Monday, March 22, 2010

Party Like It's 1935

Those newspapers of the nation which most loudly cried dictatorship against me would have been the first to justify the beginnings of dictatorship by somebody else.  -- Franklin Roosevelt
In this week's Sift:
  • Did We Win? President Obama might sign a health-care reform bill as early as tomorrow. The Senate still has some stuff to fix, but reform is going to be a reality. After a yearlong process of argument and compromise, what should we make of the final product? First, don't think of it as a final product.
  • Next Up, Financial Reform. So far, we've done remarkably little to prevent a repeat of the 2008 meltdown. This is going to take more than one Sift to cover, but let's get started.
  • Short Notes. My talk about the Sift. Subway-adapted stray dogs. Jon Stewart does a great Glenn Beck imitation, while Stephen Colbert nominates Beck for pope. Strife on the Right. Why dark matter is a liberal plot. Seven years in Iraq. And more.

Did We Win?
The Senate health care bill passed the House late Sunday night 219-212, with no Republican yes-votes. The process is not completely over, because the House also passed "fixes" to the bill (which the Senate will now consider through the reconciliation process that blocks a filibuster), and both bills must then be signed by President Obama. But this was the key step. Obama's signature is a foregone conclusion, which means that some kind of health reform will now become law. Probably the Senate will follow through on the fixes, and we'll wind up with something close to what Obama put forward a few weeks ago.

Does that mean liberals won?

This debate has been going on for more than a year now. From the outset, the liberal idea of a single-payer system (Medicare for everybody) was off the table, despite the fact that it would almost certainly work better. (France and Germany have single-payer systems. They get better outcomes for half to 2/3rds of the per-person cost we pay.) For much of the year it looked like we might get a public option, a Medicare-like system to compete with private insurance companies, but we didn't.

The details of the bill picked up further conservative compromises along the way (in exchange for no Republican votes) but the outline stayed close to the system Mitt Romney set up in Massachusetts: an expansion of Medicaid to cover more of the working poor, a mandate that everybody else buy private insurance (with the help of sliding-scale government subsidies for much of the working class), and state-by-state exchanges where individuals can buy policies at rates similar to what group policies cost, without lifetime limits on benefits or the possibility that they will be excluded for pre-existing conditions.

A single-payer system might have put health-insurance companies out of business and a public option would have limited their profitability, so they come out well. (The price of UNH stock roughly tracks the upward path of the Dow Jones average over the past year, beating it slightly.) The CBO estimates that 23 million will remain uninsured, about a third of them illegal aliens. Many of the rest would become eligible for Medicare if they became seriously ill.

So did we win?

With all the compromises and might-have-beens, it's easy to lose sight of the Big Picture, but yes, we won. The Right's government-takeover rhetoric was always overblown, but this bill is an important step in establishing the social principle that the health-care system is the government's responsibility. The market will continue to play a major role in health care, but it will be a tool that works within a system defined by the political process, rather than the ultimate definer and implementer of all policy.

That principle is very important looking forward, because the status quo was not sustainable much longer. American health care is half again as expensive as most other wealthy countries', and getting worse. We will have to come up with ways to control costs. In a market-defined system, costs would be controlled by letting poor people die. You can dress it up, but fundamentally that's what it would come down to. In the kind of system the Right wanted, less affluent families would always be tempted to gamble: Maybe that ache means nothing; maybe Susie's cough will go away on its own. Most of the time the gamble would be won, but when it was lost people would die.

Now we're going to have to focus on controlling costs at the system level. That won't be easy, but the other countries get it done and we will too.

It's not a ride-off-into-the-sunset victory. The insurance companies will find ways to abuse this system, and the hard work of controlling costs without killing poor people (or anybody) is still to come. But we're headed in the right direction. Think of all the tinkering Social Security has needed over the decades, and still needs. 1935 was just the beginning, not the end.

