Semi-Daily Journal Archive

The Blogspot archive of the weblog of J. Bradford DeLong, Professor of Economics and Chair of the PEIS major at U.C. Berkeley, a Research Associate of the National Bureau of Economic Research, and former Deputy Assistant Secretary of the U.S. Treasury.

Saturday, January 21, 2006

Things Get Even Funnier (Why Oh Why Can't We Have a Better Press Corps? Department)

Washington Post ombudsman Deborah Howell says "Uncle."

She changes her line on why no Democrats are in the first tier being investigated in the Abramoff scandal from "stay tuned" to "it's not a bipartisan scandal; it's a Republican scandal."


Deborah Howell, January 15, 2006:

Getting the Story on Jack Abramoff : Schmidt started checking Federal Election Commission records.... Schmidt quickly found that Abramoff was getting 10 to 20 times as much from Indian tribes as they had paid other lobbyists. And he had made substantial campaign contributions to both major parties. "It was enough to get me interested," Schmidt said.... Republicans... say The Post purposely hasn't nailed any Democrats [in the Abramoff scandal]. Several stories... have mentioned that a number of Democrats, including Senate Majority Leader Harry Reid (Nev.) and Sen. Byron Dorgan (N.D.), have gotten Abramoff campaign money. So far, Schmidt and Grimaldi say their reporting on the investigations hasn't put Democrats in the first tier of people being investigated. But stay tuned...

Washington Post ombudsman Deborah Howell, January 22, 2006:

The Firestorm Over My Column : I wrote that he gave campaign money to both parties and their members of Congress. He didn't.... My mistake set off a firestorm. I heard that I was lying, that Democrats never got a penny of Abramoff-tainted money, that I was trying to say it was a bipartisan scandal, as some Republicans claim. I didn't say that. It's not a bipartisan scandal; it's a Republican scandal, and that's why the Republicans are scurrying around trying to enact lobbying reforms...

I would like to know why Deborah Howell thinks various Indian tribes' contributions to Sen. Harry Reid (D-Nev) and Sen. Byron Dorgan (D-ND) are "Abramoff-tainted" or "Abramoff campaign money." And I would like to know how to interpret "stay tuned" other than a a claim that the Abramoff scandal is a bipartisan scandal. But I'm happy that she's changed her line on why Democrats aren't in the first tier of people being investigated from "stay tuned" to "it's not a bipartisan scandal; it's a Republican scandal."

Bo's BBQ

Bo's BBQ. I'm sure there's better BBQ somewhere in San Francisco proper, but I don't know where.

They say that the Grgich Hills merlot goes particularly well with the short-end ribs, made from Niman Ranch pork. And the pecan pie is made with organic pecans and real Karo.

You know, it's a tribute to our endocrine systems that any of us East African Plains Apes can eat pecan pie without profound metabolic distress.

Jonathan Cohn on Medicare Part D: The Prescription Drug Benefit

The mess was, he says, predictable--and predicted:

The Plank : THE PREDICTABLE--AND PREDICTED--MEDICARE MESS: So the General Accounting Office report warned that the transition to the new Medicare drug plan might not go too well. Still, that report was issued in December 2005. And by that time, most likely, it was too late to put in place systems and/or programs that could have eased the transition to Medicare Part D. Right?

Well, sure. But it's not like that was the first time warnings had been sounded. For some time, experts have warned that the "dual eligibles"--people who qualify for both Medicare and Medicaid---would have the most trouble with the switch to a new system.... [T]hey are generally very poor and very sick... were automatically going to lose their prescription drug coverage, which Medicaid had provided previously.... [T]he most vulnerable people were going to have to undergo the most dramatic transformation. You didn't have to have fortune-telling powers to see that, without a lot of very intensive planning and hand-holding, this wasn't going to work out too well.... Here's what Jeffrey Crowley... told the Senate Select Committee on Aging in June:

However, given that the most vulnerable segment of the Medicare population is being moved into the Part D prescription drug program first, with not a single day of overlapping drug coverage by Medicaid and Medicare, it strains plausibility to believe that this transition can be perfectly seamless. There is an urgent need for Congress, prior to January 1, 2006, to establish a short-term, onetime transition period so that individuals can continue to rely on Medicaid if they are unable to access appropriate drug coverage through Medicare....

Dr. Carl Clark, CEO of the Mental Health Center of Denver, made the same essential point in March of 2005:

[W]e're concerned about the required transition of dual eligibles to the new part D, drug benefit and here's why.... [A]lmost 40 percent of the 6.5 million dual eligibles have cognitive impairments and mental illnesses. Dual eligibles are twice as likely as others to have Alzheimer's disease... lack the capacity to manage the automatic enrollment process....

And then there was this warning, issued all the way back in January of 2005, via an issue paper by the Henry J. Kaiser Family Foundation:

The transition of prescription drug coverage for dual eligibles from Medicaid to Medicare represents a major shift in care for a particularly vulnerable population... poorer health status and heavier reliance on prescription drugs... consequences of gaps in coverage and missed medications can be severe for this group... maintaining Medicaid as a backup source of coverage on a temporary basis or devising special outreach and education efforts...

The administration didn't completely ignore such advice. There was some outreach, some of it apparently well conceived (like enlisting local groups with multilingual speakers to reach immigrant communities). Still, it obviously wasn't enough.... Can't imagine government having such foresight or being so pro-active? Believe it or not, once upon a time it was ...

UPDATE: Senator Jay Rockefeller, Democrat of West Virginia, has just introduced a bill to help senior citizens struggling with the new Medicare drug benefit. Talk about grandstanding! Where was he last year, when there was time to fix the problem before it happened? Why didn't he propose something then? Oh, wait, he did ...

Why There's No Money In Monetary Policy

Macroblog directs us to Mark Hulbert on why money stock measures are no longer closely watched. For the amount of variation in money stock growth seen in the U.S. today, shifts in money growth have effects on prices and incomes that are swamped by those of other factors:

macroblog: Why There's No Money In Monetary Policy : Here's a pretty good explanation, from Mark Hulbert at MarketWatch:

Money may indeed make the world go 'round, as many on Wall Street are fond of saying. But even among advisers who think that it does, there is little agreement on whether the supply of money is growing or contracting, much less what such trends might mean for the stock market. This was brought home to me over the past week as I read different investment newsletter editors' reactions to the money supply data that the Federal Reserve periodically releases. One veteran newsletter editor, for example, wrote this past week that "the Fed is creating liquidity at a pace that I don't think I've ever seen before." Yet another prominent newsletter editor, reviewing the same data, concluded that the Fed's growth of the money supply has been "stingy" over the past year.

How can there be such a wide disagreement? Part of the reason is that there are so many different definitions of money. And for each of the major definitions, furthermore, the Fed reports the data on both an unadjusted as well as a seasonally adjusted basis. Add to that the volatility of the data, and you have a situation in which you can find data to support almost any preordained conclusion....

I have been unable to find any statistically meaningful correlation between the growth rate of the money supply and the stock market's subsequent performance.... [Madeline Schnapp, Director of Macroeconomic Research at TrimTabs Investment Research] told me that she and her fellow researchers at TrimTabs have explored the econometric relationships between the money supply data and the stock market "every which way from Sunday" -- and that they have found no straightforward correlation...

Why Oh Why Are Our Rulers so Corrupt? (Medicare Part D Edition)

Paul Krugman explains why Medicare Part D isn't working: because it was written for lobbyists:

The K Street Prescription - New York Times : The new prescription drug benefit is off to a catastrophic start.... At first, federal officials were oblivious.... [G]overnment works when it's run by people who take public policy seriously. As Jonathan Cohn points out in The New Republic, when Medicare began 40 years ago, things went remarkably smoothly from the start. But this time the people putting together a new federal program had one foot out the revolving door: this was a drug bill written by and for lobbyists. Consider the career trajectories of the two men who played the most important role in putting together the Medicare legislation.

[Bush's choice] Thomas Scully was a hospital industry lobbyist before President Bush appointed him to run Medicare. In that job, Mr. Scully famously threatened to fire his chief actuary if he told Congress the truth about cost projections for the Medicare drug program.... He had received a special ethics waiver from his superiors allowing him to negotiate for future jobs with lobbying and investment firms - firms that had a strong financial stake in the form of the bill - while still in public office.... Billy Tauzin, the bill's point man on Capitol Hill, quickly left Congress once the bill was passed to become president of Pharmaceutical Research and Manufacturers of America, the powerful drug industry lobby. Surely both men's decisions while in office were influenced by the desire to please their potential future employers. And that undue influence explains why the drug legislation is such a mess.

The most important problem with the drug bill is that it doesn't offer direct coverage from Medicare. Instead, people must sign up with private plans offered by insurance companies. This has three bad effects. First, the elderly face wildly confusing choices. Second, costs are high, because the bill creates an extra, unnecessary layer of bureaucracy. Finally, the fragmentation into private plans prevents Medicare from using bulk purchasing to reduce drug prices. It's all bad, from the public's point of view. But it's good for insurance companies, which get extra business even though they serve no useful function, and it's even better for drug companies, which are able to charge premium prices. So whose interests do you think Mr. Scully and Mr. Tauzin represented?

And Paul Krugman wonders why America's press corps has spent so little space on the K Street Project:

Which brings us to the larger question of cronyism and corruption. Thanks to Jack Abramoff, the K Street project orchestrated by Tom DeLay is finally getting some serious attention in the news media. Mr. DeLay and his allies have sought, with great success, to ensure that lobbying firms hire only Republicans. But most reports on the project still miss the main point by emphasizing the effect on campaign contributions.

