2009 NYU Tax Policy Colloquium

It's never too soon. In that spirit, here is the schedule for the 2009 NYU Tax Policy Colloquium, which I will be co-teaching with Alan Auerbach:

SCHEDULE FOR 2009 NYU TAX POLICY COLLOQUIUM
(All sessions meet on Thursdays from 4-6 pm in Furman 120, NYU Law School)

1. January 15 – Daniel Shaviro, NYU Law School. The Long-Term Fiscal Gap: Is the Main Problem Generational Equity?
2. January 22 – Alan Auerbach, Berkeley Economics Department and NYU Law School.
3. January 29 – Edward Kleinbard, Joint Committee on Taxation. A Reconsideration of Tax Expenditure Analysis.
4. February 5 – Amy Finkelstein, MIT Economics Department, EZ-Tax: Tax Salience and Tax Rates.
5. February 12 – Dorothy Brown, Emory Law School.
6. February 19 – Yoram Margalioth, Tel Aviv University Law School and NYU Law School.
7. February 26 – Leslie McCall, Northwestern University Sociology Department.
8. March 5 – Michael Doran, University of Virginia Law School.
9. March 12 – David Duff, University of Toronto Law School.
10. March 26 – Emmanuel Saez, Berkeley Economics Department. Details Matter: The Impact of Presentation and Information on the Take-Up of Financial Incentives for Retirement Saving.
11. April 2 – Lily Batchelder, NYU Law School.
12. April 9 – Mihir Desai, Harvard Business School and NYU Law School.
13. April 16 – Mitchell Kane, NYU Law School.
14. April 23 – Thomas Brennan, Northwestern Law School.

Campaigns as a political institution

Presidential campaigns are supposed to provide information so people can make intelligent choices. Partly from the candidates' announced intentions, and the rest from what we can discern about character, temperament, and intellect.

I've had my doubts sometimes about how well campaigns work, in an age of over-the-top media manipulation and contrived narratives, to do what they are supposed to. But can anyone doubt that the McCain campaign has been astonishingly revealing about what an erratic, lunatic child he is?

I was told before the campaign by Republicans who know McCain personally that he is more of a child than an adult, and that he is temperamentally unsuited to be president. Some of the people who have told me this said they couldn't support him, others were doing so anyway and perhaps even found it endearing (the childishness, not the temper).

But can anyone doubt now that he is utterly unsuited to be president? Even the National Review Online and the Wall Street Journal are raising their eyebrows about his latest stunt.

Case study in how bitter political fights destroy social capital

I've been thinking a lot lately about Rick Perlstein's Nixonland, which I read and enjoyed while on vacation this summer. While much of it is about the eponymous Trickster, a perennial favorite topic of mine, it's really mainly about a broader trend in our society that Nixon was brilliant and innovative at exploiting but that really goes way beyond his direct influence (i.e., in large part he merely exemplifies its development). This is the bitter division of our country between left and right, or red states and blue states, or however one chooses to characterize it. If the two groups hate each other enough, they can get into escalating tit-for-tat cycles that destroy the social capital that they need to cooperate as well as compete. Cooperation is necessary, for example, in setting (1) mutually accepted rules of the road for political debate that limit how dishonest and destructive it is permitted to get, or (2) the groundwork for the long-term budget deal (with taxes going up and entitlements down) that is indispensable if we are going to forestall a U.S. fiscal collapse. In foreign policy as well, while the notion that politics should stop at the water's edge perhaps always was naive and overly restrictive of needed policy debate, we are in big trouble if foreign policy begins to be set primarily with an eye to its efficacy in bludgeoning or sidestepping the opposition, rather than to serve U.S. national interests.

I had all this in mind - not identifying bad guys, as some of the above may suggest, but lamenting the problem - when I read a blog entry from Brad DeLong describing the cancellation of an Obama versus McCain debate that was scheduled to take place tonight at Stanford, under the auspices of the Stanford Institute for Economic Policy Research (SIEPR). Apparently, Austan Goolsbee was supposed to debate Doug Holtz-Eakin. But then Kevin Hassett replaced Doug, and after that Brad replaced Austan, whereupon Kevin, at least according to Brad, called it off.

