Month: June 2014

It’s A Bird! It’s A Plane! …

It’s the first drone approved for commercial overland use!

The FAA gave BP permission to fly the UAV over Alaska yesterday. (What could possibly go wrong?) Adam Clark Estes describes the drone as “less like a hobbyist toy and more like what the military uses on the battlefield”:

In fact, AeroVironment’s Puma AE drone is one of the military’s favorite models. At nearly five feet long with a wingspan of nine feet, this is a sizable aircraft. … This makes good sense when you consider that the drone’s main duty will be patrolling BP’s oil pipelines in Alaska. AeroVironment’s five-year contract with BP also stipulates that the aircraft will do some 3D-mapping, wildlife monitoring, and the occasional search-and-rescue mission.

This is a good thing. It’s no mystery that drones can do a lot of good by taking over jobs that humans can’t or won’t do. Patrolling potentially dangerous pipelines in Alaska’s deep wilderness certainly qualifies. The location also largely skirts around the privacy issue that the FAA’sstruggled to address in its ongoing process of writing the rules that will dictate how commercial drones will operate in the United States.

Jason Koebler argues that this isn’t the breakthrough it seems to be:

In fact, AeroVironment had already been flying commercial drone missions in the area. Today, the FAA simply ever-so-slightly expanded the area in which AeroVironment can use its drone. Last July, the company became the first ever to gain FAA approval to fly the drone over the North Slope of the Arctic for oil spill monitoring and ocean surveys. That’s why you’re seeing the claim that this is the first commercial drone approved to be flown over land.

But Megan Garber argues that the launch heralds a new era of civilian UAV use:

As Transportation Secretary Anthony Foxx put it in a statement, “These surveys on Alaska’s North Slope are another important step toward broader commercial use of unmanned aircraft. The technology is quickly changing, and the opportunities are growing.”

And they’re growing because the government is fostering them. The Obama administration, The Verge points out, has considered offering a “streamlined” approval process for low-risk commercial use of drones (like farming, say, and filmmaking). It is also considering giving permissions to seven different aerial filmmaking companies that use drones in their photography. And in April, the FAA announced the certification of a site in North Dakota for testing the Draganflyer X4ES, a camera-equipped quadcopter. The site, the FAA pointed out at the time, will not only allow for the gathering of safety and maintenance data on the drones; it will also help the agency to develop rules for UAV operation.

Which is to say: The frontier is fading. In its place will be standards, regulations, and crowded skies.

The End Of Afghanistan’s War Boom

Lynne O’Donnell examines how the US drawdown is affecting the country’s feeble economy:

The international military drawdown has had an immediate impact on Afghanistan’s economic growth, with a GDP of more than 14 percent in 2012 cut to a World Bank estimate of 3.6 percent last year. According to an as yet unpublished report for NATO and the U.N., the International Security Assistance Force (ISAF) has estimated that 11.5 million people lived within a 5-km radius of at least one military base or facility that provided economic support to the local population.

Afghanistan’s military economy has depended on local services, including: construction; food, fuel, and other supplies; logistics; security; transportation and trucking. If a jeep broke down, local mechanics fixed it. If a base needed a latrine or laundry block, local carpenters built it; locals usually cleaned it, too. One analyst said that providing security for military supply convoys alone cost around $2 billion a year. The number of military bases is down from a peak of 850 in 2012 to fewer than 100 now.

The report adds that almost 90 percent of Kabul’s 4.25 million people have directly benefited from 75 ISAF and Afghan National Security Forces facilities. The capital’s febrile atmosphere is born of the shrinkage of economic activity as small businesses collapse, the construction industry winds down, and many of the wealthy prepare to leave the country.

Who Is Dave Brat?

Chuck Todd peppered him with policy questions earlier today:

Betsy Woodruff profiled him back in January:

Brat’s background should make him especially appealing to conservative organizations. He chairs the department of economics and business at Randolph-Macon College and heads its BB&T Moral Foundations of Capitalism program. The funding for the program came from John Allison, the former CEO of BB&T (a financial-services company) who now heads the Cato Institute. The two share an affinity for Ayn Rand: Allison is a major supporter of the Ayn Rand Institute, and Brat co-authored a paper titled “An Analysis of the Moral Foundations in Ayn Rand.” Brat says that while he isn’t a Randian, he has been influenced by Atlas Shrugged and appreciates Rand’s case for human freedom and free markets.

