2010 - %3, September

No Good Deed Goes Unpunished

| Thu Sep. 30, 2010 9:00 PM GMT

An internal White House report concludes that money from the stimulus bill has been well spent:

By the end of September, the administration had spent 70 percent of the act's original $787 billion, which met a White House goal of quickly pumping money into the nation's ravaged economy, the report says. The administration also met nearly a dozen deadlines set by Congress for getting money out the door...

Meanwhile, lower-than-anticipated costs for some projects have permitted the administration to stretch stimulus money further than expected, financing an additional 3,000 projects, according to the report..."Certainly, the fraud and waste element has been smaller than I think anything anybody anticipated," said Steve Ellis, vice president of Taxpayers for Common Sense, a nonpartisan watchdog group.

...An independent board established to provide oversight has received just 3,806 complaints — less than 2 percent of more than 200,000 awards. Prosecutors have initiated 424 criminal investigations, representing 0.2 percent of all awards. Typically, 5 to 7 percent of government contracts attract complaints, [Jared] Bernstein said.

According to CBO reports, the stimulus has created 3.5 million jobs and kept unemployment about 1 to 2 percent lower than it otherwise would have been, and apparently it's accomplished this efficiently and with minimal waste. It's a testament to what happens when you take good policy seriously.

Unfortunately, it's also a testament to how little most people care about good policy and competent execution. As near as I can tell, it's practically conventional wisdom these days that the stimulus package was a complete bust—and all because the Obama administration initially made a lousy projection about the future course of the recession and suggested that the stimulus package would reduce unemployment to 8 percent. If their forecast of the depth of the recession had been correct and they'd predicted, say, 11.5 percent unemployment without a stimulus package and 10 percent with it—which is what happened—elite opinion about the stimulus would probably be completely different.

So there you have it. Good policy and good execution gets you bubkes. All it takes is one wrong forecast number to wipe it all out. Welcome to the real world.

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Corn on "Countdown": Christine O'Donnell's Bogus Resume

Thu Sep. 30, 2010 6:43 PM GMT

David Corn joined Keith Olbermann on MSNBC's Countdown to discuss the scandal surrounding Christine O'Donnell's falsified resume and whether or not her tea party supporters even care.


Do Guns And College Mix?

| Thu Sep. 30, 2010 4:40 PM GMT

Should students be allowed to carry concealed weapons on college campuses? Yesterday, the question entered the national limelight after a 19-year-old University of Texas student fired four rounds through the campus with an AK-47 before killing himself. No one else was hurt, the Associated Press reports. But the incident has Texas Gov. Rick Perry—a dude who goes jogging with a loaded pistol—calling for a relaxation of the state's gun-free college laws. He told the AP:

There are already guns on campus. All too often they are illegal. I want there to be legal guns on campus. I think it makes sense—and all of the data supports—that if law abiding, well-trained, backgrounded individuals have a weapon, then there will be less crime.

It's a stock argument for pro-gun partisans: Students and faculty with concealed carry permits need the ammo to shoot back if a crazed gunmen enters their school. But a 2002 Violence Policy Center study found that sometimes, just sometimes, even the people permitted to carry concealed weapons can become the crazed gunmen. From 1996 to 2001, 41 concealed-handgun license holders in Texas were arrested for murder and attempted murder. And permit holders were arrested for weapons offenses 81 percent more often than the state's general 21-and-over population. Just a decade ago, after launching a year-long investigation into the Lone Star State's licensing laws, the Los Angeles Times reported that 400 criminals with prior convictions had been issued concealed-carry permits despite background checks. And more than 3,000 licensees had since been arrested, including a computer analyst who shot a bus driver in the chest because he'd nearly missed the bus.

But there's another group on Perry's side: Students for Concealed Carry on Campus. At the annual Gun Rights Policy Conference last weekend in San Francisco, SCCC president David Burnett cited the 2007 Virginia Tech shooting—in which "a young and mentally deranged individual took a firearm," killed 32 people, wounded 17 others, then killed himself—as an example of why licensed gun holders should be allowed to carry them on campus.  "The only alternative that we have is to duck and cover," Burnett said. "A lot of these college campuses like to pretend that they are exempt from the freedoms that we have to carry a concealed weapon." In protest, 130 campuses have participated in "Empty Holster Contests," according to Burnett, where they wear their holsters to school sans guns as a symbol that they are disarmed and vulnerable.

