head of language services for the FBI.

Gulotta said that 65 percent of applicants fail the bureau's language test; 20 percent can't pass a required polygraph and and 10 percent are eliminated for security reasons. All told, she said, the FBI has hired 286 translators and linguists since Sept. 11, 2001, in all languages, for both full-time and contract positions.

The United States -- and the world -- face a major problem with North Korea's restarted nuclear program.

Options, however, are limited. As the Washington Post's Peter Goodman reports:

The problem for the Bush administration is that the U.S. threat of force is undercut by the reality that Washington lacks the regional support it would need to conduct a war. South Korea last week elected a new president who advocates continuing dialogue and engagement with North Korea, placing him at odds with Bush. The Japanese public, already largely opposed to a war with Iraq, would likely have a harder time stomaching a war with a potential nuclear adversary on its doorstep.

The Baltimore Sun's editorial writers accurately assess the unacceptable state of our government's efforts to investigate the causes of the September 11 terrorist attacks.

Time and again the Bush administration and many of the other politicians involved have proven more concerned about their own interests than in giving Americans an unvarnished look at how their government failed in its No. 1 responsibility: to protect them.

Why do people blog? Dr. Andrew Cline offers several excellent reasons on his excellent Rhetorica: Press-Politics Journal blog.

In fact, while I was on hiatus I found that I was not staying on top of events the way I would like (his reason one). I also agree that reason three has something to do with it...

Senator John Kerry (D-Mass.) today makes the case for giving working families a payroll tax cut to help stimulate the economy.

Kerry also focuses on the differences between the payroll tax holiday idea and the policies embraced by the Bush Administration. He writes:

What President Bush's main economic adviser said was pretty clear: The wealthiest Americans pay too much in taxes, and middle-class Americans get too much help in paying their mortgage, giving to charity, and helping send their kids to college.

Kerry's plan makes economic and political sense. Nearly 75 percent of American taxpayers pay more in payroll taxes than they pay in income taxes. If our political leaders were interested in broad tax relief, they would support this idea.

The White House, of course, is not interested in broad tax relief. There are contributors to pay off and ideological points to score. Priorities, you know.

Robert Novak reports that Sen. Chuck Hagel (R-Neb.) told a Chicago audience earlier this month that the road to peace in the Middle East does not go through Baghdad. Novak writes:

''Military force alone,'' Hagel told his Chicago audience, ''will neither assure a democratic transition in Iraq, bring peace to Israelis and Palestinians, nor assure stability in the Middle East.'' Indeed, the senator returned from the Mideast more concerned than his prepared speech indicates. As the U.S. gets ready for war, its standing in Islam--even among longtime allies--stands low.

Newsday columnist James Pinkerton examines a political culture that is aging as sixty- and seventy-somethings remain prominent in politics and the media.

Of course, the oldest baby boomers are at least 57 this year. Since the boomers have redefined roles throughout their lifespans, this trend appears likely to continue as that large generation reaches senior citizenhood.

While our nation draws closer to war with Iraq, it is clear that those of us living in the United States face an ever growing risk of harm from a bioweapon attack.

Graham T. Allison outlines the problem on today's Washington Post op-ed page.

Note the contrast between the pace of the buildup for offensive action against Iraq and preparations to defend Americans at home. Over the past year, the Pentagon has constructed new bases in Oman and the United Arab Emirates; rebuilt the stock of smart weapons depleted in the war against Afghanistan; moved equipment, troops and now a headquarters to the region; and practiced tactics for a campaign that could include fighting in Baghdad. In contrast, the Department of Health and Human Services has contracted for supplies of new smallpox vaccine that will, if they meet current schedules, be delivered in sufficient supply and licensed by the Food and Drug Administration for all Americans sometime in 2004.

For example, by a war to remove him from power.

Yet when it comes to smallpox, or even more worrisome, our ill-funded and prepared public health system, our government has yet to make protecting the homeland a priority in its warplans. Why is that acceptable?

The Bush Administration tried to sneak this news out on Christmas Eve. That is, of course, no reason for you to ignore it. John M. Berry writes in the Washington Post:

The Treasury Department yesterday asked Congress to raise the government's $6.4 trillion ceiling on the national debt, setting the stage for a major political conflict early in the 108th Congress.

But one must wonder whether a large tax cut targeted to the rich is really the best fiscal policy for our nation during these times.

Anyone else uncomfortable with the fact that new Alaskan Governor Frank Murkowski (R) has given the U.S. Senate seat from which he recently retired to his daughter?

As the New York Times notes today:

Ms. Murkowski, on the merits, would not be an implausible choice for some other Alaska governor to make, but elected officials stifle the competitive spirit of American politics when they appoint their own children to public office. Political dynasties — from the Adamses to the Kennedys and the Bushes — have long been an American tradition. Ms. Murkowski will be joined in the Senate by a new Pryor from Arkansas, a new Taft from Ohio and a new Sununu from New Hampshire, not to mention Hillary Rodham Clinton and Elizabeth Dole. But even though all these other lawmakers have been helped by their names, they were elected in their own right.

Liberal Oasis has 10 excellent questions for incoming Senate Majority Leader Bill Frist.

Steve Lopez explains the largest conspiracy of them all: the effort to kill interest in public affairs.

Public disinterest, after all, is not healthy for a self-governing Republic.

The Brookings Institution's William Gale offers an excellent observation and suggestion. He writes:

The best way to boost the economy right now would be to increase federal aid to the states, which are facing their worst financial crisis in decades.

After a few week break, I have decided that it is time to return to blogging.

The end of a successful job search and the transition from my old job to my new job left me without time for working on my Political Parrhesia blog the past few weeks.

Now that some of those time pressures have lessened, I am happy to reactivate my little corner of the blogosphere.