His academic background isn’t all economics, though. Brat got a business degree from Hope College in Holland, Mich., then went to Princeton seminary. Before deciding to focus on economics, he wanted to be a professor of systematic theology and cites John Calvin, Karl Barth, and Reinhold Niebuhr as influences. And he says his religious background informs his views on economics. “I’ve always found it amazing how we have the grand swath of the Judeo-Christian tradition, and we lost moral arguments on the major issue of our day,” he says, referring to fiscal-policy issues.

Beauchamp digs into Brat’s unpublished book on economics:

Brat clearly wants to bring to bear is the role of “values” in economics. Brat seems to believe that most economists are motivated by philosophy rather than science: they’re secretly utilitarians who believe that the goal of public policy is to produce the greatest good for the greatest number. He thinks this leads them to wrongly assert that their preferred policies are “scientifically” the best policies, when in reality they’re just the policies that a utilitarian would say are the best. “Economists from the beginning to the end, have engaged in normative, ethical and moral arguments which diverge greatly from the work of the ‘true’ science which they espouse,” Brat writes.

Timothy B. Lee focuses on Brat’s views of the security state:

In a recent interview with the Richmond Times-Dispatch, he argued that “The NSA’s indiscriminate collection of data on all Americans is a disturbing violation of our Fourth Amendment right to privacy.” On his website, Brat says he favors “the end of bulk phone and email data collection by the NSA.” If Brat takes Cantor’s seat, it will shift the Republican Party a bit more toward the Amash position on surveillance issues. That’s significant because Section 215 of the Patriot Act, which the government has cited to justify its phone records program, will come up for renewal next year. With more Republicans like Brat and Amash in Congress, that could be a tough sell.

John Nichols highlights Brat’s populism:

Brat’s anti-corporate rhetoric distinguished him from Cantor, and from most prominent Republicans—whether they identify with the Republican “establishment” or the Tea Party wing of a party that in recent years has been defined by its subservience to corporate interests.

Ana Marie Cox fully expects his star to fade:

Congressional seats are not made of Valyrian steel; they do not remain powerful no matter who holds them. When he leaves the House, Cantor will take much of his influence with him – probably straight to K Street, where he arguably can hold more sway over national policy as a lobbyist than he ever could as a representative from Virginia.

Brat will have to build his political capital from zero: as an economist, he probably has a better understanding than most of us about just how difficult that is. As an economist and paid follower of Ayn Rand, he will face the added difficulty of not being a very good economist.

Noah Millman, on the other hand, gives Brat the benefit of the doubt:

Scott Galupo may be right that Brat is going to be “another useless crank,” but we can always hope that he will be a useful crank, the kind who demands a wildly against-the-consensus look at this or that particular issue, as opposed to someone willing to destroy the institution if he doesn’t get his way. The House of Representatives is pretty big; there’s for those who make the sausage and room for those who want to change the recipe – even radically. We’ve just had enough of folks whose idea of changing the recipe is adding e coli.

If Brat becomes a table-pounder on immigration, or NSA spying, or corporate welfare – he may make a useful contribution to shaping the debate, even if I don’t always agree with the direction. If he refuses to vote for any budget that doesn’t repeal Obamacare – not so much.

Don’t Under-Estimate The Power Of Right-Wing Populism

Leading Conservatives Gather For Republican Leadership Conference In New Orleans

That’s my underlying take on what just happened in American politics. We live in a potentially powerfully populist moment. The economy is failing to help middle- and working-class people make headway, while the wealthiest are living higher on the hog than since the days of robber barons. Wall Street’s masters of the universe nearly wiped out the US and global economy – and there has been scarcely any accountability for their recklessness and greed and hubris. Big business favors mass, cheap immigration – which adds marginally to the woes of the working poor. All of this is grist to someone like Elizabeth Warren, but also to someone like Dave Brat or Ted Cruz.

But the main difference between a Warren and a Brat is that Warren is never going to be able to rally the Southern or Midwestern white working poor to her professorial, Massachusetts profile. A dorky populist like Brat? Much more imaginable. A gifted demagogue like Ted Cruz? I think many liberals would be surprised. And the ace card for the populist right, rather than the populist left, is immigration. If you can weld together a loathing and resentment of elites with a loathing and resentment of foreigners “invading” the country and “taking our jobs,” then you have a potent combination.

