Kevin Drum - September 2013

GOP Unveils Yet Another Health Care Non-Plan

| Wed Sep. 18, 2013 12:12 PM EDT

Ed Kilgore previews today's release of a shiny new Republican healthcare plan to replace Obamacare:

SPOILER ALERT SPOILER ALERT SPOILER ALERT SPOILER ALERT

WORLD EXCLUSIVE MUST CREDIT POLITICAL ANIMAL

Through carefully cultivated sources in my own cerebellum, I'm able to reveal the mysterious House conservative health care plan:

High-risk pools, HSAs, tax credits, interstate insurance sales, "tort reform," "entitlement reform."

OK, smartypants, let's just compare that to reality. Here's the actual plan:

  • Spurs competition to lower health care costs by allowing Americans to purchase health insurance across state lines....
  • Reforms medical malpractice laws....
  • Provides tax reform that allows families and individuals to deduct health care costs....
  • Expands access to Health Savings Accounts (HSAs)....
  • Safeguards individuals with pre-existing conditions ... by bolstering state-based high risk pools....
  • Protects the unborn by ensuring no federal funding of abortions.

Hah! You didn't mention that last one, Ed. What makes this plan unique and exciting is its ban on federal funding for abortion. Boo-yah!

Anyway, that's it. Same old, same old. You may now go about your business and ignore the latest healthcare non-plan from conservatives, just as you can ignore the latest tax reform non-plan from conservatives. In fact, why don't you just take the whole day off?

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Republican Senator Introduces Yet Another Tax Plan to Benefit the Rich

| Wed Sep. 18, 2013 11:23 AM EDT

Dylan Matthews reports today that Sen. Mike Lee (R–Utah) has introduced a new tax plan. This is something that all the presidential candidates felt obligated to do back in 2012 as a way of signaling their fealty to the rich, but since there's no election coming up anytime soon it's not clear why Lee has decided to do this right now.

In any case, his plan reduces the number of tax brackets even though tax brackets have nothing at all to do with the complexity of the tax code. What it does do is give him an excuse to raise rates on the middle class and reduce rates on the rich. In addition, his plan leaves the current low capital gains rates and estate tax rates alone (good for the rich) and leaves the current high payroll taxes alone as well (bad for the poor). Put this all together, and the almost certain outcome is that the middle class would pay a little less; the upper middle class would pay somewhat more; and the rich would enjoy a big tax cut. In other words, it's a pretty standard Republican plan.

I guess the good news is that it's not quite as outrageously favorable toward the rich as all the plans that were released during campaign season. But aside from that, it's hard to see what other merits this plan has.

Republicans Prepare to Commit Party Suicide

| Wed Sep. 18, 2013 1:01 AM EDT

Robert Costa reports that the tea partiers have won: John Boehner will allow the House to vote on a budget resolution that defunds Obamacare while fully funding everything else. There may be some wee problems, though:

But getting such a CR through the Democratic Senate and signed into law will be very difficult — and many House Republican insiders say a “Plan B” may be needed.

Here’s how my sources expect the gambit to unfold: The House passes a “defund CR,” throws it to the Senate, and waits to see what Senator Ted Cruz and his allies can do. Maybe they can get it through, maybe they can’t. Boehner and Cantor will be supportive, and conservative activists will rally.

But if Cruz and company can’t round up the votes, the House leadership will likely ask Republicans to turn their focus to the debt limit, avoid a shutdown, and pass a revised CR — one that doesn’t defund Obamacare.

It cracks me up that Costa is able to repeat this stuff with a straight face. I guess he has to in order to stay in the good graces of his sources. But here's how it's really going to play out: The House will pass this bill. Tea partiers everywhere will rejoice. And that will be it. Harry Reid will just laugh and toss it in the dustbin.

