• The Economy's Mixed Signals

    The NYT business section had a column today urging cautious optimism about the economy's future. While the case for pessimism is clear enough (crashing housing market leads to continued declines in housing related sectors, which are soon amplifed by falling consumption, as consumers lose the ability to borrow against homes that have lost value) the article does not make much of a case for optimism. The article notes that capacity utilization has been falling for the last three months. I thought this was going to be an argument for pessimism, since firms are less likely to invest when they have considerable excess capacity. Instead, this is cited as a basis for optimism (room for expansion -- no inflation). In fact, the story on utlization is even worse than the data in the article suggest. The recent increase in utilization has been mostly in the mining sector, utliization in the manufacturing sector is just 1.3 pp higher than its year ago level and down 0.7 pp from its August peak...
  • Getting Facts Straight on the Medicare Drug Benefit

    Lobbyists and politicians often try to obscure issues when they advocate positions favored only by relatively small special interest groups. They did their job well in helping to frame a Washington Post piece on the Medicare drug benefit. The article discusses the possibility of having Medicare negotiate drug prices directly with the industry, a position strongly opposed by the Washington Post editorial board. One would be hard-pressed to figure out what is at issue after reading this piece. For example, the article raises the possibility that if Medicare negotiated prices directly with the industry, it �could drive prices higher.� Yes, this must be why the industry is lobbying so hard against having Medicare negotiate prices. They are worried that it would cause them to charge higher prices and get higher profits. The article then raises the other potential downside of negotiated drug prices �it could significantly lower drug-company profits and discourage medical innovation.� Okay,...

    WHEN YOU THINK YOU'VE LOST EVERYTHING, YOU FIND OUT YOU CAN ALWAYS LOSE A LITTLE MORE . So it's not just that Bush 's new chief of family planning services, Eric Keroack , uses wacky cartoons to teach kids reactionary, anti-scientific nonsense about sexuality. Apparently, he's not even a board-certified ob-gyn . Heckuva job, Bushie! (In fairness, as Bush appointments to crucial family planning posts go, he's still not quite as bad as David Hager .) -- Scott Lemieux

    CANCEL THE APPOINTMENT. The Department of Health and Human Services is now defending Eric Keroack as an appointee to lead federal family planning groups based on Keroack's private practice as an OB-GYN, during which he prescribed birth control to patients. Keroack has a record of working for Christian family planning centers that dissuade women from abortions and birth control. Moreover, he "inadvertently" let his OB-GYN certification expire in the last year at the same time that HHS officials have been touting that credential as evidence of his suitability. --Kay Steiger

    FUTURE FORCE. Did you like America's Army , the free first-person shooter designed as a recruitment tool by the US Army? Then you'll love Future Force Combat , a free game that simulates the experience of a Future Combat System equipped Mounted Combat Team. Future Force Combat accomplishes the nifty trick of being not only a recruitment tool but also a sales pitch for the most expensive integrated combat systems that the Army has ever requested. The sinkhole that is Iraq has hit the Army the hardest, and the Pentagon budgeting norms have by and large prevented a reshuffling of defense funding, potentially putting FCS in some jeopardy. J. at Armchair Generalist and Kingdaddy at Arms and Influence have additional commentary on the game and the pitch. As to FCS more generally, I remain ambivalent. The Army should certainly be planning for future conflict (this is what military organizations do), but I don't know that producing dominance over the entire combat spectrum, from low to high...

    SPEAKING OF MCCAIN. Greg has a very, very good question for him. --Sam Rosenfeld

    THE NEOCON PARTY. It's tempting to make fun of Marshall Wittmann 's newest guise, as Lieberman 's communications director, as if it were just another twist in one of the oddest careers in Washington. The New York Times has some fun with that theme today. However, it's quite obvious where this is going. John McCain will fail to win the Republican nomination, and he and Lieberman will turn up as a third party presidential ticket. They will have a great shtick: "We were each rejected by the ideological extremists in our parties, therefore we represent the true forgotten center of American politics." The Broder s of the world will salivate over the possibility. Except, of course, it will not be a centrist party. It will be the Neoconservative party, with Lieberman having taken that angry turn and McCain already there. And both are rank opportunists, for whom "straight talk" is an empty slogan. There are many ways this could go wrong, but be aware: someone is certainly thinking about it...

    OVERBLOWN. David A. Bell wishes more people were discussing and debating John Mueller 's new book Overblown , which makes the strong case against considering terrorism a genuinely dire, let alone existential, threat to the United States; I share Bell's wish. Mueller's argument is basically off-message for just about everybody, but has always stuck me as a truly useful contribution to debates over terrorism and American policy. Cato Unbound held an in-depth exchange with Mueller back in September that's worth a look, and so is this very strong New York Review of Books essay by Max Rodenbeck , reviewing (sympathetically) Mueller and a few other related books. --Sam Rosenfeld

    SPEAKER PELOSI. Now that Nancy Pelosi and Steny Hoyer have gone into overdrive to patch things up and get the caucus unified after last week's fight, we've been reminded that the key challenge of Pelosi's leadership is likely going to be less intra-leadership squabbling with the majority leader than handling the disparate strategic and substantive priorities of the committee chairs. Her batting down of Charlie Rangel 's draft push is one early glimmer of the kind of control we're likely going to see her exerting frequently on the chairs in the next two years. That, combined with the strategic sense of theater indicated by the leadership's plan to break up the ethics reform package into constituent parts to prolong the debate and showcase incoming freshmen, offer new reasons for optimism about the strong hand Pelosi will be using as Speaker. (Don't tell the press, of course .) --Sam Rosenfeld

    THE GENIUS. Sometimes, what with General Nuisance back in the saddle again, and Richard Cohen 's apparently mistaking the 101st Airborne for a heating pad. (Note: I'm thinking that the word "therapeutic" is just going to lay there like rotting roadkill on the ol' career path for quite some time), I despair of the world. And then something like this happens , and all is right with the world again. As nice as it was to see Alma Mater take Trust Fund U out for a walk last night, I was somewhat alarmed by the report from ESPN's Doris Burke that, in his effort to broaden his horizons, Marquette coach Tom Crean visited with "the genius, Karl Rove ." I think the Jesuit fathers ought to be awfully concerned that their highest profile employee is consorting with godless pirate scum and I think Burke's standards for "genius" are at least two weeks out of date. --Charles P. Pierce