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Republicans Love Obamacare!

| Thu Jul. 10, 2014 12:59 PM EDT

Here's an additional tidbit from that recent Commonwealth Fund survey about Obamacare:

That's a lot of Republicans who are satisfied with their Obamacare coverage. They might not realize it's Obamacare—perhaps they know it as Kynect or Covered California—but they like it. And if you take it away, they're going to be unhappy. That's several million potentially unhappy Republicans if the national GOP continues its anti-Obamacare jihad. Just saying.

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Who's Afraid of an Itsy Bitsy Bit of Inflation, Anyway?

| Thu Jul. 10, 2014 12:19 PM EDT

Why are so many people obsessed with "hard money"? Why the endless hysterics about the prospect of inflation getting higher than 2 percent? Paul Krugman, like many others, thinks it's basically a class issue. If you have a lot of debt, inflation is a good thing because it lowers the real value of your debt. But if you're rich and you have lots of assets, the opposite is true. Here's Krugman using data from the Census Bureau's SIPP database:

Only the top end have more financial assets (as opposed to real assets like housing) than they have nominal debt; so they’re much more likely to be hurt by mild inflation and be helped by deflation than the rest.

Now, it’s true that some of these financial assets are stocks, which are claims on real assets. If we only look at interest-bearing assets, even the top group has more liabilities than assets.

But the SIPP top isn’t very high; in 2007 you needed a net worth of more than $8 million just to be in the top 1 percent. And since the ratio of interest-bearing assets to debt is clearly rising with wealth, we can be sure that the truly wealthy are indeed in the category where they have more to lose than to gain by a rise in the price level.

Brad DeLong isn't buying it:

It is true that the rich do have more nominal assets than liabilities....But it is also true that America's rich have a lot of real assets whose value depends on a strong and growing economy.

I find it implausible to claim that the net gain is positive when we net out the (slight) real gain to the rich from lower inflation with the (large) real loss to rich from lower capital utilization. It's not a material interest in low inflation that we are dealing with here...

I don't think I buy Krugman's claim either. He's basically saying that hard money hysteria is driven by the material interests of the top 0.1 percent, but even if you grant them the clout to get the entire country on their side, do the super rich really love low inflation in the first place? Do they own a lot of long-term, fixed-interest assets that decline in value when inflation increases? Fifty years ago, sure. But today? Not so much. This is precisely the group with the most sophisticated investment strategies, highly diversified and hedged against things like simple inflation risks.

Plus there's DeLong's point: even if they do own a lot of assets that are sensitive to inflation, they own even more assets that are sensitive to lousy economic growth. If higher inflation also helped produce higher growth, they'd almost certainly come out ahead.

So what's the deal? I'd guess that it's a few things. First, the sad truth is that virtually no one believes that high inflation helps economic growth when the economy is weak. I believe it. Krugman believes it. DeLong believes it. But among those who don't follow the minutiae of economic research—i.e., nearly everyone—it sounds crazy. That goes for the top 0.1 percent as well as it does for everyone else. If they truly believed that higher inflation would get the economy roaring again, they might support it. (Might!) But they don't.

Second, there's the legitimate fear of accelerating inflation once you let your foot off the brake. This fear isn't very legitimate, since if there's one thing the Fed knows how to do, it's stomp on inflation if it gets out of control. Nonetheless, there are plenty of people with a defensible belief that a credible commitment to low inflation does more good than harm in the long run. After all, stomping on inflation is pretty painful.

Third, there's the very sensible fear among the middle class that high inflation is just a sneaky way to erode real wages. This is sensible because it's true. There are several avenues by which higher inflation helps weak economies that are trapped at the zero bound, and one of them is by allowing wages to stealthily decline until employment reaches a new equilibrium. I think that lots of people understand this instinctively.

Fourth, there's fear of the 70s, which apparently won't go away until everyone who was alive during the 70s is dead. Which is going to be a while.

It's worth noting that hard money convictions are the norm virtually everywhere in the developed world, even in places that are a lot more egalitarian than the United States. Inflationary fears may be irrational, especially under our current economic conditions, but ancient fears are hard to deal with. As it happens, the erosion of assets during the 70s was unique to the conditions of the 70s, which included a lot more than just a few years of high inflation. But inflation is what people remember, so inflation is still what they fear.

Bottom line: Even among non-hysterics, I'd say that hardly anyone really, truly believes in their hearts that high inflation would be good for economic growth. It's the kind of thing that you have to convince yourself of by sheer mental effort, and even at that you're probably still a little wobbly about the whole idea. It just seems so crazy. Until that changes, fear of inflation isn't going anywhere.

Pundits, Start Your Engines!

| Thu Jul. 10, 2014 11:16 AM EDT

So what's the next step in the border crisis? President Obama has introduced an emergency proposal; he's traveled to Texas to discuss it with his political opponents; and in order to stem the tide of immigrants he's declined to engage in photo-ops at the border that might encourage the tide to continue.

