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Politics

McCain campaign manager’s lobbying firm paid by Freddie Mac through last month.

By Ryan Powers on Sep 23, 2008 at 9:12 pm

The New York Times reports tonight that, until last month, Freddie Mac paid $15,000 a month to the lobbying firm owned by Rick Davis, John McCain’s campaign manager:

davis.jpg[Freddie Mac] paid $15,000 a month from the end of 2005 through last month to a firm owned by Senator John McCain’s campaign manager , according to two people with direct knowledge of the arrangement. [...]

They said they did not recall Mr. Davis doing much substantive work for the company in return for the money, other than speak to a political action committee composed of high-ranking employees in October 2006 on the coming midterm congressional elections. They said Mr. Davis’s firm, Davis & Manafort, was kept on the payroll because of Mr. Davis’s close ties to Mr. McCain, the Republican presidential nominee, who was widely expected by 2006 to run again for the White House.

Mr. Davis took a leave from Davis & Manafort for the duration of the campaign, but as a partner and equity-holder continues to share in its profits.

On Sunday, when asked about Davis’s lobbying activities, McCain claimed, “My campaign manager has stopped that, has had nothing to do with it since and I’ll be glad to have his record examined by anybody who wants to look at it.”

Yglesias

Answering David Cay Johnston

By Matthew Yglesias on Sep 23, 2008 at 9:11 pm

Felix Salmon and Ryan Avent answer his questions.

The answers both convince me that there really is an urgent need to “do something” and also an urgent need to try to make sure we do the right thing. Middle class people are pretty desperately in need of some form of bulk modification of mortgages, a step the financial institutions and their hirelings in the GOP have been blocking for months. In theory, this question is separable from the bailout issue. In practice, the banks’ desire for a bailout provides a key moment leverage and opportunity.

Media

Why Is There Something Rather Than Nothing?

By Matthew Yglesias on Sep 23, 2008 at 8:39 pm

I was watching Hardball early today and the always-idiotic Jim Cramer and the usually-reliable Steven Pearlstein were both completely eliding the distinction between the following propositions:

  1. If we do absolutely nothing in response to the current situation, terrible things will happen.
  2. Unless we do exactly what Hank Paulson proposed over the weekend, terrible things will happen.

These are, clearly, very different claims. And (1), while perhaps open to debate, is a lot more plausible than (2). But proponents of the Paulson Plan have an obligation to either make the case for (2), or else to canvass some alternative ways of doing (1) and explain in clear terms why the Paulson Plan is superior to other alternatives. Merely citing the urgent need for action is a transparent effort to foreclose debate.

Politics

McCain: New coal plants ‘will increase greenhouse gas emissions dramatically.’

By Brad Johnson on Sep 23, 2008 at 8:34 pm

Today, Sen. Joe Biden’s criticism of “dirty coal plants,” first reported by TP’s Wonk Room, was picked up by the Drudge Report. The McCain campaign held a press call this afternoon with former Sen. George Allen (R-VA) and mining industry lobbyist Scott McInnis (R-CO) to attack Biden’s comments. But McCain himself attacked coal plants last week, saying they “will increase greenhouse gas emissions dramatically.” In a Sept. 15 townhall meeting, McCain voiced opposition to mountaintop removal coal mining, then continued:

We’re going to build new plants that generate energy, my friends, we’re going to build them. We’ve got to. There’s an increased demand for it. And it seems to me, it’s going to be coal, which I believe will increase greenhouse gas emissions dramatically, or it’s going to be nuclear, or it’s going to be clean coal technology.

Watch it:

Carbon capture and sequestration (sometimes described as “clean coal” technology) is still in development, and McCain has called fighting global warming part of his “top priority” of national security. Is McCain saying “no” to new coal? For more, go to the Wonk Room.

Yglesias

Rounding Errors

By Matthew Yglesias on Sep 23, 2008 at 8:18 pm

Just a quick note on language, but I noticed a number of deal critics throughout the day refer to the bailout package as involving “nearly $1 trillion.” I’m outraged, too, but you need to be careful when rounding very large numbers. If somebody was trying to sell you a $7 hamburger, you might get upset and complain that it cost “nearly $10″ but you certainly wouldn’t complain that it cost “nearly $300 billion.” And yet, $7 is closer to $300 billion than $700 billion is to $1 trillion.

Now obviously rounding $700 billion up to $1 trillion isn’t as bad as rounding $7 up to $300 billion — orders of magnitude count for something. But actual quantities actually count for something, too. It’s not a good idea to wave hundreds of billions of dollars away as a shorthand.

Politics

Bush administration has ‘no plans’ to declassify ‘grim’ Afghanistan NIE before the election.

By Ryan Powers on Sep 23, 2008 at 7:36 pm

ABC News reports that the Bush administration has “no plans to declassify” the forthcoming National Intelligence Estimate on Afghanistan before the election:

U.S. intelligence analysts are putting the final touches on a secret National Intelligence Estimate (NIE) on Afghanistan that reportedly describes the situation as “grim”, but there are “no plans to declassify” any of it before the election, according to one US official familiar with the process. [...]

According to people who have been briefed, the NIE will paint a “grim” picture of the situation in Afghanistan, seven years after the US invaded in an effort to dismantle the al Qaeda network and its Taliban protectors.

The plan to cover up the “grim” reality of the war in Afghanistan is not surprising given the Bush administration’s history of “selectively declassifying” such reports for political gain.

Climate Progress

Has runaway climate change begun?

