Wonkbook: An Elena Kagan primer; oil spill beats containment dome; Europeans agree on mega-bailout
If a tree falls in the forest and it's the tree that everyone expected to fall, does it make the evening news? We'll find out later today, when Barack Obama nominates solicitor general Elena Kagan to the Supreme Court. (And props to Mike Allen, who broke this story a couple of days ago!) The political line on Kagan is that the left won't love her and the right won't filibuster her. She's got experience in government, in academia, and in the private sector, but in contrast to every other member of the Supreme Court, she has not served as a judge. Consequentially, her written record is surprisingly thin. Which is not, of course, the same as nonexistent. Read on for a full Kagan primer.
Oh, and welcome to Wonkbook.
House: Not in session.
Senate: Debate continues on financial regulation, but no votes scheduled.
White House: Look for a 10am news conference announcing Elana Kagan's nomination to the Supreme Court.
Kagan, Kagan, Kagan, Kagan! "President Obama plans to nominate Solicitor General Elena Kagan to be the 112th justice of the Supreme Court," report Anne Kornblut and Robert Barnes. "Kagan, 50, the former dean of Harvard Law School, would become the fourth woman to serve on the high court; if she is confirmed, the nine-member court will have three female justices for the first time." They've also got this graphic timeline of Kagan's career: http://bit.ly/9JtQxg
SCOTUS Blog's comprehensive backgrounder on Elena Kagan: http://bit.ly/d0zJSJ
Tom Goldstein's look at the 10 potential points of controversy: http://bit.ly/9rvV5g
Europeans announce 'Shock and Awe' bailout to stabilize the Eurozone: "The European Union agreed on an audacious €750 billion bailout plan in an effort to stanch a burgeoning sovereign debt crisis that began in Greece but now threatens the stability of financial markets world-wide," report Stephen Fidler and Charles Forelle. "The money would be available to rescue euro-zone economies that get into financial troubles, the diplomats said. The plan would consist of €440 billion of loans from euro-zone governments, €60 billion from an EU emergency fund, and €250 billion from the International Monetary Fund."
"The giant bailout package reflects the gravity of the crisis gripping Europe and growing fears that the situation may grow so dire as to hamper the fragile rebound in the global economy. It would also cast aside long-held notions that each EU nation should manage its own finances, opening an era in which members of the common currency take on unprecedented responsibilities for each others' fiscal troubles."
Containment dome fails to stop oil spill: "BP at the weekend lowered a 40-foot-tall (12 meter) steel chamber over the oil leak about a mile below the surface," report Edward Klump, Mark Chediak and Aaron Kuriloff, "hoping to capture the 5,000 barrels of crude oil leaking each day and pump it to a ship. The effort failed when an icy mixture of gas and water near the seafloor clogged the chamber, forcing the company to remove it and study how to stop the ice forming before trying again."
Team CoCo interlude: Conan O'Brien gives a talk at Google.
Table of contents: A variety of takes on Elana Kagan; What Ben Bernanke thinks about happiness (plus other economic news); a variety of takes on Audit the Fed (plus other FinReg news); and sex, drugs, and relationships with industry executives in the agency charged with regulating offshore drilling.
Evaluate her as a dean, not an academic: "The skills of a good administrator are very different from those of a good scholar," writes Ilya Somin. "A reclusive, difficult to get along with person, can be an outstanding scholar but would be a disaster as an administrator. Contrariwise, a skilled manager and politician who is not an original thinker would make a poor scholar. But so long as he values and recognizes original thought in others, he could be an excellent dean. To return to the case of Kagan, there is little doubt that she was an excellent dean. She successfully hired numerous top scholars in many subfields, and from across the political spectrum. Under her tenure, Harvard arguably managed to surpass Yale and Chicago as the law school with the most productive faculty (I say this despite the fact that I’m a Yale Law grad, and a longtime admirer of Chicago). At the very least, she did a great deal to regain the ground that Harvard lost to its rivals in the 1980s and 90s."
