March 23, 2009
No Retreat, No Surrender
WASHINGTON--President Obama's biggest task at his news conference on Tuesday will not be to defend Treasury Secretary Tim Geithner or to push aside the administration's bungling of the AIG bonus imbroglio. It will be to challenge Washington's habit of evading substantive issues by transforming them into procedural questions. A deep narrative is taking root in the political class, and it goes something like this: Obama is biting off way more than he can chew, "overloading" the system and dealing with all sorts of "side issues," when he should be focusing solely on the broken economy.
Harold Pollack is a public health policy researcher at the University of Chicago's School of Social Service Administration, where he is faculty chair of the Center for Health Administration Studies. He is a regular contributor to The Treatment. As the 2009 health reform debate heats up, the proposed public healthcare plan has become the main fault-line among center-left policy wonks, all of whom favor health reform but who don't always agree about about what reform really should be.
What to make of the Treasury Department's latest bid to save the banks? We asked Kenneth Rogoff, a Harvard professor and former chief economist of the International Monetary Fund, for his thoughts. I'm still digesting the plan, and I think it looks pretty much like what they discussed a couple weeks ago. It's a piece of the larger set of initiatives, all of which aren't enough to get credit flowing again. The whole administration strategy seems to involve shoveling money to the financial system in the most opaque way possible.
I'm not really sure what to think about the new Treasury plan. But I do know that the fact that the stock market rallied upon its announcement is not proof that it's a good plan, just as the market drop was not proof that the last iteration of the plan was bad. I made this point in my TRB column: Stock prices represent the market's guess at the profitability of corporations. While that's related to the health of the overall economy, it's not the same thing, and sometimes the two diverge sharply.
No Special Envoy, No Crisis
"Burn me. Don't treat me like this.
A Cap And Trade Calamity?
It is gradually dawning on Washington that cap-and-trade legislation won't pass anytime soon--certainly not this year, and probably not next year either.
Harold Koh Nominated
The White House has made official its choice of the Yale Law professor as State Department legal advisor. Koh, as I noted a few weeks ago, has condemned the Iraq invasion as a violation of international law. Via Ben, he's also a fierce torture opponent. --Michael Crowley
The impact of a carbon cap-and-trade system on electricity prices depends on both the stringency of the cap and how easy it is for utilities to shift away from fossil fuels. Under a cap, power prices will rise until electricity demand falls by enough—or a sufficient amount of renewable generation is brought online—that the demand can be met without going over the carbon cap. Whether carbon-emissions permits are auctioned or given away for free has no impact on this market-clearing electricity price.
So, from where I sit, Geithner's second pass at explaining his bank plan has already gone much, much better than the first.
Paul Krugman nails what I think is at the heart of so many observers' despair over Obama's PPIP plan: The likely cost to taxpayers aside, there's something strange going on here. By my count, this is the third time Obama administration officials have floated a scheme that is essentially a rehash of the Paulson plan, each time adding a new set of bells and whistles and claiming that they're doing something completely different. This is starting to look obsessive. Or cataclysmic. After six months of watching the economy implode, the best thing the new administration can come up with is ...