Boehner will then beg the lunatic wing of his party to get serious. They will threaten to hold their breaths until their faces turn blue. Boehner will sigh and toss off a pro forma speech about how President Obama needs to "get serious" about the deficit. He will then spend some time with Eric Cantor, and ask him for permission to pass a grown-up CR with some Democratic votes. If Cantor decides to let him, that's what he'll do. If not, there will be a government shutdown accompanied by dancing in the streets and solemn promises to hold out forever. But the public, to the apparent surprise of the tea partiers, will run out of patience very quickly. Democrats will start previewing campaign ads for next year. Phones will ring off the hook. Poll numbers will plummet. Suddenly La Revolución won't seem quite as much fun anymore. The whole thing will then peter out amid much acrimony and scapegoating while Erick Erickson mutters on his blog about how Republicans can never be trusted to stand their ground in support of true conservatism.

Something along those lines, anyway.

Fear of iPhone Finger Severing Frenzy Proves Groundless

| Tue Sep. 17, 2013 9:48 PM EDT

Good news for iPhone 5S customers! The fingerprint reader will only work with actual live fingers, so you don't need to worry about some James Bond supervillain wannabe cutting off your finger in order to get access to the iPhone he's stolen from you.

Actually, it's even better than that, since a thief would have no idea which finger you normally use and would therefore have to chop off both your hands to really be sure he had the right fingerprint. But you don't have to worry about that either. Your digits are safe.

(Assuming that iPhone thieves all read Mashable, that is.)

Hooray! Basel III is Working Pretty Well So Far

| Tue Sep. 17, 2013 2:57 PM EDT

After the great crash of 2008, two big new financial regulations were put in place. In the U.S., Congress passed the Dodd-Frank Act. Internationally, the Basel III accord increased the amount of capital that banks are required to hold. Of the two, Basel III is probably the more important, but only if it actually works as planned. So has it?

Via Matt Levine, Felix Salmon glosses a new BIS report today and concludes that, basically, yes, so far it's worked pretty well. Banks all yelled and screamed that higher capital requirements would destroy their lending business, but it hasn't. Nor have banks really had much trouble meeting the new capital standards. In fact, they've met them well ahead of schedule:

The banks achieved this feat in the most painless way possible: they simply retained their earnings, rather than paying them out in dividends. And those earnings weren’t easy to come by, either. The banks in general shed what Levine calls “income that lots of people find naughty, prop trading and so forth”, which reduced their overall profitability. The banks instead had to make money the old-fashioned way, by lending it out at a higher rate than their cost of funds. Net interest income, across all global banks, rose substantially from the pre-crisis period to the post-crisis period: it was 1.34% of assets in 2005-7, and 1.62% of assets in 2010-12.

As it happens, U.S. bank lending still hasn't returned to pre-crash levels—though it's been growing nicely for the past couple of years. But I'm with Felix that this is OK:

I’m not sure that this [] is really bad news. If you stipulate that there was too much lending in the economy in 2008, and that we needed to enter a period of slow deleveraging, this is actually exactly what the doctor ordered.

....And in reality, a large part of the stagnation in bank lending has to be a consequence of the fact that the economy as a whole is evincing little demand for credit. Individuals are more interested in paying down their debts than they are in borrowing more; businesses, too, have learned the hard way that debt has a tendency to bite, hard, at the worst possible moment....So I’m with Levine on this one: so far at least, Basel III seems to be working in an almost optimal manner. We’re used to a world where the only way you can achieve growth is through leverage — and we learned, with extreme pain, that leverage is a very dangerous thing. This recovery, by contrast, is not being driven by leverage. And that is surely a good thing.

Yep. The big question is whether this is just a short-term reaction to a traumatic financial crisis or whether it's a lesson that stays learned for a while. I have a fundamentally Minsky-ite view that this lesson will be unlearned within a few years as fears fade and everyone makes up clever new reasons to believe that new economic paradigms make leverage safer than in the past, so the big question is whether regulators have longer memories and will stick to their guns if they see leverage increasing dangerously.

We'll know in a few years. In the meantime, you should be unsurprised to learn that all the caterwauling from banks about Basel III's new capital requirements was, as usual, just the usual self-interested rubbish. They've met the new standards; they've met them sooner than expected; they've stayed profitable doing so; and lending is in perfectly good shape. That's good news all around.