Republicans, for their part, appear at the moment to be completely unwilling to do anything at all.

So here's the next step: a barrage of columns from our nation's pundits acknowledging Republican intransigence but then insisting that, ultimately, the lack of action is Obama's fault. Because leadership. Because LBJ. Because schmoozing. Because lecturing. Because relationships. Because political capital. Because great presidents somehow figure out a way to get things done. Rinse and repeat.

We're Still at War: Photo of the Day for July 10, 2014

Thu Jul. 10, 2014 9:48 AM EDT

US Navy sailors navigate the USS Kidd in the waters of the Indo-Asia Pacific Region. (US Navy photo by Mass Communication Specialist 2nd Class Declan Barnes.)

Todd Akin Is Not Sorry for His Insane Rape Comments

| Thu Jul. 10, 2014 9:38 AM EDT

Former GOP Senate candidate Todd Akin is not sorry for saying that women don't usually get pregnant from rape.

Akin tanked his 2012 Missouri Senate campaign by claiming that there is no need for rape exceptions to abortion bans because "if it's a legitimate rape, the female body has ways to try to shut that whole thing down." In his new book due out next week, titled Firing Back: Taking on the Party Bosses and Media Elite to Protect Our Faith and Freedom, Akin says he regrets airing a campaign ad apologizing for the statement, Politico reported Thursday.

"By asking the public at large for forgiveness," Akin says in the book, "I was validating the willful misinterpretation of what I had said."

He adds that the media misconstrued his words and explains why he's still right about rape and pregnancy. "My comment about a woman's body shutting the pregnancy down was directed to the impact of stress of fertilization. This is something fertility doctors debate and discuss. Doubt me? Google 'stress and infertility,' and you will find a library of research" on the impact of stress on fertilization, he writes.

And Akin doubles down on the term "legitimate," which he says refers to a rape claim that can be proved by "evidence," as opposed to one used "to avoid an unwanted pregnancy."

Akin's comments two years ago perpetuated what Democrats have dubbed the GOP "war on women," which refers to Republican attempts to limit abortion coverage, contraception, and workplace rights for women.

The release of Akin's book comes just weeks after the Supreme Court ruled that family-owned companies—which employ more than half of all American workers—do not have to provide contraception coverage for women as mandated by Obamacare if their owners have a religious objection to doing so. The decision is expected to open the floodgates to further assaults on contraceptive access for women.

It's More or Less Final: Obamacare Has Insured About 11 Million People

| Thu Jul. 10, 2014 12:31 AM EDT

Jonathan Cohn passes along the results of a new study from the Commonwealth Fund which estimates that the ranks of the uninsured have dropped by about 5 percentage points since the start of the Obamacare rollout:

To put that in more concrete terms, there are still a lot of Americans walking around without health insurance today. But there are about 9.5 million fewer of them than there were last fall, almost certainly because so many people have enrolled in the newly expanded Medicaid program or purchased subsidized insurance through the Obamacare marketplaces.

How does that compare to expectations? The Congressional Budget Office predicted that, one year into full implementation, Obamacare would reduce the the number of Americans without insurance by 12 million. That included the young adults who got insurance before 2014, by signing onto their parents’ plans. There’s been some controversy over exactly how many people that is, but the best estimates I’ve seen place it somewhere between 1 and 2.5 million. Add that number to the 9.5 million from the Commonwealth survey, and you're close or equal to the CBO projections.

So that's probably a total of around 11 million or so. Nearly all of the estimates now seem to be converging around this number, and given the inherent uncertainty in measuring the uninsured it seem like this is about as good as we're going to get.

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Quote of the Day: "This Isn't Theater"

| Wed Jul. 9, 2014 7:18 PM EDT

From President Obama, asked why he wasn't making a visit to the border during his trip to Texas today:

This isn't theater. This is a problem.

"I'm not interested in a photo-op," he said. "I'm interested in solving a problem." It would be nice if he weren't the only one.

The Legacy of the Hobby Lobby Case: Protecting Anti-Gay Discrimination?

| Wed Jul. 9, 2014 6:49 PM EDT
A protester patiently awaits the Hobby Lobby decision outside the Supreme Court

In his majority opinion in the recent Hobby Lobby case, Supreme Court Justice Samuel Alito took pains to frame the ruling, exempting companies from complying with Obamacare's contraceptive mandate if it violated the religious beliefs of their owners, as a narrow one. But gay and civil rights groups have long warned that a decision permitting such a religious exemption could have broad ramifications, potentially allowing employers to discriminate against gays. Now, their fears may be coming to pass.

"What we've seen since last week's decision came down is that opponents of LGBT equality have pushed a misreading of that decision as having broadly endorsed discrimination against people, including LGBT people in the workplace," says Ian Thompson, a legislative representative for the American Civil Liberties Union.

