Kevin Drum - November 2009

The Gift Card Scam

| Tue Nov. 17, 2009 1:11 PM EST

Here's the latest good-news-bad-news on the financial regulation front:

The Federal Reserve today proposed new rules that would protect gift card users from fees and other unexpected restrictions.

....Under the proposed rules, gift cards would not expire until at least five years from the purchase date. Service and inactivity fees could only be charged once a month and only after a card had been inactive for at least a year.

The good news is obvious: at least the Fed is finally doing something.  But the bad news is equally obvious: Why did it take so long?  These things are plainly marketed as replacements for cash, after all.  And why, even now, are the rules so lame?  California flatly prevents both expiration dates and fees, and guess what?  Gift card business is booming.

On a more analytical level, I'll say this: I can understand why gift cards might eventually expire, both for accounting reasons and for common sense reasons.  But inactivity fees?  Come on.  There's no reason to make a card inactive in the first place, and there's no cost to re-activating if you do.  This is just plain and simple robbery.  The fact that the Fed caved in to industry pressure to allow this is exactly why we need a Consumer Finance Protection Agency.  A CFPA would never allow scams like this.

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Trying the Terrorists

| Tue Nov. 17, 2009 12:17 PM EST

Andrew Sullivan on the prospect of trying the 9/11 suspects in civilian courts in New York City:

When you listen to the Fox News right speak about this, they reveal amazing levels of fear. They have been truly spooked by these men with long beards and chilling eyes. They are so scared of them they are willing to drop any and all legal principles that the West has historically used with respect to mass murderers. Their fear brought them to institute torture, and to engage in mass brutality against prisoners of war in every theater of combat in a manner that will tragically taint the honor of the US military for a very long time. It led them to establish Gitmo, to create for the world a reverse symbol of the Statue of Liberty, and imprint it on the minds and in the consciences of an entire generation of human beings, whose view of America will never be the same.

It's not as if the right's reaction to these trials is a surprise, not after listening to a year's worth of wailing about death panels, socialism, birthers, dithering, Chicago thugs, and more.  The right wing base today doesn't just oppose Obama, they're aboslutely terrified of everything he stands for.

But they brought the New York trials on themselves.  I'm not categorically opposed to using military tribunals in cases like this, but that's hardly an option anymore thanks to the Bush administration's contemptuous efforts to turn them into obvious kangaroo courts.  Hell, even military lawyers couldn't stomach them.  As for an international court, that would be fine too except that conservatives have blocked every attempt to make the United States a party to them.  The only real choice left, if you want ensure something within shouting distance of a fair trial, is a civilian court.

But does this mean there's any chance they could get off?  In theory, sure.  That's the whole point of having a fair trial.  In practice, forget it.  The evidence against KSM and the others is too strong.  A year from now, they'll all be convicted, New York City will be intact, and we'll get on with our lives.

And the right will move on to being outraged and terrified about something else.

The Swiss System

| Tue Nov. 17, 2009 11:26 AM EST

Tyler Cowen has a list of 11 healthcare reform ideas (plus three extras) over at his site today, and he says he would "trade away the Obama bill for these in a heart beat."  I wouldn't, for reasons having more to do with future reform than with anything on the table today, but there's plenty to agree on here.  Tyler would like to federalize Medicaid, spend more on medical R&D, make an "all-out" effort to limit hospital infections, encourage the spread of walk-in clinics, and a few other things that I've written in favor of before.  So bring 'em on.

But he's also in favor of limiting universal coverage to catastrophic care, which I'm not so keen on, and thinks that universal coverage is pretty much impossible if you try to build it on top of our current jury-rigged system:

11. Realize that you cannot tack "universal coverage" (which by the way it isn't) onto the current sprawling mess of a system, so look for all other means of saving lives in other, more cost-effective ways.  If you wish, as a kind of default position, opt for universal coverage if the elderly agree to give up Medicare, moving us to a version of the Swiss system and a truly unified method of coverage.  But don't bet on that ever happening.

I'm sympathetic to this idea, but I'm not really sure why it has to be true.  The current bills pretty clearly move us along the path toward a Swiss system — not my first choice for a model to follow, but certainly better than what we have now — and I don't think that the existence of Medicare as a separate part of that really stands in the way.  A single comprehensive system for all would probably be better and more efficient, but it's hardly an absolute precondition.  My own guess is that a decade or two from now we'll basically have Medicare for the elderly and the Swiss system for everyone else.  Austin Frakt adds this:

The current debate over health reform is just the beginning–call it Health Reform Debate 1.0 (beta). Debate 2.0 will be about costs, specifically about payment reform....Therefore, I’d like to add a 15th item to Cowen’s list: payment reform that compensates providers, at least in part, on the basis of quality and cost control. That’s very vague. One can conjure up some specifics and some have. Few are thoroughly tested and none have been anywhere near the center of political debate. But they will, and soon.