It's not nearly as momentous as the passage of Medicare in 1965 and won't fundamentally alter how Americans think about social safety nets. But the passage of Obama's health care reform bill is the biggest thing Congress has done in decades, and has enormous political significance for the future.

On the politics of this bill, David Axelrod sums up my thinking:
This only worked well for the Republican Party if it failed to pass. They wanted to run against a caricature of it rather than the real bill. Now let them tell a child with a pre-existing condition, "We don’t think you should be covered.”
If the bill didn't pass, then Democrats could be portrayed not only as sinister, but ineffective as well. An able villain earns a grudging respect, but a bumbling one deserves only contempt. And the new Obama voters who turned out in 2008 would have learned that the cynics were right -- voting doesn't change things.

Now Obama inherits a frame that benefitted Bush: You may not agree with him, but he has stuck by his beliefs and gotten something started. Now the country needs to make it work.
If the Republicans do make repealing healthcare reform the centerpiece of their 2010 campaign, it won't be the first time they've tried this tactic. Pledging to repeal Social Security is how Alf Landon defeated FDR in 1936 ... in Maine and Vermont. The other 46 states and 523 electoral votes went for Roosevelt.
The final days of the health-care debate brought more of the kinds of deceptions we've been seeing all along. There was, for example, the survey supposedly conducted by the prestigious New England Journal of Medicine in which 46% of primary care doctors said that reform might cause them to quit.

Except ... it wasn't the NEJM. The survey was published in a somewhat less prestigious publication: a free newsletter called Recruiting Physicians Today. It was conducted by a medical recruitment firm, which claimed that the survey established the increased need for medical recruitment firms after reform passes. So: a firm you never heard of published a survey in a free newsletter claiming that its services would soon be in high demand. Very newsworthy.

Nonetheless, this falsely-attributed "NEJM survey" was all over Fox News for most of a day.

Another fraud was the Democratic strategy memo that Republicans tried to make an issue of. This C-SPAN exchange is classic, as Rep. Weiner of New York calls out the Republican representative who just referred to the memo on the floor of the House. No one seems to know where this purported memo came from or who wrote it, but that didn't stop Politico and other news outlets from publishing it. And once they have, of course, the Republican leadership can blame the press for any misinformation.

One of the more interesting stories in the closing days of the health-care debate has been the struggle between single-issue anti-abortion Catholics and Catholics who recall Matthew 25:31-46. ("I was sick and you looked after me.") 

On March 11, the US Conference of Catholic Bishops released a statement to be inserted into church bulletins. It denounced "those who insist on reversing widely supported policies against federal funding of abortion and plans which include abortion" and asked Catholics to call their representatives in Congress. USCCB president Cardinal Francis George followed up on Monday with this judgment:
the flaws [of the bill] are so fundamental that they vitiate the good that the bill intends to promote. 
In a rare move, the leaders of religious orders representing 59,000 American nuns undercut the bishops in a letter sent to members of Congress. It lists the virtues of the bill, and says:
despite false claims to the contrary, the Senate bill will not provide taxpayer funding for elective abortions.
The head of the Association for Catholic Hospitals (also a nun) has come out for the bill too. I'm not sure how Catholics are reacting, but from the outside the bishops look like old bachelors for whom female health is a theological abstraction.

One thing you have to give the anti-health-care protestors, they stayed classy. Here they yell racial and sexual insults at congressmen, and here they humiliate a man with Parkinson's. But why should they show more restraint than members of Congress, one of whom yelled "baby killer!" at Bart Stupak on the floor of the House after Stupak's last-minute abortion compromise.