Hassett and DeLong have a feud, on which you can get Brad's side at the above link, going back to Kevin's coauthored book, Dow 36,000, which I suppose even Kevin would agree made a prediction that did not come to pass within the suggested time frame of 3 to 5 years after 1999. (Hassett then recouped intellectually with his interesting follow-up, Bubbleology.) But although academics can always squabble over nothing as well as something, or over analytical fine points as well as fundamental political issues, I find it hard to doubt that the great and angry divide in our country had a lot to do with the Hassett-DeLong falling-out.

As it happens, although I am obviously intellectually and politically in DeLong's camp rather than Hassett's, I am friends with Kevin (with whom I co-taught the NYU Tax Policy Colloquium for the first half of the winter 2008 semester) and don't really know Brad personally. Without pointing any fingers or saying anyone is wrong, or even definitively assuming that without the great political divide this wouldn't have happened, I must say it's not only too bad but seems to exemplify the broader problems I've been writing about from time to time in this blog, regarding where our country seems to be headed.

Country last

It's amusing that McCain apparently wants to avoid voting on the bailout, but is eager to have Democrats provide the votes to pass it so that he can then safely grandstand as the noble naysayer. (Details here.)

Having been shamed into a press conference, he's quoted as follows:

"This issue should be - and their vote should be determined in how we can resolve this crisis and get America going again," McCain said. "This is a huge crisis. We know, in the words of many experts and mine, this is the greatest financial crisis since World War II. So to somehow, for the Democrats to say that their vote is going to be gauged on my vote frankly doesn't do them a great deal of credit.

"Their first and only priority should be making sure this economy recovers and get back on our feet again," McCain said.

I guess it logically follows, if we define the decision as purely theirs, that they aren't "putting America first" unless they agree to commit political harikiri, and that he isn't harming the recovery (supposing it to depend on passage of a bailout package) by merely exploiting it politically afterwards. But that doesn't make his stance any less sleazy or destructive of the social and political capital that one needs for government to function adequately in a competitive political environment.

UPDATE: What a loon, with his crazy stunt of purporting to suspend his campaign. All he has to do is (as the Obama campaign apparently proposed to him) put his name on a joint statement by the two of them regarding what they'd consider an acceptable deal.

Good day

My cold or allergies receded, I was productive and am close to finishing my paper on generational equity/efficiency/political economy and the fiscal gap, the expanded Pavement reissue of Brighten the Corners was announced for mid-November, the Mets won while the Yankees were eliminated, and Paulson got some of the tough questioning that he deserves.

Could the bailout actually make money for the Treasury?

Republican Senator Norman Coleman apparently is arguing that it could.

Theoretically speaking, Coleman actually is potentially right. The deleveraging theory that I've mentioned in earlier posts suggests that assets may end up having market values well below fundamental value in a temporary squeeze where there simply isn't enough money on the "long" side to compete away the windfalls suggested by the spread.

If Warren Buffett, say, indicated that he wants to buy the same bad loans that Secretary Paulson is talking about (supposing that he had enough money), and was willing to pay more than current market value, I would figure that this was indeed happening, and that Buffett might be quite likely to do well.

However, there are several key institutional differences between the hypothetical Buffett scenario and the actual one. The Treasury isn't deciding to go in for any such reason, would have no incentive to execute its buying strategy from a profit-making standpoint (even where socially optimal), and would probably be unable to do it competently even if it tried. Obviously, making money is not exactly at the heart of its institutional skill set.

Hence I would predict huge losses to the taxpayers even though the undervalued-assets scenario is by no means silly. Reinforcing the argument that Treasury's outlays ought to be fully financed under the assumption that they will recover zero, and probably, insofar as arbitrary stated measures matter to political behavior, ought to be included in the budget deficit.