Agreed.  Coverage first, cost controls second.  It would be great to do it all at once, but politically there's really no alternative to the way we're doing now.

Being Uninsured Can Kill You

| Mon Nov. 16, 2009 10:14 PM EST

Today comes news of a new study on emergency medical care:

Patients who lack health insurance are more likely to die from car accidents and other traumatic injuries than people who belong to a health plan — even though emergency rooms are required to care for all comers regardless of ability to pay, according to a study to be published Tuesday.

Well, no surprise there.  But this is a surprise:

Trauma physicians said they were surprised by the findings....Dr. Frank Zwemer Jr., chief of emergency medicine for the McGuire VA Medical Center in Richmond, Va., said he was "kind of shocked. "

"We don't ask people, 'What's your insurance?' before we decide whether to intubate them or put in a chest tube," said Zwemer, who wasn't involved in the research. "That's not on our radar anywhere."

The surprise is that these guys are surprised.  How much evidence do we need about the disproportionate rate of poor outcomes among the uninsured before everyone understands that lousy American healthcare coverage really is killing people?  You'd think that doctors, at least, might be aware of this.

In fairness, part of the result in the trauma study might be due to selection bias.  To some extent, the uninsured are more likely to lead risky lives and more likely to have preexisting conditions of one kind or another.  But mostly it's this:

The researchers offered several possible explanations for the findings. Despite the federal law, uninsured patients often wait longer to see doctors in emergency rooms and sometimes visit ERs at several hospitals before finding one that will treat them. Other studies show that, once they're admitted, uninsured patients receive fewer services, such as CT and MRI scans, and are less likely to be transferred to a rehabilitation facility.

Patients without insurance may have higher rates of untreated underlying conditions that make it harder to recover from trauma injuries, the researchers said. They also may be more passive with doctors and nurses since they don't interact with them as often. All of these factors could influence whether a trauma patient is able to recover from his or her injuries.

A lot of people die unnecessarily every year because we have lousy, expensive healthcare coverage in the United States.  It's about time to start doing something about it.

Quote of the Day #3 and #4

| Mon Nov. 16, 2009 5:34 PM EST

From Sarah Palin, talking to Oprah about Levi Johnston:

By the way, I don't know if we call him Levi — I hear he goes by the name Ricky Hollywood now, so, if that's the case, we don't want to mess up this gig he's got going.

Ricky Hollywood? And this from a "former McCain campaign aide," on Palin's book:

It is unrecognizable at every instance. There is not one truthful account as it relates to any conversation I ever had with her.

So why is Sarah Palin so endlessly fascinating? The sex appeal that practically oozes out of every pore?  Her perpetual family soap opera? A sense of besiegement and resentment so powerful it practically knocks you over every time she speaks? The fact that she actually seems to take pride in her complete lack of policy expertise? Her seemingly total lack of real self-awareness?  The fact that she lies so casually it seems like she actually believes everything she makes up?

Yeah, I guess that's it.  By the way, Sullivan has been watching her Oprah interview and says "She's clearly hoping to run for president in 2012."  Wouldn't that be great?  And not just for the entertainment value, but to answer some truly nagging questions.  Is it possible to win the Republican nomination while giving interviews to no one except Fox News personalities?  Her fellow Republicans mostly treat her with cautious respect right now, but what will they say about her once they're all on stage together during the primary debates?  Will she develop any actual policy positions?  And who would she choose to be her running mate?  Inquiring minds want to know.

Quote of the Day #2

| Mon Nov. 16, 2009 4:41 PM EST

From Mark Shields, on President Obama's long process of trying to figure out what to do in Afghanistan:

It makes me nostalgic for those days when we had a manly man in the White House who could say, “Let’s kick some tail and ask questions afterwards” you know? That’s what we really need instead of any reflection.

You know, it's not that I don't sympathize at all with Shields here.  It's true that Obama really has drawn out this process for an awfully long time.  And who wouldn't want to just kick some tail if that was all it took to finish things up and bring the troops home?  But it's time to grow up.  Kicking tail is the easy part.  It's figuring out what to do afterwards that's the problem.  That's what Obama is trying to do.

