In Defense of Obama--Again

In a past post I expressed bafflement at the left-wing disillusionment with Obama. These days, I’m not only baffled, I’m getting upset. There is an emerging narrative in left-leaning circles that Obama is spineless, in league with big corporations (particularly Wall St.), and afraid to stand up to the war hawks. This attitude would be forgivable if it had any relation to the truth. But it doesn’t.

THE ECONOMY

False narrative: Obama and Bernanke don’t care enough about jobs and are overly worried about the deficit. We need a second “jobs” stimulus and an explicit policy of higher inflation to get us out of this economic slump. We can’t worry about deficits right now until America gets back to work.

Reality: after the first stimulus successfully stopped the economic meltdown (success for Obama!), now is, in fact, the right time to start worrying about our debt. Sustainable job growth in America depends on the re-balancing of the world economy: Americans need to save more, consume less, and make more stuff that the world wants to buy, while the Chinese needs to buy less of our debt and consume more of our goods. This transition will run smoothly only if the Chinese agree to devalue their currency in relation to the dollar. But the Chinese will do this only if they believe America is serious about cutting back on its debt. That’s the bargain. If the Chinese lose faith in our ability to cut our debt, there are only two possible outcomes: a Chinese-American trade war (instigated by the U.S. because the Chinese will refuse to devalue their currently) or a U.S. dollar currency crisis (instigated by the Chinese who will stop buying our bonds). Both of these would be disastrous for the world economy.

Also, inflation as an explicit policy prescription is totally insane: inflation punishes most the one group of people we should be most eager to help—that is, middle class savers. And it is most kind on those who know how to handle money, who also happen to be the same folks liberals want most to punish--that is, Wall St.

REGULATION

False narrative: Obama bailed out the banks and now is too chicken to regulate their bonuses. The financial regulatory package making its way through Congress will be watered down so much as to be virtually worthless. Even the Democrats are in bed with Wall St.

Reality: Barney Frank, who is leading the charge against bonuses and fighting very hard for more financial regulation, is a rock star. Watch how Ed Shultz, a proud member of the putting-Obama’s-feet-to-the-fire club, doesn’t listen to a word Frank says about what he and Congress is doing about bonuses. Read this Barney Frank speech, which lays out his plans for financial regulation. He may not get everything he wants in the end, but there is no doubting his determination and the soundness of his thinking. Regulation will happen.

HEALTH CARE

False narrative: Obama failed to step up to the plate when we needed him, he compromised away the public option because of pressure from corporations, and now the bill will only enrich insurance companies and won’t even insure everyone in America. The bill may be so bad, we might be better off with the status quo.

Reality: the public option is decidedly not dead yet, Obama is in favor of said public option, and regardless of whether or not a public option is in the final bill, the reform will be a big step forward when compared with the status quo. At the least there will be no more penalties for pre-existing conditions and many more people will get coverage, with insurance for lower income folks subsidized by increased taxes on upper income folks. It won’t be a dream bill, but getting a dream bill was always pie-in-the-sky.

AFGHANISTAN

False narrative: Obama is escalating the war and is too chicken to stand up to the warmongers.

Reality: despite painting himself into a corner with his hawkish talk on Afghanistan leading up to the election in 2008, Obama, I believe, is trying to wriggle his way out of this growing quagmire. He rejected all of the options for escalation, with explicit instructions to include a clear “end-game” in all future proposals. Obama is increasingly worried about the cost of an open-ended, never-ending war in Afghanistan. The reality in Afghanistan is grim, but Obama is thinking clearly about the issue and should be commended for that.


I admit that on the issues of cap-and-trade and Israel-Palestine Obama does look to have genuinely failed us. That said, it’s clear that on both those issues Obama’s heart is in the right place. If he gets a second term there is hope for the future on these tough issues, too. Patience, my friends, patience.

In a future post I will speculate on why liberals are so pissed at Obama when it seems so obvious (to me, at least) that we should be happy with him.

An Illustration of why we need an overhaul of national health care policy

Adapted from an email I sent to a friend yesterday:

I’m in a class this semester called “Writing and Reporting on Politics and Policy.” The thrust of the class is that each of us has picked a beat to cover for the semester, and mine is the city government of my hometown: Newton, MA.