The Paulson Catch-22

While Paulson is generally well-regarded, we don't really know a great deal about him as a public official. From that standpoint, his demanding a close to zero-oversight blank check grant of authority, followed by his calling for a "clean" bill to forestall, not Congressional pork barrel attachments but meaningful oversight, is not encouraging.

Another way of putting it is that his seeking these unfettered powers lowers one's confidence that he should have such powers.

More on the bailout plan

Imagine that it's January 2009, and that Treasury Secretary Phil Gramm has $700 billion to dole out as he likes to Wall Street companies claiming distress. Phrases that occur to me include Teapot Dome (or perhaps I should say Iraq reconstruction), crony capitalism, and great Republican Party fundraising tool.

UPDATE: Great column by U of Chicago economist Luigi Zingales on the bailout.

Understatement of the day

From Peter Goodman, "But Will It Work?" in today's NY Times, page A-1:

"Some question the prudence of adding [$700 billion] to the nation’s overall debt at a time when the Treasury relies on the largess of foreigners to cover the bills."

The best argument in favor of being so reckless is not an edifying one. If you are going to crash and burn no matter what, why not max out the credit cards first and have a really good time.

On a more serious note, the fact that absolutely no one is discussing financing this wildly expensive bailout is exemplary of why the U.S. is likely headed for a catastrophic fiscal collapse. The core problem is more political than economic. Changing course would be conceptually easy to do though painful in practice. But Republicans have succeeded in utterly banishing from public discourse the idea of a budget constraint. Apparently nothing needs to be paid for. A $2 trillion Iraqi war? Reason to cut taxes. An $18 trillion Medicare prescription drug benefit? No need for financing. And imagine what would happen politically today if Pelosi, Reid, or Obama pointed out that we need to pay for this bailout. They're not that brave, but frankly I don't blame them. Why fall on your sword if no one will listen anyway?

Enacting the bailout without financing is sheer insanity, but it's going to happen beyond a doubt. You may ask: Does it really make sense to increase taxes at a time when we're teetering on the brink of recession? The answer, I'd say, is that it makes perfect sense to announce the tax increase - just not to implement it yet. A tax increase to pay for the bailout, with a deferred implementation date (say, 2010 or 2011) would be stimulative if considered credible, since it would reward accelerating economic activity.

Hundreds of billions of dollars worth of bailouts (according to Paulson)

Absolutely no need to finance it, of course.

Subsidizing the Yankees

A House sub-committee is holding hearings today on alleged improprieties in the use of tax-exempt bond financing to pay for the new Yankee Stadium. Not to put too fine a point on it, but highly questionable representations concerning site value seem to have been made in the IRS private letter ruling request, which found the financing eligible for tax-exempt treatment without its being subject to the dollar cap on issuance of private activity bonds.

As an aside, even if the site value claims were true and the ruling remains valid, the plan that the IRS was asked to approve appears to have been a sneaky end-run around the intent of the dollar cap for private activity bonds, possibly undermining important public accountability and transparency goals in the design of the tax subsidy (as suggested in testimony before the sub-committee by my NYU colleague Clayton Gillette).

My own belief is that the Yankees should be punitively taxed, not subsidized. Major league baseball has already taken constructive steps in this direction, but the federal government should get in on the action as well.

And (shedding light perhaps on my mood swings concerning the election?) I will not feel totally sure that at last, for the first time since 1993, there will be baseball playoffs without the Yankees, until they are mathematically eliminated. Until that happens, how sure can one really be?

War with Spain?

Sorry guys, but you're going to have to wait your turn in line. After Iran, Russia, China, Syria, and North Korea, we will see what we can do.

Accounting rules and the financial meltdown

Today's WSJ had an interesting, albeit not very clearly written, op-ed by Zachary Karabell blaming post-Enron accounting rules for helping create the AIG meltdown. Read in conjunction with the WSJ's front-page coverage of the AIG drama as a case study in "deleveraging," the story appears to be as follows. As we all know, financial institutions (like all other companies) dislike having to write down their assets on the books and have long resisted doing so even when value has declined. For a long time, they could. But post-Enron, the accounting rules were changed to require more write-downs to market value. This, in turn, then triggered a self-reinforcing cycle of write-downs triggering mandatory asset sales, triggering distress prices far below fundamental value, triggering more write-downs, triggering more mandatory asset sales, and so forth. (Apparently a story that Bernanke, among others, has endorsed.)