The more important effect of the K Street project is that it allows the party machine to offer lavish personal rewards to the faithful. For a congressman, toeing the line on legislation brought free meals in Jack Abramoff's restaurant, invitations to his sky box, golf trips to Scotland, cushy jobs for family members and a lavish salary after leaving office. The same kinds of rewards are there for loyal members of the administration, especially given the Bush administration's practice of appointing lobbyists to key positions.

I don't want to overstate Mr. Abramoff's role: although he was an important player in this system, he wasn't the only one. In particular, he doesn't seem to have been involved in the Medicare drug deal. It's interesting, though, that Scott McClellan has announced that the White House, contrary to earlier promises, won't provide any specific information about contacts between Mr. Abramoff and staff members.

So I have a question for my colleagues in the news media: Why isn't the decision by the White House to stonewall on the largest corruption scandal since Warren Harding considered major news?

This Is Funny

I put these two questions:

Should the Washington Post have a "World Columnist" who does not know that it is Canberra, not Sydney, that is the capital of Australia?

Should a man who thinks that the capital of Australia is Sydney be pontificating about foreign affairs in any forum?

Still the Colossus: Robert Kagan: In East Asia, meanwhile, U.S. relations with Japan grow ever closer as the Japanese become increasingly concerned about China and a nuclear-armed North Korea. China's (and Malaysia's) attempt to exclude Australia from a prominent regional role at the recent East Asian summit has reinforced Sydney's desire for closer ties.

"Directed" Contributions

T. Slothrop writes:

All Intensive Purposes: Deborah Howell is still at it. : It's not clear to me that Howell's response is much better. She continues:

Lobbyists, seeking influence in Congress, often advise clients on campaign contributions. While Abramoff, a Republican, gave personal contributions only to Republicans, he directed his Indian tribal clients to make millions of dollars in campaign contributions to members of Congress from both parties.

Records from the Federal Elections Commission and the Center for Public Integrity show that Abramoff%u2019s Indian clients contributed between 1999 and 2004 to 195 Republicans and 88 Democrats. The Post has copies of lists sent to tribes by Abramoff with specific directions on what members of Congress were to receive specific amounts. One of those lists can be viewed in this online graphic, while a graphical summary of giving by Abramoff, his tribal clients and associated lobbyists can be viewed here. The latest developments in the Abramoff investigation are available in this Special Report.

But take a look at her evidence. That "online graphic" is a short excerpt (apparently only the Bu - Da portion of an alphabetically organized list) of entities to whom Abramoff told the Louisiana Coushatta tribe to give money in 2002. I count 3 Democrats on the list, and 9 GOP/conservatives. Abramoff apparently recommended contributions of $2000 each to 2 of the Democrats (if you can read the figure for Sen. Daschle, you have a better computer than mine). For the GOP/conservatives, I see $155,000 in suggested contributions. That Howell could look at the gigantic disparity in the recommended contributions on this graphic and think that it supports some sort of claim of equivalence is astounding. On one side is a mountain, and on the other a molehill.... Nor does this graphic establish Howell's claim that Abramoff "directed" contributions to both parties, unless you assume that the Coushatta tribe was simply an unwitting pawn, incapable of acting on its own in ways like, oh, donating money to politicians. (Would journalists be so quick to ignore the client's agency here if it were not an Indian tribe? I wonder.)

No, to show Abramoff's hand here, you need to establish two more things: first, that the tribe acted on his advice -- something not shown here but that I assume the Post's reporters have tracked down -- and, second, that in doing so it wasn't doing what it would have done anyway. Indian tribes donated money to Washington politicians before Jack Abramoff was on the scene, and they will keep doing so after he is a guest of the federal correctional system. To claim that Abramoff "directed" these contributions, you need to show that the Coushatta tribe would not have otherwise donated, e.g., a few thousand dollars to a few Democratic politicans. It's not at all clear to me that the Washington Post has thought about this problem, or wants to think of it, but it's not that hard. The information is out there for those who care to look for it.... All of it just goes to show that it takes an awful lot of work to sustain the illusion that Abramoff was corrupt in a bipartisan sort of way, but that Deborah Howell and The Washington Post are up to the challenge.

Friday, January 20, 2006

Negative Journalistic Credibility (Yes, Yet Another Washington Post Edition)

A Why Oh Why Can't We Have a Better Press Corps Update: A correspondent points out that when Deborah Howell writes:

washingtonpost.blog - The Editors Talk About Site Policies, Design and Goals : 11:30 AM ET, 01/19/2006 Deborah Howell Responds: I've heard from lots of angry readers about the remark in my column Sunday that lobbyist Jack Abramoff gave money to both parties. A better way to have said it would be that Abramoff "directed" contributions to both parties.... The Post has copies of lists sent to tribes by Abramoff with specific directions on what members of Congress were to receive specific amounts. One of those lists can be viewed in this online graphic...

In the readable parts of the document to which she links, Abramoff appears to "direct" $220,000 of contributions to Republicans, and $4,000 of contributions to Democrats.

At this point, I'd regard even a half-truth from the Washington Post as *big* progress.

And Deborah Howell is still the only person I have called at the Washington Post or at washingtonpost.com who has not returned my phone calls: 925-708-0467.

On One Level, This Is Pretty Funny...

On one level, this is pretty funny: From "washingtonpost.blog - - The Editors Talk About Site Policies, Design and Goals":

washingtonpost.blog - The Editors Talk About Site Policies, Design and Goals : Posted at 06:32 PM ET, 01/20/2006 Some Comments Returned Some previously posted comments have been returned to post.blog. Specifically, all comments that meet washingtonpost.com's standards for community interaction have been returned to the post "Deborah Howell Responds." For a fuller discussion about why the comments were orginally removed, read the Q&A transcript of the Friday live discussion with Executive Editor Jim Brady. -- Liz Kelly Editor, Interactivity & Opinions....

Posted at 04:22 PM ET, 01/19/2006 Comments Turned Off As of 4:15 p.m. ET today, we have shut off comments on this blog indefinitely. At its inception, the purpose of this blog was to open a dialogue about this site, the events of the day, the journalism of The Washington Post Company and other related issues. Among the things that we knew would be part of that discussion would be the news and opinion coming from the pages of The Washington Post and washingtonpost.com. We knew a lot of that discussion would be critical in nature. And we were fine with that. Great journalism companies need feedback from readers to stay sharp. But there are things that we said we would not allow, including personal attacks, the use of profanity and hate speech. Because a significant number of folks who have posted in this blog have refused to follow any of those relatively simple rules, we've decided not to allow comments for the time being. It's a shame that it's come to this. Transparency and reasoned debate are crucial parts of the Web culture... Jim Brady Executive Editor, washingtonpost.com

UPDATE, 7 p.m.: As you might expect, we're getting a ton of e-mail on this, and while I can't answer those e-mails individually, I'll address the two main points being made, that 1) we're afraid of being criticized and, 2) that were no personal attacks, profanity or hate speech in any of the comments.... What we're not willing to do is allow the comments area to turn into a place where it's OK to unleash vicious, name-calling attacks on anyone, whether they are Post reporters, public figures or other commenters. And that's exactly what was happening. That leads into the second complaint. The reason that people were not routinely seeing the problematic posts I mentioned were that we were trying to remove them as fast as we could....

Posted at 11:30 AM ET, 01/19/2006 Deborah Howell Responds: I've heard from lots of angry readers about the remark in my column Sunday that lobbyist Jack Abramoff gave money to both parties. A better way to have said it would be that Abramoff "directed" contributions to both parties. Lobbyists, seeking influence in Congress, often advise clients on campaign contributions. While Abramoff, a Republican, gave personal contributions only to Republicans, he directed his Indian tribal clients to make millions of dollars in campaign contributions to members of Congress from both parties. Records from the Federal Elections Commission and the Center for Public Integrity show that Abramoff’s Indian clients contributed between 1999 and 2004 to 195 Republicans and 88 Democrats....

On another level, it's quite sad.

If Washington Post ombudsman Deborah Howell were a real reporter, she would know how many of the Indian tribes' relationships with members of congress antedated the arrival on the scene of Jack Abramoff, and would not be talking about "195 Republicans and 88 Democrats" to whom Abramoff had "directed" Indian tribes' contributions. She would be talking about three different sets of money flows: Abramoff's $130,000 of direct campaign contributions to Republicans, the money given as campaign contributions by Abramoff's clients, and the $80 million or so that was paid to Abramoff and company for access to Republicans leaders--$25,000 for setting up a meeting with George W. Bush, et cetera.

With respect to the third money flow, she would write that some portion of it (the guesses I am hearing is about a quarter) flowed through to politicians (and overwhelmingly Republican politicians) as "lifestyle enhancements"--luxury vacation trips paid for by Abramoff's credit card, and so forth.

With respect to the second money flow--money donated by Indian tribes that had hired Abramoff--she would write that some of them were expenditures directed by Abramoff, and some of which were expenditures that the clients would have made in any case. For example, Bloomberg reports that the Saginaw Chippewa gave $279,000 to Democrats over 1997-2000, and $277,000 over 2001-2004, after they had gotten into bed with Abramoff. It is a safe bet that little or none of those contributions to Democrats were "directed" by Abramoff. The Saginaw Chippewa gave $158,000 to Republicans in 1997-2000, and $500,000 to Republicans in 2001-2004, after they had gotten into bed with Abramoff. It is a safe bet that much of this extra $340,000 of contributions to Republicans were "directed" by Abramoff.

With respect to the first money flow, she would write that Abramoff was a Republican giving campaign contributions to Republicans and only Republicans.

But these aren't stories you read in the Post, are they? To get these stories you have to read something like Bloomberg.

UPDATE: A correspondent points out that when Howell writes:

The Post has copies of lists sent to tribes by Abramoff with specific directions on what members of Congress were to receive specific amounts. One of those lists can be viewed in this online graphic...