Here’s the most interesting thing I’ve found: The city's costs have been increasing and will continue increasing at about 5.5% per year, and its revenues have been increasing at about 3.5% per year. Municipalities in MA are prohibited from having deficits, so they've kept the budget balanced by cutting city staff, deferring needed capital maintenance and investment, and not funding long-term pension liabilities. As a result, the city has a skeleton crew in city hall, a $300 million backlog of capital expenditure (ie roads and schools and fire-stations) and a $400 million unfunded pension liability. If the city were to start making incremental, responsible investment in capital and pension fund, there would be cumulative deficits of $174 million over the next 5 years, on a budget of $262 million for this fiscal year.

Here's the punchline: It’s all health care. The whole structural gap - growth in uses exceeding growth in sources - comes from health care. The city's health care costs have grown at 9.4% per year for the past 10 years. Together with the health care portion of pension benefits, it now makes up 20% of the city budget. If the cost of health care had grown at the same rate as revenues over that 10-year period, the city wouldn't have this structural gap at all. The increasing cost of health care has ripped the city's budget to shreds.

Sour Grapes

Friend of The Pickle Justin King called my attention to this column, by Joe Posnanski, which is an oldie but goodie: the Yankees buy championships.

One of his main points is that baseball is better at hiding competitive imbalance than are other sports. Whereas in football it’s not uncommon for a great team to win more than 90% of its games, and in basketball a great team can win over 80% of the time, the best baseball teams only win around 65%. The best winning percentages in the last 100 years of pro football, basketball, and baseball are, respectively, 100%, 88%, and 72%.

Which naturally made me wonder why, and I developed a little theory that I think isn’t bad, and perhaps is of some interest: The outcome of a baseball game is determined by fewer events.

Each of the three sports can be thought of as a sequence of zero-sum events, in which each team is doing to try to do something to help it win the game, and that better teams are better at doing. In football, the event is a play from scrimmage. In basketball, it’s an offensive possession, and, ultimately in most cases, a shot. In baseball, it’s a plate-appearance.

When two evenly-matched teams play each other in any sport, what we mean by “evenly-matched” is that, on average, each team will prevail in each of those individual events roughly an even number of times. Perfect example: The 2008 Wimbledon Final, in which Nadal won 209 points, and Federer won 204. The greater the disparity between the two teams, the greater the probability that the better team will prevail in any given trial.

And here’s the rub: For a given probability that the better team will prevail in any given trial, the probability that team will win the whole game is higher the greater the number of trials. And there are fewer trials in baseball than there are in other sports.

In football, each team runs about 70 plays from scrimmage. In basketball, each team has the ball about 100 times. But in baseball, the average game sees each team send about 40 players to the plate.

It’s just a shorter game. There are fewer random trials of an event with probability p. And that means that it’s less unusual for a bad team to beat a good one.

That, and the fact that there are Zach Greinkes on Kansas City Royalses. And I hate the Yankees. And thank you, Peter, for taking me to my first ever world series game.

New York makes us stop and think

I would have voted for Bloomberg today if I lived in New York. But let me ask this question: When a gajillionaire spends a brajilion dollars to get re-elected for an election-law-alteration-enabled third term, yet he still only wins by 5 percentage points, does that mean the democratic thing would have been to wave goodbye? Does it mean he shouldn't be there?

I think it probably does. If he didn't have a jagriblion dollars, he wouldn't be the mayor...

Friedman is Right for Once

Holy mackerel! Thomas Friedman actually wrote something sensible in this don't-escalate-in-Afghanistan column. More than sensible, actually. A must read. (If only he had had this attitude leading up to the war in Iraq...)

Money quote:

The message: “People do not change when we tell them they should,” said the Johns Hopkins University foreign policy expert Michael Mandelbaum. “They change when they tell themselves they must.”

Thank You, Scientist

So, H1N1 is officially a national emergency, and vaccine production is not where it should be. Count as unworried Bill Maher, who, on his show last week told a flabbergasted Bill Frist that people should not take the vaccine because it is net harmful. In fact, the questioning of the scientific establishment by what I'll call populist lay "science" seems to be an, er, epidemic. (Examples include the linkage of other vaccines to autism and most notably the denial of global warming and evolution.) What is the proper role of the lay person when it comes to science?

In my opinion, it's one of complete deferral on scientific matters. However, the laity has an important part to play with respect to evaluating the social impacts of science. This part is especially important when enthusiasm might lead scientists to sweep larger social considerations under the rug. For example, lay worries about the potential moral pitfalls of human gene therapy strike me as valid and legitimate. I also think it's appropriate for laypersons to weigh in on economic considerations relating to science, particularly if it's government science we're talking about. Most of us would consider cost-benefit objections to, for example, a manned mission to Mars, to be legitimate (regardless of whether they're right or wrong). We should also criticize and question scientists if claims they offer are scientific really aren't. A great example of this is overutilization in the health care system; it is legitimate to worry that the amount of care prescribed by a physician is motivated by profit rather than expertise.