One part of the story is that whoever buys the assets at distress prices far below fundamental value ends up doing just great when the dust settles. In the more rational world of an economics textbook or model, all you need is two such prospective purchasers who are competing with each other, rather than colluding, to drive the price up to fundamental value and make this scenario impossible. But apparently there isn't enough liquidity and prospective demand for under-valued assets for this to happen, especially when the bowling pins start falling one after the other.

As an aside, this I gather was at play in the collapse of Long-Term Capital Management some years back. A credit crunch forced them to sell assets for way below fundamental value, leaving some very happy purchasers to clean up (but apparently there were too few of them to drive the prices back up, and perhaps there was even implicit collusion to all enjoy part of the good thing that was popping into their laps).

Anyway, all this can't and won't happen in textbook financial markets, but I gather it actually is happening out there in the world, even at this very moment. One of the issues it raises is what to do with the accounting rules, which play a triggering role in the self-reinforcing downturn.

Obviously we want financial accounting to report true value. The argument here is that true value is hard to identify when you have a temporarily low market value and a higher fundamental value, and when the market mechanisms (arbitrage, etc.) that are supposed to drive these together aren't currently operating.

Is the solution not to write down assets to market valuation when there's reason to think that fundamental value is actually higher? This might sound good to me if we had Olympian companies and accountants honestly and objectively trying to determine when the two have been temporarily driven apart. However, given managerial incentive problems, along perhaps with evidence that they try to ignore, rather than just publicly deny, downturns in the making, it doesn't sound very good either.

So let's call it an open question for now what if anything should be done from an accounting standpoint about the deleveraging scenario that is currently hitting the markets so hard.

The AIG rescue

It may well have been the right decision, all things considered, but I must say I really don't like it. The obvious points are moral hazard plus the question of exactly what the government is going to do with the new asset in its portfolio.

Interesting point about this is that the decision was presumably made by Bernanke and Paulson. These are the rare Bush Administration appointees - Gates comes to mind as well - whom I personally would trust in these matters as much as the average appointee in, say, a Reagan, Bush Sr., Clinton, or Obama Administration. (Maybe more than the average, given the hacks that are likely to be appointed to some roles in any Administration - so let's say I trust Bernanke and Paulson as much as the average good appointee in a historically typical Administration.)

But even so, any appointee in such a position arguably has slightly skewed incentives. (I would as well if I were the officeholder.) While the catastrophic downside that you are trying to prevent (if serving at the Fed or in the Treasury) obviously does in fact matter enormously, it arguably matters a little more to you than it does socially. Given that your job is to prevent it, and that you will go down in history as a horrendous failure if it happens on your watch, the clear incentive structure is to err on the side of worsening moral hazard, rather than of taking a bit too large a chance of an economic meltdown.

Over time, then, one would expect too many rescues, and I fear that this may fit and feed into that scenario.

UPDATE: It's interesting to observe, though I'm not sure what to make of it yet, that the market fell more than 400 points today despite / because of / without being affected by the AIG rescue.

Behind the market meltdown

Why are these things happening on Wall Street, and what can we learn from them?

Legal and economic scholarship concerning markets and regulation are actually in the ballpark of understanding this, if not of developing bulletproof answers. During my early years in the legal academy (which I entered in 1987), market-based, anti-regulatory law and economics was sweeping all before it - on merit, based on the insights it was advancing and the defects in prior ways of thinking about the issues.

But the pendulum has decisively turned with the rise of behavioral law and economics plus a greater understanding of the range and importance of agency costs and asymmetric information problems. (An example, in his recent writing about the subprime market, is my NYU colleague Oren Bar-Gill.)