Currently, Colorado and Utah allow concealed weapons on campuses. But gun advocates have vowed to press the state on the side of public armament. A Texas state representative, Republican Joe Driver, plans to file legislation (again) that would invite gun-toters back to school, cocked and locked. Criminals "would not go to a place where they don't know who has a gun," Driver says. "I think it's an absolute deterrent."

Kate Sheppard on "Countdown": Jim Sensenbrenner's Climate Revenge

Thu Sep. 30, 2010 3:25 PM GMT

Kate Sheppard joined Keith Olbermann on MSNBC's Countdown to discuss the ramifications of noted climate denier and GOP congressman Jim Sensenbrenner's potential takeover of the House Select Committee on Energy Independence and Global Warming if Republicans win back the House in November.


Endgame for AIG

| Thu Sep. 30, 2010 2:24 PM GMT

The New York Times reports today:

A.I.G. Reaches Deal to Repay Treasury and Fed for Bailout

This is good news. But take it with a grain of salt. Here's the part about repaying the Fed:

The insurance giant [] owes the Fed about $46 billion in two forms: about $20 billion in borrowings under the original revolving credit facility, and a $26 billion preferred stake that the company must redeem....The company said it would use its own resources to pay back the $20 billion in loans....In addition, the Treasury has agreed to help the Fed sever its ties with A.I.G., by providing the means for the company to redeem most of the Fed’s $26 billion in preferred interests. That money will come from the unused portion of an emergency assistance package that the Treasury made available to A.I.G. as its troubles reached a peak in early 2009.

OK. So AIG is going to pay back $20 billion by selling off some assets, but the other $26 billion comes from tapping into unused parts of the existing Treasury rescue package. So now AIG will owe the Treasury even more. How is that going to be paid off?

The Treasury will come out of the transaction with a larger preferred stake in A.I.G....Once the Fed has been fully repaid, the agreement calls for A.I.G. to exchange all of the Treasury’s preferred shares for 1.65 billion shares of common stock....When the exchange from preferred to common has been done, the Treasury will be able to sell its common shares on the public markets, something it is expected to do gradually over time.

This might work! Then again, when the government starts selling off billions of shares of AIG stock, whether slowly or not, it might not. Only time will tell. Basically, though, the Treasury now owns 92% of AIG, and taxpayers will get paid back only if and when it sells that stake. Once this deal is complete I think Treasury will be on the hook for about $50 billion or so in outstanding loans to AIG, so if AIG's share price holds up at around 40 bucks while Treasury's shares are dribbled out to the market, we the taxpayers will end up in decent shape on the whole deal.

Salazar: When Drilling Moratorium Ends, Expect Stricter Rules

| Thu Sep. 30, 2010 12:45 PM GMT

The Obama administration expects to move forward with offshore drilling, but not without more strict rules on the oil and gas industry and not until officials are assured that the industry is operating safely, Interior Secretary Ken Salazar said Thursday. Salazar did not indicate when he will lift the temporary moratorium on new deepwater drilling—the subject of much political and legal contention in the months since the spill—though he affirmed the administration believes that offshore drilling will remain part of the energy portfolio.

"The fact is, we still need oil and gas from the Gulf of Mexico," said Salazar in a speech outlining the administration's overall energy policy. However, he said, the Deepwater Horizon explosion and spill "laid bare fundamental shortcomings in the oil and gas industry's safety practices" in the Gulf.

Salazar defended the moratorium in his remarks: "The same people who fought regulation and oversight in the oil and gas industry have protested the suspension from the start. They want us to ignore the new reality and to go back to business as usual as if nothing had happened," he said. "That's not an option, and we won't proceed on that front."

At the same time, he indicated that the administration expects to green light additional drilling in the future. "There will always be risks associated with deepwater drilling. Nothing in life is without risks," he said. But, he continued, "We will only lift the moratorium when I, as secretary of interior, am comfortable that we have significantly reduced those risks."

