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Chart of the Day: Net New Jobs in July

| Fri Aug. 1, 2014 10:22 AM EDT

The American economy added 209,000 new jobs in March, but about 90,000 of those jobs were needed just to keep up with population growth, so net job growth clocked in at 119,000. The headline unemployment rate ticked up slightly to 6.2 percent.

The jobs number is a little lower than expected, and continues to show that the recovery is weak. On the bright side, the unemployment number increased not because more people were out of work, but because more people were entering the labor force. It's basically not a negative sign. As Jared Bernstein says:

There is some evidence that the all-important labor force participation rate may be stabilizing. It rose a tenth last month to 62.9%, but has wiggled between 62.8% and 62.2% since last August. If the firming job market has in fact arrested the decline in this key metric of labor supply, it will be an important and favorable sign.

Overall, the economy still appears to be dog paddling along. GDP growth is OK but not great; jobs growth is OK but not great; and wage growth is positive but not by very much. More and more, this is starting to look like the new normal.

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Watch Drought Take Over the Entire State of California in One GIF

| Fri Aug. 1, 2014 6:00 AM EDT

California, the producer of half of the nation's fruits, veggies, and nuts, is experiencing its third-worst drought on record. The dry spell is expected to cost the state billions of dollars and thousands of jobs, and farmers are digging into groundwater supplies to keep their crops alive. We've been keeping an eye on the drought with the US Drought Monitor, a USDA-sponsored program that uses data from soil moisture and stream flow, satellite imagery, and other indicators to produce weekly drought maps. Here's a GIF showing the spread of the drought, from last December 31—shortly before Gov. Jerry Brown declared a state of emergency—until July 29.

First Indochina War Ended 60 Years Ago [Photo]

| Fri Aug. 1, 2014 6:00 AM EDT

A wounded Vietminh prisoner is given first aid by Franco Vietnamese medicals after hot fire fight near Hung Yen, south of Hanoi, 1954. US Department of Defense

On this date in 1954 the first Indochina War officially ended. After a long war in Viet Nam, culminating in the nearly four month battle of Dien Bien Phu, the French withdrew under the the Geneva Acccords. That agreement also also divided Viet Nam along the 17th parallel under the condition that a unification election would be held two years later. When elections didn't happen as planned, the communist Viet Minh fought to reclaim the South, which eventually drew the United States deeper into the fight between the Communists and Western-backed South Vietnamese government.

A French Foreign Legionnaire goes to war along the dry rib of a rice paddy, during a recent sweep through communist-held areas in the Red River Delta, between Haiphong and Hanoi. Behind the Legionnaire is a U.S. gifted tank, 1954. US Department of Defense

 

California Projects Very Modest Obamacare Rate Hikes in 2015

| Fri Aug. 1, 2014 1:30 AM EDT

Good news from the Golden State!

Defying an industry trend of double-digit rate hikes, California officials said the more than 1.2 million consumers in the state-run Obamacare insurance exchange can expect modest price increases of 4.2% on average next year.

...."We have changed the trend in healthcare costs," said Peter Lee, Covered California's executive director. "This is good news for Californians."....State officials and insurers credited the strong turnout during the first six-month enrollment window that ended in April for helping to keep 2015 rates in check.

It's still early days for Obamacare, and it's not yet clear if it deserves credit for keeping California's rate hikes low. It may instead be due to the recent slow growth of medical costs nationally. Nonetheless, this is a very positive sign. California is a big market, and it's one that's traditionally seen steep rate hikes in the individual insurance market. At the very least, we can certainly say that conservative predictions of catastrophically high rate increases thanks to Obamacare have turned out to be groundless. Again.

Feds Say Big Banks Are Still Too Big to Fail

| Thu Jul. 31, 2014 8:06 PM EDT

Six years after the financial crisis, the largest US banks are likely still too-big-to-fail, according to a study released Thursday afternoon by the Government Accountability Office (GAO). That means that these massive financial institutions are still so important to the wider financial system that they can expect the government to bail them out again if they are close to collapse.

Even though the GAO study found that this advantage banks enjoy dropped off significantly in 2013, "this is a continuing issue," Sen. David Vitter (R-La.), who has introduced legislation aimed at ending bank bailouts, told Bloomberg Thursday. "Too-big-to-fail is not dead and gone at all. It exists."

During the financial crisis, the government forked out $700 billion to bail out the nation's biggest banks. The 2010 Dodd-Frank financial reform act imposed new requirements on Wall Street designed to prevent this from happening again. The law gave federal Wall Street regulators more authority to dismantle failing financial institutions, mandated that banks hold more emergency funds on hand, and required banks to submit to yearly stress tests to ensure that they can withstand another crisis.

How effective these measures have been in ending too-big-to-fail is still an open question, and subject to heated debate in the halls of Congress. Other reports have found that even after Dodd-Frank, big banks still enjoy a huge advantage over smaller, community banks in terms of lower borrowing rates, thanks largely to the perception that they can't fail. Many investors believe the government will still bail out large, systemically important banks if they are again faced with collapse, whereas the economy can afford to lose a local bank or two. As a result, the biggest US banks benefited from a $70 billion too-big-to-fail subsidy in 2012, according to a March report by the International Monetary Fund.