But the fact of the matter is most of us don't have enough expertise to evaluate the actual science of vaccines (less so global warming, and less less so evolution). In fact, it seems that the lay questioning of these theories can often be traced to some other ideological commitment - skepticism (bordering on paranoia) of the drug establishment on Maher's part or Christian doctrine on the part of evolution doubters.

I suppose I am granting scientists almost priest-like status. Bad when that's combined with the fact that the scientific establishment has, in the past, believed things that are just plumb crazy. But the operative word is "almost." Science contains within it the self-limiting safety valves of verifiability and falsifiability, unlike religion. Science is prepared to be wrong.

The Pickle series entitled "Treating people like people." Voting Rights Edition

Many people – and I was one of them until two days ago – don’t know that non-citizens for the most part had the right to vote in this country until the middle of the 19th century. I discovered this while reading for a class I have this semester at the Kennedy School, called “Reasoning for History.”

That only citizens can vote is an orthodoxy that is rarely questioned. Question it, though, and it is at least apparent that it should be questioned. My neighbor is a permanent legal resident whose kids go to the Cambridge public schools. Shouldn’t she be allowed to vote for the school committee? I try to imagine an argument for why she shouldn’t, and I suddenly remember the debate I bellicosely and ungracefully got into a few years ago with a Republican friend of a friend at a bar in Washington about why DC should or should not have representation in Congress. I dared him to answer the question, and he took a deep breath, and then began “DC was never intended to be…” and seconds later I had to be peeled off the ceiling.

My permanent-resident neighbor is only the least ambiguous on an increasingly ambiguous spiral staircase of cases asking who should be allowed to vote in what elections. But her case is really unambiguous; there is no standard by which she is not a fully interested member of our community who should be allowed to have a say in how she is governed.

Recently, some cities have allowed non-citizens to vote in local elections. It’s a movement we should all pay attention to and encourage.

A great choice by the Nobel Committee

Charitably, giving the Nobel Peace Prize to President Obama for the reasons it was given was naively aspirational and politically stupid. But the Nobel Committee redeemed itself a teeny tiny bit today (though I imagine it’s a different Nobel Committee) by giving the economics prize to one of my intellectual and academic heroes, Elinor Ostrom.

Ostrom, a political science professor at Indiana University, is the author of Governing the Commons, a book I first read in college, and then re-read a few years ago. Her work was the first to encourage me to think deeply about what the “commons problem” nature of climate change means for the parameters of the problem and the hope of solving it. It is still the book that influences me most when I think about a bit of climate policy and ask the question “Is this going to help? Is this going to work?”

Of note, Ostrom is also the first woman to win the economics prize, and the fifth woman to win a Nobel this year, which is a record for a single year. So congratulations to Elinor Ostrom, who bent the arc of history a bit today, and whose life’s work may yet bend it quite a bit more.

On Sleep

I heard a pretty simple but amazing thing today on Fresh Air, while I was driving to pick up my new suit from the tailor, for my brother's wedding this weekend. (You may email me with congratulations.)

The guest was talking about how important it is for children to get a good night's sleep. He said that while adults spend only 4% of the night in what is called "low-wave" sleep, kids spend 40% of the night in low-wave sleep. Makes you want to know what's going on in low-wave sleep, right? You're not alone. According to his research, this is when your brain is chemically converting short-term memories into long-term memories.

Sick, right? Way to go humans!

Putting the public in option

I thought that only two things were clear from the New York Times poll on the front page of yesterday’s paper. First, everyone is confused. Second, people want the public option.

I was shocked by the second part (not the first part – I am also confused). Asked “Would you favor or oppose the government offering everyone a government-administered health insurance plan like Medicare, that would compete with private insurance plans?,” 65% or respondents favor such a program, 26% oppose, and 9% have no opinion. And to the first point, that is the only concrete statement about health care reform that more than two-fifths of respondents were able to answer. Has Obama explained it well enough? 37%. Do you understand what’s under consideration? 37%. Does the GOP have an articulated alternative? 14%. 14% is a coin flip among the 28% who weren’t listening to the question. And on all specific details, the preponderance of answers are “don’t know enough.”