By Joe Romm on Sep 23, 2008 at 6:49 pm

The UK’s Independent reported today some pretty shocking news in “Exclusive: The methane time bomb“:

The first evidence that millions of tons of a greenhouse gas 20 times more potent than carbon dioxide is being released into the atmosphere from beneath the Arctic seabed has been discovered by scientists.

The Independent has been passed details of preliminary findings suggesting that massive deposits of sub-sea methane are bubbling to the surface as the Arctic region becomes warmer and its ice retreats.

Assuming these findings are published in a peer-reviewed publication, as is planned, they should be taken quite seriously for four reasons. First, many fear that a huge methane release is what happened during the Permian-Triassic extinction event and the Paleocene-Eocene Thermal Maximum. Second, releasing even a small fraction of the sub-sea methane would make a stabilizing greenhouse gas emissions at non-catastrophic concentrations all but impossible.

Third, as NOAA reported earlier this year, levels of methane rose sharply last year for the first time since 1998:

methane2.jpg

Fourth, the findings are apparently based on very new and credible in situ measurements:

Read more

Economy

Why Newt Gingrich Is Wrong About Capital Gains Taxes

By Guest Blogger on Sep 23, 2008 at 6:30 pm

Our guest blogger is Michael Ettlinger, Vice President for Economic Policy at the Center for American Progress Action Fund.

gingrichwrong.jpgIn the movie “My Big Fat Greek Wedding,” an ongoing joke is that the patriarch of the family solves any problem by spraying Windex on it. The equivalent among the “tax cuts are the answer to everything” crowd is cutting the tax rate on capital gains.

The latest idea from Newt Gingrich – which he pitched on Fox News last night – is to cut the capital gains tax rate to zero. He argues that cutting the capital gains tax will cause private capital to flood into Wall Street and rescue the capital markets, which will do so much good for the economy that revenue will go up. Gingrich’s proposal is echoed by the conservative Club for Growth, which today advocated suspending the capital gains tax, saying that such an action “would bring as much as a trillion dollars of capital sitting on the sidelines back into the market.”

There are, to say the least, flaws in this argument:

1. Capital Gains Cuts Mostly Benefit The Wealthy: If you care about who benefits from tax cuts, and don’t think it should mainly be the rich, and in particular if right now you’re not so crazy about cutting taxes on the people on Wall Street who are responsible for getting the country into the huge financial mess it’s in, this probably isn’t your favorite tax change. The benefits of capital gains tax cuts overwhelmingly go to those who own capital assets outside of retirement and other tax-protected accounts. By definition it is the rich who own most capital assets.

2. Tax Cuts Don’t Pay For Themselves Or Produce Growth: The idea is brought to you by the same crowd that has been promising that tax cuts for the wealthy pay for themselves since the late 1970s. Instead, these policies have produced trillions of dollars of government debt. And, for all that debt, what they haven’t produced is particularly strong economic growth. In particular, they haven’t produced the investment growth bragged about.

3. The Incentive Will Be To Change Income To Capital Gains: You may have heard about the break that hedge fund managers get. There’s an attempt to legislatively stop that, but its underlying cause is that capital gains are already taxed at a lower rate than ordinary income. So people who can change, on paper, the characterization of their income from wages, dividends, interest, etc. to capital gains do so. Thus, these people don’t just get a tax cut on their capital gains income, they get a tax cut on much more of their income than that. That’s what accountants are for. If you think it’s bad now – with a capital gains rate at a little less than half the rate of ordinary income – imagine if the rate were 0%. Read more

Politics

GOP rises up ‘en masse’ against White House bailout package.

By Satyam Khanna on Sep 23, 2008 at 6:13 pm

Today, Vice President Cheney and White House Chief of Staff Josh Bolten spent the day in Congress trying to convince conservatives to accept the administration’s bailout package. Politico reports, however, that “House Republicans rose up en masse against their vice president.” ThinkProgress has compiled a list of conservatives who have declared opposition to the administration’s $700 billion bailout:

Sen. Jim Bunning (R-KY)
Sen. Jim DeMint (R-SC)
Rep. Scott Garrett (R-NJ)
Rep. Darrell Issa (R-CA)
Rep. Marilyn Musgrave (R-CO)
Rep. Mike Pence (R-IN)
Rep. Dana Rohrabacher (R-CA)
Sen. Richard Shelby (R-AL)

“They were in worse shape when they left than when they came in,” said one lawmaker who was in the caucus meeting with Cheney and Bolten. “These were the wrong guys…The problem is that they’ve used up a lot of good will.” Former House Speaker Newt Gingrich called the administration’s bailout “just wrong.” (Let us know in the comments if we’ve missed anyone.)

Update

“I don’t know anyone who’s sold on this rescue plan,” said Rep. Wally Herger (R-CA).

Yglesias

Paulson Needs to Come Clean

By Matthew Yglesias on Sep 23, 2008 at 5:40 pm

So testifying before congress today, Hank Paulson repeatedly lied, saying he welcomes oversight of his proposed bailout, and merely didn’t include a bailout mechanism because he thought it would be inappropriate for him to propose the means by which he will be overseen.

This is transparently false. His proposal wasn’t silent on the issue of oversight, leaving a blank for congress to fill in. Rather, it included a provision that specifically precluded oversight from happening:

Section 8. Review: Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Bloggers do a lot of “gotcha” stuff of this sort, but it’s deadly serious. Paulson is asking congress to trust him that (a) a bailout is necessary, (b) he ought to be in charge of implementing it, and (c) that $700 billion is the correct figure. For him to open his explanation by lying to congress is absurd. He needs to come clean about this, admit he made a mistake, apologize, and start making a serious effort to explain why he thinks a bailout is necessary. To just take his work for it would be crazy.

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