The document to which she links appears to "direct" $220,000 of contributions to Republicans, and $4,000 of contributions to Democrats.

On One Level, This Is Pretty Funny...

On one level, this is pretty funny: From "washingtonpost.blog - - The Editors Talk About Site Policies, Design and Goals":

washingtonpost.blog - The Editors Talk About Site Policies, Design and Goals : Posted at 06:32 PM ET, 01/20/2006 Some Comments Returned Some previously posted comments have been returned to post.blog. Specifically, all comments that meet washingtonpost.com's standards for community interaction have been returned to the post "Deborah Howell Responds." For a fuller discussion about why the comments were orginally removed, read the Q&A transcript of the Friday live discussion with Executive Editor Jim Brady. -- Liz Kelly Editor, Interactivity & Opinions....

Posted at 04:22 PM ET, 01/19/2006 Comments Turned Off As of 4:15 p.m. ET today, we have shut off comments on this blog indefinitely. At its inception, the purpose of this blog was to open a dialogue about this site, the events of the day, the journalism of The Washington Post Company and other related issues. Among the things that we knew would be part of that discussion would be the news and opinion coming from the pages of The Washington Post and washingtonpost.com. We knew a lot of that discussion would be critical in nature. And we were fine with that. Great journalism companies need feedback from readers to stay sharp. But there are things that we said we would not allow, including personal attacks, the use of profanity and hate speech. Because a significant number of folks who have posted in this blog have refused to follow any of those relatively simple rules, we've decided not to allow comments for the time being. It's a shame that it's come to this. Transparency and reasoned debate are crucial parts of the Web culture... Jim Brady Executive Editor, washingtonpost.com

UPDATE, 7 p.m.: As you might expect, we're getting a ton of e-mail on this, and while I can't answer those e-mails individually, I'll address the two main points being made, that 1) we're afraid of being criticized and, 2) that were no personal attacks, profanity or hate speech in any of the comments.... What we're not willing to do is allow the comments area to turn into a place where it's OK to unleash vicious, name-calling attacks on anyone, whether they are Post reporters, public figures or other commenters. And that's exactly what was happening. That leads into the second complaint. The reason that people were not routinely seeing the problematic posts I mentioned were that we were trying to remove them as fast as we could....

Posted at 11:30 AM ET, 01/19/2006 Deborah Howell Responds I've heard from lots of angry readers about the remark in my column Sunday that lobbyist Jack Abramoff gave money to both parties. A better way to have said it would be that Abramoff "directed" contributions to both parties. Lobbyists, seeking influence in Congress, often advise clients on campaign contributions. While Abramoff, a Republican, gave personal contributions only to Republicans, he directed his Indian tribal clients to make millions of dollars in campaign contributions to members of Congress from both parties. Records from the Federal Elections Commission and the Center for Public Integrity show that Abramoff’s Indian clients contributed between 1999 and 2004 to 195 Republicans and 88 Democrats....

On another level, it's quite sad.

If Washington Post ombudsman Deborah Howell were a real reporter, she would know how many of the Indian tribes' relationships with members of congress antedated the arrival on the scene of Jack Abramoff, and would not be talking about "195 Republicans and 88 Democrats" to whom Abramoff had "directed" Indian tribes' contributions. She would be talking about three different sets of money flows: Abramoff's $130,000 of direct campaign contributions to Republicans, the money given as campaign contributions by Abramoff's clients, and the $80 million or so that was paid to Abramoff and company for access to Republicans leaders--$25,000 for setting up a meeting with George W. Bush, et cetera.

With respect to the third money flow, she would write that some portion of it (the guesses I am hearing is about a quarter) flowed through to politicians (and overwhelmingly Republican politicians) as "lifestyle enhancements"--luxury vacation trips paid for by Abramoff's credit card, and so forth.

With respect to the second money flow--money donated by Indian tribes that had hired Abramoff--she would write that some of them were expenditures directed by Abramoff, and some of which were expenditures that the clients would have made in any case. For example, Bloomberg reports that the Saginaw Chippewa gave $279,000 to Democrats over 1997-2000, and $277,000 over 2001-2004, after they had gotten into bed with Abramoff. It is a safe bet that little or none of those contributions to Democrats were "directed" by Abramoff. The Saginaw Chippewa gave $158,000 to Republicans in 1997-2000, and $500,000 to Republicans in 2001-2004, after they had gotten into bed with Abramoff. It is a safe bet that much of this extra $340,000 of contributions to Republicans were "directed" by Abramoff.

With respect to the first money flow, she would write that Abramoff was a Republican giving campaign contributions to Republicans and only Republicans.

But these aren't stories you read in the Post, are they? To get these stories you have to read something like Bloomberg.

With Great Power Comes Great Responsibility

Henry Farrell tells Danny Glover that Max Sawicky and I had an influence on last year's Social Security debate. Let me be more skeptical. The Bush administration did the heavy lifting, through failing to come up with a Social Security plan that anybody liked. You can get Congressmen to vote for tax cuts for the rich because the rich like tax cuts--and give campaign contributions. But who liked Bush's never-spelled-out Social Security plan? There is something to the idea that weblogs are contributing to the creation of a public sphere of debate and discussion at a more elevated level than the somewhat stylized, hieratic, and chronically-underbriefed-on-matters-of-policy-substance traditional media and opinionate. But there is not very much.

Still, since to be perceived to have power is to have power, I'll take what I can get:

Beltway Blogroll: The Rise Of Blogs : With such active readers, it made sense for bloggers to turn their attention to Washington -- and for more people inside the Beltway to awaken both to the influence of bloggers and the potential of blogging technology. That is exactly what happened after the 2004 election.Issues such as Social Security reform drove the interest in blogging and demonstrated the technology's power. George Washington University's Farrell said that blogs were very effective at "creating outrage and creating a groundswell" against Bush's plans for Social Security. Experts -- such as economics professor Brad DeLong of the University of California (Berkeley) and Max Sawicky, an economist at the Economic Policy Institute -- used their blogs to create a "testing bed for interesting arguments," Farrell said.

"We began to see those arguments being taken up by op-ed people ... and change the conventional wisdom in the media" about the Bush plan, Farrell said. Although the blogosphere alone did not push Social Security off the short-term agenda, it was a factor, he contended...

Why Oh Why Can't We Have a Better Press Corps? (Yet Another Washington Post Edition)

We all remember when Sebastian Mallaby wrote an editorial for the Washington Post saying that anyone who valued the World Bank as an institution should shut up and stop complaining about Bush's nomination of Wolfowitz to be its president, don't we?

Well now Steve Clemons says that the word is that Paul Wolfowitz is as lousy as president of the World Bank as he was a deputy secretary of Defense:

The Washington Note : Paul Wolfowitz, architect of America's failing foray into Iraq as Rumsfeld's former Deputy at the Pentagon, now heads the World Bank and finally seems like his true self is coming out of the closet. In recent months, picking up steam in recent weeks, there has been a massive exodus of top talent from the World Bank. According to reports, the senior Ethics Officer at the Bank has departed. Also on the exit roster are the Vice President for East Asia & Pacific, the Chief Legal Counsel, the Bank's top Managing Director, the Director of Institutional Integrity (which monitors internal and external corruption), the Vice President for Environmentally and Socially Sustainable Development, and the head of ISG (Information Solutions Group).

According to one senior insider who feels as if Wolfowitz is gut-punching the most talented teams at the bank and indicated that morale is plummeting...

Thursday, January 19, 2006

What Is Wrong with the Culture of the Washington Post? (Why Oh Why Can't We Have a Better Press Corps?)

I had a thoughtful email from Ruth Marcus of the print Washington Post, asking why I don't presume that Post reporters are "trying, hard, to do their jobs and, perhaps on deadline, [fall] short of the idea."

Here is what I answered. It goes, I think, to the culture that print Washington Post reporters absorb as they sit in that newsroom and try to maneuver in the Washington snakepit:


Dear Ms. Marcus:

Thanks for your thoughtful and intelligent email, with its question of why, given that "we all write and say and even blog things that we could have done better... you seem always to leap to the assumption that the people making these errors are lazy 'idiots,' to use your favorite term, rather than individuals who are trying, hard, to do their jobs and, perhaps on deadline, fell short of the ideal." It's a good question.

Let me give one of eight or so examples of my personal experiences with *Washington Post* reporters in which I found it impossible to believe that they were "trying, hard, to do their jobs." It is a March 2, 1995 *Washington Post* article by Clay Chandler, "Treasury Aides' Memos Warned of Peso Plunge," about the 1994-1995 Mexican financial crisis, which in the version in the *Post* archives reads:

Treasury Undersecretary Lawrence H. Summers... was warned of potential economic problems in Mexico in at least three separate memos during the eight months before the peso's collapse, according to sources familiar with the documents.... Two of the memos from Summers's subordinates -- one written in April and the other in September -- recommended he pay careful attention to papers written by Rudiger Dornbusch, a Massachusetts Institute of Technology economist widely respected for his expertise on developing Latin American economies.... A third memo, passed from staff to Summers through Deputy Assistant Treasury Secretary Timothy F. Geithner in late November, warned that the Mexican economy had seriously deteriorated and recommended the Treasury Department begin "contingency planning" in anticipation of a possible financial slump in the Latin nation.

These documents, whose authenticity was not disputed by Treasury Department officials, could bolster critics of the administration's handling of the Mexican crisis who charge that officials missed warnings of trouble. Treasury Department spokesman Howard Schloss said the memos buttressed the administration's argument that officials were on top of events.... Senate Banking Committee Chairman Alfonse M. D'Amato (R-N.Y.), who plans hearings on the administration's handling of the Mexican bailout [said]... "We're getting the runaround.... This is absolute and total nonsense.... I know darn well that the administration received information that should have alerted any prudent person that there were problems with the Mexican economy and then ignored it and withheld it from the Congress."...