Brat also targeted K Street as well as Wall Street. So you have this dynamic, noted by John Judis:

Speaking last month before the Mechanicsville Tea Party, Brat tied Cantor to Wall Street and big business, whom he blamed partly for the financial crisis. “All the investment banks in the New York and D.C.—those guys should have gone to jail. Instead of going to jail, they went on Eric’s Rolodex, and they are sending him big checks,” he said. Brat echoed these charges in a radio interview. “The crooks up on Wall Street and some of the big banks—I’m pro business, I’m just talking about the crooks—they didn’t go to jail they are on Eric’s Rolodex,” he said.

Brat and local Tea Party leaders also criticized Cantor for attempting to water down the Stock Act, which banned members of Congress from profiting from insider trading. “One congressman changed the act so spouses could benefit from insider trading,” Brat charged, referring to Cantor. (Cantor drew equal fire from Democrats for attempting to undermine the bill.)

This theme also taps into a deep dissatisfaction with a gridlocked government.

The gridlock is, of course, caused by the absolutism of the opposition to anything Obama might want to do – but the GOP radicals can rely on their base and many more to forget that. Besides, it’s a political win-win. You create the gridlock, then present yourselves as the only people able to break it. And that’s the other feature of this potential movement: it’s about upsetting Washington; it’s about change in an economically depressed time. The change may be incoherent; it may be economically disastrous (brutal fiscal austerity would not exactly sustain short-term growth or employment, for example); but it’s politically powerful. If the Democrats put up Hillary Clinton – a symbol of the past, of the DC establishment, of big money and big corporations and big lobbyists – then the opening for a root-and-branch right-wing revolt is absolutely in sight.

Would it stand a chance? I wish I could say it didn’t. Is this a mere protest vote to be buried in a multiracial landslide for Clinton in 2016? Maybe. But maybe not.

(Photo: U.S. Senator Ted Cruz (R-TX) speaks during the final day of the 2014 Republican Leadership Conference on May 31, 2014 in New Orleans, Louisiana. Leaders of the Republican Party spoke at the 2014 Republican Leadership Conference which hosted 1,500 delegates from across the country. By Justin Sullivan/Getty Images.)

Mental Health Break

The self-proclaimed Bruce Lee of bartending:

Update from a reader:

I grew up watching kung-fu movies on HBO, back in the late 1970s when HBO didn’t own the rights to play much mainstream cinema. And the thing about Bruce Lee is that, beneath his theatricality, he displayed an awe-inspiring economy of motion. Lee and his imitators were all about maximum asses-kicked for minimum motion.

The bartender, on the other hand, spends the better part of three minutes on a juggling routine with no connection to drink-making at all – admittedly, a fun juggling routine – before mixing a single cocktail. And when he finally gets down to the actual, you know, bartending, his motions aren’t all that much different than if you or I mixed a martini.

So the guy isn’t the Bruce Lee of bartending. He’s the hulking, clumsy white dude wannabe whom Bruce Lee humiliates in every movie, of bartending.

Responding To Student Groans

Suzy Khimm summarizes Obama’s executive action on student debt:

Obama signed a memorandum on Monday that would allow more Americans to limit their student loan payments at 10 percent of their income. The action will expand on Obama’s “Pay as You Earn” program, which first launched in October 2011, making it available to those who took out student loans before October 2007. Those who opt into the program will have their student loan payments set according to a sliding scale based on income. The remaining balance is forgiven after 20 years; those working in public service have any remaining balance forgiven after 10 years.

The original “Pay as You Earn” program was only available to those who took out loans after October 2007 and continued to borrow after October 2011. The White House estimates that the program’s expansion will offer student debt relief to an estimated 5 million Americans.

But Derek Thompson believes the plan won’t fix the college-cost crisis:

The pay-as-you-earn plan is appropriate and targeted. It carries relatively few downsides, and it will help some students get on with their post-graduate lives. But we shouldn’t expect it to “fix” much now, because the existing program hasn’t “fixed” much already. Libby Nelson reports that just a tiny fraction of eligible borrowers are currently using Pay As You Earn. This is like giving somebody with a broken leg a half-off coupon for crutches – a perfectly decent ameliorative option that only works if the injured party chooses to use it.

Jana Kasperkevic concurs, arguing that “at the heart of the problem are the increasing tuition costs that often lead students to take on more and more debt”:

Consider this: as tuition at public four-year college increased by 250 percent, family incomes increased by just 16 percent. The increase in tuition last year amounted to a 2.9 percent increase for in-state students at four-year public college and a 3.8 percent increase for student at private colleges.

