Last night, in the latest evidence that the Murdoch-ization of the Wall Street Journal proceeds apace, the WSJ reported that McDonald's was threatening to cancel its employee health insurance, calling it "the latest indication of possible unintended consequences from the health overhaul."

Yawn. Put this one in the same bucket as the student health insurance scare a few weeks ago. As Aaron Carroll points out, there's nothing either new or unintended about this. As Igor Volsky points out, both McDonald's and the Obama administration said this morning that the story was overblown. "Wrong," said HHS. "Completely false," said McDonald's. And as Jon Cohn points out, this whole manufactured story is about crappy health plans that provide almost no benefit in the first place:

The policies in question are so-called mini-med plans with very limited benefits. In the case of McDonald's, according to the Journal, there are two options: Employees who go with the minimum plan pay $14 a week for a policy that won't cover more than $2,000 in medical bills a year. Employees who opt for the "generous" option pay about $32 a week for a policy that maxes out at $10,000.

To call that "insurance" is to distort the definition, since these policies would do very little to help people with even moderately serious medical conditions. (You can blow through $10,000 in medical care with one emergency room visit.)....In the long run, McDonald's employees need policies that protect them in case of serious medical problems. And they need policies they can afford. They'll get those policies thanks to the Affordable Care Act — but not until 2014, because the administration and Congress couldn't come up with enough money to implement the full scheme sooner.

To summarize: ACA requires health insurers to spend 80-85% of premium dollars on actual patient care. The mini-med folks claim they can't possibly meet this target. (They're probably blowing smoke, but leave that aside.) HHS knows all about this and is working on phase-in rules to accomodate problems. McDonald's says they have no plans to drop coverage. And the entire thing is a short-term transition issue, since crappy mini-med policies will hopefully be replaced by actual useful coverage when ACA fully kicks in in 2014.

But other than that, it was a great story.

The Senate confirmed a bunch of Obama appointees before it recessed today, including a couple of Federal Reserve governors (though not Peter Diamond, who's presumably still held up in Richard Shelby hell) and such dignitaries as Nancy Lindborg as Assistant Administrator of the United States Agency for International Development for Democracy, Conflict and Humanitarian Assistance Bureau. Yes, really. Senate confirmation is required for the post of Assistant Administrator of the United States Agency for International Development for Democracy, Conflict and Humanitarian Assistance Bureau. We are all insane.

There are still loads of nominees still pending, of course, but hey — Obama can always give a few of them recess appointments. Right? In a word, no:

Senate Democrats agreed Wednesday night to a Republican demand to block President Obama from making recess appointments while Congress is out of town campaigning for the midterm elections. Democratic leaders have agreed to schedule pro-forma sessions of the Senate every week over the next six weeks, a move that will prevent Obama from making emergency appointments, according to Senate sources briefed on the talks.

....Republican Leader Mitch McConnell (R-Ky.) had threatened to send Obama’s most controversial nominees back to the president if Democrats did not agree to schedule pro-forma sessions, according to a senior GOP aide....Under Senate rules, the chamber may only carry over pending nominees during an extended recess if senators agree by unanimous consent. Senators rarely invoke this rule, but McConnell threatened to object unless Democrats agreed to prevent Obama from making recess appointments.

Now, that's some hardball from the Republicans. Was there anything Harry Reid could have done to stop it? I think so. Obama can make recess appointments if the Senate is out of session for as little as a week, while the carry-over rule applies only to recesses of 30 days or more. So if Reid had scheduled pro-forma sessions every two weeks, current nominees would have been carried over automatically but Obama still would have retained the option of making some recess appointments.

Now, maybe Obama didn't ask for that. Who knows? Or maybe I'm reading the Senate rules wrong. But if I have it right, Reid didn't have to give in to this extortion.

Gold Bugs

CJR's Ryan Chittum picks up on one of my pet peeves:

The Wall Street Journal goes page one with a misleading story about gold, splashing this headline across four columns atop the page:

       Gold Vaults to New High

Gold hit $1,306 an ounce yesterday, which is a nominal record. Emphasis on nominal. That doesn’t mean anything, really. The real record was set thirty years ago at $2,318 in 2010 dollars. The Journal, incredibly, doesn’t mention this once in its story. This isn’t just an institutional knowledge failure, it’s one of numeracy.

