John Cassidy's Blog, page 80

Obama’s Drone Man Escapes Senate Unscathed

With his broad shoulders, cauliflower ears, big nose, and hooded eyes, John Brennan, looked a bit like a farmer, or a burly priest, perhaps, from Roscommon, the county in central Ireland from which his father emigrated sixty-five years ago. When he spoke, though, it was in the rapid-fire diction of someone brought up in North Bergen, New Jersey, a few miles west of the Hudson. Several times, he said he was known for speaking his mind of regardless of the consequences. But this was not the occasion to exhibit such candor. For President Obama’s nominee to head the C.I.A., a veteran spy known principally for his role as the keeper of the White House kill list, It was a day for keeping his own head down and flattering his inquisitors.

Barely had he been seated at the witness table when a group of protestors bearing signs with pictures of children killed by U.S. drones and slogans saying “Brennan = Drone Killing” and “Brennan: A National Security Risk,” started kicking up a rumpus. “When you kill people, you are a threat to democracy,” one woman shouted. Looking straight ahead, Brennan took a drink of water and tried his best to look unruffled. For a fifty-seven year old hardened by twenty-five years in the C.I.A. and four years in the White House heading the country’s counter-terrorism efforts, it can’t have been too hard.

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U.K. Lesson: Austerity Leads to More Debt

Yesterday, I argued that U.S. fiscal policy is heading in the wrong direction, toward the economics of austerity. If you want to know where this path can lead, look across the Atlantic to poor old Blighty. For almost three years now, since the election of a Conservative-Liberal coalition, the British government has been slashing government programs and raising taxes, supposedly to reduce a big budget deficit. As I’ve written previously, the results have been pretty disastrous—both for ordinary Britons and for the public finances.

Just how disastrous was made clear yesterday by a new report from the Institute of Fiscal Studies, a London-based think tank that is widely regarded as independent and nonpartisan. In the “Green Budget,” its lengthy and detailed annual review of the U.K.’s finances, the I.F.S. pointed out that the budget deficit, far from being eliminated, was still so large that next year the Chancellor, George Osborne, will have to borrow about sixty-five billion pounds more than he had anticipated. (That’s about four per cent of the U.K.’s G.D.P.) Indeed, the hole in the public finances is so big, the I.F.S. said, that the government might well be forced to introduce a series of tax hikes following the next general election, which is expected to take place in 2015.

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U.S. Fiscal Policy is Upside Down

Reading through the new budget outlook from the Congressional Budget Office, which was released on Tuesday, three figures made the biggest impression on me: 1.4 per cent, 2.4 per cent, and 76 per cent. Taken together, these three numbers explain a good deal about what’s wrong with Washington, and how we are focussing on precisely the wrong things. Rather than tackling the projected rise in entitlement spending, which does present a long-term threat to the country’s prosperity, policy makers, particularly congressional Republicans, are intent on making short-term spending cuts across the board, which would threaten the current economic recovery. In short, they’ve got things upside down.

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Burning Down the House of S. & P.

One of the most surprising aspects of the Justice Department’s five-billion-dollar lawsuit against Standard & Poor’s, which the D.O.J. accuses of defrauding investors by issuing ratings on subprime mortgage securities that it knew to be misleading, is that the settlement talks broke down. According to a story in the Times, McGraw-Hill, S. & P.’s parent company, decided to take its chances in court rather than accept a billion dollar fine and admit wrongdoing, which could have made it vulnerable to more lawsuits from investors.

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Postscript: Ed Koch, 1924-2013

Ed Koch, who has died, at the age of eighty-eight, always had a sense of timing—or maybe he just made a Faustian pact with the fates. During his 1977 mayoral run, which started with him as the outsider in a Democratic field that included Mario Cuomo, Bella Abzug, and the incumbent, poor old Abe Beame, the city suffered an infamous blackout with widespread looting. Koch, who was running on a law-and-order platform, was the principal beneficiary. After defeating Cuomo and the others, he served three terms in City Hall, during which time he became a national figure (and international one, actually); wrote a best-selling book that was turned into an Off Broadway show; retained popular support while, at some point, infuriating almost everybody; and, finally, suffered defeat at the hands of the courtly David Dinkins, a politician who was in many ways his polar opposite.

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Six Reasons to Discount the G.D.P. Shocker

At 8:30 Wednesday morning, the Commerce Department announced that “real gross domestic product—the output of goods and services produced by labor and property located in the United States—decreased at an annual rate of 0.1 percent in the fourth quarter of 2012.” Like most economists and pundits, I was expecting the growth number to come in at somewhere between one per cent and three per cent—and that’s up, not down.

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Hillary Was a Great Ambassador, Not a Great Secretary of State

Having stopped off in a hundred and twelve countries during her four years as Secretary of State, Hillary Clinton, in her last week in office, seems intent on visiting almost as many televisions studios. At the weekend, she did “60 Minutes” on CBS. Today, she will be on ABC, NBC, CNN, and Fox. Tomorrow, it’s the BBC. If you are a news producer at CNBC, Bloomberg, New York 1, or the Weather Channel, give the State Department a call. As far as I know, Thursday and Friday are still open.

O.K., O.K., all you Hillary fans. I’m just being flippant. We all know that once she decides to do something, she gives it her all, and this is probably just another case of the Wellesley-Yale standout overdoing things. And, perhaps, after playing the role of the dancing monkey to President Obama’s organ grinder during the interview with Steve Kroft, she is eager to speak for herself about her record, without the boss looking over her shoulder.

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Immigration Reform: Should We Treat Engineers Differently Than Bricklayers?

Whisper it softly, but signs of sanity are breaking out in the G.O.P. Ten days after John Boehner wisely backed down on the threat of refusing to raise the debt ceiling, four Republican senators, led by Marco Rubio and John McCain, have joined four Democrats, including Chuck Schumer, to propose a framework for immigration reform. By containing principles that have bipartisan support from the start, the framework—or at least some version of it—has a good chance of eventually becoming law.

Inevitably, most of the focus will be on the proposal to provide an estimated eleven million illegal immigrants with a “pathway to citizenship.” Some conservative Republicans, and many of their constituents, favor rounding up these same people and deporting them. Mitt Romney’s bright idea was to make things so tough for them that they would choose to “self-deport.” Under the bipartisan plan, illegal immigrants would be able to stay where they are. As long as they register with the government, undergo a background check, and agree to pay any back taxes they owe, they will be granted “probationary legal status,” which will allow them to live and work legally in the United States. At some unspecified future date, after border security has been beefed up to the satisfaction of a newly appointed panel of pooh-bahs, they will be able to obtain a green card.

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Two Reasons Why Mary Jo White Is A Bad Choice for the S.E.C.

By now, you’ve probably heard the yarn about a young and pint-size Mary Jo White challenging a boastful male colleague to a tennis match, riding up to the court on a red motorcycle, and proceeding to beat the braggart. If you haven’t, take a glance at some of the laudatory pieces about President Obama’s decision to nominate White, a veteran prosecutor and corporate lawyer, to head the Securities and Exchange Commission: the story features in of them.

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Memo to Obama: Send Mary Jo to Justice, not the S.E.C.

By now, you’ve probably heard the yarn about a young and pint-size Mary Jo White challenging a boastful male colleague to a tennis match, riding up to the court on a red motorcycle, and proceeding to beat the braggart. If you haven’t, take a glance at some of the laudatory pieces about President Obama’s decision to nominate White, a veteran prosecutor and corporate lawyer, to head the Securities and Exchange Commission: the story features in of them.

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