A earlier version of the article--the one that made it into the Treasury Department's daily clips--included a short quote from one of the three memos that D'Amato leaked to Chandler: "bottom line: peso overvalued." It's those four words that make me believe that I was the author of the April memo. And the "bottom line: peso overvalued" quote was ripped from context: that wasn't my bottom line, but Rudi Dornbusch's bottom line. My assessment was that Rudi was very smart and thoughtful but wrong, and that the magnitude of capital inflows to Mexico was likely to be large enough to make yet another peso crisis highly unlikely. Would that we in the Treasury staff had been smart enough to warn Larry Summers in April (or even September) 1994 that a peso crisis was likely or even moderately probable rather than, in April, an unlikely possibility and, in September, a possibility. We weren't.

When we went to talk to D'Amato's staff about this, we were told: Save your breath. It's politics. D'Amato doesn't think that staff warned Larry and that he ignored staff. Dole wants to be in a good political position if this Mexico thing goes south in a serious way. I asked the Treasury public relations staff if I should go talk to Chandler, and they said: No. Chandler knew that the "papers" by Rudi Dornbusch weren't private documents written for the Treasury and withheld from Congress, but rather things that the Brookings Institution printed up in editions of 7000 and had prominently discussed in its conference room. Chandler knew that the documents D'Amato leaked to him had no passages that supported D'Amato's "theory" that Larry and Lloyd Bentsen had refused to heed our warnings--if they had such passages, after all, Chandler would have quoted them in his story.

So what was Chandler doing? The assessment of the Treasury public relations staff was that Chandler thought that he had not been getting enough private advance leaks from the Treasury, and was sending us a message: "Nice little Treasury Department you have there. Wouldn't it be a shame if anything happened to it? I'm the Washington Post's chief economics correspondent. I deserve more private leaks. Or I can hurt you: I'll become D'Amato's partisan mouthpiece."

I could multiply examples. Take, oh, the *Washington Post* on February 8, 2005, with Jonathan Weisman's claim that there is "a heated debate among economists... [over whether] stock market... [returns can] meet the president's expectations [of an average return of 6.5% per year]..." Out of all those Weisman talked to the "heated debate" turns out to be (a) me, Dean Baker, Paul Krugman, Doug Fore, Richard Jackson, Ed Keon, Jeremy Siegel, various unnamed economists at the Mannheim Research Institute, Kevin Hassett, and Donald Luskin on the side that the forecast is too optimistic--that stock returns are likely to be lower or economic growth faster than the forecast, or both--(b) Bush's Council of Economic Advisers in the middle, refusing to say that they forecast stock returns to average 6.5% per year if the long-run economic growth rate is 1.9% per year, but saying only that stock returns will be "healthy"; and (c) as defenders of the Bush position only Steve Goss of Social Security (a good guy trapped in an impossible position) and an anonymous "White House economist" who doesn't want to take the reputational hit of having his name revealed.

If there really were a "heated debate among economists," shouldn't Weisman have been able to find one person *outside* the administration--hell, one person *inside* the administration besides Steve Goss--willing to go on the record saying that they endorse the long-run forecast of 1.9% per year real GDP growth and 6.5% per year stock returns? While Weisman is writing his story, I'm getting phone calls from Bush's Council of Economic Advisers asking me to please not say that they made Steve Goss's forecast. They accept it, the CEA says, because it's Steve Goss's bureaucratic role as Chief Social Security Actuary to make the forecast. They do not endorse it.

Now most of my experiences with *Post* reporters have been very pleasant, and most of the time the story that emerges--at least my part of the story--seems fair. But there is a difference between the experiences I have had with a subset of *Post* reporters, like Clay Chandler and company, and the reporters I deal with from the news pages of the *Wall Street Journal,* the *Financial Times,* or the *Economist*--who are genuinely trying their best.

So what am I to conclude when I run into Susan Schmidt and James Grimaldi, who on October 18 write:

...Abramoff, whom DeLay once described as "one of my closest and dearest friends"...

and who last week write:

...DeLay, a Christian conservative, did not quite know what to make of Abramoff, who wore a beard and a yarmulke. They forged political ties, but the two men never became personally close...

?

Either the first story *requires* an in-line fact-check like "(of course, it is the business of politicians to have hundreds if not thousands of closest and dearest friends)"; or the second *requires* an in-line fact check like "(even though DeLay once described Abramoff as one of his closest and dearest friends)." Without those in-line fact-checks, at least one of the two is highly mendacious. In fact, both probably are: real reporters would include both in-line fact checks.

The accepted narrative among participants at Grover Norquist's weekly breakfast Republican strategy meetings--at least those that I talk to--is that until recently Abramoff has been trying to cling as close to DeLay as possible and has been searching for *complaisant* reporters to help him do so; while DeLay is trying to maximize the distance between him and Abramoff (by, for example, getting Grimaldi to print the false claim that DeLay had broken off all relations with Abramoff in February 2001); but that the truth is that DeLay spent a lot of time with Abramoff and enjoyed it (especially when it involved what Wall Street calls "soft dollar compensation" paid for on Abramoff's credit card), and that Abramoff at the very least found it very useful to convincingly pretend to be close personal friends with DeLay.

If that is the real story--and by now Susan Schmidt and James Grimaldi certainly knows better than I what the real story is--don't they have an obligation to print that? How can I to conclude anything other than that they are writing one thing pleasing to one source in October and another thing pleasing to a different source in December?

Yours,

Brad DeLong

More Signs of Weak Aggregate Demand

Kashyip Mansouri points out that low non-energy inflation is a sign of weak demand relative to the economy's productive potential:

Angry Bear : Where is the non-Energy Inflation? "The Producer Price Index for Finished Goods rose 0.9 percent in December, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 0.7-percent decline in November and a 0.7-percent gain in October. Prices for finished goods other than foods and energy advanced 0.1 percent in December, the same rate as in November....From December 2004 to December 2005, finished goods prices rose 5.4 percent, following a 4.2-percent increase in 2004. The index for finished energy goods climbed 23.9 percent in 2005, after moving up 13.4 percent in the preceding calendar year. Conversely, prices for finished goods other than foods and energy rose 1.7 percent in 2005, following a 2.3-percent gain in 2004."

It continues to be the case that dramatically higher energy costs are not feeding through into higher costs of other goods and services.... Unlike during earlier energy shocks, when increases in the price of oil typically led to inflation in other types of goods and services, this time the increase in the price of oil has led only to a change in the relative price between energy and non-energy products. Why haven't firms passed on their higher energy costs? Presumably it's because they haven't been able to charge higher prices, not because they haven't wanted to. This could be the case if the demand for non-energy products by firms has fallen a bit as firms have had to spend more of their budgets on energy products. In other words, firms are simply shifting the allocation of their spending away from non-energy products and toward energy products.

One interpretation of this phenomenon is that it is a symptom of weak aggregate demand. If aggregate demand were higher, then firms would be in a better position to pass on their higher energy costs. The fact that the discrepancy between energy costs and non-energy costs has persisted and even widened in recent months may therefore be a sign of a slowing economy.

Are Business Cycles Fluctuations Around Trend or Not?

If business cycles are simply fluctuations around the economy's long-run growth trend--with production being sometimes above and sometimes below its sustainable level--then it is hard to get too worried about them. What you lose in this recession you gain back in the next boom. By contrast, if business cycles consist of falls below the sustainable long-run trend followed by recoveries to that trend, then one should be very worried about them indeed:

Here Mark Thoma gives an overview of one model of the second type of cycles: Milton Friedman's "plucking" model:

Economist's View: New Support for Friedman's Plucking Model : Milton Friedman's "plucking model" has always been an interesting alternative to the natural rate view of the world. The typical view of business cycles is one where the economy varies around a trend.... In Friedman's model, output moves along a ceiling value, the full employment value, and is occasionally plucked downward through a negative demand shock. Quoting from the article below:

In 1964, Milton Friedman first suggested his “plucking model” (reprinted in 1969; revisited in 1993) as an asymmetric alternative to the self-generating, symmetric cyclical process often used to explain contractions and subsequent revivals. Friedman describes the plucking model of output as a string attached to a tilted, irregular board. When the string follows along the board it is at the ceiling of maximum feasible output, but the string is occasionally plucked down by a cyclical contraction.

Friedman found evidence for the Plucking Model of aggregate fluctuations in a 1993 paper in Economic Inquiry. One reason I've always liked this paper is that Friedman first wrote it in 1964. He then waited for almost twenty years for new data to arrive and retested his model using only the new data. In macroeconomics, we often encounter a problem in testing theoretical models. We know what the data look like and what facts need to be explained by our models. Is it sensible to build a model to fit the data and then use that data to test it to see if it fits? Of course the model will fit the data, it was built to do so. Friedman avoided that problem since he had no way of knowing if the next twenty years of data would fit the model or not. It did. I was at an SF Fed Conference when he gave the 1993 paper and it was a fun and convincing presentation.

Here's a recent paper on this topic that supports the plucking framework (thanks Paul):

Asymmetry in the Business Cycle: New Support for Friedman's Plucking Model, Tara M. Sinclair, George Washington University, December 16, 2005, SSRN: Abstract This paper presents an asymmetric correlated unobserved components model of US GDP. The asymmetry is captured using a version of Friedman's plucking model that suggests that output may be occasionally "plucked" away from a ceiling of maximum feasible output by temporary asymmetric shocks. The estimates suggest that US GDP can be usefully decomposed into a permanent component, a symmetric transitory component, and an additional occasional asymmetric transitory shock. The innovations to the permanent component and the symmetric transitory component are found to be significantly negatively correlated, but the occasional asymmetric transitory shock appears to be uncorrelated with the permanent and symmetric transitory innovations. These results are robust to including a structural break to capture the productivity slowdown of 1973 and to changes in the time frame under analysis. The results suggest that both permanent movements and occasional exogenous asymmetric transitory shocks are important for explaining post-war recessions in the US.