Unfortunately, the devastating law & economics critique of politics and government solutions proved to be wrong in only one sense - it was too optimistic (!). So what will come of all this is unclear, although one certainly could imagine regulatory responses (to help in the future, not with what we face at the moment) addressing the blizzard of bad subprime loans to people who didn't understand what they were doing, the unwitting use of securitization to magnify agency problems and misaligned incentives, etc.

Unfortunately, I anticipate government remaining indefinitely in the hands of people who rely on an outmoded version of free market ideology (outmoded in their invocation of it even though in fact it retains enormous force rightly applied) as a thin veneer over a conscious actual policy of organized piracy on behalf of friends and campaign contributors.

Call me crazy but ...

... I've pretty much decided to stop following the 2008 presidential campaign. My sentiments are the same as previously, and I will of course vote. But I am simply finding it too infuriating and distressing; I could use stronger words if I wanted to get back in the mood. Given how little I can actually do, I feel there simply are more constructive and enjoyable uses for my time than following the daily twists and turns.

I gave up on baseball right before the 2004 season when the Yankees got A-Rod. I figured it wasn't worth following if they just kept on getting everyone. I came back when the Red Sox miracle happened. Ready to repeat that chapter, but this time it's serious business not fun and games, and also I think the prognosis is pitch dark. UK law and public policy schools should feel free to contact me this November.

Fall of the titans

Lehman Brothers apparently was founded in 1850, and Merrill Lynch in 1914. The fall of these two titans - though Merrill Lynch is merely being sold, not liquidated - truly is an epochal event, symbolizing how high the metaphorical flood waters, no less than the literal ones in various hurricane zones, are rising these days.

Something about McCain that I've been wondering about lately

Let's see: he's been violent in public, and he's called his wife a "c---" in public. What sort of behavior in private does that fit the profile for?

Campaign / budget update from the Tax Policy Center

According to the widely respected Tax Policy Center, analyzing the candidates' campaign platforms:

"The simple bottom line: under Senator Obama’s tax plan as described by his campaign advisors, the ten-year federal deficit (before spending cuts) would total nearly $5.9 trillion; a comparable total for Senator McCain’s tax plan is almost $7.4 trillion. Expanding each candidate’s plan to include proposals made in stump speeches yields ten-year deficit totals (again before spending cuts) of $5.4 trillion for Obama and almost $11 trillion for McCain."

Neither candidate's spending cuts are included due to a lack of specificity from both in saying what these would be.

On the spending side, I'd say the ten-year McCain total is several trillion dollars too low given the foreign military adventures he would engage in.

Krugman gets it 99 percent right

From his column today on the presidential campaign:

"T]he deceptive and dishonest 2000 Bush-Cheney campaign provided an all-too-revealing preview of things to come. In fact, my early suspicion that we were being misled about the threat from Iraq came from the way the political tactics being used to sell the war resembled the tactics that had earlier been used to sell the Bush tax cuts.

"And now the team that hopes to form the next administration is running a campaign that makes Bush-Cheney 2000 look like something out of a civics class. What does that say about how that team would run the country?

"What it says, I’d argue, is that the Obama campaign is wrong to suggest that a McCain-Palin administration would just be a continuation of Bush-Cheney. If the way John McCain and Sarah Palin are campaigning is any indication, it would be much, much worse."

To this I'd just add, among the key Bush personality traits that has shaped his presidency is the fact that he is a natural, lifelong bully. But he does not appear to be a violent bully to quite the same degree as McCain. That's a rather large consideration when one considers that, under the current U.S. government system as it actually operates, the president effectively has plenary and unilateral war-making powers, and has lately been claiming equally plenary and unilateral domestic national security powers.

Out-of-print album watch

First Dennis Wilson's Pacific Ocean Blue came back into print a couple of months ago - a great and very sad listen (if rather 70s) that is packaged with the equally good aborted follow-up, Bambu.

On Tuesday, Tom Verlaine's Dreamtime is coming back into print, his second solo album after the (initial) break-up of Television. I have the old LP but have been waiting for this one for years.

