Nation editor-at-large and host of MSNBC's Up with Chris Hayes.
In this week's column on the Obama foreclosure plan I write:
This is all significant progress over the callous inaction of the Bush administration. But though the Obama foreclosure plan threads the needles of the various interests, there is still a lot of painful stitching left. The main problem at the heart of the real estate and financial crises is that hundreds of billions, perhaps trillions, of dollars that were once part of the economy now aren't.
Dean Baker writes in to gently chastise me for my hedging:
there is no "perhaps trillions" about the money lostin housing. House prices are down around 30percent from where they were two and a half years ago. That translatesinto a loss of more than $6 trillion in housingwealth. There is no "perhaps" in that sentence, it's straight arithmetic.
Good point. My hedging was meant to indicate that we don't know how much or how long it will take for the housing market to rebound. But as a descriptive statement about the present: it's pretty straightforward. At least $6 trillion in housing wealth has vanished.
Since I've been giving Gary Gensler such a hard time for refusing to admit a mistake, I thought it would be appropriate to pointed out just how colossally I screwed up the math in my column on the Pentagon budget. (Lucky for me it was behind the sub wall!)
The correction, which runs in this week's issue, is also behind a subwall, so I'll post below in all its mortifying glory:
Correction: Those Pesky Decimals
There were three computation errors in Christopher Hayes's March 2 "Cut the Military Budget." The Pentagon budget request represents a 13 (not 12) percent increase over last year's budget. The reported Obama Defense Department appropriation would represent a 2.2 percent increase over last year's budget (not 8 percent). And regarding the F-22 Raptor fighter jet, $3.4 billion divided by 95,000 works out to $35,800 per job (not $35.8 million). So it is not true that "more jobs would be created by hiring people to shred the money." We deeply regret the errors and have FedExed a new abacus to our Washington bureau.
Just got off a briefing with OMB Director Pete Orszag. I asked him what part of the budget he was surprised hadn't gotten more attention. His answer: universal savings. One of the central planks of the whole nudge crowd of behavioral economists is automatic enrollment in 401k's. Turns out there's a huge difference between participation rates in pension plans when people are automatically enrolled and when they have to proactively enroll. But as Orszag pointed out, most low wage workers don't work at firms that even 401k's, so automatic enrollment doesn't help them. As part of the new budget proposal, almost every employer would have to automatically enroll every employee in an IRA. Only very small businesses would be exempt. This seems like a smart idea at first blush. And it's perfect example of the Obama folks' policy approach.
Some more thoughts on the budget TK.
UPDATE: Ben Smith has more.
In my column, Never Say You're Sorry, I wrote about Gary Gensler, the Obama administration's nominee to head the Commodity Futures Trading Commission. Yesterday the Senate Agricultural Committee held hearings on the nominee, and Laura Dean was there. She sends this dispatch:
"I will stand up and say I made a mistake," declared Rep. Kent Conrad, with a hard look toward Gary Gensler. "All of us need to ‘fess up." Conrad was referring to the Commodity Futures Modernization Act of 2000 (of which Gensler was a vocal advocate) that mandated that credit default swaps remain unregulated and led in part to the current economic crisis.
Rep. Tom Harkin had tried a different tack earlier in the afternoon when he quoted Gensler's own testimony from May 18th 1999, "I positively unambiguously agree" with Larry Summers in opposing this regulation.
But no amount of brow-beating from the senators could get Mr. Gensler to admit that he might have made an error in judgment. Gensler's refrain remained that this crisis was a "dot on the horizon;" something no one could possibly have foreseen. Somewhat puzzlingly though, Gensler insisted, "we should have fought harder for regulation" and "for some of the things we suggested at the time." I don't think I was the only one in the room wondering which "we" Mr. Gensler was referring to. Which Gary Gensler was this that had been a soft-spoken advocate of regulation all along?
Better foresight will be particularly important for the next CFTC commissioner with the forthcoming creation of a cap and trade system that, as Rep. Stabenow pointed out, "will create the largest derivative market in the world." The next commissioner will be charged with regulating an entirely new market. Yet while Gensler was quite adamant that a cap and trade system should fall under the jurisdiction of the CFTC, he was unable to address any of the specifics such a plan might entail.
In an argument that he and his supporters ground in personal rather than professional history -- he "brings values," said Sen. Mikulski. "He's committed to our community," said Sen. Cardin -- one wonders why a simple "I'm sorry" is so difficult. Could it be that he doesn't think he made a mistake, that this situation really was unavoidable? If so, this raises serious concerns about the vision of a man who might have to make some pretty far-sighted decisions in the coming years.
There's been some pretty awesome grassroots mobilization around MSNBC's 10pm time slot, with Facebook groups devoted both to Sam Seder and Cenk Uygur of the Young Turks. Today Chris Bowers unveils the Case for David Sirota.
TV is an absurdly powerful medium. I've been seeing this first-hand for the last few months and still can't get over its reach. Having progressives on TV is really good for the nation's politics, and my friend David would totally tear it up.
Greg Kaufmann, who's been following developments closely writes:
Don't count your 60 Senate votes before they hatch… Look, it definitely looks good. However, there are a couple things we still gotta watch out for: 1) poison pill amendments -- especially gun amendments which we don't necessarily have the votes to shoot down (no pun intended); 2) needing cloture to end the debate. Since we had 62 votes yesterday, odds are we could get 60 again. But here are three votes to watch: Republican Lisa Murkowski supported cloture yesterday but opposes the bill; Republican Thad Cochran voted against cloture last session and for it yesterday; and, finally -- a disappointment -- Democratic Senator Kay Hagan. She voted for cloture to bring the bill to the floor for debate, but her staff confirmed that she hasn't made up her mind on cloture to end debate in the event that it's necessary; nor has she decided whether to support the bill. Now is a great time for her to hear from her constituents -- tell her you appreciated her vote yesterday and you look forward to her supporting the bill's final passage.
