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Is Europe's Central Bank Finally Getting Worried About Deflation?

| Tue Aug. 26, 2014 12:21 PM EDT

Brad DeLong notes that Mario Draghi, the head of Europe's central bank, went off text in his speech at Jackson Hole. Here's his summary of Draghi's extended ad-lib:

The speech text says:

  1. The ECB knows that inflation has declined.
  2. The decline in inflation has not led to any decline in expectations of inflation.
  3. THE ECB will, if necessary, within its mandate, use QE and other policies to keep expectations of inflation from declining.

The speech as delivered says:

  1. The ECB knows that inflation has declined.
  2. My usual line is that the decline in inflation is due to temporary factors that will be reversed.
  3. That explanation is now long in the tooth: the longer "temporary" lasts the greater the danger.
  4. In fact, it is too late to "safeguard the firm anchoring of inflation expectations".
  5. Inflationary expectations have already declined.
  6. We will use all the tools we have to reverse this.

Is this deviation a mere line wobble....Is this deviation an audience effect....Or does it signal a recognition on Draghi's part that the Eurozone is heading for a triple dip, and that if he doesn't assemble a coalition to do much more very quickly to boost aggregate demand we will have to change the name "The Great Recession" to something including the D-word, and he will go down in history as the worst central banker since the 1930s?

I would like to know...

I suppose we'd all like to know. The Germans better start taking this stuff seriously pretty soon. They can't stick their heads in the sand and live in the past forever.

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Wyoming Is Thinking About Accepting Medicaid Expansion After All

| Tue Aug. 26, 2014 11:54 AM EDT

Michael Hiltzik passes along the news that Wyoming's governor is the latest traitor to the cause of denying health care to poor people no matter what the cost:

The reason for Wyoming's wavering is clear: It's money.

The Health Department says Medicaid expansion could save the state $50 million or more if it expands the program, for which the federal government will pay at least 90%. Meanwhile, Wyoming hospitals say they're losing more than $200 million a year in uncompensated care for people without insurance.

The state Legislature has rejected the expansion, but Republican Gov. Matt Mead has been saying it's time to pack up. He's entering negotiations with the feds for a way to expand Medicaid next year, covering as many as 17,600 low-income residents.

I imagine that before very much longer, most of the other Midwest holdouts will go ahead and accept Medicaid expansion too. That will leave only the hard-core holdouts of the Old South, where the poor are apparently especially undeserving. I guess there must be some kind of difference between poor people in the Midwest and poor people in the South. I wonder what it could be?

Ukraine Claims it Has Captured Russian Soldiers

| Tue Aug. 26, 2014 10:18 AM EDT

Ukraine claims that it now has proof that Russian soldiers have been involved in fighting on Ukrainian soil:

Ukraine released video footage on Tuesday of what it said were 10 captured Russian soldiers, raising tensions as President Vladimir V. Putin of Russia arrived in Minsk, the capital of Belarus, for talks later in the day with his Ukrainian counterpart, President Petro O. Poroshenko.

....The release of the videos and the high-level talks came a day after Ukraine accused Russia of sending an armored column across the border, prompting Geoffrey R. Pyatt, the United States ambassador to Ukraine, to express alarm on Twitter. “The new columns of Russian tanks and armor crossing into Ukraine indicates a Russian-directed counteroffensive may be underway. #escalation,” he wrote.

....“Everything was a lie. There were no drills here,” one of the captured Russians, who identified himself as Sergey A. Smirnov, told a Ukrainian interrogator. He said he and other Russians from an airborne unit in Kostroma, in central Russia, had been sent on what was described initially as a military training exercise but later turned into a mission into Ukraine. After having their cellphones and identity documents taken away, they were sent into Ukraine on vehicles stripped of all markings, Mr. Smirnov said.

This kind of thing represents a cusp of some kind. If it's true, Putin has to decide pretty quickly whether to gamble everything on an outright invasion, or whether to back off. If it turns out to be a Ukrainian invention, Putin has to decide whether to use it as a casus belli. These are dangerous times.

UPDATE: Apparently Russia has admitted the soldiers are theirs:

Sources in Moscow have admitted that a number of men captured inside Ukraine were indeed serving Russian soldiers, but said they crossed the border by mistake...."The soldiers really did participate in a patrol of a section of the Russian-Ukrainian border, crossed it by accident on an unmarked section, and as far as we understand showed no resistance to the armed forces of Ukraine when they were detained," a source in Russia's defence ministry told the RIA Novosti agency.

Uh huh. I suppose Putin will now claim that detaining the soldiers is an act of war unless they're immediately released.