There are reasons for this increase, such as decreased funding from the government. According to CNN, US states have cut college funding by a total of $15.2 billion between 2007 and 2012. That’s a 17.4-percent drop in funding. During that time, the number of students increased by 12 percent. … Until US government tackles the issue of increasing cost of tuition and the fact that for majority of Americans going to college means taking on some kind of debt, the overall burden of student debt is only bound to increase

The editors at Bloomberg aren’t thrilled with the news either:

[T]he share of students who default, now at one in seven – its highest level in two decades. By that light, expanding access to income-based repayment is a good idea, as far as it goes. A more efficient idea, proposed by Republican Senator Marco Rubio of Florida earlier this year, would automatically enroll borrowers in those plans, rather than leaving students to wade through the details on their own. Otherwise, the students who most need those programs may not be the ones who know enough to sign up for them.

Another idea worth pursuing is effectively removing the possibility of default altogether, by having a borrower’s employer automatically deduct those income-based repayments from borrowers’ paychecks and send the money to the Internal Revenue Service. That’s what Republican Representative Tom Petri of Wisconsin has proposed, modeled on systems in the U.K. and elsewhere.

Libby Nelson notes that Congress “could take other steps to make it less likely that students need to take out loans in the first place” – but almost certainly won’t:

A decade ago, two House Republicans, including now-Speaker John Boehner, proposed cutting off financial aid at colleges that increase tuition too rapidly. Colleges strongly opposed the specter of federal price controls; Democrats refused to get on board; and the idea went nowhere. When President Obama proposed an updated version of the same idea, suggesting that Congress should some federal financial aid to reward colleges that offer good value and punish colleges that don’t, even Democrats left the idea out of their budget proposals.

That leaves student loans as the remaining tool in Congress’s college affordability toolbox. Unlike grants, they’re a moneymaker for the federal government under current accounting rules. And they’re less thorny politically because the vast majority of student loans already come from the Education Department. There aren’t other interests – like banks and colleges – to be taken into account when changing policy. Student loans aren’t the only lever Congress has over higher education policy. They’re just by far the easiest one to pull, and so lawmakers return to it again and again.

But Cardiff Garcia notes that a half-measure could be better than none:

[W]hat can be said with more confidence is that higher student loan debt has a deleterious effect on the lives of the people who have it. From [Wenli Li of the Philadelphia Federal Reserve’s] paper:

Researchers have found evidence that high debt burdens make students less likely to choose lower-paying careers such as teaching. Jesse Rothstein and Cecilia Rouse study a “natural experiment” generated by a change in financial aid policy by a highly selective university. The university introduced a “no loans” policy, in which it replaced the loan component of financial aid awards with grants. Interestingly, they find that debt causes graduates to choose jobs with substantially higher salaries, such as those in finance and consulting, and reduces the probability that students choose low-paid “public interest” jobs such as grade-school teacher or social worker. …

And from Brookings:

Dew (2008) finds a negative correlation between reduced marital satisfaction and student loan debt, positing that increased stress related to consumer debt—including student loans—could diminish marital satisfaction. About 14 percent of borrowers surveyed in 2002 reported delaying marriage due to student loan debt, up from 9 percent 15 years earlier. Over the same period, the share of borrowers who reported that they delayed having children due to student loans jumped from 12 percent to 21 percent (Baum and O’Malley 2003).

Meanwhile, Kelly Field observes that “the biggest beneficiaries of the change are likely to be graduate- and professional-school alumni with large debt balances and low-paying public-service careers”:

Consider, for example, a public defender who graduated from a private law school in 2012 with $125,000 in debt (the average that year) and has an adjusted gross income of $55,000. He could reduce his payment from $469 a month under income-based repayment to $312 under Pay as You Earn, according to the repayment estimator, and have more than $175,000 in debt forgiven, compared with less than $49,000 under income-based repayment. Ultimately, he would pay back more than $150,000 less than he would in an income-based plan.

That Time The Clintons Ran Out Of Money, Ctd

Following her tone-deaf claim that she and her husband were “dead broke” when they left the White House, Alec MacGillis posits that Clinton’s wealth will be an issue if and when she runs for president:

Even before Clinton’s clumsy answer to Sawyer, it wasn’t hard to predict that the Clintons’ relentless quest for great wealth in the years since they left the White House was going to loom as one of the main areas of scrutiny should Hillary make a second bid for president. Bill Clinton’s pursuit of riches, and the company he was keeping in that endeavor, was an issue when she ran in 2008, and in the years since, Hillary herself has joined the chase, giving $200,000-and-up speeches to Goldman Sachs (twice) as well as humbler venues such as the Institute of Scrap Recycling Industries (really.) The couple’s net worth is now estimated to be as high as $50 million and they spent last summer living in a $200,000 per month mansion on the Hamptons [seen in the above tweet, which has the incorrect year].

