U.S. Politics, 14

[TerraPrime]

Continue.

[TerraPrime]

It's not disingenuous as all. Sure, one effect of dumping the public option was to get rid of something Republicans hated, but that wasn't the motive. The motive was to get Democratic votes. The goal was to get the most progressive bill possible, and still have it pass.

Indeed, and the core Democrats would not care whether they have to cut deals with Blue Dogs OR with RINOs, if it'll get them to the magic number. The motive is to get votes, but the effects included giving some GOP members some of what they wanted. To discount that is just bizarre.

And again, that is all completely irrelevant to Frum's point that the bill was still a disaster even after the public option was removed.

Well, I don't think the bill is a disaster, from either perspective. It's a compromised bill that will get the ball rolling. Inertia will, I hope, eventually push us towards a single-payer system. The point that I think Frum is right on is that the GOP painted themselves into a corner with the type of rhetoric they used, such as death panels.

[The Progressive]

GM's IPO today was incredible:

http://www.latimes.com/business/la-fi-gm-ipo-20101119,0,4951682.story

I mean this is a company that many people has written off for good just about a year ago or so .............. I guess the auto bailout is already paying dividend, which I didn't think would happen until at least a few more years. Imagine the hundreds of thousands of jobs that would have been lost had the teabaggers been successful at preventing the auto bailout from happening.

[The Progressive]

I heard an economist today say that for taxpayers to get a full return we need to see the stock price get slightly over $50/share. So there's no way to know for certain if this will happen (but it seems like there's a solid shot right?), but you make another good point. That's just one way of looking at it. The broader picture of the "cost" of the bailout must consider the opportunity cost of the economic impact of American Auto going under. I am sure there are some good estimates out there of how many jobs were saved/not lost by this bailout, and I'd imagine its a huge number. Is there any doubt whatsoever that our economy would be worse off today if not for the Auto Bailout? The only way that I think that it will not be worth it is if GM ends up still collapsing in epic fashion despite the bailout which will suggest that it was unsalvageble (sp), but I don't think that's too likely.

If they recouped 2/3 of the bailout money, I still consider it a net gain given the opportunity cost of having GM went under. This study explains why the auto bailout was quite a bargain:

http://michiganmessenger.com/43953/study-says-auto-bailout-saved-1-4-million-jobs

A new study by the Center for Automotive Research in Ann Arbor concludes that the bailout of General Motors and Chrysler in 2009, with $85 billion in taxpayer money going to the two companies to help them survive the restructuring process of managed bankruptcies, saved 1.4 million jobs. The Detroit News reports:

Most of the jobs — 1.14 million — were saved in 2009, during the low-point of the industry’s severe downturn. But another 314,400 were saved in 2010, the Center said Wednesday.

“The government intervention prevented additional personal income losses totaling $71.9 billion for 2009 and $24.6 billion for 2010,” the center said in a statement.

“The net impact to the federal government—in terms of changes in transfer payments, social security receipts and personal income taxes—was $21.6 billion in 2009 and $7 billion in 2010.”

But that is merely the tip of the iceberg. The cost to state and local governments for the sudden increase in Medicaid, unemployment benefits, loss of property taxes and other consequences of allowing the two companies to fail would have been even higher.

Add in the $29 billion cost of taking over the pensions of the two companies by the federal Pension Benefit Guaranty Corporation and the effect of another wave of foreclosures that would have been triggered and the bailout was a bargain

[Former Lord of Winterfell]

Indeed, and the core Democrats would not care whether they have to cut deals with Blue Dogs OR with RINOs, if it'll get them to the magic number.

They care to the extent the deal they cut with the Blue Dogs is more appealling than the deal they'd need to cut with Republicans. In other words, the mass of the Democratic Party wanted to get the most progressive deal they could. So as I see it, the only way for the GOP to have replaced the Blue Dogs as the compromising element was to offer a more progressive deal than the Blue Dogs were willing to accept. And why on earth would the GOP do that? Compromise to ensure passage of an even worse (from their perspective) bill?