With rare exceptions, inflation-adjusted prices should always be considered the baseline when you're reporting on trends. I know that it can make for clumsy writing, but that's life. It's the right thing to do, and nominal prices should be the ones in parentheses if you need to include them. Adjusted for inflation, gold peaked 30 years ago at a daily fix of about $2,300 and a monthly average of about $1,800. We're still quite a ways from that record.

However, this is an excuse for me to ask about something else: what is the deal with gold, anyway? I understand that historically it responds to panics, which explains why gold prices have been rising for the past couple of years. But why did it double between 2001 and 2008? Those were nice, low-inflation times, not the kind of environment that's usually friendly to gold bugs. What's the story here?

UPDATE: Via comments, a reminder that not everything is about us. China deregulated gold ownership in 2001, and since then demand in both China and India has boomed. So perhaps that's (part of) the answer.

National Review editor Kevin Williamson once again tries to persuade his fellow conservatives that the American government should not have the right to assassinate American citizens:

I am not a lawyer, but it seems clear to me that the state of our law is such that anybody with sufficient legal training can make a reasonably strong-sounding argument for any policy he chooses, and that if his argument is wrong, it is likely to be wrong in ways that are non-obvious....So, set aside the legal questions for a second. The Awlaki case speaks to something even more fundamental than law: Decent nations do not permit their governments to assassinate their own citizens. I am willing to give the intelligence community, the covert-operations guys, and the military proper a pretty free hand when it comes to dealing with dispersed terrorist organizations such as al-Qaeda and its affiliates. But citizenship, even when applied to a Grade-A certified rat like Awlaki, presents an important demarcation, a bright-line distinction in our politics.

....If Awlaki were to be killed on a battlefield, I’d shed no tears. But ordering the premeditated, extrajudicial killing of an American citizen in Yemen or Pakistan is no different from ordering the premeditated, extrajudicial killing of an American citizen in New York or Washington or Topeka — American citizens are American citizens, wherever they go. I’m an old-fashioned limited-government guy, and I am not willing to grant Washington the power to assassinate U.S. citizens, even rotten ones.

Actually, I'd like to know if the Obama administration really does believe that it has the authority to assassinate U.S. citizens in Washington or Topeka in the same way it believes it has the authority to assassinate them in Sanaa and Karachi. And if not, why not?

Unfortunately, they've declared the entire thing to be a state secret, so we'll never find out. But as far as any of us are allowed to know, their official stand is that the entire world is a battlefield in the war against terrorism, and therefore killing terrorists is fair game anywhere in the world. Even if Williamson is right that a good lawyer can defend pretty much any proposition, I'd sure like to see the legal justification for that. At a bare minimum, you'd think that in a free democracy we'd all have the right to hear at least that much.

From Mark Leibovich's profile of Glenn Beck today:

When I mentioned Beck’s name to several Fox reporters, personalities and staff members, it reliably elicited either a sigh or an eye roll. Several Fox News journalists have complained that Beck’s antics are embarrassing Fox, that his inflammatory rhetoric makes it difficult for the network to present itself as a legitimate news outlet.

Look, I'm willing to blame Glenn Beck for a lot of things. But making it difficult for Fox to present itself as a legitimate news outlet? That's a bridge too far. You really can't tie that one around Beck's neck, folks.

Yet Another Nannygate

Well, we have another nanny scandal in California. Meg Whitman's former nanny and housekeeper, Nicky Diaz Santillan, now represented by Gloria Allred, says she worked for Whitman for nine years, during which she was "exploited, disrespected, and humiliated." Her story: she was hired in 2000 and was never asked if she was here illegally. But she claims Whitman knew her status and received multiple letters from the Social Security Administration asking about it, none of which she responded to. Instead, she told Diaz to "check on this" but never did anything further. Then, in June 2009, when Diaz asked Whitman to help her legalize her status, she was fired. She believes it was because Whitman had announced her run for governor and could no longer afford to employ an undocumented worker.

Ben Smith reports that Whitman agrees on the broad outlines of the story, but says she was deceived by Diaz and never knew her status. She fired Diaz only after she found out. So far this story is pretty sketchy on both sides, so stay tuned.

Diaz's actual legal claim, by the way, is for wages that she claims she wasn't paid during her employment. Obviously, though, the damage to Whitman is primarily the accusation that she knowingly employed an undocumented worker.

Was Keynes Right?

Tyler Cowen on problems with the theory underlying contemporary Keynesian economics:

Aggregate demand macroeconomics works in many cases and it almost always "works" (predicts well) when the macro forces are pointed toward destructive ends. We are not sure why it works at all, or if it always works, and yet we see a great fervor of belief in it and a demonization of those who are skeptics.