Sen. Vitter, as well as Sens. Elizabeth Warren (D-Mass.), Sherrod Brown (D-Ohio), and John McCain (D-Ariz.) have introduced legislation that attempts to truly end big bank bailouts by forcing banks to hold larger emergency reserves and shrinking the size of massive Wall Street firms.

John Boehner's Lawsuit Against Obama Is Perfectly Reasonable

| Thu Jul. 31, 2014 7:24 PM EDT

I've made this point before, but I'd like to make it again: Exactly why is John Boehner's lawsuit against President Obama so frivolous? I don't mean this in a strictly legal sense. It may be that the suit fails immediately for lack of standing.1 Or that the merits of this particular case don't hold water. We can let the lawyers battle that out.

Politically, though, what's wrong with asking a court to decide if a federal agency has overstepped the will of Congress in its execution of the law? The answer, of course, is: nothing. People do it all the time, hundreds of times a year. The only difference here is that a house of Congress is doing it. But why does that suddenly make it frivolous?

It could be that you think courts should stick to their traditional practice of staying neutral in "political" disputes between branches of the government. That's fine. But it's not an argument that's gotten much air time. You might also think it sets a bad precedent. But again, I'm not hearing that. Instead, the argument seems to be that this suit is simply absurd on its face, an idiotic piece of grandstanding by the Republican Party.

There's no question that it's a piece of grandstanding. Nor that House Republicans could be making better use of their time. And yes, it's obviously deeply politically motivated. But that doesn't mean it's frivolous. So once again: why is it that suing a federal agency over its interpretation of a law suddenly becomes ridiculous just because Congress does it?

I'm open to good arguments on this score. Go ahead and convince me.

1I hope not, though. I understand why standing is important,2 but I'm unhappy that there seem to be a fair number of colorably important cases in which it's all but impossible to find someone with standing to sue. That's just not right.

2Honest, I really do.

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Microsoft Loses Another Round in E-Mail Privacy Case

| Thu Jul. 31, 2014 6:08 PM EDT

The latest in the privacy wars:

A federal court in New York ruled Thursday that Microsoft must comply with a U.S. search warrant to turn over a customer’s e-mails held in a server overseas.

....A number of tech firms and privacy advocates have joined [Microsoft] in arguing that if the government prevails and can reach across borders, it will cause foreign individuals and businesses to flee to their non-U.S. competitors. Microsoft also argued that the United States would not be in a position to complain when foreign governments do the same and insist on access to e-mail content stored in the country.

Hmmm. How would we feel if, say, an Egyptian court demanded that Microsoft turn over emails stored on a server in California? Hmmm.

Yes, the CIA Spied on the Senate

| Thu Jul. 31, 2014 1:43 PM EDT

Earlier this year, CIA Director John Brennan accused staffers from the Senate Intelligence Committee of removing classified material from the CIA office where they were researching a report on the agency's use of torture during the Bush administration. This turned out to be very poor tradecraft on Brennan's part, since it implicitly revealed the fact that the CIA was spying on Senate staffers even though it wasn't supposed to. Brennan tried to mount a suitably aggressive counterattack to Senate outrage over this, but today it all came crashing down:

CIA employees improperly accessed computers used by the Senate Intelligence Committee to compile a report on the agency’s now defunct detention and interrogation program, an internal CIA investigation has determined.

....The statement represented an admission to charges by the panel’s chairwoman, Dianne Feinstein, D-Calif., that the CIA intruded into the computers her staff used to compile the soon-to-be released report on the agency’s use of harsh interrogation methods on suspected terrorists in secret overseas prisons during the Bush administration.

CIA Director John Brennan briefed Feinstein and the committee’s vice chairman, Saxby Chambliss, R-GA, on the CIA inspector general’s findings and apologized to them during a meeting on Capitol Hill on Tuesday, Boyd said.

I find that my reaction remains one of schadenfreude. Dianne Feinstein and the rest of the Intelligence Committee seem to be mostly unconcerned with the omnipresent surveillance apparatus constructed by the US intelligence community, so it's hard to feel very sorry for them when they learn that this apparatus is also sometimes directed at Senate staffers. If this affair had persuaded a few senators that maybe our intelligence chiefs are less than totally honest about what they do, it might have done some good. But it doesn't seem to have done that. With only a few exceptions, they're outraged when the CIA spies on them, but that's about it.

We're Still at War: Photo of the Day for July 31, 2014

Thu Jul. 31, 2014 12:12 PM EDT

US Soldiers from the 82nd Airborne Division participate in a training mission in Florida. (US Air Force photo by Senior Airman Christopher Callaway.)

Why American Politics Is Broken In One Sentence

| Thu Jul. 31, 2014 12:06 PM EDT

Dave Weigel explains modern politics in a single sentence:

Voters are aware of a border crisis, they are aware that Barack Obama is president—they blame him for nothing getting done.

Yep. Republicans can basically do anything they want and never get blamed for it. Most voters don't even know who's in control of Congress anyway. When something goes wrong, all they know is (a) something went wrong, and (b) Barack Obama is the president and he should have done something about it.

That being the case, what incentive do Republicans have for making things go right? Pretty much none. This is, roughly speaking, a fairly new insight, and it explains most of what you need to know about American politics in the Obama era.