The motive is to get votes, but the effects included giving some GOP members some of what they wanted. To discount that is just bizarre.

I truly do not understand the point you're trying to make regarding "discounting". I'm not talking about brownie points earned on some theoretical scorecard as to which side compromised more. I honestly don't see the relevance of such a discussion at all. The idea that any political group should vote in favor of something they don't like simply because it's not as bad as something that wasn't going to pass anyway is, too use your phrase, just bizarre.

Inherent in a compromise is that each side gives up something. In this case, the more progressive elements of the Democratic party gave up some things in exchange for the votes of the Blue Dogs and other less progressive elements. The GOP weren't part of those discussions, made no such promise, and gave up nothing, so they weren't part of the "compromise" involving the majority.

Well, I don't think the bill is a disaster, from either perspective. It's a compromised bill that will get the ball rolling. Inertia will, I hope, eventually push us towards a single-payer system. The point that I think Frum is right on is that the GOP painted themselves into a corner with the type of rhetoric they used, such as death panels.

I know you don't think it's a disaster, but Frum believed that even the non-sinngle payer version that past was a disaster, and it's his argument we're discussing. The reality isn't that the GOP members of Congress painted themselves into a corner. The reality is that they were outvoted by an opposition over whom they had no practical leverage at all.

[TrackerNeil]

I don't really buy the argument some of the left have made that "once people start seeing some of the benefits they'll come around." Maybe in the long term but not in the next few years. What I do see as a possibility is that enough people will not notice anything bad happening as a result of the new law and will just sort of forget about how much they were told to hate it. I'm hoping for this much more in the middle than with the Fox/Rush types.

I think that the ACA will really become entrenched once people start actually receiving subsidized insurance policies and it becomes reality to them. Until that time it's abstract, and Americans aren't great with abstraction, at least in terms of politics.

However, the political will to repeal the ACA isn't very strong now - exit polls showed voters ranking the law fourth on their list of concerns - and in two years I can't imagine it will have gotten stronger. I guess House Republicans can hold a bunch of symbolic repeal votes to try to keep the issue front and center, but...well, symbolic is often another way of saying abstract, and I already told you what I think about that.

[Former Lord of Winterfell]

You know what other corner they painted themselves into? One in which a huge % of the electorate believes that repealing this healthcare bill is one of the top priorities for the United States right now. I hope that this dissipates with time.

That's what the GOP gained by opposing the ACA so strongly.

I don't really buy the argument some of the left have made that "once people start seeing some of the benefits they'll come around." Maybe in the long term but not in the next few years. What I do see as a possibility is that enough people will not notice anything bad happening as a result of the new law and will just sort of forget about how much they were told to hate it. I'm hoping for this much more in the middle than with the Fox/Rush types.

I still think the entitlement aspect of the ACA, which doesn't kick in until 2014, will be a very big issue in 2012. That's all the subsidies given to people who can't afford to buy insurance on their own. Other things in the ACA arguably benefit a lot of folks, but the direct beneficiaries of the entitlement are much more narrow. Given that most folks are very well aware of the problems we already face with Medicare, I believe "we can't afford a new entitlement program" is going to be a very appealing argument to the vast majority of voters who aren't going to be receiving a subsidy. So I suppose I see the political effect of the subsidy exactly the opposite from TrackerNeil.

The Democrats better figure out how to fix the SGR/Doc Fix issue though, because if they don't a lot of places will stop accepting Medicare. This has absolutely nothing to do with the ACA, but you can be damn sure that the GOP will have a lot of angry seniors convinced that it does.

The ACA cut a lot of money from Medicare, but instead of applying the savings to other aspects of Medicare, they used primarily to finance a completely separate entitlement program. We could have taken those Medicare savings and used them to finance the SGR/doc fix.