Maybe. It looks like I might finally have a congressperson who can, you know, actually vote. The DC Voting Rights Act just passed cloture in the senate, 62-34. It would temporarily increase the size of the House of Representatives by two members, one for DC and one for reliably Republican Utah. (After the next census, the number reverts to 435, but DC is guaranteed one of those seats)
It just has to clear a senate vote this afternoon. Nothing's definite yet, but things look good. should be he law of the land fairly soon. Since the president is one record supporting it, would be signed into law shortly thereafter. This has been an incredibly long time coming and would be a very sweet victory for the residents of DC.
From Greg Kaufmann:
As a native Washingtonian, and one of the city's 600,000 current residents, for me this week is all about DC Voting Rights. We know that passing the bill that would finally give us a voting Representative in the House comes down to this: can we get 60 votes in the Senate to overcome a GOP filibuster? On Tuesday we'll find out. Sen. Harry Reid will attempt to bring the District of Columbia House Voting Rights Act of 2009 to a vote. Tell your Senators to support this bill which fell just three votes shy in the last session. One Democrat on the fence is freshman North Carolina Senator Kay Hagan. We need her constituents to tell her to get on the right side of history -- end taxation without representation for DC citizens.
Another huge happening in the Senate on Tuesday afternoon -- the confirmation vote on Rep. Hilda Solis as Secretary of Labor. She's also going to need 60 votes to overcome the delaying, filibustering, fearful GOP which is terrified that she will support the Employee Free Choice Act.
The House will take up an omnibus appropriations package for FY09 this week. Bush and Congress couldn't agree so they passed a continuing resolution to keep the government going -- it expires in a couple of weeks.
The House also might vote on Rep. John Conyers bill to allow bankruptcy judges to modify home mortgages, including reducing the principal. Brace yourselves for the rhetoric on how this will drive interest rates sky high and further freeze the credit market. (Although the Conyers bill does have the support of Citigroup http://www.thenation.com/blogs/jstreet/395180/things_you_learn_in_washin....)
It's long-term economic policy week for The White House: hosting a bipartisan "fiscal responsibility summit" on Monday; President Obama addresses Congress on these issues on Tuesday; and on Thursday he delivers a summary of his FY2010 budget which begins in October. (The full budget is revealed later this month.)
Congress will be pursuing some answers of its own about the nation's long-term fiscal health. Fed Chairman Ben Bernanke will testify on Monetary Policy and the State of the Economy before the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday. But I'd say the can't-miss hearing if you want to get a more uncensored view about what's going on -- same topic -- is Thursday's House Financial Services Committee hearing with James Galbraith and Joseph Stiglitz.
Rep. Barney Frank has some good ideas of his own about the budget, and on Tuesday he will host a Defense Spending Forum and Press Conference. Also expected to be there -- Congressional Progressive Caucus co-Chairs, Reps. Lynn Woolsey and Raúl Grijalva; and Dr. Lawrence Korb, Senior Fellow at Center for American Progress and Senior Advisor to the Center for Defense Information.
One thing you probably won't hear anything about is Rep. Grijalva's resolution honoring Geronimo, recognizing the 100th Anniversary of his death, and calling for "a time of reflection and the commencement of a ‘Healing' for all Apache people." (Along those lines … here's a Senate hearing you won't hear anything about on Indian Youth Suicide. Senate Indian Affairs Committee Chairman Byron Dorgan helped secure $2.5 billion in the recovery package to benefit reservations, but this hearing will look at one of the effects at least partially attributable to decades of 50 percent unemployment and double-digit poverty rates.)
Other hearings worth checking out: the Ticketmaster/Live Nation merger; the Latest Global Warming Science -- with the Chairman of the UN Intergovernmental Panel on Climate Change; paying for healthcare reform; Afghan/Pakistan Strategic Outlook; the future of missile defense testing with Philip Coyle; Improving Service and Volunteerism with Usher (yes, Usher) and Van Jones; and Rep. John Murtha chairs a hearing on Defense Outsourcing
So the stimulus is law. Whatever its shortcomings, there is a lot of good stuff in the bill. As just one example: my parents were visiting this weekend and the whole time my dad, who works in public health in poor neighborhoods, was receiving promising updates on his blackberry about just how much potential funding there would be for some of their programs.
On the politics side of the ledger, Ben Smith notes Obama's emphasis on the tax cuts in the bill. I'm not necessarily a fan, though politically it's true that every single Republican member of congress can now be accused of "Voting against the biggest tax cut in history" come next election." Clearly, this hasn't escaped the White House's notice.
But since I did some reporting on this for last week's column (behind the sub-wall), I figured I'd point out something that hasn't attracted the requisite amount of attention:
The first concrete test of the strength of the military lobby and its allies in Congress is the battle over the fate of the F-22 Raptor fighter jet. Military experts agree that the F-22 is outdated and unnecessary. As Gates has noted, not a single F-22 mission had been flown in either of the current wars.
Despite the encouraging rhetoric from the administration, Lockheed Martin won the first round in December, when Gates included funding for four additional F-22s in a draft of the upcoming war supplemental.
This is really outrageous. The supplemental hasn't been sent to the hill yet, but the draft version contains $600 million for four planes that have, by everyone's admission nothing to do with the ongoing wars. I'm just waiting for all those Republicans who railed against projects in the stimulus that didn't belong there to get worked up about these four F-22's.