"She did this in part by pushing for the hiring of top conservative scholars like Jack Goldsmith and John Manning. In a hiring market characterized by a degree of hostility to non-leftwingers, productive right of center scholars were an undervalued asset similar to the undervalued high-OPS hitters that Beane relied on in his early years with the A’s. More generally, Kagan fostered by word and deed an atmosphere of openness and ideological tolerance at a a school that previously wasn’t exactly well known for either. She deserves special credit for achieving all this at an institution with a famously difficult to manage faculty and at a time of harsh ideological conflict in society as a whole."
Lawrence Lessig makes the liberal case for Kagan: "My case for Kagan depends of course upon believing that Kagan has the right views. Obviously, my read of Kagan's politics comes from my personal experience, and I hope it is obvious that I wouldn't say someone should believe this about her merely because I say it."
"I believe there's an aspect to Kagan's experience that sets her apart from others on the short list. Kagan has had practical strategic experience. Her most important work over the past two decades has been in contexts where she has had to move people to see things as she did. And through that experience, she has developed a sixth sense for the strategy of an argument. She matches that insight with a toughness that can get what she wants done. That doesn't mean triangulating. It doesn't mean "compromise." It means finding a way to move others to the answer you believe is right." http://huff.to/c4XOGI
Glenn Greenwald makes the liberal case against Kagan: "Why is it seemingly impossible to find even a single utterance from her during the last decade regarding the radical theories of executive power the Bush administration invoked to commit grave crimes and other abuses? It's possible that she said something at some point, but many hours of research (and public inquiries) have revealed nothing -- other than when she endorsed the core Bush template during her Solicitor General confirmation hearing." http://bit.ly/b2MO0u
Stephen Bainbridge makes the conservative case for Kagan: "I don't know very much about Elena Kagan other than that a couple of Harvard folks for whom I have a lot of respect think highly of her. When I look at some of the lefties who are opposing her and their reasons for doing so, however, I'm tempted to conclude that she's the most acceptable--from my perspective--candidate Obama is likely to put forward for the SCOTUS. You can tell a lot about a person from who their enemies are." http://bit.ly/9XK21u
Jonathan Strong makes the conservative case against Kagan: "As the dean of Harvard’s law school, Kagan fought to bar military recruiters from the university’s campus," he writes. "Her reasoning? Even with two wars in progress, she contended, Don’t Ask, Don’t Tell should disqualify the US military from having any association with the school. 'I abhor the military’s discriminatory recruitment policy,' she said, describing it as a 'moral injustice of the first order.' Critics say Kagan’s legal arguments on the matter are so preposterous that they raise doubts about her ability to serve on the bench."
Kagan has argued that nominees should provide detailed answers during the confirmation process: "Kagan is on record calling upon the Senate to demand more — much more — from prospective Supreme Court nominees," notes Jonathan Adler. "Indeed, she wrote a law review article about it, 'Confirmation Messes, Old and New,' 62 U. Chi. L. Rev. 919 (1995), in which she argued that probing questions about a nominee’s views were not only appropriate but essential. According to Kagan in 1995, the Senate should ask — and demand answers — about both a nominee’s 'broad judicial philosophy' and 'her views on particular constitutional issues' including those 'the Court regularly faces.'"
Slow-cooking interlude: Thomas Keller teaches you to sous vide.
Recession worsens employment gap: "The recession is showing that even a college degree isn't enough to close the stubborn employment gap between white and black Americans," reports Sudeep Reddy. "In April, the nationwide jobless rate for white college graduates, ages 25 and older, stood at 4%, according to the Labor Department. The rate for college graduates in the same age bracket who identify themselves as black or African-American was 7.4%. And that gap—3.4 percentage points—has widened since the recession started in December 2007, when the comparable figure was 0.9 percentage point."
The mood on Wall Street: "Investors hate uncertainty, but uncertainty — lots of it — is what they are facing," reports Christine Hauser. "Add to that Thursday’s white-knuckled ride and the result, for some, is a case of high anxiety that could cause more wild market swings."