[TrackerNeil]

I still think the entitlement aspect of the ACA, which doesn't kick in until 2014, will be a very big issue in 2012. That's all the subsidies given to people who can't afford to buy insurance on their own. Other things in the ACA arguably benefit a lot of folks, but the direct beneficiaries of the entitlement are much more narrow. Given that most folks are very well aware of the problems we already face with Medicare, I believe "we can't afford a new entitlement program" is going to be a very appealing argument to the vast majority of voters who aren't going to be receiving a subsidy. So I suppose I see the political effect of the subsidy exactly the opposite from TrackerNeil.

You give voters a great deal of credit in terms of following complicated issues; more than is warranted, in my view. I think that the deficit is really a proxy for the economy; when economic times are good, you don't hear much popular concern about deficit spending, but when the economy tanks, it's the biggest threat to the US since Osama bin Laden. So, assuming that in 2012 the economy is on its way back up, I don't think voters are going to spend much time worrying about entitlement spending for other people no matter how debt-funded it is.

I certainly don't think voters are going to be keen to delve into the intricacies of if/how the ACA cuts Medicare, particularly since those cuts are from what I can see responsible and non-disruptive. Saying, "Obamacare makes certain cuts to certain parts of Medicare that not everyone uses!" is hardly a call to arms, methinks. Those who might be roused by such a call are likely to vote Republican anyway, so why should the Democrats lose sleep over those folks?

But maybe you're right, FLoW. Maybe come 2012, a wide swath of the electorate will have become significantly more policy wonkish than they are now and will have worked up a righteous rage over the ins and outs of the ACA. We'll see.

[Shryke]

Most people don't understand ACA at all. I mean shit, look at how powerful a message "Death Panels" was and you'll see it quite clearly. Or, to use TrackerNeil's example, look at the Deficit. People say they care about it, but their knowledge of the deficit is so terrible that their voting patterns have nothing to do with the deficit at all.

Support for ACA will depend entirely on how much people believe it effects their lives and how well the media can sell a narrative on it.

[Former Lord of Winterfell]

But maybe you're right, FLoW. Maybe come 2012, a wide swath of the electorate will have become significantly more policy wonkish than they are now and will have worked up a righteous rage over the ins and outs of the ACA. We'll see.

I just don't see it as being a very wonkish issue -- welfare and entitlements are one form of government activity about which most people have a fairly formed opinion. I also don't see us having a gangbusters economy in 2012 that will have made people forget about this downturn. The fear card that a new entitlement may kill business/entitlement growth, is going to be a pretty easy one to play, and fear of a double dip may be pretty powerful.

As it stands, we're now closer to the 2012 election than we are to the 2008 election, and people still remember that stuff pretty well. I just don't think memories on such a high-profile issue are going to be that short.

[Shryke]

So apparently Senators Lieberman, Murkowski, Collins, Lugar and maybe even Ensign and Snowe and others will vote for the DADT repeal coming along before the end of the lame-duck session.

So there's a decent chance it will be gone.

If Lieberman is sticking his neck out for it, the odds are pretty good.

[TrackerNeil]

I just don't see it as being a very wonkish issue -- welfare and entitlements are one form of government activity about which most people have a fairly formed opinion.

If you mean "formed" as in "irrational", then I agree with you. Current polls show that although there is some interest among Americans in debt reduction, they don't want it accomplished through cuts to Medicare, Social Security or defense. Perhaps they think we can save a few hundred billion recycling paper clips in the Pentagon, I couldn't say.

Besides, as I have said, even if people have a rational, well-informed opinion on an issue doesn't mean that they'll vote on it. In casting a vote in 2012, I don't think most people are going to delve much more deeply than their general perception of the economy, and not concerns over a law they don't understand that doesn't affect them anyway. (And in all honesty, the ACA really doesn't affect most Americans very strongly.) If things seems OK, Obama will likely get a second term; if not, he might not. It's not sexy, but from the date I have seen, in most elections it's all about the economy.