We're Still at War: Photo of the Day for August 26, 2014

Tue Aug. 26, 2014 9:16 AM EDT

US Marines conduct a Helicopter Support Team exercise. (US Marine Corps photo by Sgt. Sarah Fiocco)

Charts: Kids Are Paying the Price for America’s Prison Binge

| Tue Aug. 26, 2014 6:00 AM EDT

As students return to the classroom this fall, one large group of children will be more likely than their peers to suffer learning disabilities, ADD/ADHD, behavioral problems, chronic school absence, and a host of other health concerns. These are the 2.7 million US children coping with the stress of parental incarceration.

In a new study, University of California-Irvine sociologist Kristin Turney analyzes data from the 2011-12 National Survey of Children's Health (NSCH) to determine the mental and physical health effects of having a parent in jail or prison. The results are striking:
 

The NSCH surveyed 95,677 children. Turney's analysis found that children with a parent in jail or prison had worse health across all but three tested health outcomes. They were more than three times as likely to suffer depression (6.2 percent vs. 1.8 percent) and behavioral problems (10.4 percent vs. 2.6 percent), compared to kids without an incarcerated parent. Perhaps more surprisingly, parental incarceration was related to higher levels of asthma, obesity, speech problems, and overall poor physical health.

Factors that affect health are often interrelated, making it difficult to isolate and study just one: Families already in poverty are more likely to be affected by incarceration, but incarceration can also destabilize family finances. Even when Turney controlled for a host of other factors—including parental employment and income, ethnicity, parents' relationship status, safety of neighborhood, and parental health—the relationship remained between parental incarceration and health concerns like learning disabilities, ADD/ADHD, and developmental delay.

Children with a parent in jail or prison were more than three times as likely to suffer depression and behavioral problems.

In fact, Turney found that children with parents behind bars are as likely to suffer certain health problems—including learning disabilities and developmental delay—as children who experience divorce or the death of a parent, witness parental abuse, or share a home with someone with a drug or alcohol abuse problem.

"Results suggest that children's health disadvantages are an overlooked and unintended consequence of mass incarceration," Turney writes, "and that incarceration, given its unequal distribution across the population, may have implications for population-level racial-ethnic and social class inequalities in children's health."

One study found that a quarter of black children born in 1990 saw a parent go to jail or prison by age 14, as opposed to 3 percent of white children.

Parental incarceration introduces significant stress into a child's life, Turney tells Mother Jones, which "leads to negative health effects, especially mental-health conditions." But on top of inherent psychological stress, incarceration can hit a family from all directions: The destabilization of family finances, relationships, and other elements of daily life can cause indirect stress that further impacts a child's health, Turney explains.

The NSCH data does not make clear the extent to which direct and indirect stress contribute to poor health, but Turney says she hopes future research will help figure that out: "Because that's really important for where to best invest, in terms of intervening in these kids' lives and where we might be able to develop public policies."

She says children can be overlooked as policymakers focus on the health of the inmates themselves. "And while there are certainly a host of negative things that go along with that, we should be thinking about how these consequences can really have spillover effects on families and on children."

Incarceration's impact on family life is made worse by facilities located far from cities, exploitative phone rates, lack of official policies to address children's needs, and excessively long sentences. Two-thirds of incarcerated parents are nonviolent offenders.

Turney has previously studied the way in which teachers' perceptions of children with incarcerated fathers can make it more likely for these children to be held back a year in school. She says there is a growing interest in studying parental incarceration, but that researchers are stymied by a lack of good data.

Its not just academics who are starting to think about this issue: Sesame Street recently reached out to children coping with parental incarceration by introducing a puppet whose father is in jail. As one little girl says in the clip, it gets hardest "when I see children with their mothers, and playing and everything, and I just wonder how it feels to be like that."

Earthquake Warning Systems Exist. But California Won't Pay for One.

| Tue Aug. 26, 2014 6:00 AM EDT
The aftermath of California's August 24 earthquake in Napa, California

As Bay Area residents clean their streets and homes after the biggest earthquake to hit California in 25 years rocked Napa Valley this weekend, scientists are pushing lawmakers to fund a statewide system that could warn citizens about earthquakes seconds before they hit.

California already has a system, called ShakeAlert, that uses a network of sensors around the state to detect earthquakes just before they happen. The system—a collaboration between the University of California-Berkeley, Caltech, the US Geological Survey (USGS), and various state offices—detects a nondestructive current called a P-wave that emanates from a quake's epicenter just before the destructive S-wave shakes the earth. ShakeAlert has successfully predicted several earthquakes, including this weekend's Napa quake. It could be turned into a statewide warning system. But so far, the money's not there.