UPDATE: Uncle! I admit it: I just read the quote online.  I didn't watch the video and I didn't read any of the comments at ThinkProgress.  Now that I have, yes, it's pretty obvious that Shields was being sarcastic.  Sorry about that.

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Quote of the Day

| Mon Nov. 16, 2009 4:33 PM EST

From Ben Bernanke, in a speech to the Economic Club of New York:

The best thing we can say about the labor market right now is that it may be getting worse more slowly.

Hey, you know what would be great right about now?  Federal aid to states to keep them from going bankrupt and making the labor market even worse.  There must be a branch of the government out there somewhere that could do something along these lines.  Thinking it starts with an L.....

Chart of the Day

| Mon Nov. 16, 2009 1:55 PM EST

Via Kaus, here's a Pew map comparing California's disastrous economic situation to everyone else's.  Congratulations to Rhode Island and Arizona for their close second place finishes!  How's your state doing?

iPhones in China

| Mon Nov. 16, 2009 12:47 PM EST

Have you been sitting around wondering why Apple's launch of the iPhone in China has gone so miserably?  Me neither.  But here's the answer anyway: it hasn't.  Chinese consumers are buying plenty of iPhones, but because the official China Unicom version has WiFi disabled, they're mostly buying them on the gray market instead:

They are for sale at stalls in every cybermall and market in every Chinese city, and come in two varieties: The most expensive ones (at around 6000 RMB in Shanghai for a 16GB 3GS, or 880 USD, depending on your haggling skills) come directly from Hong Kong, where the factory-unlocked model is available from the Apple store for around 4800 RMB....The distribution model is extensive and robust, and in fact most Chinese buy their mobile phones from stalls like this. There are no iPhone shortages, as prices fluctuate to meet demand. The received wisdom is that around 2 million iPhones are in the Chinese wild; I’ve personally seen a good many of them here in Shanghai, where they are much in evidence among the eliterati.

....China Unicom stores all have iPhone banners up; I’ve passed several China Unicom road shows stopping by Shanghai extolling the iPhone. The iPhone is being talked about widely. But so is the fact that the China Unicom iPhone is crippled — the Chinese are sophisticated consumers; forget this at your own peril.

The upshot: anecdotal reports tell of aftermarket prices increasing for Hong Kong iPhones these past few weeks, as demand increased. Clearly, the advertising is working, even if China Unicom’s sales of wifiless iPhones are anaemic.

So: Apple has done an official deal with China Unicom, which isn't producing much in way of official sales but is producing increased marketing and awareness.  Apple's hope, apparently, it that eventually the whole situation will get a little too ridiculous and the Chinese government will cave in to public pressure.  Then they'll start selling unlocked versions through official channels and make a ton of money.  Now you know.

(Via Felix Salmon.)

Missing the Story

| Mon Nov. 16, 2009 12:08 PM EST

Can a city use its power of eminent domain in order to seize property and then turn it over to a private developer?  In Kelo vs. New London the Supreme Court ruled that it could, but by the time the case was finally decided in 2005 the private development project in question had already started to run out of steam.  Last week, in an ironic coda to the story, Pfizer, which the city of New London had hoped would build a headquarters building on the land, pulled out of New London completely.

Over at CJR, Ryan Chittum says this is a great story that the press completely whiffed on:

The Hartford Courant, fifty miles up the road, wrote a 900-word story the next day on Pfizer’s moves and barely mentioned the whole Supreme Court controversy that roiled the city and country for months. Neither did the Associated Press in a brief. The Wall Street Journal ran with 600-plus words on C3 and didn’t mention Kelo.

....Finally, today, the fourth day of the story, we have major papers covering the Kelo angle. The Daily News hits it, while The New York Times admirably puts its story —and it’s a good effort—on page one.

What took so long and why have other papers been missing on this? Are our institutional memories that short? Are we staffed that thin? Are we that disconnected from our readers?

Believe me, they remember Kelo.

I wonder about that.  Sure, lots of political junkies remember Kelo, but I'll bet that something like 99% of the country couldn't distinguish it from a brand of corn syrup.  Nor do they care about the town of New London, or about Pfizer, or even about the eminent domain issue in question.  The facts of the case make it an interesting topic for a feature story — hubris, irony, hard times, etc. — but in a straight news piece of a few hundred words I'm not really surprised the Supreme Court case didn't get much of a mention.  After all, Suzette Kelo is no Michael Jackson.