2013...mewhat-popular - %2

GDP Grew at Anemic 1.7% Rate Last Quarter. Thanks, Sequester!

| Wed Jul. 31, 2013 11:57 AM EDT

The economy sputtered along in the second quarter, growing at an annual rate of 1.7 percent. Whether you consider this good news or bad probably depends on what you expected the impact of the sequester and the fiscal cliff to be. If you figured that $2 trillion in extra austerity measures would tank the economy completely, then a gain of 1.7 percent looks pretty good. If you figured it would have a modest effect, then 1.7 percent is probably about what you expected.

As I recall, CBO estimated that the sequester alone would cut about 0.8 percent from GDP growth. The fiscal cliff deal might have cut another 0.4 percent or so. If they were right, it means that 2.9 percent growth has been pared back to 1.7 percent. My rough eyeballing of the figures suggests to me that this was probably an overestimate, but probably only by a bit. I'll bet that without the latest round of austerity, growth would have been in the range of 2.5 percent.

So we're recovering slowly and austerity is hurting. Beyond that, there aren't a lot of fascinating nuggets to be gleaned from this quarter's report. However, this is the first quarter that BEA has produced its long-awaited new measurement of private investment in intellectual property products, and there are some interesting tidbits there. For more on this, see Dylan Matthews' writeup over at Wonkblog. 

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Fox News' Neil Cavuto Doesn't Know How Inflation Works

| Wed Jul. 31, 2013 11:29 AM EDT
Neil Cavuto

Fox News host Neil Cavuto has a special message for living-wage activists: Deal with it. "It's like jobs aren't enough these days," he said on Tuesday. "They better pay well, or folks just aren't applying for them at all." As proof, he cited his own teenage years serving fried fish in Connecticut:

Only in America today, can our politicians bemoan a livable wage, forgetting a lot of folks would be grateful for any wage, any chance, any job, anytime. All I know is as soon as I turned 16 and heard a fast food chain called Arthur Treacher's was opening a store in my town of Danbury, Connecticut. I stood in a line for a position—any position. I got the job, and soon rocketed to relief manager, then weekend manager, then by 16 and a half, full-time store manager! And it all started at two bucks an hour. And all the fish I could eat.

That's a good story. But the math makes the opposite point Cavuto intended—adjusted for inflation, he made a lot more money as a teenager than the fast food employees who walked off their jobs in seven US cities this week. Cavuto says he made $2 per hour when he was 16, which would have been around late 1974. That's $9.47 per hour in today's dollars—or $.28 per hour more than Washington state's minimum wage, which is the nation's highest. Cavuto made the equivalent of $1.02 per hour more than the current minimum wage in Connecticut today and $2.22 per hour more than the current federal minimum wage. His starting wage was $2.17 more than Saavedra Jantuah made at the Burger King on 34th St. in New York City before she walked off the job in protest last November because she was unable to feed her son.

Cavuto's riff also misses the larger point, which is that the living-wage fight isn't about 16-year-olds with no kids whose parents cover their basic living expenses. The median fast food worker is 28 years old, and the median female fast food worker is 32. Their wages have dropped an average of 36 cents since 2010. And they're making less than Neil Cavuto ever did.

Watch the segment:

Congress Knew All About the NSA's Phone Record Program Back in 2009

| Wed Jul. 31, 2013 11:17 AM EDT

The Obama administration has now released the documents that it said it would regarding the NSA's phone record collection program. You can read them here. For the most part, they don't tell us anything we didn't already know, but a DOJ letter in 2009 does shed some light on how much Congress knew about this program. A relevant excerpt is below. This letter was made available to all members of Congress (under the usual strict secrecy rules), and it makes clear that (a) NSA collects "substantially all" of the domestic phone records of U.S. phone companies, (b) ditto for emails, and (c) they use these records to perform contact chaining.

Whatever else you think about these programs, these letters suggest to me that members of Congress knew all of the basics of what NSA was doing. Complaints that they were kept in the dark, or that the programs were more extensive than they were led to believe, don't have much to support them.

Indiana Loses War Against Poor Women Who Use Planned Parenthood

| Wed Jul. 31, 2013 10:31 AM EDT
A Planned Parenthood in East Chicago, Indiana

A judge has slammed the book shut on a two-year legal battle between Indiana and Planned Parenthood, ruling that the state cannot prohibit family planning clinics from accepting Medicaid funds. Former GOP Governor Mitch Daniels signed a law in 2011 that prevented Medicaid enrollees from using funds for routine procedures such as breast exams and STD testing at Planned Parenthood, which also performs abortions. Tuesday's ruling means that Indiana has no more legal options to appeal—the Supreme Court has refused to hear the case. But if the high court agrees to hear a challenge to a similar law in another state, Indiana's zombie law could come back to life. 

"Over and over again, courts have said that states cannot block people from getting preventive health care at Planned Parenthood, and the vast majority of the American public agrees," said Cecile Richards, President of Planned Parenthood Action Fund in a statement. "All women, no matter where they live, should be able to get quality, affordable health care from the health care provider they know and trust."