Syria Is a Very Minor Blip in the Course of US Foreign Policy

| Tue Sep. 17, 2013 12:45 PM EDT

I don't think anyone is really much interested in yet another tedious thumbsucker about What Syria Means, but the tone of the commentary over the past few days has simply gotten insane. I know I'll get laughed at for writing a typical Kevin Drum post that tells everyone to calm down a bit, but for God's sake. Can we all calm down a bit? Some quick bullet points:

  • Yes, Obama's handling of Syria was initially pretty fubared. He didn't understand how much support he could count on for air strikes; he was taken by surprise over the intensity of the opposition; and he ended up hurting his own cause with some pretty silly statements.
  • At the same time, can we talk? The question of whether to bomb Syria for a few days is pretty trivial as these things go. This is no Iraq and it's no Vietnam. Hell, it's not even a Suez crisis.
  • American credibility has barely been scratched. Our foreign policy is intact; the rest of the world is pretty clear on what it is; and our reluctance to engage in military action one time out of dozens of opportunities simply doesn't change anyone's view of American power. If a congressional repudiation of a president happened over and over, that would change some views. But once? Please.
  • Obama's leadership chops have likewise barely been scratched. They were pretty low to begin with, and Syria hasn't changed that much.
  • And while we're talking about that: being willing to change course isn't a sign of vacillation or weakness. It's simply nuts to think this. The Russian proposal for UN inspections represented a pretty good opportunity to salvage a decent outcome from the congressional mutiny; it was a chance to nudge Vladimir Putin in a constructive direction; and it doesn't preclude future military action in any way. Only someone with near-clinical insecurity issues would reject this opportunity simply because it represented a change of course.
  • Nor is the latest round of diplomacy a triumph for Putin or Bashar al-Assad or Iran. Russia continues to be yoked to a crumbling pariah regime; Syria actually is a crumbling pariah regime; and Iran has gotten nothing out of this. See Dan Drezner for more straight talk on this score.
  • Syria will have precisely zero effect on domestic fights over the budget and the debt ceiling. The whole idea is preposterous, and I think everyone knows it. The Republican gridlock freight train has been on track for months and it hasn't budged an inch since spring. Syria hasn't had the slightest impact on this.

As Anthony Weiner would say, chillax, people. This whole affair is a pretty minor foreign policy barnacle, and its long-term effect on both American power and Obama's ability to get things done is tiny. How about if we all tone down the apocalyptic language?

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Gridlock Might Destroy the US Economy, But It's Still Good for Business

| Tue Sep. 17, 2013 12:01 PM EDT

Robert Costa writes today that both Republican aides and veteran House members are worried that it's fast becoming impossible to find a budget compromise that can win the support of the Republican caucus:

Both camps fear that a shutdown is increasingly likely — and they blame the conservative movement’s cottage industry of pressure groups.

But these organizations, ensconced in Northern Virginia office parks and elsewhere, aren’t worried about the establishment’s ire. In fact, they welcome it. Business has boomed since the push to defund Obamacare caught on. Conservative activists are lighting up social media, donations are pouring in, and e-mail lists are growing.

There you have it. Gridlock is good for business. Nuff said.

It's all pretty remarkable, isn't it? Our government is deadlocked because Republicans control one half of one branch of the government. The tea party faction controls that half because it can prevent John Boehner from being re-elected Speaker if he crosses them. So we've somehow maneuvered ourselves into a place where 40 or 50 fanatic representatives can bring the entire government of the most powerful nation on Earth to a screeching halt. And somehow this seems....kind of normal. It hardly even raises an eyebrow anymore.

Just thought I'd mention that.

Today's Roundup of Dinosaur Technology

| Tue Sep. 17, 2013 10:52 AM EDT

Are telephone answering machines dinosaurs? Matt Yglesias says yes. I say no. Believe it or not, lots of people still make and receive phone calls! And not everyone has signed up for their phone company's voice mail service. But they'd still like to know when someone has called and would like them to call back. Thus, the answering machine. They're mostly built into phones these days rather than sold as standalone devices, but there are still lots of them out there.