[Shryke]

According to Neil Barofsky, GM shares will have to be at $137 in order to get back our investment.

So, let's not start celebrating quite yet.

This is in contrast to this article that doesn't cite anything, but fields that $50 figure.

Why not?

It's a complete mistake to look at this in terms of a simple, straightforward investment with a return.

You have to consider, as people were saying above, the jobs not lost because of the bailout and thus the not-shrinking of the economy and the not-loss in tax revenue and such.

[Shryke]

If we get our investment back, I'd love to see numbers on whether creating a jobs program would be more cost effective than bailing out the auto industry.

I'm mostly just skeptical of where this mid $50 figure is coming from. It's being thrown around all over the place, even though the IG's figure is almost 3 times as much. What is that about?

They are the same thing.

The bailout, actually, would probably be far cheaper since the jobs are already there.

[Shryke]

We don't know how much a jobs program would cost, because there isn't one.

Well no. Because you haven't defined it in any way.

[The Progressive]

If we get our investment back, I'd love to see numbers on whether creating a jobs program would be more cost effective than bailing out the auto industry.

What do you mean by "jobs program"?

You do know that the stimulus bill includes funding for job training/placement programs, right?

[C S]

I just don't see it as being a very wonkish issue -- welfare and entitlements are one form of government activity about which most people have a fairly formed opinion. I also don't see us having a gangbusters economy in 2012 that will have made people forget about this downturn. The fear card that a new entitlement may kill business/entitlement growth, is going to be a pretty easy one to play, and fear of a double dip may be pretty powerful.

As it stands, we're now closer to the 2012 election than we are to the 2008 election, and people still remember that stuff pretty well. I just don't think memories on such a high-profile issue are going to be that short.

Sadly, I think it usually comes down to economy bad=vote change or economy good=vote status quo. This is regardless of the party in power.

[ThinkerX]

http://www.ritholtz.com/blog/2010/11/dear-uncle-sucker/

• 1999, you passed the Financial Services Modernization Act. This repealed Glass-Steagall, the law that had successfully kept main street banking safely separated from Wall Street for seven decades. Even the 1987 market crash had no impact on Main Street credit availability, thanks to Glass-Steagall.

• 1997-2010, you allowed the Credit Rating Agencies to change their business model, from Investor pays to Underwriter pays — a business structure known as Payola. This change effectively allowed banks to purchase their AAA ratings, and was ignored by the SEC and other regulators.

• 2000, you passed the Commodities Futures Modernization Act. It allowed the shadow banking industry to develop without any oversight by the Commodity Futures Trading Commission, the SEC, or the state insurance regulators. This led to rampant creation of credit-default swaps, CDOs, and other financial weapons of mass destruction — and the demise of AIG.

• 2001-04, the Fed, under Alan Greenspan, irresponsibly dropped fund rates to 1%. This set off an inflationary spiral in housing, commodities, and in most assets priced in dollars or credit.

• 1999-07, the Federal Reserve failed to use its supervisory and regulatory authority over banks, mortgage underwriters and other lenders, who abandoned such standards as employment history, income, down payments, credit rating, assets, property loan-to-value ratio and debt-servicing ability.

[Shryke]

The Republican Party, continuing their proud tradition of Vote Caging for Freedom! and Democracy!, are now trying to do it to Rahm Emmanuel:

http://www.huffingtonpost.com/2010/11/18/rahm-emanuels-residency-i_n_784796.html

Good times: http://electls.blogs.wm.edu/2010/10/04/rahms-residency-not-a-problem/

[Commodore]

I'm intrigued by

of legalizing transactions in other currencies to allow people to opt out of the dollar and keep the Fed in line (is it illegal to transact in non-dollar currencies within the United States?).

That way if people don't like what the Fed is doing, they have a choice, a means of escape.