But people seem to want the public option. From this poll – and it is only one poll – that strongly emerges as the only conclusion that people have drawn about what’s on the table. Seems like we should do it, then, huh?

By the way, 26% still think there are death panels.

Big is Beautiful

Paul Volcker says the administration is planning to continue the policy rationale of "too big to fail," implicitly promising future bailouts should the need arise.

I'm slightly disappointed, but that sentiment is starting to have a certain gnawing familiarity. There is an obvious public interest in keeping private institutions from becoming "too big to fail," but these megacorporations make so much money just based on scale - and spend so much of that money on Democrats - that I know I'm kidding myself to think anything would or could be done about it. By the way, donde estan Republicans on this? Where is your budget freakout about exposing taxpayers to these potential outlays? Where are your costumed nutjobs and their misspelled signs protesting government takeovers of things? You're really missing out on some out-of-power minority rock-throwing here.

On balance, I am actually okay with keeping the rationale - so long as the administration comes through on some kind of banker compensation rule such that it rewards long term growth as opposed to short-term stock price gains. Otherwise, bankers are just playing with house money.

If bringing up "excessive" banker compensation serves a polemic purpose in this fight, then fine. And if we have to ridicule the banking establishment's claims that the market is rewarding "talent," which I do find rankling, then so be it. But there's no real public interest in forestalling "objectively" high compensation, whatever that may be. If compensation is a market price arrived upon within bounds of the rule above, then great.

Obama's "correct and brave" decision

The Obama administration’s decision to scrap missile defense in Eastern Europe has shed some light on the following items of note:

--Despite claims to the contrary, the missile-defense shield, as originally conceived under the Bush administration, was intended to counter Russia, not Iran. Or at least that was the understanding of the Poles and Czechs. How else are we to explain their vehement objections to losing this supposedly anti-Iranian defense-shield when everyone agrees that Iran has zero intention--now or ever--of threatening Poland or the Czech Republic with missiles? Clearly, and somewhat understandably, the Poles and Czechs are worried about their historically not-so-friendly neighbor to the east.

--The right-wingers in America have been forced to show their hand that they, too, intended the shield to counter Russia. How else are we to explain the hissy-fit they are collectively throwing given that Obama’s new missile-defense plan will, in theory, be better suited to the Iranian threat than the former Eastern Europe-based shield, though it will be useless against Russia? If they really were worried about Iran--and Iran only--they should be cheering this change in course.

--The right-wingers have also revealed the degree to which they are still trapped in Cold War thinking. Their favorite word for describing Obama’s shift in policy is “appeasement.” They employ this highly-charged word so as to harken back to another “retreat from Czechoslovakia,” when Neville Chamberlain handed over the Sudetenland to Hitler’s Germany in 1938. The use of the word “appeasement” implies that the party being “appeased” is uncompromisingly aggressive, as Hitler was leading up to WWII. To assume that today’s Russia is belligerent in the same way as Hitler, or in the same way as the Soviet Union was during the Cold War, shows a poor understanding of the nature of Putin’s regime.

--This near-hysteria displayed by the neocons brings me to, perhaps, the most interesting aspect of this episode. It centers on Putin’s description of Obama’s decision as “correct and brave.” Why “brave?” To my mind, Obama’s decision displayed more common sense than bravery. Because I assume that Russia has zero interest in attacking or otherwise threatening Poland, because I’m dubious of the shield’s technical viability, and because I’m disgusted by the shield’s cost (both financially and in terms of pissing off the Russians), missile-defense in Eastern Europe strikes me as worse than useless, and its scrapping as a no-brainer decision. Putin likely agrees with my above assessment, yet he recognizes the decision as “brave.” The bravery comes in when we consider the intensity of the heat Obama is getting from the “appeasement”-crying crowd. Putin knows how difficult it is to stand up to “appeasement” talk because he has his own neocon-types in Russia to deal with. The Russian paranoids, like their American neocon counterparts, assume that America is Russia’s enemy, and that if Russia gives America an inch, it will take a foot. With the Cold War still dominating the mind-set of these paranoid brains (in both countries), it takes serious balls to unilaterally make a change in policy that will incite these folks’ ire. Thus, the “brave” comment.

Regardless of whether or not Russia reciprocates by dropping its opposition to possible sanctions against Iran, Obama’s decision to scrap the Eastern Europe missile shield was, indeed, “correct and brave”. The Bush administration had set American-Russian relations on a track towards a renewed Cold War. With this act, Obama opens the door to much friendlier relations between the two countries, which if achieved, will pay great dividends in the years to come.