"For years, seismic monitoring has been funded, essentially, on a shoestring," says Peggy Hellweg, operations manager at UC-Berkeley's seismological lab.

Maintaining ShakeAlert in its current state costs $15 million a year—a tiny fraction of the estimated $1 billion in damage caused by the Napa quake. Turning it into a statewide early-warning system would require installing new earthquake sensors throughout the state, building faster connections between sensors and data centers, and upgrading the data centers themselves. Since many of California's population centers, including the Bay Area, sit on fault lines, a warning system would likely give residents little time to prepare, ranging "from a few seconds to a few tens of seconds," depending on a person's proximity to the earthquake's epicenter, according to ShakeAlert's website—not enough time to leave a large building, but perhaps enough to take cover under a desk or table. Warnings could be deployed via text messages, push notifications, or publicly funded alert systems. Setting the whole thing up could cost as much as $80 million over five years—and keeping it running would cost more than $16 million annually, according to a USGS implementation plan published earlier this year.

In September 2013, the California legislature passed a bill requiring the state's emergency management office to work with private companies to develop an early warning system, but forbade it from pulling money from the state's general fund. The effort got a boost last month when the House appropriations committee approved $5 million for the system, the first time Congress has allocated money for a statewide system. But the project is still short on funding. 

An earthquake early-warning system would not be a unprecedented: Similar systems already exist in China, India, Italy, Romania, Taiwan, and Turkey. In Mexico City, a warning system connected to sensors 200 miles to the south gave residents two minutes' warning before a magnitude 7.2 earthquake struck earlier this year—enough time for many to leave buildings and congregate in open areas. 

More than 200 people were injured following last weekend's Napa earthquake, 17 of them seriously, according to the San Francisco Chronicle. Among those hit was a boy who was hit by debris from a falling chimney. 

On Monday, the USGS said the likelihood of a "strong and possibly damaging" aftershock (magnitude 5.0 or higher) occurring within the next week was around 29 percent.

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Here's the Latest Right-Wing IRS Fantasy

| Tue Aug. 26, 2014 1:16 AM EDT

Here's a great example of the conservative media bubble at work. I was browsing The Corner a few minutes ago and came across a post telling me that the government has, rather astonishingly, acknowledged that it has another backup of Lois Lerner's missing emails. Judicial Watch, which has been trying to get hold of these emails, sent out a press release trumpeting its discovery:

Department of Justice attorneys for the Internal Revenue Service told Judicial Watch on Friday that Lois Lerner’s emails, indeed all government computer records, are backed up by the federal government in case of a government-wide catastrophe....This is a jaw-dropping revelation. The Obama administration had been lying to the American people about Lois Lerner’s missing emails....The Obama administration has known all along where the email records could be — but dishonestly withheld this information.

Well. That's fascinating. But I wondered what was really up. I went to Google News but all I found were links to conservative news sites. The Judicial Watch story was plastered over all of them: Forbes, The Blaze, NRO, Breitbart, Fox, Townhall, the Washington Examiner, the Free Beacon, and the New York Observer. But none of the usual mainstream news sources seemed to have anything about this.

Except for The Hill. Hooray! So I clicked:

[An] administration official said Justice Department lawyers had dropped no bombshells last week, and that Judicial Watch was mischaracterizing what the government had said.

The official said that Justice lawyers were only referring to tapes backing up IRS emails that were routinely recycled twice a year before 2013, when the investigation into the Tea Party controversy began....The administration official said that the inspector general is examining whether any data can be recovered from the previously recycled back-up tapes and suggested that could be the cause of the confusion between the government and Judicial Watch.

Roger that. What he's saying is that backup tapes are routinely recycled and written over, but it's possible that some of the tapes weren't entirely written over. There's a chance that old emails might still be at the tail end of some of the tapes and could be recovered. And who knows: maybe some of them were Lerner's. This is, as you can imagine, (a) the longest of long shots, and (b) a pretty difficult forensic recovery job even if some parts of the backup tapes contain old messages. It's certainly not a jaw-dropping revelation.

But in right-wing fantasyland, it's no doubt already become conventional wisdom that the feds have some kind of massive government-wide backup system that contains every email ever written by any federal employee. The Obama administration has just been hiding it.

Which is exactly what you'd expect from them, isn't it?

Quote of the Day: Congressmen and Crackpots

| Mon Aug. 25, 2014 7:07 PM EDT

From Jon Chait, responding to Paul Ryan's list of favorite books about economics and democracy—which notably fails to include his former favorite book, Ayn Rand's Atlas Shrugged:

It seems the lesson Ryan has drawn from the harmful publicity surrounding his Rand fixation is not that he shouldn’t associate himself publicly with crackpot authors but merely that he should find different crackpot authors.