Americans are famously slow to begrudge successful people their good fortune. Still, the country is getting more sensitive to the winner-take-all trends benefiting the top one percent (and top-tenth of the top one percent that the Clintons qualify for), and it will be very interesting to see how candidate Hillary Clinton reconciles her family’s fabulous wealth with her and her husband’s explicit attempt to fit their rhetoric (and the mixed economic legacy of the Clinton administration) into a more populist frame.

In fact, Yglesias remarks, the amount of debt the Clintons accrued in the late ’90s was not at all a sign of penury. Quite the contrary:

You need to be really rich to go that deeply into debt.

Nobody would lend a normal person $10 million or anything remotely in that vicinity. A similar problem arises when you try to compile a list of the poorest members of congress. Instead of having the lifestyles of actual poor people — or even actual middle class people — the members of congress with the lowest net worths are guys like David Valadao with negative $4.10 million to his name (a result of his families’ business interests in dairy farming) or Alcee Hastings who’s $2.23 million in debt (related to legal fees).

The story with the Clintons is that they left office millions of dollars in hock to various law firms. But this wasn’t some random financial misfortune that could have happened to anyone. If you found yourself in legal hot water, you wouldn’t possibly be able to hire the Clinton’s lawyers. No firm would let you run a multi-million dollar tab. The reason the Clintons were able to get away with it is that it was always obvious that Bill had enormous post-presidential earnings potential.

Despite her “dead broke” gaffe, Michael Hirsh sees inequality as Clinton’s best option for a campaign theme:

[N]owhere is Hillary less defined as a candidate than on economic policy. There is good cause for that lacuna: Upon being named President Obama’s secretary of state in late 2008, Clinton quite properly kept herself out of domestic-policy issues. She had a free pass from the biggest economic debates of the era, whether on the bank bailouts, the president’s nearly $800 billion stimulus package, the Dodd-Frank financial regulation law, Obamacare or the sluggish housing recovery. And yet it is on economic policy—not on foreign policy, on Benghazi, her broader record as secretary of state or even her now-ancient votes as the senator from New York—that she is most likely to build her case for the Oval Office in an era of a chronically wayward recovery and runaway inequality.

To make that case, according to some people familiar with Clinton’s thinking, she is likely to argue that she was often well ahead on those issues the last time she ran for president in 2007—that in fact she was often to the left of the more centrist Obama, who as president has regularly upset his own liberal base for what is perceived as a moderate, Wall Street-friendly response to the financial crisis.

“She was talking about inequality before inequality was in vogue,” says Neera Tanden, president of the Center for American Progress and a longtime close aide and adviser to Clinton.

Meanwhile, John Dickerson suggests that Clinton ought to worry more about being dishonest than out of touch:

The danger for Clinton is that the “dead broke” comment will not be seen as a tone-deaf slip-up about personal wealth but as an effort to create a false story when confronted with the uncomfortable fact that she and her husband have made a lot of money fast. (That Clinton resorted to such a clumsy dodge gives you some sense of how uncomfortable she is with the topic.) The misstatement will be irresistible for her opponents who want to lampoon Clinton and press on the trust issue, which is the one that hits voters in the gut.

Cutting The Costs Of Healthcare

Here’s some encouraging news:

Adjusted for timing shifts, Medicare growth is even lower through eight months at just 0.3 percent. And even after removing the effects of temporary policies, year-to-date Medicare growth remains extremely low at 2.5 percent, even lower than through April. This is more than a full percentage point below economic and beneficiary growth, meaning that even excluding one-time effects, Medicare spending is on pace to both fall as a percent of GDP and on a per-capita basis.

As Chait reminded us, another promise kept.

A New Iraqi Refugee Crisis

The International Organization for Migration reports that over 500,000 Iraqis fled the city of Mosul in the days leading up to its capture by ISIS jihadists yesterday:

The situation for those who remain is grim. “The violence has resulted in a high number of casualties among civilians. The main health campus, a group of four hospitals, is inaccessible, as it is in the middle of an area in which there is fighting,” the IOM continues, adding that some mosques have been converted to clinics to treat casualties. “Western neighborhoods of Mosul are also suffering from a lack of drinking water, as the main water station for the area was destroyed by bombing. Families are also running low on food, particularly families hosting IDPs in their homes. Few areas are receiving electricity, and when they do it is for only one to two hours a day. Most generators are not working because there is no fuel.”