Republicans oppose bailout package for Greece: "House Republican Conference Vice Chairwoman Cathy McMorris Rodgers (R-Wash.) warns the effort could lead to future bailouts of larger struggling countries such as Portugal and Spain," reports Ian Swanson. "McMorris Rodgers said Greece should tighten its own belt. If other European countries want to help a fellow European Union member, it’s one thing, she said. But U.S. taxpayers should not be asked to contribute through the IMF.
She noted that the U.S. isn’t asking Europe to help bail out indebted U.S. states such as California."
Federal Reserve triumphantly cashing out? "Having waged a battle against financial mayhem for the past two years, the Federal Reserve is tentatively declaring victory," writes Daniel Gross. "As it guaranteed debt and swapped cash for all sorts of assets, the Fed's balance sheet grew -- from about $850 billion in assets before the crisis to about $2.3 trillion this spring. The binge included the purchase of $1.25 trillion of mortgage-backed securities issued by Fannie Mae and Freddie Mac...The Fed is discussing how to sell off these new assets. The prospect of the Fed dumping hundreds of billions of dollars of bonds and mortgage-backed securities onto the market has unsettled some market watchers. But they shouldn't worry -- too much."
Ben Bernanke's commencement speech at the University of South Carolina: "I always find it difficult to choose a topic for a commencement talk. I am an economist, but my experience has been that people in a celebratory frame of mind are usually not that interested in an economics lecture. (I can’t quite understand why not.) Instead, they are generally looking for something more personal and inspirational. So I thought I would split the difference between an economics lecture and inspirational remarks and speak briefly about what economics and social science more generally have to say about personal happiness, and what those ideas imply both for economic policymaking and the choices each of you will make as you leave college for other pursuits."
"We all know that getting a better-paying job is one of the main reasons to go to college, and achieving economic security for yourself and your family is an important and laudable goal. But if you are ever tempted to go into a field or take a job only because the pay is high and for no other reason, be careful! Having a larger income is exciting at first, but as you get used to your new standard of living, and as you associate with other people in your new income bracket, the thrill quickly wears off. Some interesting studies of winners of large lottery prizes, even in the millions of dollars, found (as you would expect) that they were happy and excited on learning that they had won. But only six months later they reported being not much happier than they were before they won the lottery. The evidence shows that, by itself, money is not enough. Indeed, taking a high-paying job only for the money can detract from happiness if it involves spending less time with your family, stress, and other such drawbacks." http://bit.ly/aU7gdn
Meet the new president of SEIU: "In her decades of organizing, Ms. Henry became a master practitioner of the labor strategy that companies hate most: corporate campaigns," reports Steven Greenhouse. "In one major success, she led a four-year corporate campaign against Catholic Health Care West, a chain of California hospitals, branding it antiworker and lining up the support of several Catholic bishops. That campaign led to unionizing 17,000 workers at 27 hospitals."
Does Greece show how the welfare state dies? "The welfare state's death spiral is this: Almost anything governments might do with their budgets threatens to make matters worse by slowing the economy or triggering a recession," writes Robert Samuelson. "By allowing deficits to balloon, they risk a financial crisis as investors one day -- no one knows when -- doubt governments' ability to service their debts and, as with Greece, refuse to lend except at exorbitant rates. Cutting welfare benefits or raising taxes all would, at least temporarily, weaken the economy. Perversely, that would make paying the remaining benefits harder."
"Greece illustrates the bind. To gain loans from other European countries and the International Monetary Fund, it embraced budget austerity. Average pension benefits will be cut 11 percent; wages for government workers will be cut 14 percent; the basic rate for the value-added tax will rise from 21 percent to 23 percent. These measures will plunge Greece into a deep recession. In 2009, unemployment was about 9 percent; some economists expect it to peak near 19 percent."
Live, from New York, it's Saturday Night! interlude: Betty White's tasty muffin.
Wall Street lobbyists spending all their time fighting Lincoln's spin-off proposal: "Cory Strupp, who represents Wall Street in Washington, spent the last six months lobbying for more than two dozen changes in the derivatives chapter of the Senate’s financial legislation," report Binyamin Appelbaum and Eric Lichtblau. "He has spent the last two weeks focused on one: eliminating a new provision that would require banks to leave the lucrative business of derivatives trading...Mr. Strupp, who works for the Securities Industry and Financial Markets Association, a Wall Street trade group in Washington, said that he generally has only 30 minutes to sway a senator or aides. He said he now uses almost the entire time to argue that banks should retain the right to trade derivatives."