Salazar also announced two new rules in the speech—the Drilling Safety Rule and the Workplace Safety Rule—which he said will reduce the risk of another disaster like the Deepwater Horizon. The first rule, drafted under the agency's emergency rule-making authority, outlines proper practices for well cementing and casing and the use of drilling fluids—three major problems identified as potential causes of the Gulf spill. It also requires more oversight of blowout preventers, the mechanism that is supposed to shut the well in the event of an accident, and will require additional back up mechanisms. Drillers will also be required to have their plans reviewed by independent experts, Salazar said.

Salazar also announced that the agency is at last finalizing its "Safety and Environmental Management System" rule. The agency first proposed this rule, which would require oil and gas companies to develop new mandatory environmental planning procedures, more than a year ago, but the industry—most notably, BP—pushed back hard. The rule was in regulatory purgatory at the time of the Deepwater Horizon disaster.

Salazar also warned that oil and gas drillers should "expect a dynamic regulatory environment" in the future as well, with other new rules coming in the next weeks and months as his agency creates the framework for proceeding on offshore drilling. He acknowledged the significant "gap" between the technologies that allow companies to drill in deep waters and the technologies and regulations that would ensure they are doing so safely.

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This Week in National Insecurity: Frequent Fliers Edition

| Thu Sep. 30, 2010 12:38 PM GMT

Welcome, insecure reader, to the friendly skies of national defense! In this weekly link dump: Air marshals are freeloaders; WikiLeaks Wiki-locks down on its public image; dirty subs, built dirt-cheap; Iranian arms dealers stop for cheesesteaks; your granddaddy's Medal of Honor means bubkis at the White House; and a tea party Republican exaggerates just a teensy bit about his military experience.

The sitrep:


  • Sky marshals, who fly with you (for free) to prevent a hijacking, sit in first class a lot. Which airline executives don't like. Not because "a free ride in a fluffy seat" costs the airlines money, mind you, but because it's less secure. Silly air executives: Protecting profits is a national security issue. Every good free-marketeer knows that.
  • What's long, hard, and wrapped in a "Wal-Mart tarp"? The Navy's new $2 billion submarines, whose super-stealth coating falls apart in the water. It turns out that cutting costs on the construction of nuclear vessels is not totally a good thing.
  • What's the best investigative national security story you haven't heard about? It's this Philadelphia Inquirer series about how authorities used a storefront sting to ensnare an arms dealer for the Iranian government, operating in a Philly suburb. Wait, what?
  • We've said it before: If you're a descendant of the last African American Medal of Honor recipient in World War II, who rallied his fellow black troops and took out a bunch of Nazi gunner's nests after his white commander deserted, and you don't want to be turned away from a tour of the White House...don't wear shorts and a T-shirt bearing the likeness of your hero grandfather. It's just disrespectful.

Vegetable Research Grant Needed

| Thu Sep. 30, 2010 11:34 AM GMT

Adam Ozimek rants about vegetables:

[Alice] Waters and her organization are touting a new study showing that school gardens get kids to eat more vegetables. This isn’t surprising, but how much does it impact their lives once they graduate? Are future blue collar workers really going to take the time to grow themselves vegetable gardens in window boxes outside their apartments?....From every description of these programs I’ve read they have an obsession with local, fresh, organic, and growing your own food. The obsession should be on quick, easy, delicious, and inexpensive. These sets of descriptors are damn near antonyms.

If you can get kids to eat and prefer frozen vegetables then you’ve got a sustainable improvement in diet and nutrition. If you get them to like fresh organic vegetables they’ve grown in the garden or bought at the farmers market, then you’ve temporarily instilled in them the tastes of upper middle class people with enough time and money on their hands for such luxuries.

If people like Alice Waters and Jaime Oliver want wider support for heathy schools movements they need to purge them of the wasteful upper-class liberal obsession over local, fresh, and organic foods, and instead focus them on practical and sustainable lessons like how to prepare frozen vegetables cheaply, quickly, and deliciously.

I feel ideally situated to report objectively on this since the only vegetables I like are tomatoes, and they aren't even really vegetables at all — though the Supreme Court has decreed otherwise. In any case, I figure they're close enough, and better than eating nothing vegetable-ish at all.

But back to all those upper-class liberal vegetable gardens in local schools. Haven't they been around long enough for someone to do a serious study of this?1 You know the drill: interview ten thousand 30-year-olds, control for a whole bunch of variables, and then do a regression that plots years of tending vegetable gardens in school vs. current consumption of vegetables. Let's settle this thing once and for all.