The next one on my list would be the Feelies' Crazy Rhythms. Hard to imagine why that one is out of print when it still has a following.

Ten good things about John McCain

I've been a bit harsh on him at times, but here are 10 GOOD things about John McCain, the best I could think of:

1) He performed up to his ability in military school.

2) He never lies when his lips aren't moving.

3) He's been right, at one time or another, about most major domestic policy issues (since he's taken both sides).

4) He creates good jobs ... for lobbyists in his campaign.

5) You try making better decisions with as little time, care, and information as he uses.

6) While his tax plans would cost $7 trillion over the next ten years, he is hoping to make back 1 percent of that amount by reforming earmarks.

7) He's willing to share his POW story with us again and again and again and again, even though he hates talking about it.

8) So far as we know, he's only gotten into a couple of physical altercations with fellow members of Congress.

9) To forgive is divine, and he just hired the guy who slimed him in South Carolina in 2000.

10) There are probably a couple of vile names that he hasn't called his wife in front of witnesses.

Rosanne Altshuler becomes co-director of the Tax Policy Center

The Urban-Brookings Tax Policy Center just announced that, starting in January, Rosanne Altshuler will become its co-director, joining Len Burman and Bill Gale. This is great news on many levels. Rosanne, one of the best international tax economists in the country, is an incredibly thoughtful, careful, and creative scholar who has made important contributions and is at the forefront of thinking seriously and fair-mindedly (not a universal trait) about where U.S. international tax policy should go. She also has fantastic knowledge in multiple arenas, ranging from the empirical issues to understanding legal and institutional details. The only downside, a selfish one, is that we in the NYC tax policy community will regret seeing less of her.

9/11

Being in downtown NYC, I saw the whole thing happen and then lived through the crazy days that came after it. I will never forget the shock, rage, and fear of that period.

But by its seventh anniversary there's an even more hateful overlay. Now, 9/11 invokes in my memory above all:

1) "All right, you've covered your ass. You can go home now." (Bush to the CIA briefer in August 2001.)

2) My Pet Goat.

3) The instantaneous decision, made at the top but immediately embraced (and indeed anticipated) by the entire Republican establishment and base, to treat it as a wedge issue for political gain, rather than as a Pearl Harbor-like national focal point. Only people who hated their opponents and loved power more than they cared about anything else could have done such a thing. If there were a hell they would rot in it eternally for that alone.

When will the U.S. default?

For my current work in progress, "The Long-Term U.S. Fiscal Gap: Is the Main Problem Generational Inequity?," I recently took a look at the question of how fast, under current budget scenarios, the U.S. debt-to-GDP ratio would explode. The sequence is potentially interesting because capital markets, in determining when U.S. public debt should cease to be considered a safe investment, may look only so far ahead, given not just myopia (which need not be posited here), but (a) the fact that the real issue is credibility, which may be affected by the timing of the exploding debt problem, and (b) the unpredictable psychology of bubble markets.

Luckily for me - as I do theoretical not empirical work - the General Accounting Office recently did a long-term simulation of the projected U.S. debt-to-GDP ratio over time under present policy. It's available via their public website (details available to the curious who contact me if they can't find it themselves).

More specifically, the GAO did 2 simulations, one under the CBO baseline and the other adjusting it to be more realistic (e.g., expiring tax cuts are extended for a while, discretionary spending grows with the economy & population). The CBO baseline is plainly ridiculous - for example, it shows massive budget surpluses from 2010 to 2020 that no one expects will actually happen - so I present below only the figures for the alternative simulation.