Bernie Sanders responds to charges that he 'sold-out' Audit the Fed: "The primary changes [to Sanders' amendment] include more explicit language on the purview of the one-time audit—setting a firm time window for the review, from Dec. 1, 2007 to the day the legislation is signed into law, if it passes," reports Meredith Shiner. "Additionally, the new amendment was narrowed in scope so that the GAO, which will conduct the audit, is not allowed to look into the discount window or interest rates."
"'What I want is in this amendment, all right?' Sanders said with a hint of frustration. 'Would I like to go further, sure? Would I like an ongoing investigation ordered of the Fed? Sure, I would. But 99 percent of the American people, they're interested in what's happened since the financial crisis—and that's in the amendment.'"
Chair of Philadelphia Fed takes aim at audits: "The objective of these audits is not transparency of policy per se, but to influence policy in real time," he said.
Amendment coming to bar banks from betting against customers: "Lawmakers are considering legislation that would ban investment banks from betting against their customers in many circumstances, in a further ripple effect for Wall Street from Goldman Sachs's troubles," reports John McKinnon. "In a statement to The Wall Street Journal, Sen. Carl Levin (D., Mich.) said he is drafting legislation to prevent conflicts of interest by 'prohibiting companies from taking the opposite side of the deal for their own account,' at least when they are marketing investments they have created themselves."
Allan Sloan's "six simple steps to fix Wall Street": http://bit.ly/cJRZPA
Lindsey Graham bails on climate bill: "Senator Lindsey Graham, one of the chief sponsors of a nascent plan to address energy and climate change in the Senate, said Friday that the proposal had no chance of passage in the near term and called for a “pause” in consideration of the issue," reports John Broder. "But his two co-sponsors, Senators John Kerry, Democrat of Massachusetts, and Joseph I. Lieberman, independent of Connecticut, vowed to press forward with a broad energy and global warming plan next week...But Mr. Graham, Republican of South Carolina, said that the current political climate had made it impossible to consider such a difficult subject."
Gulf Coast tourism industry advertising for sympathy: "Gulf Coast tourism boosters face a quandary: They need to keep hotels, casinos and beachfront bars humming," reports Michael Phillips. "But what to say about that huge oil slick swirling just offshore? From Louisiana to Florida, local authorities are urging travelers to ignore the headlines and head to the coast, pitching it as charitable. 'Although the level of actual environmental and economic impact cannot be realized until the spill is capped and possibly reaches our shores, your visit will help to ensure that our local tourism economy—which is a cornerstone to our growth—remains vibrant,' a regional tourism group, SouthCoast USA, said in a statement this past week to travel writers, travel websites and area tourism bureaus."
Sex, drugs, and relationships with industry executives: "For years, the Minerals Management Service, the arm of the Interior Department that oversees drilling in the gulf, minimized the environmental risks of drilling," writes Paul Krugman. "It failed to require a backup shutdown system that is standard in much of the rest of the world, even though its own staff declared such a system necessary. It exempted many offshore drillers from the requirement that they file plans to deal with major oil spills. And it specifically allowed BP to drill Deepwater Horizon without a detailed environmental analysis."
"Surely, however, none of this — except, possibly, that last exemption, granted early in the Obama administration — surprises anyone who followed the history of the Interior Department during the Bush years. For the Bush administration was, to a large degree, run by and for the extractive industries...Given this history, it’s not surprising that the Minerals Management Service became subservient to the oil industry — although what actually happened is almost too lurid to believe. According to reports by Interior’s inspector general, abuses at the agency went beyond undue influence: there was “a culture of substance abuse and promiscuity” — cocaine, sexual relationships with industry representatives, and more."
Indie interlude: What do you think of the new Wolf Parade?
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Closing credits: Wonkbook compiled with the help of Dylan Matthews. Photo by Doc Searls.
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