...Notice that the size of the downturn from the ceiling... [helps predict] the size of the upturn... that follows (taking account of the slope of the trend.)... In a natural rate model, there is no reason to expect such a correlation...

I Want Douglas Holtz-Eakin Back in Government

A surprisingly large number of people are really pissed off at the Council on Foreign Relations for plucking Douglas Holtz-Eakin out of the Congressional Budget Office.

Here David Wessel compares Doug to Jeremiah:

WSJ.com - Capital : To a Seer, It's Clear: Budget Will Buckle Under Health Costs: Like the prophets of the Old Testament, directors of the Congressional Budget Office tell unpleasant truths that Americans and their leaders don't always want to hear. After two years in the Bush White House and three as CBO director, economist Douglas Holtz-Eakin is now freshly out of government and perched at the Council on Foreign Relations. As the annual federal-budget drama opens in the U.S. -- with its political posturing, mind-numbing arguments and bickering over million-dollar fish in a trillion-dollar sea -- a conversation with the plain-spoken Mr. Holtz-Eakin seems timely.

Despite what you may hear in the weeks ahead, the important fiscal issues aren't how much the government will spend next year or how big the deficit will be the year after, he says. "Beyond five years, no matter what choices you make in the interim, you face Social Security, Medicare, retirement income, medical care and long-term care. More generically, how will we support the old-age needs of retirement income, medical care and long-term care? We're going to have a whole bunch more old people. And current programs aren't sustainable. The long-term issue is reimagining and reinventing our programs for older people so that they don't kill us. And then, putting in place a real tax system that will support the government once it makes those decisions. It really has to be done in order."

That's not news to budget geeks, but politicians act like they don't get it, perhaps because the public doesn't believe it. Americans do care about this, says Mr. Holtz-Eakin, who has spent a lot of time speaking to Rotary Clubs and the like. "But they don't have a whole lot of time to sit and study these things, so there's a fairly limited sophistication. I'd go out and say things that I think are sort of obvious and they look at me like I'm nuts."

Like what? "The thing that I found most amazing is everybody thought the war in Iraq was a much bigger expenditure than the [Medicare] drug benefit. How could you possibly believe that? The war in Iraq, $6 [billion] to $7 billion a month, maybe $70 billion, $75 billion, a year, something like that. And the drug benefit is forever."

So how did he describe it so citizens would get it? "The demography is pretty predictable," he says. "People get older one year at a time. Then you layer on historical trends in health-care spending. If you just take demography plus history as your guide, Medicaid and Medicare are as big in 2050 as the entire federal government is today. And then you say, 'Oh, my God, that just can't be.' So either we're going to have a really big government, and you have to have a tax system that can support a big government. Or, no, we need to have a smaller government, and we're going to make those programs support the right people at the right levels."

"I think this is self-evident," says Mr. Holtz-Eakin, chuckling. "But I realize now this is the price of being too close to the process. I wake up every morning saying it doesn't matter what happens in the next five years, and people say I am really weird."

Of course, CBO directors have been preaching this message since the agency was founded in 1974, and they've occasionally seen results. But the political system appears paralyzed today. "I understand people who think: The political system doesn't reward painful choices. We'll never do this, and we're toast. And you try to reconcile that with a history where in fact we have done these things," Mr. Holtz-Eakin says. "I don't have a defining vision of how it happens. I just know that it does sometimes."

Even though he no longer has to answer to political masters, Mr. Holtz-Eakin won't join those who argue the Bush tax cuts were a mistake, or at least were too big. But forget the notion that somehow the U.S. economy will grow fast enough so we don't have to wrestle with health-care and retirement-spending trends. "I don't know how to quantify how implausible I think that is," Mr. Holtz-Eakin says.

So how and when does something happen? "One theory is that it takes a crisis," he says. "A second way to do it is ingenious political leadership. That's what we're waiting for. There's a point where, for some politician, it will be better to fix it than to let it happen. I don't know when that is. But given how fast health-care costs are going up, that phenomenon will be the driving one."

Heed the prophet.

Ex-Navy Secretary James Webb Is an Honorable Gentleman

And Howard Kurtz and Shallagh Murray are not. The Washington Post's credibility as an objective reporter of news continues to drop, and is now less than zero.

From Whatever Already:

Whatever Already: The Washington Post this morning gives major play this morning to an attack of Rep. John Murtha (D-Pa.) on the website of the (until now) obscure Cybercast News Service. It accuses Murtha--who won a Silver Star and three Bronze Stars in Vietnam-- of purportedly saying that he had not deserved to win two Purple Hearts also awarded him for his service during the Vietnam war.

The Post story, by reporters Howard Kurtz and Shallagh Murray, quotes extensively David Thibault, the editor in chief of the (who ever heard of them before the Washington Post decided to give them such prominence?) Cybercast News Service.... But the article tells us very little about Thibault himself... [does not describe] Thibault... as a "senior producer for a televised news magazine" broadcast and sponsored by the Republican National Committee. I dunno, but I for one, would have wanted to know that. Thibault's background and those engaging in the Swiftboating of Murtha would be relevant to any news story on this issue, I would think. And so would some independent examination by the Post as to whether there is even any veracity to the charges....

Update: 5:20 P.M., Saturday night: The Post article in amplifying the allegations of the Cybercast News Service... included a 1996 quote from Harry Fox, who worked for former represenative John Saylor (R-Pa.), teling a local newspapaer that Murtha was "pretending to be a big war hero."... What the Post leaves out... is that Saylor is deceased, and well, has been for some time now. (Saylor died way back in 1973.)... [T]he Washington Post is relying on something said by a person with an axe to grind (Fox), who is quoting someone who is deceased (but who the newspaper forgot to tell you is deceased.)... Makes you want to drop a dime to Howie Kurtz! But alas, Kurtz wrote the story. Oh well.

And Reaganite ex-Navy Secretary James Webb says:

firedoglake : In today's NYTimes, James Webb, former Secretary of the Navy in the Reagan Administration and former Marine platoon and company commander in Vietnam, calls the attacks on Jack Murtha for what they are: a baseless political smear, coordinated by a group with deep ties to the far right of the GOP. And he calls those behind the attacks for what they are as well:

The political tactic of playing up the soldiers on the battlefield while tearing down the reputations of veterans who oppose them could eventually cost the Republicans dearly. It may be one reason that a preponderance of the Iraq war veterans who thus far have decided to run for office are doing so as Democrats. A young American now serving in Iraq might rightly wonder whether his or her service will be deliberately misconstrued 20 years from now, in the next rendition of politically motivated spinmeisters who never had the courage to step forward and put their own lives on the line....

Kudos to James Webb for calling it like it is.

Those who shamefully "play up the soldiers on the battlefield while tearing down the reputations of veterans who oppose them" include not only Republican operative-hacks like David Thibault, but their journalistic megaphones like Shallagh Murray and Howard Kurtz.

If the Washington Post cared about its reputation as an objective news reporter, it would fire Murray and Kurtz today. Those print Washington Post reporters who care seriously about their own reputations are now writing memos to their bosses about how stories like this Kurtz-Murray one impact their own reputations as well.

Barkley Rosser on Iran

Last week Barkley Rosser emailed me that he disagreed with pieces of Dariush Zahedi's analysis of Iran. I asked him what he disagreed with, exactly. I don't see anything in my email inbox, but there is this:

IRAN: THE FIRST ISLAMIC NEW TRADITIONAL ECONOMY : [T]here is a global movement to "re-embed" modern, technologically advanced economies (such as ones pursuing nuclear power for peaceful or other purposes) back into a traditonal socio-political framework, following the categories of Karl Polanyi as discussed in his _The Great Transformation_. The most common candidate for such a framework is a great world religion, and we noted such movements occurring within Hinduism, Confucianism, and several other religions. However, the movement has been most developed within Islam.... [T]he first nation to attempt to implement a new traditional economy: Iran... which has been struggling to adopt an Islamic econmic system since the Islamic revolution of 1979.

We identify five stages in the post-revolutionary political-economic development of Iran, with a sixth stage clearly now in progress.... 1979-81 was the First Radical Phase, dominated by Islamic socialism that draws on the works of the Iranian ayatollah, Taliqani.... [N]ationalizations and a huge increase in income equality.... [The] Second Radical Phase (1982-84) came in a struggle over an effort to nationalize land and international trade, which was blocked by the Council of Guardians... the most serious implementation of more strictly Islamic elements.... Then came the First Pragmatic Phase (1985-89)... opening to the world economy to obtain weapons to fight Iraq.... The Second Pragmatic Phase (1989-97) followed the end of the war, the death of Khomeini, and coincided with the presidency of Hojjat-el-Islam Hashemi Rafsanjani... opening [to trade] and a move towards some marketization and privatization.... The Social Reform Phase (1997-2005) followed during the presidency of Mohammed Khatami, who loosened many social controls on women and political discussions.... The new president has been elected on a simultaneous platform of undoing social reforms and a populist appeal to help the poor....

