BAILING OUT THE STATES….Paul Krugman writes today about the Bush tax plan ? he doesn’t like it ? and at the end throws in a quick sentence about a topic that has pretty much dropped off the radar screen in Washington: the increasingly horrific budget problems of state governments. It’s a bit of a throwaway line:
If the administration really cared about jobs, it would provide an emergency package of aid to state governments ? not to pay for new spending, but simply to maintain basic services. How about $78 billion ? the same sum just allocated for the Iraq war?
The fiscal meltdown of the states has been truly catastrophic, and back in December there was a lot of talk that Bush’s plan would include some kind of state bailout. In the event, though, it never happened.
There’s a good reason to be opposed to a state bailout, too: moral hazard. If the states come to expect that the feds will save their bacon any time they get into trouble, they’ll be less careful in the future. Bail them out once, and you can expect to do it again and again.
This is an argument that I take seriously, but life is all about making difficult choices and this is one that Bush and his team got wrong. Running a federal budget deficit as a fiscal stimulus but then forcing the states to cut spending makes little sense, and pretending that the Bush tax plan is a “jobs” program while simultaneously watching the states cut thousands of jobs is foolhardy in the extreme.
There are plenty of ways that a bailout could be structured to avoid the worst of the moral hazard problem. After all, we were willing to spend hundreds of billions of dollars to bail out the S&L industry in the 80s and Long Term Capital Management in the 90s. Why are we willing to bail out big corporate interests but unwilling to bail out state and local governments that provide basic services to the indigent?
Do I really need to ask?
FINDING THE WMDs….This story says that France has proposed ending UN sanctions on Iraq. This story says that Hans Blix would like to send his UN inspection team back to Iraq.
Sounds like there might be a deal here: end the sanctions in return for letting UNMOVIC back in. I think working with UNMOVIC would be in our best interests in any case, but if it helped to get an overall UN deal moving it would be even better.
And while we’re on the subject, note this comment of Blix’s from a BBC interview: “I think it’s been one of the disturbing elements that so much of the intelligence on which the capitals built their case seemed to have been shaky.” No kidding. No matter what we discover over the next few months, one thing that’s already clear is that either (a) U.S. and British intelligence in Iraq was close to useless, or (b) administration members deliberately lied about it over the objections of the intelligence agencies themselves. I’m not really sure which of these worries me more.
IN-N-OUT URGE….Ken Layne is thrilled because In-N-Out, a Southern California burger chain, is finally opening a stand in his new hometown of Reno, Nevada.
This just goes to show how unfair the universe is. I have three or four In-N-Out stands within a few miles of my house, while Ken has none, but I’ve never really been able to figure out the cultish devotion that In-N-Out inspires. (Well, aside from the venerable SoCal tradition of taking “In-N-Out Burger” bumper stickers and removing the “B” and the “r” from “Burger,” which is pretty easy to understand.) Basically, they’re fine burgers, but that’s all.
Now that I have comments on the blog, though, it makes sense to ask my fellow Southern Californians about this: exactly what is it that raises In-N-Out from the merely tasty to culinary nirvana?
(And while I’m on the subject of cult burgers, I finally tried a White Castle slider a few years ago on a trip to Chicago, and I’m still in the dark about their appeal. But if you’re ever visiting Southern California and want a real burger, try Tommy’s instead. That’s nirvana.)
RECONSTRUCTING IRAQ….A couple of days ago it looked like we were planning to establish permanent military bases in the New Iraq?, but apparently now we’ve decided not to:
“The likelihood of it seems to me to be so low,” [Donald] Rumsfeld said, suggesting that the United States would more likely use bases in other Middle Eastern countries. “We’ve got all kinds of options and opportunities in that part of the world to locate forces.”
And how about that commitment to stay around for as long as it takes to rebuild Iraq into the thriving democracy it deserves to be? Well, Jay Garner has his own definition of “as long as it takes”:
Speaking to reporters, Garner declined to specify a timetable. “I don’t think I would put 90 days as a mark on the wall, but we will be here as long as it takes,” he said. “But we’ll leave fairly rapidly.”
One of the criticisms of the Clinton administration was that it was always in chaos and never seemed able deliver a consistent message. The Bush administration, run by an MBA, was supposed to be different.
But when it comes to postwar Iraq it seems to be in complete disarray. Military bases? Maybe, maybe not. The UN? Blair says a “vital role,” Bush says “ptui.” WMDs? Around here somewhere….probably. Length of occupation? Somewhere between 90 days and ten years. Democracy? State says “yes,” Defense says “yawn.” Syria? A terrorist state hiding Saddam Hussein last week, gratifying cooperation this week. It’s just trial balloon after trial balloon.
This has gotten ridiculous. Is anyone in this administration in charge? Is there even the vaguest kind of plan in place for the reconstruction of Iraq? It seems like every senior official in the administration is free to shoot off his mouth on any subject at any time, with no one calling the shots. Where’s the CEO?