Here is Chait's description of Jude Wanniski's most famous book, which earns a place on Ryan's list.

The Way the World Works is a novel argument that the entire history of the world can be explained by changes of tax rates. The fall of the Roman Empire, the rise of the Nazis — Wanniski attempts to explain it all as a result of taxes. It is a work of genuine derangement on the same intellectual level as the sorts of unpublishable hand-scrawled diatribes that I used to scan through when I sorted the mail as a magazine intern.

But...but...but—look! Michael Moore!

Yes, Republicans Really Are Unprecedented in Their Obstructionism

| Mon Aug. 25, 2014 1:48 PM EDT

When we talk about Republican obstruction of judicial nominees in the Senate, the usual way is to look at filibusters and cloture votes. But that can sometimes be misleading, since cloture votes can happen for a variety of reasons. Or we can look at the raw number of seats filled. But that can be misleading too, since this can depend on how aggressive the president is about nominating new judges in the first place. A better way may be to simply look at how long nominees are delayed. That's easier to measure, and long delays mostly happen for only one reason: because the minority party is blocking floor votes.

Via Jonathan Bernstein, the chart on the right comes from @Mansfield2016. It shows pretty clearly what's happened to judicial nominees over the past couple of decades. Under George HW Bush, nominees that made it to the Senate floor were voted on almost immediately. The majority Democrats waited only a few days to schedule a vote.

That jumped suddenly when Bill Clinton became president and Republicans started delaying his nominees. Things settled down and delays plateaued during George W Bush's administration.

And then came Barack Obama. Once more delays spiked. Even after the rules were changed, delays have stayed high, averaging about 80 days. This is far higher than it was under Bush or Clinton. Bernstein comments:

I believe that Senate rules requiring super-majority cloture for judicial nominations are an excellent idea, provided the minority observes the Senate norm of using filibusters rarely. Unfortunately, Republicans simply haven’t abided by longstanding Senate norms. After Obama's election, they suddenly insisted that every nomination required 60 votes — an unprecedented hurdle. They blockaded multiple nominations to the DC Circuit Court. They have, before and after filibuster reform, used Senate rules to delay even nominations that they have intended ultimately to support. Since reform, they have imposed the maximum delay on every single judicial nominee.

Ideally, I'd like to see a compromise that restores the minority's ability to block selected judicial nominees. But right now, the more pressing concern is that if Republicans win a Senate majority in November, they may simply shut down all nominations for two full years. That would be absolutely outrageous. Yet it seems entirely plausible.

That final comment is what makes these numbers even more outrageous. It's fairly normal for a minority party to start delaying nominees in the final year or two of an administration. Obviously they're hoping to win the presidency soon and they want to leave as many seats open as possible for their guy to fill. This tends to inflate the average numbers for an administration.

But that hasn't happened yet for Obama. His numbers for his first five years are far, far higher than Bush's even though Bush's are inflated by delays during his final year in office. It's just another example of the fact that, no, both parties aren't equally at fault for the current level of government dysfunction. Republicans greeted Obama's inauguration with an active plan of maximal obstruction of everything he did, regardless of what it was or how necessary it might be in the face of an epic economic collapse. No other party in recent history has done that. It's a new thing under the sun.

This Time Is Different

| Mon Aug. 25, 2014 10:42 AM EDT

I was chatting with a friend about the relentless, one-sided hawkishness on display yesterday on the morning chat shows, and he responded:

The recurring "stay tuned for" loop are clips of McCain ("We never should have left"), Graham ("ISIS no longer JV"), Ryan ("What's the president's plan for eradicating ISIS?"). Over and over again. Nowhere are clips of people urging caution or restraint. War is great news, is action, is drama. Whether consciously or not, the media simply drives inevitably to pushing for a clash.

It's really beyond belief. Israel invades Lebanon and gets Hezbollah out of the deal. We arm the mujahideen and get the Taliban and Al Qaeda out of the deal. We depose Saddam Hussein and play kingmaker with Nouri al-Maliki, and we get ISIS out of the deal. But hey—this time is different. Really. This time we'll be done once and for all if we just go in and spend a decade wiping the theocratic butchers of ISIS off the map. This time there won't be any blowback. This time we'll fix the Middle East once and for all. This time things can't possibly get any worse. Right?

Of course, the hawks always have Munich, don't they? Always Munich. And so we need to fight. We need troops. We need leadership. And no one with political aspirations really wants to argue the point. There's no future in siding with the thugs, is there?

Besides, maybe this time really is different.