Persian political developments [in the twentieth century] largely followed those in Turkey.... The westernizing Reza Pahlavi Shah overthrew the Qajars in 1925 and followed a path similar to that of Ataturk. He introduced indicative central planning in 1941 and oversaw development of industry half-owned by the state. He was removed by the British, Soviets, and Americans during WW II for his de facto alliance with Germany, and was replaced by his son, Mohammed, who would rule until 1979, except for a brief period in the early 1950s, when Mohammed Mossadegh (and Taliqani), a veteran of the Constitutonalists, removed him and nationalized oil production. Mossadegh was removed in the US-British "Project Ajax" coup.... In 1963, Shah Pahlavi... introduced the secularizing "White Revolution", which guaranteed equal rights for women. These were undone after 1979.

Today, the Iranian economy is dominated by oil... a $40 billion reserve... nuclear program... very popular in Iran.... [O]il provides over 90% of export industries, and its dominance makes it hard to develop other industries. Poverty and inequality have spread. Unemployment is running around 12% and inflation around 15%, with these problems worse for the young and the poor. This is the backdrop of the election of Ahmadinejad.

If asked I shall comment more on the significance of the dominance of Shi'ism in Iran and some other matters. However, I think this will provide a basic backdrop for a more informed discussion of matters in Iran. I will note only that Shi'ism is more inclined to have clerics actually holding office, although the new president is the first since 1979 not to be an actual cleric, despite the apparent religious radicalism of his ideology. Sunni fundamentalists are perfectly happy to have a non-cleric in charge, as long as he implements and enforces a shari'a law code.

A Good Story on Abramoff from Bloomberg

There are three money flows here. First, there is Abramoff's $130,000 of direct campaign contributions. Second, there is the money given as campaign contributions by Abramoff's clients--some of which were expenditures directed by Abramoff, and some of which were expenditures that the clients would have made in any case. For example, the Saginaw Chippewa gave $279,000 to Democrats over 1997-2000, and $277,000 over 2001-2004, after they had gotten into bed with Abramoff. It is a safe bet that *none* of those contributions to Democrats were "directed" by Abramoff. The Saginaw Chippewa gave $158,000 to Republicans in 1997-2000, and $500,000 to Republicans in 2001-2004, after they had gotten into bed with Abramoff. It is a safe bet that $340,000 of those contributions to Republicans were "directed" by Abramoff.

The third money flow is the $80 million or so that was paid to Abramoff and company for access to Republicans leaders--$25,000 for setting up a meeting with George W. Bush, et cetera. Some portion of that money flow (the guesses I am hearing is about a quarter) flowed through to politicians (and overwhelmingly Republican politicians) as "lifestyle enhancements"--luxury vacation trips paid for by Abramoff's credit card, and so forth.

All this is by way leading up to this story from Bloomberg News. This is how a story on Abramoff-connected money should be written. Organizations like the Washington Post now have negative credibility as objective news reporters. But--as there ability to report stories honestly indicates--for organizations like Bloomberg, there is still a presumption that their word is good:

Bloomberg.com:: Abramoff's `Equal Money' Went Mostly to Republicans (Update1) Dec. 21 (Bloomberg) -- U.S. President George W. Bush calls indicted lobbyist Jack Abramoff ``an equal money dispenser'' who helped politicians of both parties. Campaign donation records show Republicans were a lot more equal than Democrats. Between 2001 and 2004, Abramoff gave more than $127,000 to Republican candidates and committees and nothing to Democrats.... [H]is Indian clients were the only ones among the top 10 tribal donors in the U.S. to donate more money to Republicans than Democrats.... Larry Noble... who directs the Washington-based Center for Responsive Politics [says]. ``It is somewhat unusual in that most lobbyists try to work with both Republicans and Democrats, but we're already seeing that Jack Abramoff doesn't seem to be a usual lobbyist,'' Noble said. Abramoff, 46, is under investigation....

Between 2001 and 2004, Abramoff joined with his former partner, Michael Scanlon, and tribal clients to give money to a third of the members of Congress, including former House Majority Leader Tom DeLay, according to records of the Federal Election Commission and Internal Revenue Service. At least 171 lawmakers got $1.4 million in campaign donations from the group. Republicans took in most of the money, with 110 lawmakers getting $942,275, or 66 percent of the total. Of the top 10 political donors among Indian tribes... three are former clients of Abramoff and Scanlon.... All three gave most of their donations to Republicans -- by margins of 30 percentage points or more -- while the rest favored Democrats....

More Signs of Weak Aggregate Demand

Kashyip Mansouri points out that low non-energy inflation is a sign of weak demand relative to the economy's productive potential:

Angry Bear : Where is the non-Energy Inflation? "The Producer Price Index for Finished Goods rose 0.9 percent in December, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 0.7-percent decline in November and a 0.7-percent gain in October. Prices for finished goods other than foods and energy advanced 0.1 percent in December, the same rate as in November....From December 2004 to December 2005, finished goods prices rose 5.4 percent, following a 4.2-percent increase in 2004. The index for finished energy goods climbed 23.9 percent in 2005, after moving up 13.4 percent in the preceding calendar year. Conversely, prices for finished goods other than foods and energy rose 1.7 percent in 2005, following a 2.3-percent gain in 2004."

It continues to be the case that dramatically higher energy costs are not feeding through into higher costs of other goods and services.... Unlike during earlier energy shocks, when increases in the price of oil typically led to inflation in other types of goods and services, this time the increase in the price of oil has led only to a change in the relative price between energy and non-energy products. Why haven't firms passed on their higher energy costs? Presumably it's because they haven't been able to charge higher prices, not because they haven't wanted to. This could be the case if the demand for non-energy products by firms has fallen a bit as firms have had to spend more of their budgets on energy products. In other words, firms are simply shifting the allocation of their spending away from non-energy products and toward energy products.

One interpretation of this phenomenon is that it is a symptom of weak aggregate demand. If aggregate demand were higher, then firms would be in a better position to pass on their higher energy costs. The fact that the discrepancy between energy costs and non-energy costs has persisted and even widened in recent months may therefore be a sign of a slowing economy.

Why Oh Why Are We Ruled by These Fools? (Your President Speaks! Edition)

Bad prose style from George W. Bush

First Draft - Your President Speaks! : Ostensibly to talk up the economy, but he was really all over the map.

So the death tax was put on its way to extinction. I said, put on its way to distinction. The problem is the way the law was written. It's coming back to life in 2011, which is going to make some interesting estate issues, particularly in 2010.

First. "Distinction" and "extinction" are two distinct words. The difference between them has not become extinct.

Second, his unnecessary and inappropriate use of the passive voice makes George W. Bush's prose weak and cowardly. Consider the following two sentences: "The problem is the way the law was written." "The problem is the way I and the Republican Congressional leaders wrote the law back in 2001." See how much stronger, more effective, and more confident the second sentence is? The first sentence could only be uttered by somebody whom California governor Arnold Schwarzenegger would call a "girlie man": someone who can only say weak words; can only drink weak tea; is afraid to take responsibility for his actions. If George W. Bush were George Washington, he would say: "Father, the problem is that the cherry tree was chopped down."

Waging a Living

Covering the unskilled working class:

They work hard (too hard) for the money: - Mick LaSalle, Chronicle Movie Critic: Waging a Living: Documentary. With Jean Reynolds, Jerry Longoria, Barbara Brooks and Mary Venittelli. Directed by Roger Weisberg. (Unrated. 85 minutes. At Bay Area theaters.)

"Waging a Living" is a documentary about the working poor in America, people who have full-time jobs and can't get by on their low-paying or minimum wage salaries. Directed by Roger Weisberg, the film is without narration but occasionally drops a statistic onto the screen that relates the specific case histories to a general problem -- for example that housing costs have tripled since 1979, while wages for the bottom 20 percent of the work force have remained stagnant.

Weisberg follows [four] people over the course of several years: Jean Reynolds, a nursing assistant supporting three kids and seven grandchildren on 11 dollars an hour; Barbara Brooks, who's supporting three kids as a counselor, while going to school for her associate's degree; Mary Venittelli, a woman with three kids, who drops from comfort into poverty following a divorce; and the lone West Coast entry, Jerry Longoria, a security guard in San Francisco. The four subjects are engaging and intelligent, fighting long odds and working extra hours, living without health care and having no time for rest and little for sleep. The struggle is unrelenting, the stories poignant. Among the many revelations in "Waging a Living" is the surprising fact that those security guards, working the desks in the lobbies of Market Street's most opulent office buildings, are making 10 and 11 bucks an hour -- in San Francisco.

The intent of "Waging a Living" is to inspire outrage, and to an extent it succeeds. But in every country, somebody's going to be broke, and the film sometimes overestimates the shock we should feel that people with no education or skills and lots of kids should be feeling the squeeze. After all, it's hardly esoteric information that dropping out of school and having children early is a recipe for poverty. A viewer could easily come away, in fact, consoled that there are so many programs to help people who find themselves at a disadvantage. Likewise, though the government's efforts to wean people off of the system sometimes results in dispiriting situations like Barbara Brooks' (she gets a $450 raise and loses $600 in aid), it's not unreasonable that there should be incentives for people to get off assistance.

However, the film makes two points so persuasively as to seem beyond dispute. The first is that fathers are getting away scot free, that there's no system for tracking down deadbeat dads and that court-ordered child support is often treated as something optional. The second is that people who work hard should be able to get ahead, that it's unfair and un-American that, in a nation founded on the idea of the second chance, people can't climb their way out of poverty.

That's the point of the film -- people who work hard should have a decent life -- and it's hardly unreasonable. It's the way it used to be, after all. Sixty-five years ago even the soda jerk in "Meet John Doe" got to live in a house.

Actually it isn't the way it used to be. Fifty years ago absolute material poverty was far deeper than it is today. Of course, absolute material poverty is only one dimension of real poverty.