When the law was passed in 2011, it exempted hospitals and surgical facilities, making it pretty clear that the goal of the law was to shut down Planned Parenthood. Unfortunately for Indiana's Republican lawmakers, the effort only rallied pro-choice activists. The Associated Press reports that the interruption in Medicaid funds encouraged 1,600 donors from around the world to give about $500,000 to Planned Parenthood so that it could continue to provide services to Medicaid recipients in Indiana. Additionally, in May, after the Supreme Court refused to hear the case, the US federal agency that administers Medicare and Medicaid sided with Planned Parenthood. 

Indiana was the first state to attempt to shut down Planned Parenthood by denying the organization Medicaid funds. But since then, lawmakers in other states—including Texas, Tennessee, Arizona, Kansas, and North Carolina—have also tried to use this tactic. According to the AP, if the Supreme Court decides to hear one of these other laws, Indiana could submit an amicus brief to revive its legal argument​. To see what happens when a state successfully defunds family planning clinics, look no further than Texas, where the ever-enterprising Republican Governor Rick Perry is squeezing Planned Parenthood out of the state. He's doing so not just by trying to prevent family planning clinics from receiving Medicaid, but by flat-out refusing to accept $30 million a year in federal Medicaid money. As my colleague Jaeah Lee—who made these awesome charts, including the one below—notes, since Perry had denied this funding, "nearly 200,000 Texas women have lost or could lose access to contraception, cancer screenings, and basic preventive care, especially in low-income, rural parts of the state." Indiana women, be glad this isn't you: 

 

 

The Mystery of Bee Colony Collapse

| Wed Jul. 31, 2013 6:00 AM EDT

What's tipping honeybee populations into huge annual die-offs? For years, a growing body of evidence has pointed to a group of insecticides called neonicotinoids, widely used on corn, soy, and other US crops, as a possible cause of what has become known as colony collapse disorder (CCD).

Rather than kill bees directly like, say, Raid kills cockroaches, these pesticides are suspected of having what scientists call "sub-lethal effects"—that is, they make bees more vulnerable to other stressors, like poor nutrition and pathogens. In response to these concerns, the European Union recently  suspended most use for two years; the US Environmental Protection Agency, by contrast, still allows them pending more study.

But according to a new peer-reviewed paper, neonicotinoids aren't the only pesticides that might be undermining bee health. The study, published in PLOS One and co-authored by a team including US Department of Agriculture bee scientist Jeff Pettis and University of Maryland entomologist Dennis vanEngelsdorp, found that a pair of widely used fungicides are showing up prominently in bee pollen—and appear to be making bees significantly more likely to succumb to a fungal pathogen, called Nosema ceranae, that has been closely linked to CCD. The finding is notable, the authors state, because fungicides have so far been "typically seen as fairly safe for honey bees."

Government Set to Release Verizon Phone Records Order

| Wed Jul. 31, 2013 2:05 AM EDT

One of the documents released by Edward Snowden back in June was a court order requiring Verizon to turn over phone records of all its domestic calls. On Wednesday, the government will release a bit more:

The Obama administration has declassified a secret order directing Verizon Communications to turn over a vast number of Americans’ phone records, and it plans to disclose the document Wednesday morning in time for a Senate hearing, according to senior U.S. officials.

....The officials, speaking on the condition of anonymity because they were not authorized to speak publicly, said the court order released by Snowden was a “secondary” order. They expressed hope that the document being released Wednesday will shed light on how the U.S. government obtains communications records under the Foreign Intelligence Surveillance Act and the restrictions placed on surveillance programs.

The document we'll see on Wednesday is the "primary" order underlying the order that Snowden leaked. I'm not sure what that means, or why it would shed any more light on what's going on, but I guess we'll find out soon.

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The Onion Predicts Real Life: Republicans Block NASA's Asteroid Plan

| Tue Jul. 30, 2013 4:45 PM EDT

President Obama's plan to have NASA lasso an asteroid, tow it toward Earth, place it into the moon's orbit, and claim the space rock for the United States of America has hit a congressional snag. The New York Times reports:

NASA wants to launch an unmanned spacecraft in 2018 that would capture a small asteroid — maybe 7 to 10 yards wide — haul it closer to Earth, then send astronauts up to examine it, in 2021 or beyond.

But the space agency has encountered a stubborn technical problem: Congressional Republicans...[T]he science committee in the Republican-controlled House voted to bar NASA from pursuing that faraway rock. In a straight party vote — 22 Republicans for, 17 Democrats against — the committee laid out a road map for NASA for the next three years that brushed aside the asteroid capture plan, the centerpiece of the Obama administration's agenda for space exploration. The plan, instead, included new marching orders, telling NASA to send astronauts back to the Moon, set up a base there and then aim for Mars (and to do so with less money than requested).

Not only would the asteroid-lasso initiative have astronauts travel to the space rock to conduct mining operations and test technology for missions to Mars—it would allow NASA to research strategies for deflecting future, potentially world-ending asteroids.