Cecile Richards, president of the Planned Parenthood Action Fund, told Mother Jones that the Hobby Lobby ruling "opens the door for corporations to discriminate against anyone that doesn't look, sound, or share the religious beliefs that they do. This isn't a business agenda; it's an extreme social agenda and it is deeply unpopular with the American people."

For God's Sake, Stop What You're Doing and Go Buy Tickets to See Nick Cave

| Wed Jul. 9, 2014 3:01 PM EDT
Nick Cave at San Francisco's Warfield Theater on July 8
Nick Cave at San Francisco's Warfield Theater on July 8 Michael Rosenthal

Most concert reviews are ponderous, so I'll keep this one short: The quirky, passionate Australian musician Nick Cave, who was profiled in Sunday's New York Times Magazine if you care to read up on his latest doings, basically just renewed my faith in rock and roll—a concept that this scrawny, sexy, histrionic, 56-year-old love child of David Bowie and Tom Waits and something much darker more or less embodies.

Regardless of whether you've kept up with his oeuvre (I certainly haven't) or can even name any Nick Cave songs, he's a fabulous performer whom you need to see before you die—or before he does. Last night, during his second sold-out evening at San Francisco's Warfield Theater, the audience was smitten as Cave bounced around the stage like a gothic scarecrow, styled out in his signature dark suit and black velvet, taking full advantage of his rich voice and theatrical tendencies.

Reaching into the front rows, and occasionally throwing himself halfway down into them, Cave connects intimately and powerfully with his audience, leavening lyrical intensity with dark humor: Within the twisted landscape of "Higgs Boson Blues," Cave croons: "If I die tonight, bury me / In my favorite yellow patent leather shoes / With a mummified cat and a cone-like hat / That the caliphate forced on the Jews." On the contemporary track "We Real Cool," he sings, "Wikipedia is heaven / When you don't want to remember no more." And if you've never heard Cave's unique take on "Stack-O-Lee" or "Stagger Lee" (or however you choose to write the name of the old murder ballad), well, yeah. It's not much like the other hundred versions you might have heard.

Cave's talented band, the Bad Seeds, is a marvelous cast of characters to boot, especially the guy I'm calling the Mad Fiddler (and flautist, guitar, keyboard, and mandolin player). All wild hair and long, scraggly half-gray beard, he attacks his violin like some deranged fiddler on the roof. Together the Bad Seeds highlight Cave's quieter moments with subtlety, exploding with their bandleader when the time is right into mad catharsis. Rock and fucking roll at its finest. Tour dates are here.

Medicare Just Keeps Producing Great Budget News

| Wed Jul. 9, 2014 2:20 PM EDT

Medicare has been a bastion of good news lately. Every year, the CBO reduces its baseline estimate of Medicare costs, which have dropped by more than $1,000 since 2010. So what's going on? Tricia Neuman and Juliette Cubanski of the Kaiser Family Foundation round up the evidence:

It is clear that the Medicare savings provisions in the ACA, such as reductions in provider payment updates and Medicare Advantage payments, have played a major role....In addition, the Budget Control Act of 2011 also exerted downward pressure on Medicare spending through sequestration that reduced payments to providers and plans by 2 percent beginning in 2013.  And yet even after incorporating these scheduled payment reductions in the baseline, CBO has continued to lower its projections of Medicare spending.

So what else might be going on here? In addition to scheduled reductions in Medicare’s more formulaic payment rates, providers may be tightening their belts and looking to deliver care more efficiently in response to financial incentives included in the ACA, and it is possible that these changes are having a bigger effect than expected. For example, CMS recently reported that hospital readmission rates dropped by 130,000 between January 2012 and August 2013. It is also possible that hospitals and other providers are using data and other analytic tools more successfully to track utilization and spending and to reduce excess costs. Another more straightforward factor is that several expensive and popular brand-name drugs have gone off patent in recent years, which has helped to keep Medicare drug spending in check.

No one knows for sure if these reductions are permanent, or whether high growth rates will reappear in the future. But even if the low growth rates of the past few years can't be sustained, I suspect that Medicare growth will continue to be lower than anyone expected. There are two reasons for this. First, the growth rate of medical costs in general has been declining steadily for the past 30 years, and this has now been going on long enough that it's highly unlikely to be a statistical blip. After a surge in the 80s and 90s, we really are returning to the growth rates that were common earlier in the century, and obviously this will affect Medicare.

Second, Obamacare really will have an impact. Not everything in it will work, but it includes a lot of different cost-cutting measures and some of them will turn out to be pretty effective. And who knows? If Republicans ever stop pouting over Obamacare, we might even be able to experiment with different kinds of cost reductions.

There's a fair amount of year-to-year variability in health care inflation, and we should expect to have some years of high growth. But I'll bet the average over the next decade is somewhere around 2 percent above the general inflation rate. That's not too bad.