1In fact, longer than you think. My mother says her first grade class had a little garden, and that was back in 1938.

The Counterintuitive World

| Thu Sep. 30, 2010 11:06 AM GMT

Back during World War II, the RAF lost a lot of planes to German anti-aircraft fire. So they decided to armor them up. But where to put the armor? The obvious answer was to look at planes that returned from missions, count up all the bullet holes in various places, and then put extra armor in the areas that attracted the most fire.

Obvious but wrong. As Hungarian-born mathematician Abraham Wald explained at the time, if a plane makes it back safely even though it has, say, a bunch of bullet holes in its wings, it means that bullet holes in the wings aren't very dangerous. What you really want to do is armor up the areas that, on average, don't have any bullet holes. Why? Because planes with bullet holes in those places never made it back. That's why you don't see any bullet holes there on the ones that do return. Clever!

On a related note — related because it involves both an air force and some counterintuitive statistical reasoning — Henry Farrell writes about a passage from Justin Fox's Myth of the Rational Market involving the great behavioral economist Daniel Kahneman. Here is Kahneman reacting to an Israeli Air Force flight instructor who told him that whenever he chewed out a student he got better performance the next time out, but whenever he praised a student he got worse performance:

As a man trained in statistics, Kahneman saw that of course a student who had just brilliantly executed a maneuver (and was thus praised for it) was less likely to perform better the next time around than a student who had just screwed up. Abnormally good or bad performance is just that — abnormal, which means it is unlikely to be immediately repeated. But Kahneman could also see how the instructor had come to his conclusion that punishment worked. “Because we tend to reward others when they do well and punish them when they do badly, and because there is regression to the mean,” he later lamented, “it is part of the human condition that we are statistically punished for rewarding others and rewarded for punishing them.”

Likewise, we tend to go to the doctor only when an illness has become really bad. Sometimes, though, that just means the illness is at its lowest point and has nowhere to go but up. And sure enough, after we see the doctor we get better. But it's not always because of something the doctor did. Sometimes it's just a natural consequence of when humans choose to see them.

Finally, on yet another related note — related this time solely because it involves counterintuitive statistical reasoning, not because it involves an air force — check out Nate Silver's brief seminar on how weak most of us are at calculating how much variance there is in the things we do every day. There's a lot of natural variance in everyday life, and there's not always a reason for it. But we like to make up reasons anyway. Statistics is a profoundly unnatural enterprise for most of us.

The Foreclosure Scandal

| Thu Sep. 30, 2010 9:09 AM GMT

I haven't posted yet about the news that thousands of delinquent homeowners are being booted out of their houses in special "expedited" courtrooms using flimsy and often fraudulent documentation produced by foreclosure mills that handle thousands of cases with factory-like efficiency. Part of the reason is that lousy documentation aside, it wasn't clear to me how many people were actually being unfairly evicted. Mike Konczal sets me straight:

I was raised by a family in law enforcement, and as such, I tend to think people who are arrested are usually guilty. And I think that the people who are ending up inside the Florida bankruptcy courts are usually going to be people that shouldn’t be in their homes.

It’s because of the fact that I and others usually believe this to be true that I think due process and the trust in the process of our courts is so incredibly important. It’s necessary to force the parties at hand to marshall evidence that they swear is true, and to present it to an impartial judge to render judgment after full consideration. This is America, where everyone gets a chance before the court. If this breaks, the weak and the innocent are the ones who suffer.

This is right. It's precisely when we're absolutely sure that someone is guilty that we need to be most careful about making sure we actually prove it. Beyond that, as Mike points out in the rest of his post, virtually all of these foreclosure problems could probably be resolved quickly and fairly amicably if banks were simply willing to share the loss with the homeowner. But they're not, and neither Congress nor the president has been willing to change the law to encourage this. It's all about protecting the banks, not anyone else.

Read the whole thing, and then click the links to read a bit more. I think Obama probably gets more flack for his economic policies than he deserves — for the most part they've been about as good as they could have been under the circumstances — but when it comes to home foreclosures the administration and Congress have been cynical and derelict in the extreme. It's a disgrace, whether Rick Santelli likes it or not.