YEAR - - - - - U.S. PUBLIC DEBT / GDP (as %)
2008 - - - - - - - - - 37.1
2010 - - - - - - - - - 38.7
2015 - - - - - - - - - 47.1
2020 - - - - - - - - - 60.8
2025 - - - - - - - - - 80.7
2030 - - - - - - - - - 109.2
2035 - - - - - - - - - 145.6
2040 - - - - - - - - - 188.4
2045 - - - - - - - - - 236.6
2050 - - - - - - - - - 290.1
2055 - - - - - - - - - 348.5
2060 - - - - - - - - - 412.0
2065 - - - - - - - - - 480.3
2070 - - - - - - - - - 553.8
2075 - - - - - - - - - 632.0
2080 - - - - - - - - - 714.8

As a bit of background, the all-time U.S. high debt to GDP ratio was 109 percent, right at the end of World War II. BUT - in 1945 it was clear to the world that, with peacetime rapidly approaching, annual budget deficits and thus new debt issuances were about to plunge. This time around, the picture would be radically different absent a credible prospect of voluntary budget reform.

Some people may conclude from this that we still have a bit of time. Maybe so, maybe not, because financial markets can be very forward-looking and even, say, the Chinese government might be able to precipitate the plunge right now (which is not to say they'd ever rationally want to do this).

Open empirical question

Brendan Nyhan suggests that liberal blogger Josh Marshall is guilty of a "smear" when he compares Guiliani's speech at the recently concluded RNC convention to a speech by Josef Goebbels. Nyhan notes that "casual Nazi analogies demean and cheapen the discourse -- it's an easy way to active a series of unflattering associations and attach them to a public figure that you don't like." He then compares Marshall's Nazi analogies to Bush's arguably comparing the Democrats to Vietnamese Communists in his video address to the convention.

Here's my problem with so rapidly dismissing the left side of this, which is comparing the current Republicans to Nazis or fascists. I regard it as a genuinely open empirical question how far these guys are willing to go to destroy American democracy. For my money, the discourse at the RNC convention truly was Nazi or fascist-style: demeaning opponents as less than fully human or at least not American, militarism, outrageously over the top lying (Palin on the Bridge to Nowhere, Guiliani denouncing cosmopolitans, Romney denouncing Eastern elites), claiming that only people from small towns are real Americans, etc. Then there's the executive authoritarianism, the claims the president can lock up anyone indefinitely, lying to get us into wars, government secrecy for everything (including indefensible legal opinions embracing torture), the use of torture itself when its intelligence payoff has pretty much been proven to be negative, complete politicization of the executive branch, use of the Justice Department to throw political foes such as Don Siegelman in jail, and repeated, systematic attempts to intimidate the media and prevent it from questioning even demonstrably false claims (whether about Guanatanamo or Palin's earmark record), etc.

I feel they are destroying civil society and the rule of law, and I honestly don't know how far they would go. Explicit dictatorship? Jailing of the opposition? Reichstag fire style fake terror attacks? (Bush and Cheney have both been quoted considering the equivalent in foreign affairs to create casus bellis with Iraq and Iran.) I don't think that leading Republicans themselves know what they would do or where they are headed beyond the next news cycle, but that doesn't mean that they aren't, via their incentives and inclinations and the pressure of events, headed somewhere very nasty.

At this point, I feel there are reasonable arguments to be made on both sides of this - yes, they are something new in American politics and there really is no limit to how far they would go; or no, it's pretty much still business as usual and neither politics nor government have ever been pretty.

But Nyhan is guilty of simply assuming the no side here. He might be right, but at this point I feel we genuinely don't know.

Siberia sounds toasty by comparison

I gather from a Michael Isikoff blog on the Newsweek site that Doug Holtz-Eakin has been posted from the McCain campaign over to Sarah Palin as director of her domestic policy operation (such as it is).

Wow - what a reward to Doug for having endangered his (previously justifiably high) reputation for all these months by carrying water for the campaign's wildly irresponsible tax and budget policies.

New wine in old bottles

I find the newly released Byrne-Eno album quite charming, even delightful, but am going to pass on the new Brian Wilson (odds seem high against its actually being much good).

Call me old-fashioned, but ...

.. while I think chest-beating invocations of patriotism can be over-done, I still have this crazy belief that elected U.S. national leaders should be, well, pro-U.S., rather than Alaskan nationalists.