That's the point missing from all the Bush-critics-were-crazy-too articles: Leading Democrats were embarrassed by the more extreme Bush critics (like the Bush-knew-about-9-11 conspiracy theorists) and did their best to distance themselves. But elected Republicans won't distance themselves from the crazies, and many urge them on. And the supposedly liberal media never fanned the flames of craziness the way Fox News does now.
Speaking of the Stupak compromise, it appears to be a face-saving way to resolve a trumped-up non-issue. The nuns were right: The health-care bill never provided the federal funds for elective abortion that critics claimed. So an executive order re-iterating that no federal funds will go for elective abortions has no real consequences.
Salon's Alex Koppelman nominates a Michelle Bachman - Steve King article on Politico for worst op-ed ever. The lowest of its many low moments is when it feeds the bizarre keep-government-away-from-my-Medicare notion:
Obamacare cuts a half-trillion dollars in health care for seniors to lay the foundation for socialized medicine.
This isn't some confused protester with a sign; this is two members of Congress purporting to defend Medicare against socialized medicine. In writing.

I'm often asked if I find any reasonable conservatives to listen to. Well, David Frum is making a lot of sense:
Some [Republican] leaders were trapped [on health care]. They were trapped by voices in the media that revved the Republican base into a frenzy that made dealing impossible. I mean, you can’t negotiate with Adolf Hitler, and if the President is Adolf Hitler, then obviously you can’t negotiate with him.

Next Up: Financial Reform
The health-care debate has taken up all the airtime, but there's also that little question of how not to repeat 2008's financial meltdown. Up until now I've been negligent in covering this topic, mostly because I haven't found good articles to link to.

I promise to do better. Let's start by framing the problem that re-regulation needs to solve: De-regulation was always a little bit of a myth, because everyone knew that if things got bad enough the government would have to step in, as it ultimately did. So we had the worst of both worlds: A fictitious free market continued as long as times were good, but the taxpayers were left holding the bag when times turned bad. 

I find this metaphor useful: Imagine a gambler with a bagful of somebody else's chips. If he wins he keeps the winnings, but if he loses they weren't his chips anyway. That's the situation that the big Wall Street firms like Goldman Sachs were in. So naturally they made big risky bets, and when those bets paid off they took home a lot of money. When the bets went bad, the government bailed them out.

It would be satisfying to send people to jail for this. But that's probably impossible, because there's no meta-law against taking advantage of laws that Congress has rigged in your favor. There's not even a law against asking Congress to rig laws in your favor in exchange for your support, as long as the quid-pro-quos aren't too explicit. So the best we can reasonably hope for is to write a better set of laws this time and have somebody actually enforce them. That may even be more than we can reasonably hope for.

The basic idea of re-regulation ought to be this: The bigger a financial institution gets, the more regulated it is, and the fewer risks it is allowed to take. If an institution is truly too big to fail, it should be also be too big to take risks.

Bankers wouldn't like to be limited like that, and so they'd be motivated to split companies up when they got close to regulatory limits.

After some Googling around and other stuff that passes for research, it looks like the best online source for keeping track of this stuff is a blog called Naked Capitalism. In this post, for example, guest blogger Frank Partnoy examines the examiner's report on the Lehman Brothers bankruptcy and concludes:
The Valuation section is 500 pages of utterly terrifying reading. It shows that, even eighteen months after Lehman’s collapse, no one – not the bankruptcy examiner, not Lehman’s internal valuation experts, not Ernst and Young, and certainly not the regulators – could figure out what many of Lehman’s assets and liabilities were worth. ... When the examiner compared Lehman’s marks on these lower tranches to more reliable valuation estimates, it found that “the prices estimated for the C and D tranches of Ceago securities are approximately one‐thirtieth of the price reported by Lehman. (pages 560-61) One thirtieth? These valuations weren’t even close.

Jon Stewart gives a pretty good explanation of how the meltdown happened. And of course there's always the classic Bird and Fortune routine from the early stages of the real estate bubble.
Lawrence Lessig attends a conference on re-regulation and concludes that everyone (except Elizabeth Warren) is still in denial about the real problem: the way our political system is financed.
as expert after expert demonstrated, practically every one of the design flaws that led to the collapse of the past few years remains essentially unchanged within our financial system still. ... Wall Street continues unchanged because the Congress that would change it is already shuttling to Wall Street fundraisers. Both parties are already pandering to this power, so they can ... fund the next cycle of campaigns.