Why Oh Why Are We Ruled by These Liars? (Supreme Court Edition)

Ruth Marcus is upset by Roberts's and Alito's disingenuous claims that they just apply the settled law to the case, ma'am:

Underneath Their Robes : [T]he judge's job, as Roberts and Alito surely know, is far more complicated.... That is... what makes who is nominated to the high court matter. And it is what I find so frustrating about the vapidity of their answers.... For even the most responsible, well-intentioned judge, respectful of precedent... is called on to make, well, judgment calls, filling gaps in legislation or interpreting capacious constitutional phrases. The higher up the judicial ladder, the harder the cases -- and the more important the judge's underlying worldview, judicial philosophy and constitutional vision. There is, in short, a soul inside every judicial machine.

Justice Benjamin Cardozo... described the inescapable, hidden forces tugging at judges -- "inherited instincts, traditional beliefs, acquired opinions" -- forces, that, he said, produced "an outlook on life, a conception of social needs... which, when reasons are nicely balanced, must determine where choice shall fall." Cardozo dismissed judges who see themselves as mere painters hired to touch up a room. "Their notion of their duty is to match the colors of the case at hand against the colors of the many sample cases spread out upon their desk. The sample nearest in shade supplies the applicable rule. But of course," Cardozo continued, "no system of living law can be evolved by such a process, and no judge of a high court, worthy of his office, views the function of his place so narrowly.... It is when the colors do not match... when there is no decisive precedent, that the serious business of the judge begins."...

On a more elevated but even more important plane, different judges bring to the bench different attitudes about presidential power, federalism and constitutional interpretation. What has been so disappointing about the nominees' testimony is their unwillingness to engage in this discussion in an honest, meaningful way. What has been so maddening about the questioning is the senators' inability to penetrate their platitudes or robotic restatements of the law...

It is possible to penetrate the platitudes and robotic restatements. But we can start down that road only if the Washington Post and other opinion leaders have the guts to recommend the rejection of any nominee who is unwilling to engage in honest, meaningful discussion about presidential power, federalism, and constitutional interpretation.

Why Oh Why Are We Ruled by These Fools? (Your President Speaks! Edition)

Bad prose style from George W. Bush

First Draft - Your President Speaks! : Ostensibly to talk up the economy, but he was really all over the map.

So the death tax was put on its way to extinction. I said, put on its way to distinction. The problem is the way the law was written. It's coming back to life in 2011, which is going to make some interesting estate issues, particularly in 2010.

First. "Distinction" and "extinction" are two distinct words. The difference between them has not become extinct.

Second, his unnecessary and inappropriate use of the passive voice makes George W. Bush's prose weak and cowardly. Consider the following two sentences: "The problem is the way the law was written." "The problem is the way I and the Republican Congressional leaders wrote the law back in 2001." See how much stronger, more effective, and more confident the second sentence is? The first sentence could only be uttered by somebody whom California governor Arnold Schwarzenegger would call a "girlie man": someone who can only say weak words; can only drink weak tea; is afraid to take responsibility for his actions. If George W. Bush were George Washington, he would say: "Father, the problem is that the cherry tree was chopped down."

Deborah Howell Tells Us the Washington Post Should Fire Herself

Atrios finds Deborah Howell advising us that the Washington Post should fire herself for getting the facts wrong:

GRADUATION: Bureau chief gives grads Top 10 list : 10. Accuracy is not just the most important thing; it%u2019s the only thing. The American Society of Newspaper Editors recently did an excellent study on the credibility problems of American newspapers. The No. 1 complaint is that newspapers just don't get facts right. Misspelled names and words; wrong addresses; wrong times. Simple stuff. This is not rocket science. When a job seeker writes me a letter and misspells my name or has my title wrong or a misspelled word or a grammar error, I either ashcan the letter or write and tell them to get a new trade.

Ah. But that was then. Now things are very different. Now Deborah Howell says:

washingtonpost.blog - The Editors Talk About Site Policies, Design and Goals : I've heard from lots of angry readers about the remark in my column Sunday that lobbyist Jack Abramoff gave money to both parties. A better way to have said it would be that Abramoff "directed" contributions to both parties.

Good for Senator Leahy Against Alito - New York Times

Good for Senator Leahy, who announces he will vote against the confirmation of Alito:

Leahy Says He'll Vote Against Alito: Senator Patrick J. Leahy of Vermont today became the first Democrat on the committee to declare his intention to vote against him. Mr. Leahy told an audience at the Georgetown Law School that he did not believe Judge Alito would provide the necessary checks and balances to an executive branch that might exceed its powers. "I cannot vote for this nomination," Mr. Leahy said. "I will not vote for this nomination." Mr. Leahy, the ranking Democrat on the committee, said he was disturbed by Judge Alito's responses during the committee hearings last week on the issues of privacy and conflicts between government and individuals. He also said he believed Judge Alito, who has spent his entire legal career working for the government, would be too deferential to what the senator called his "patrons." "At a time when the president is seizing unprecedented power, the Supreme Court needs to be a check and balance," he said. "I have no confidence that Judge Alito will provide that check and balance."

Indeed. The threshold question is: "Is Alito one of the five hundred or so people who would best improve the judgments of the Supreme Court?" I have heard lots of arguments that say he is not one of the five hundred. I have heard no arguments that he is.

I question why any Senator is even thinking of voting for him, or why any newspaper is supporting him.

Weighing the True Costs and Benefits in a Matter of Life and Death

Robert Frank--Ben Bernanke' coauthor on their Principles of Economics book--has a nice response to one of the pieces of immoral toxic swill that periodically emerge from Slate:

Weighing the True Costs and Benefits in a Matter of Life and Death - New York Times : Slate this month.... The subtitle says: "A woman who couldn't pay her bills is unplugged from her ventilator and dies. Is this wrong?"... the answer is "no."...

[T]his argument as morally preposterous. Well, yes. But it is also economically preposterous... some details.... The patient was Tirhas Habtegiris, a 27-year-old legal immigrant being kept alive by a ventilator as she lay dying of cancer last month in the Baylor Regional Medical Center in Plano, Tex. Physicians offered no prospect for her recovery. She was hoping, however, to hang on until her East African mother could reach her bedside.

Ms. Habtegiris had little money and no health insurance. On Dec. 1, hospital authorities notified her brother that unless another hospital could be found to treat his sister, Baylor would be forced to discontinue care after 10 days.... Baylor disconnected her ventilator on Dec. 12, invoking a law signed in 1999 by George W. Bush, then governor of Texas.... Unlike the comatose Terri Schiavo, Ms. Habtegiris was fully conscious and responsive when she was disconnected, according to her brother. She wanted to continue breathing. Her brother and several other family members have described the agonizing spectacle of her death by suffocation over the next 16 minutes. Her mother never got there....

In Baylor's defense, Mr. Landsburg argues that Ms. Habtegiris's treatment would have failed the economist's basic cost-benefit test, which says that an action should be taken only if its benefit exceeds its cost. The cost of care is relatively easy to calculate, but measuring its benefit is more difficult, and it is here that Mr. Landsburg stumbles.... He is mistaken for multiple reasons... he ignores the economically compelling reasons for having social safety nets in the first place... most people favor collectively financed rescue efforts. That a poor person would not, or could not, buy private insurance against such contingencies is entirely beside the point.

Even more troubling, Mr. Landsburg completely ignores moral emotions like sympathy and empathy. As economists since Adam Smith have recognized, economic judgments are often tempered by these emotions.... [L]arge numbers of people benefit when a patient in imminent mortal danger receives treatment. Had the opportunity presented itself, many would have eagerly contributed to Ms. Habtegiris's care. But organizing an endless series of individual private fund-raisers for such cases is impractical. So, we empower government to step in when the need arises.

Mr. Landsburg's argument finesses the important distinction between a "statistical life" and an "identified life"... introduced by the economist Thomas C. Schelling.... It is one thing to risk one's own life in an unlikely automobile accident, but quite another to abandon a known victim in distress.

By offering a transparently unsound economic argument in defense of the Habtegiris decision, Mr. Landsburg unwittingly empowers those who wrongly insist that costs and benefits have no legitimate role in policy decisions about health and safety. Reducing the small risks we face every day is expensive. The same money could be spent instead on other pressing needs. We cannot think intelligently about these decisions without weighing the relevant costs and benefits. But using cost-benefit analysis does not make one a moral monster.

In the wealthiest nation on earth, a genuine cost-benefit test would never dictate unplugging a fully conscious, responsive patient from life support against her objections. Mr. Landsburg's argument to the contrary is wrongheaded, not just morally, but also economically.

150? How About 4500?

Off by a factor of 30:

Daily Health Policy Report: HHS Secretary Mike Leavitt on Tuesday in a conference call with reporters said the department is working to address problems with the new Medicare prescription drug benefit, including increasing the number of telephone operators to assist pharmacies working with Medicare beneficiaries from 150 on Jan. 1 to 4,500, the Detroit News reports (Herrndobler, Detroit News, 1/18). He also reiterated that the government has instructed insurers to cover a 30-day supply of drugs, regardless if the medications are on the plan's formulary, and to limit copayments. He added that, as a last resort, beneficiaries could be enrolled in a default prescription drug plan while at a pharmacy. He said, "Our message [to beneficiaries] is, 'Don't leave the pharmacy without your drugs'" (Schuler/Reichard, CQ HealthBeat, 1/17). He added, "There is no reason for you to go without your medicines ... or for you to have to pay more than you owe" (Appleby/Wolf, USA Today, 1/18). Leavitt added, "When there's change, there's an opportunity for things to go wrong. We are fixing them one pharmacy, one beneficiary at a time" (Pear, New York Times, 1/18). Leavitt and CMS Administrator Mark McClellan said "tens of thousands" of low-income beneficiaries have experienced problems obtaining drugs (USA Today, 1/18).... The federal government will not reimburse states that are covering the cost of prescription drugs for Medicare beneficiaries who are unable to obtain medications under the new drug benefit, McClellan said Tuesday...