In a separate vein, Dave Weigel questions the utility of morning roundup posts:

It's 2013 A.D. and I'm no longer convinced that early-morning round-up posts are a good use of time. So this will be the last one — again, barring some massive pressure campaign, letters from readers piling up like letters to Santa in Miracle on 34th Street.

For what it's worth, my take on this has always been simple. Roundup posts with more than four or five entries are a waste of time. You're basically signaling me that this is just a dump of everything you've read this morning, so I'm going to skip it. But a roundup with three or four or maybe five items signals something different. It tells me that this is actually a carefully pruned list of things you truly found interesting and think I might be interested in too. Those kinds of roundup posts I frequently find worthwhile.

Sadly, nearly all roundup posts are the former type.

There's No Such Thing as a Value-Neutral Economic Choice

| Tue Sep. 17, 2013 12:56 AM EDT

Charles Lane complains about the politicization of the Federal Reserve:

The 1978 Humphrey-Hawkins Act, passed by a Democratic Congress and signed by Democratic President Jimmy Carter, put the Fed in charge of value-laden (i.e., political) trade-offs by requiring it to minimize both inflation and unemployment.

The implication here is that restricting the Fed's mandate solely to inflation wouldn't be a value-laden decision. But it is. It's a decision to conduct monetary policy exclusively for the benefit of the moneyed class, which likes low inflation, and the corporate class, which dislikes tight labor markets—and without concern for the preferences of the middle class, which likes having a job.

Remarkably, a lot of people in Washington DC are blind to this. They simply take it for granted that conservative economic doctrines are value-neutral, and they tend to dismiss opposing views as just so much partisan nonsense. That's what produces sentences like the one above.

Yep, the Ghouta Gas Attacks Were Carried Out By the Assad Regime

| Mon Sep. 16, 2013 11:59 PM EDT

The UN report on the chemical weapons strike in the Ghouta suburb of Damascus has been released, and to no one's surprise it confirms that a sarin gas attack was carried out. The report doesn't try to affix blame for the attack, but the facts it provides make it vanishingly unlikely that it was launched by anyone other than the Assad regime.

The inspection team found two rockets that were relatively intact and therefore possible to describe in some detail (the details are in Appendix 5). The first one is an old Russian BM-14. The second is a unique design that Syria weapons autodidact Brown Moses has been referring to for a while as an UMLACA (Unidentified Munition Linked to Alleged Chemical Attacks). It's shown below in the UN report:

The UMLACA appears to be manufactured, not cobbled together out of parts, as you might expect if it were a rebel design. What's more, Moses says this about the BM-14 and the UMLACA: "In the 18 months I've been studying the arms and munitions in the conflict I have never seen either type of munition used by the opposition."

The UN inspectors were able to estimate the trajectories of the two rockets they found, and BruceR provides a map showing where they seem to have come from:

The graphic here shows the actual bearings the report gives (215 degrees and 105 degrees) with arrows exactly 5 miles long, pointing away from their likely points of origin....Incredibly, the two rocket paths traced backwards actually converge right on Mount Qasioun, a mountain overlooking Damascus which the Syrian government has heavily fortified. You may remember Mount Qasioun... back in May Israeli jets blew up a huge quantity of "advanced surface-to-surface rockets" on the mountain they alleged were about to be transferred by the Syrian government to Hezbollah. The same mountain is also the location of the government's secretive Jamraya military research center, long rumoured to be central to the Syrian government's chemical weapons program.

And the New York Times adds this:

Moreover, those weapons are fired by large, conspicuous launchers. For rebels to have carried out the attack, they would have had to organize an operation with weapons they are not known to have and of considerable scale, sophistication and secrecy — moving the launchers undetected into position in areas under strong government influence or control, keeping them in place unmolested for a sustained attack that would have generated extensive light and noise, and then successfully withdrawing them — all without being detected in any way.

BruceR's conclusion: "The chances of this being some kind of attack by someone outside the Syrian government, already slim, basically have to drop to zero now, assuming you trust the UN's facts as presented." That sounds about right. Added to all the other intelligence pointing in the same direction, there's really no longer any case to be made that this was some kind of false-flag rebel operation. It was a chemical weapons attack mounted by the Assad government. Sorry, Rush.