Short Notes
The text of my talk about this blog, Sifting the News, is online now.

In Moscow, the stray dogs have learned how to use the subway. I know it sounds like the start of a joke, but would ABC News lie about something like that?

Conservative blogger Debbie Schlussel turned on Sean Hannity this week, charging that his fund-raising for Freedom Alliance (a charity that is supposed to benefit wounded veterans and the children of soldiers killed in combat)  is "a huge scam". David Frum was one of the few conservatives that didn't either ignore the story or reflexively jump to Hannity's defense, but now his FrumForum says there's nothing to it either.

No surprise, given some of the outlandish things Schlussel has said about liberals. But if conservatives are going to start eating their own, I'll happily pull up a chair and pop some corn.

And I know I shouldn't be criticizing female bloggers and pundits based on their appearance, but is there a factory somewhere that churns out conservative blondes? There's Schlussel, Ann Coulter, Megan Kelly, Laura Ingraham, Liz CheneyGretchen Carlson, and I could probably go on. Did Michelle Malkin have to get a waver or was she grandmothered in?
Jon Stewart was great the other time he did a Glenn Beck impersonation, but Thursday night was the best yet. 

And let's not overlook Stephen Colbert's response to Beck's attack on "social justice" churches. He interviews Jesuit Father Jim Martin, and asks the question we all wonder about: "If I help the poor, what's in it for me?" Colbert also asks Father Martin to speculate on Beck as a future pope, noting that "he seems so comfortable telling Catholics what to do."
We all know that they crash-test cars, but I'd never thought about crash-testing a helicopter.

President Obama went on Fox News Wednesday, and was treated with an unprecedented level of disrespect by interviewer Bret Baier, who persistently interrupted and talked over him. Media Matters compares Baier's Obama interview with his Bush interview, where he asked such stinging questions as "What are you reading now?"

I'm sure you already knew that evolution and global warming are hoaxes put out by the evil liberal scientific community, but I'll bet they slipped dark matter right past you. Have no fear, the Conservapedia (the conservative movement's answer to the hopelessly liberal Wikipedia) is on the case. It has noted that a new set of experiments "may disprove liberal claims that 'dark matter' comprises 25% of the universe."

Steven Andrew is puzzled by how dark matter became a liberal/conservative thing, writing:
I'm aware of no split in the cosmology community on Dark Matter vs. [Modified Newtonian Dynamics] that falls neatly across a progressive-conservative axis (Probably because there isn't one). 
But that's because he hasn't read the Conservapedia article on dark matter. Without dark matter, you see, there are cosmological conundrums that require the direct intervention of God. So dark matter is just one more pitiful attempt by liberal scientists to hide the holes in their godless universe.

Either that, or it's a government takeover of 25% of the universe.

Brave New Films commemorates the 7th anniversary of the invasion of Iraq.
The NYT public editor reviews its coverage of the ACORN-pimp video, finds a number of failings in the Times' coverage (all damaging to ACORN), and then concludes:
It remains a fascinating story. To conservatives, Acorn is virtually a criminal organization that was guilty of extensive voter registration fraud in 2008. To its supporters, Acorn is a community service organization that has helped millions of disadvantaged Americans by organizing to confront powerful institutions like banks and developers.
If only our universe contained "facts" that could be ascertained by "reporters". Then newspapers could spread knowledge rather than just repeat opinions from both sides.
John King's new show on CNN starts tonight. It will include Erick Erickson, the editor of the conservative blog RedState. This was supposed to be a "straight news show" about which King has commented:
I think what is troubling in part of our business is you have people on news shows who start the conversation with a bias.
Erickson, who has twittered that Supreme Court Justice David Souter is a "goat-fucking child molestor" and characterized Michelle Obama as a "marxist harpy" should fit right in with that no-bias agenda.
Conservatives think it's unpatriotic to agree with a foreign country in a dispute with the U.S. government -- unless there's a Democratic administration and the country is Israel.

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