Michael Hiltzik on the Prescription Drug Benefit Rollout

Michael Hiltzik has a good piece about the Medicare Part D prescription drug rollout:

Golden State: Bush's Catastrophic Drug Benefit: The defining fiasco of the Bush Administration may prove to be the utterly disastrous Medicare prescription drug benefit, formally known as Medicare Part D. Already the newspapers are filled with stories about Medicare-Medicaid patients, the poorest of the poor, being denied prescriptions by the thousands because the government, with only two full years to prepare, didn't have its computer systems tested, up, and running when the program launched January 1. The pain is just beginning.

What's instructive about this project is that it provides a concrete illustration of what Social Security would have looked like after a Bush privatization job: A program that should be designed to serve citizens turned instead into a plaything for lobbyists and business interests.... Is there a saving grace in the disaster? Only that, considering that most eligible people will be signing up in early May, then discovering the flaws in the system through the summer and early fall, they'll be reaching the peak of fury and be well poised to wreak vengeance on the perpetrators at the ballot box in November. Good riddance.

When I began to research this issue some weeks ago, my intention was to write one column. I soon realized that wouldn't scratch the surface. This column will be followed by a second column on Monday, explaining the so-called "doughnut hole" in the system that will trap millions of Americans in doughnut hole hell....

One recent afternoon in Los Alamitos, I watched Marcy Zwelling-Aamot, M.D., pick her way through a government website designed to help elderly patients select the right Medicare drug plan.... The website... identified 48 individual plans... sponsored by private health insurance companies administering the government drug benefit for a profit. The plans' monthly premiums ranged from $5.41 to $66.08; their lists of covered drugs differed from one another, sometimes significantly; and all imposed different annual out-of-pocket costs on enrollees - a critical consideration for patients on fixed incomes.

Zwelling-Aamot is a private internist who accepts a limited number of patients but places herself at their beck and call. She and her staff have spent months helping her patients navigate the new benefit, a process that requires at least an hour and a half of research per patient (time for which she's not compensated by Medicare).... [S]he has come to see it not as a boon for elderly consumers, but as a scandal. "As a patient, you are totally hoodwinked by this system," she told me. "It's not just an economic tragedy; it's a moral tragedy."

The Medicare drug benefit is shaping up as the single most cynical scam perpetrated by the Bush Administration on American consumers. Designed to maximize profits for drugmakers and health insurers, the program was launched so ineptly Jan. 1 that hundreds of thousands of patients have been prevented by computer glitches from filling their prescriptions. California and 25 other states have had to step in temporarily to pay for improperly rejected prescription claims.... The program is ostensibly tailored to serve up to 43 million elderly Americans, most of them subject to an enrollment deadline of May 15 and a stiff financial penalty for late enrollment. Yet, most seniors seem to be biding their time; Medicare says that only 3.6 million persons people, out of an estimated 18.3 million who are eligible for the stand-alone benefit, have signed up thus far. Even the government acknowledges that selecting a plan is dauntingly confusing for those without access to its Internet help site. That's a big hurdle, because an estimated 70% of Americans over 65 have never been online.

The toll-free information lines set up by Medicare and various health plans have been overwhelmed for weeks. Medicare regulations discourage physicians, pharmacists and healthcare advocates from helping patients select a specific plan. Yet many professionals say they themselves are so confounded by the program's intricacies that their patients will be hard pressed to make the right choices on their own. The health plans have filled the vacuum with glossy marketing brochures, some of which are flagrantly misleading....

It's worth remembering that the prescription drug program was born in an act of fraud. The Bush Administration sold it to Congress in 2003 by estimating its cost at less than $400 billion over 10 years. Scarcely a month after its enactment, the White House issued a new estimate: $535 billion....

As written, the legislation complied with a drug industry demand that Medicare be prohibited from negotiating with manufacturers for lower drug prices. Among those helping the industry make its stand was Rep. Billy Tauzin (R-Louisiana), whose committee on energy and commerce oversaw Medicare. In an odoriferous development, Tauzin soon quit Congress to become president of the Pharmaceutical Research and Manufacturers of America - Big Pharma's Washington lobbying group...

Wednesday, January 18, 2006

Judicial Activism

Mark Kleiman points out that it's only "judicial activism" when liberal judges do it:

The Reality-Based Community: Judging and personal beliefs : Now comes Justice Scalia, in dissent in the Oregon assisted-suicide case. As a legal matter, the key question was whether the Justice Department could use the its [licensing] power... to regulate the practice of medicine, as opposed to using that power only to prevent "script-doctoring" and the diversion of drugs to the illicit market. The regulations provide that physicians may prescribe drugs only for a "legitimate medical purpose." Could that rule be used to overrule the decision of the voters of Oregon, voting in a referendum, to allow physicians in that state to help badly suffering terminally ill patients put an end to their misery? To Scalia, the answer is clear. "If the term 'legitimate medical purpose' has any meaning, it surely excludes the prescription of drugs to produce death." Savor that "surely," if you will. Because Scalia finds assisted suicide morally offensive, it "surely" must be the case that relieving suffering by hastening death isn't a legitimate part of what a physician does.

I'm glad Scalia's opinion was a dissent, not so much because a few Oregonians will continue to have access to physician assistance in ending their lives - the job can be done without the use of controlled substances, for example by using a breathing mask hooked up to a tank of an inert gas or nitrous oxide - as for the sake of striking down what seemed to me a clearly illegitimate power grab by the Federal government on behalf of the prejudices of the "God" faction of ruling God-and-Mammon coalition that is the political base of the current ruling oligarchy. But it's also worth noticing how empty the conservatarian promise of "neutral" judging turns out to be when push comes to shove.

The Missing Grownup Republicans Stay Missing

Steve Clemons writes:

The Washington Note : There are many thoughtful, fair-minded, and deeply concerned senior Bush administration Republicans who think that the administration must turn itself around and get out of the "thumb in their eye" national security positions it has taken... believe that there have been huge public relations and policy disasters surrounding Guantanamo, the management of accountability after Abu Ghraib, the rendition of prisoners abroad, the administration's battle with John McCain over torture policy, and even the NSA intercepts.... This person is introspective and self-critical about these problems and wants to fix them. He wants to address the problem and to reconnect to real debates. This is exactly the right strategy -- and this writer and pundit is more than happy to help those inside the Bush administration try to get to more constructive ground than that on which the administration currently stands.

If so, then where the *&^%$#&(&! have they been for the past five years?

If there were even six grownup Republicans in the Senate, they would issue a joint statement calling for the withdrawal of Alito's nomination on the grounds that when the executive branch is incompetent is not the time to put an executive branch royalist on the supreme court.

Me and Susan Tedeschi

Don't get me wrong. I like the music that Susan Tedeschi does enormously. But, still, I have to ask: Is it legal to do what she does without a Janis Joplin license?

Orwell vs. Orwell

I have decided that George Orwell's Road to Wigan Pier is even better than his Homage to Catalonia.

That is all.

In Praise of Knight-Ridder

Also from Poynter:

Poynter Online - Forums : From ERIC ALTERMAN: I think with all the difficulties facing Knight Ridder these days, we should take a moment to praise their Washington Bureau. My impression during the run up to the war in Iraq was that they bought less of the BS coming from the Bush administration than any other major news outlet, and backed it up with inspired investigative reporting, shaming the employers of Judy Miller and Bob Woodward. Ditto the story mentioned here in re Alito's historical record. Merely doing such conscientious journalism these days invites bad-faith charges of "liberal bias" as part and parcel of the right's strategy of "working the refs." But these guys stick to their guns, do the difficult gruntwork, and then stand by their story. Dammit, it's inspiring.

Inequality Continues to Rise...

Another thing noted by Kevin Drum--from Bloomberg's coverage of the American Economic Association meeting:

The Washington Monthly : BUSHONOMICS....Bloomberg News writes the following about the state of the economy:

After 16 consecutive quarters of economic growth, pay is rising at a slower rate than in any similar expansion since the end of World War II. Companies are paying less of their cash gains in the form of wages and salaries than at any time since the Great Depression, according to government figures.

...."There is no doubt that something is happening" to reduce labor's share of income, says Robert Solow, a Nobel Prize- winning economist and professor emeritus at Massachusetts Institute of Technology in Cambridge. An economy that doesn't distribute its gains widely is "poorly performing," he says.

From the final quarter of 2001 through last year's third quarter, total compensation paid to employees by corporations, including health benefits, rose at a 4.3 percent average annual rate, according to government figures. That's the slowest growth for any similar period in post-war expansions lasting at least four years.

Translation: supply side economics works. It just doesn't work for you or me.

Bush Administration Ineptness Watch

Kevin Drum writes:

The Washington Monthly : THE PRESCRIPTION DRUG DEBACLE....PART 341....Jon Cohn -- who's writing a book about the American healthcare system -- promises more about the Medicare prescription drug debacle shortly but wants to pass along one tidbit while we're waiting:

It's a Government Accounting Office report, issued in December, warning that the Bush administration hadn't done enough to make sure the most medically and financially vulnerable Medicare beneficiaries could actually get their drugs.

If you do get around to reading it, make sure to check out the part where Mark McClellan, director of the Center for Medicare and Medicaid Services, says the GAO has it all wrong -- the part where he insists that "CMS has established effective contingency plans to ensure that dual-eligible beneficiaries will be able to obtain comprehensive coverage and obtain necessary drugs beginning January 1, 2006."

You know, that sounds familiar. The Bush administration is warned that its planning is inadequate but it ignores the advice and plows ahead without listening.

Very familiar. It's on the tip of my tongue. Help me out here.