In a way, the Times got scooped on this story. By the Onion. More than two years ago:

The Onion asteroid obama
The Onion

The Onion, one of America's leading satirical news outlets, has predicted the future before. Al Qaeda squabbling with 9/11 truthers, for instance. Or the Onion's piece on George W. Bush ushering in an era of war and economic recession...published in January 2001.

20-Week Abortion Bans Are Mostly a Charade

| Tue Jul. 30, 2013 4:39 PM EDT

Most of you probably know this already, but it's worth a reminder. All those red states that are passing anti-abortion laws usually emphasize the provision that bans abortions after 20 weeks. That tends to poll pretty well. But it's mostly a charade:

While all the attention is going to the 20-week bans, they're not the point, not by a long shot....The 20-week bans are just the most high-profile component of larger pieces of legislation whose goal is to make it impossible for women to get abortions at all, no matter what the stage of their pregnancies. The bills are inevitably crafted with provisions that will shut down as many abortion clinics as possible. Abortion clinics often require doctors from out of state to travel to the clinic, because of the harassment, threats, and even assassinations that local doctors have been subject to? Then we'll require that every doctor have admitting privileges at a hospital within a certain number of miles, which out-of-state doctors won't have. And we'll throw in some rules on how wide your hallways need to be (not kidding), meaning in order to stay open you'd have to do hundreds of thousands of dollars of remodeling. Failing that, we'll make sure that women who need abortions will have to suffer as much inconvenience, expense, and humiliation as possible.

It's these provisions, much more than the 20-week bans, that will make the largest difference for women in these states. Depending on what state they're in, they'll have to travel far—in some cases hundreds of miles—pay for hotels because of waiting periods, get lectures from doctors required to lie to their patients about things like a fictional link between abortion and breast cancer, and submit to forced and medically unnecessary procedures. These kinds of provisions aren't new, but this latest wave is occurring under the rubric of 20-week bans that are much more likely to be met with public approval, or at least the indifference most state legislation receives. Opponents of abortion rights are hoping they can get a case to the Supreme Court that will result in Roe v. Wade being overturned, but even if that doesn't happen, they can still succeed in making abortion virtually illegal in states where they have control. And they've made lots of progress already.

Like I said, you probably already knew this. But it can't hurt to hear it again. More here.

JPMorgan Chase Accused of Manipulating Electricity Prices, Pays Record-Breaking Penalties

| Tue Jul. 30, 2013 4:15 PM EDT

Just one day after US regulators formally accused it of manipulating energy prices, America’s largest bank, JPMorgan Chase, has agreed to pay a record $410 million in penalties.

Specifically, the Federal Energy Regulatory Commission (FERC) accused Chase traders in Houston of devising elaborate schemes that essentially forced electricity grid operators—organizations that manage the flow of electricity—in California and the Midwest to pay for plants to sit idle, causing them to pay more than 80 times the cost of prevailing electricity prices for ten months between 2010 and 2011. Chase's alleged price-gouging echoes the infamous 2001 Enron scheme, in which the company constricted electricity supply in California in order to jack up prices.

The FERC action comes at a time of increasing scrutiny of banks' ownership of commodities. Last week, for example, the New York Times questioned whether Goldman Sachs was manipulating the aluminum market through the metal warehouses it controls.

Even though the penalty for Chase's bad behavior is the largest the FERC has ever slapped on a company, the fine still falls in line with trifling punishments leveled against the bank—and other financial behemoths—for similar egregious behavior. Chase’s $410 million settlement, which was reached on Tuesday and will be divided between ratepayers and the Treasury Department, represents less than two percent of Chase’s record $21.3 billion 2012 profits—or about what it earns in a single week. (FERC has also barred the bank from trading in US energy securities for the next six months.)

Investigators for the agency initially considered holding one Chase executive and a few specific traders individually liable for the allegedly abusive pricing schemes, but ultimately dropped that idea, according to the Times. The bank has denied wrongdoing, and, as Reuters has pointed out, the settlement will put an end to a troublesome "distraction" for Chase CEO Jamie Dimon.

The bank has had other distractions in recent years. In May 2012, Chase lost $6 billion on risky trades out of its London office. So far, the banks has escaped penalty for those actions—US banking regulators merely ordered it to fix the risk-management failures that led to the massive loss.

Sen. Elizabeth Warren (D-Mass.) has repeatedly highlighted the discrepancy between the punishments meted out to ordinary Americans for criminal behavior and those big banks receive for wrongdoing—whether it be tricking consumers into paying higher power prices, causing massive trading losses, or laundering drug money: "If you're caught with an ounce of cocaine, you're going to go to jail," she said at a Senate Banking Committee hearing earlier this year, referring to the giant international bank HSBC. "But if you launder nearly a billion dollars for international cartels and violate sanctions you pay a fine and you go home and sleep in your own bed a night."

What if Apple and Google Went to War?

| Tue Jul. 30, 2013 2:28 PM EDT

What would happen if Apple and Google went to war? Really went to war, that is? I think I resisted getting sucked into this, but it's pretty amusing. Worth a read over lunchtime.