Am I misunderstanding this? Right now macro forces are indeed pointed toward destructive ends, aren't they? So if AD macro almost always works in those cases, doesn't a great fervor of belief in it make sense even if we're not 100% sure why it works?

Manufactured Ignorance

Bob Somerby on the widely-reported Pew poll showing that most people don't know much about either their own religion or anyone else's:

Can we talk? We the people always turn out to be “deeply ignorant,” on any information survey. In response, major broadcasters feign surprise. It’s how such things are done.

My favorite, as longtime readers know, is the annual geography survey that always produces howls of indignation. 70% of high school kids don't know where France is! 80% can't find Kansas City on a map!

Of course, no one ever bothers testing adults, who would probably do just as poorly. Just as they do poorly on surveys of American history, constitutional knowledge, current events, and everything else. Most of us just don't know very much about anything.

And least of all about complicated legislative proposals. A couple of days ago I linked to an AP poll that asked people what they thought about healthcare reform. I decided to devote my post to the question of whether a more liberal proposal would have been more popular (almost certainly not), which didn't leave room to talk about a long series of questions AP asked about the legislation itself. Basically, they wanted to find out what people knew about the law, and the answer is: meh. Of the true items AP mentioned, 69% thought they were part of the law. Of the made-up items, 37% thought they were part of the law. Not bad, I guess (and note that these numbers assume that I know which items were right and which were wrong), but it's still the case that 20% of the country thinks you'll have to disclose major diseases to your employer, 30% think the law requires insurance companies to charge smokers an extra $1,000, 40% think death panels will be empowered to pass judgment on individual treatment, and 50% think the law requires doctors to treat illegal immigrants.

Now where do you think so many people could have gotten these ideas? It's not just simple ignorance at work, though that's certainly part of it. It's the noise machine. If you listened to Rush and Sean and Sarah and Glenn and Drudge all day, you'd probably believe most of this stuff too. And you'd oppose the law. Who wouldn't?

From Rand Paul, talking 15 months ago about problems with Medicare:

Medicare is socialized medicine! People are afraid of that because they'll say "Ohhh, you're against Medicare." No, I'll say, "We have to do something different. We can't just eliminate Medicare, but we have to get more to a market-based system." It's counter-intuitive to a lot of people, but you have to pay for things if you want prices to come down. So you really need higher deductibles. And the real answer to Medicare would be a $2,000 deductible, but try selling that one in an election. But that's the real answer.

That's via Steve Benen, who reports that Paul is outraged that his Democratic opponent has highlighted his support for a $2000 deductible, which as you can imagine, is not going down well with Kentucky's seniors. But the video is here, and it sure doesn't look like anything is taken out of context. Paul supports the deductible idea but admits that it's a terrible campaign idea. And of course, now he's in a campaign. So he no longer wants anyone to know that he said this. And who can blame him?

Want to know more? Check out "Tea and Crackers," Matt Taibbi's latest in Rolling Stone. It's ostensibly about the tea party movement, but about half the piece is actually about Rand Paul. Enjoy.

Tax Cut Followup

This is arcane, but I guess I need to follow up on my post last night about the CBO's report on extending tax cuts. I think I've figured out what's going on.

The CBO chart is below, and it doesn't seem to match the data in Table 4. But it does, sort of. Take the bar for full extension of tax cuts with a weak labor response. According to Table 4, its effect in 2020 is to reduce real GNP by 1.6%. That's if everyone assumes there's no response. But if we assume that government spending will be reduced after 2020, a lifecycle model predicts that the net effect of extension is only -1.4%. If we assume a tax increase after 2020, the lifecycle model predicts that the net effect is -0.8%.

Now average all those together and you get -1.26%. That rounds to -1.3%, and that's what's shown in the chart. If you average all the other options they also match the chart.

Is this simple arithmetic averaging legit? Beats me. And I'm not even sure who to ask. But apparently that's what they did.

One more thing, though. The CBO model suggests that in all cases, a policy response to full extension of the tax cuts reduces the long-term damage. However, a policy response to extension of just the middle-class cuts increases the long-term damage or has only a tiny effect. This seems like a very strange result. Why does a policy response (either lower spending or higher taxes) have a strongly positive effect in one case and a bad or negligible effect in the other? Again, I'm not even sure who to ask. But it seems odd even if you're a supply side die hard.