Kevin Drum - November 2013

The Lesson of Obamacare: Sabotage Works

| Sun Nov. 3, 2013 9:28 PM EST

Amy Goldstein and Juliet Eilperin have a big piece in the Washington Post today about the disastrous implementation and rollout of Obamacare following the euphoria of its passage in 2010. Goldstein and Eilperin document plenty of bad decisions along the way, and lots of them reflect poorly on Team Obama. Still, I have to say that my big takeaway from the article was the same as Andrew Sprung's: sabotage works.

The primary example of this comes early in the story, when the team responsible for building the marketplaces—and the website—was moved under the Centers for Medicare and Medicaid Services (CMS). Partly this was for operational reasons, but:

The move had a political rationale, as well. Tucked within a large bureaucracy, some administration officials believed, the new Center for Consumer Information and Insurance Oversight would be better insulated from the efforts of House Republicans, who were looking for ways to undermine the law. But the most basic reason was financial: Although the statute provided plenty of money to help states build their own insurance exchanges, it included no money for the development of a federal exchange — and Republicans would block any funding attempts. According to one former administration official, Sebelius simply could not scrounge together enough money to keep a group of people developing the exchanges working directly under her.

Now, one obvious question is why the law failed to finance the federal exchanges. That was pretty clearly a mistake. Still, under normal circumstances, even an opposition party would end up cutting a deal eventually to shore up the missing funding. Not this time, though. As one White House official told the Post, "You're basically trying to build a complicated building in a war zone, because the Republicans are lobbing bombs at us."

There are plenty of other examples of this, and Sprung outlines them in his post today. No federal program that I can remember faced quite the implacable hostility during its implementation that Obamacare has faced. This excuses neither the Obama administration's poor decisions nor its timidity in the face of Republican attacks, but it certainly puts them in the proper perspective.

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Friday Cat Blogging - 1 November 2013

| Fri Nov. 1, 2013 2:05 PM EDT

Sometimes catblogging is a last-minute affair. Yesterday afternoon I suddenly realized I hadn't taken this week's picture, and the light was fading. So I grabbed this week's quilt, tossed it onto the grass outside, and plonked Domino down on it. She did not cooperate, so I only got a few shots to choose from. This is the best of the lot. The quilt is called Amish Shadow, and it's machine pieced and hand quilted.

In the end, though, I did come through with catblogging today. Why? Because here at MoJo, we're all about giving our readers what they want. So why not subscribe to the magazine? It doesn't feature any catblogging (yet....), but it does feature lots of great reporting six times a year for the low, low price of only $12. And subscriptions make great holiday gifts too! Here are the links to subscribe:

Chart of the Day: The Collapse of the American Middle Class

| Fri Nov. 1, 2013 1:30 PM EDT

Via Harrison Jacobs, here's a recent study showing the trend in income segregation in American neighborhoods. Forty years ago, 65 percent of us lived in middle-income neighborhoods. Today, that number is only 42 percent. The rest of us live either in rich neighborhoods or in poor neighborhoods.

This is yet another sign of the collapse of the American middle class, and it's a bad omen for the American political system. We increasingly lack a shared culture or shared experiences, and that makes democracy a tough act to pull off. The well-off have less and less interaction with the poor outside of the market economy, and less and less empathy for how they live their lives. For too many of us, the "general welfare" these days is just an academic abstraction, not a lived experience.

Small Businesses Plan to Add Health Coverage For First Time in a Decade

| Fri Nov. 1, 2013 11:48 AM EDT

Sean Vitka directs my attention to page 26 of a new survey from NFIB, the National Federation of Independent Business. They asked their members if they planned to add health insurance next year, and it turns out that there's going to be a net increase. Of those who currently offer insurance, 7 percent plan to drop it. Of those who don't currently offer insurance, 13 percent plan to add it. That's good news, and the report notes that "If small employers follow those plans, the net proportion of them offering would rise, breaking a decade-old trend." Thanks, Obamacare!

Yet Another Benghazi Story Falls Apart

| Fri Nov. 1, 2013 11:11 AM EDT

Earlier this week I wrote about Lara Logan's sensationalistic report on Benghazi for 60 Minutes on Sunday. As it turned out, the only new bit of reporting came from a British security supervisor who has written a book and came on the program to publicize it, but even he didn't really have anything new to add. When he got to Benghazi, he said, he realized it was a dangerous place and that al-Qaeda-affiliated groups were active in the area. This isn't news.

However, the supervisor, who was dramatically disguised on camera and went by the pseudonym Morgan Jones, did have a very detailed account of his own heroic actions on the night of the attacks. Today, Karen DeYoung of the Washington Post suggests—well, she's a straight news reporter, so she doesn't suggest anything. But here's what she reports:

In a written account that Jones, whose real name was confirmed as Dylan Davies by several officials who worked with him in Benghazi, provided to his employer three days after the attack, he told a different story of his experiences that night.

In Davies’s 2½-page incident report to Blue Mountain, the Britain-based contractor hired by the State Department to handle perimeter security at the compound, he wrote that he spent most of that night at his Benghazi beach-side villa. Although he attempted to get to the compound, he wrote in the report, “we could not get anywhere near . . . as roadblocks had been set up.”

....The State Department and GOP congressional aides confirmed that Davies’s Sept. 14, 2012, report, a copy of which was obtained by The Washington Post, was included among tens of thousands of documents turned over to lawmakers by the State Department this year.

....A person answering the telephone Thursday at Blue Mountain, based in Wales, said no one was available to discuss Benghazi or Davies, who no longer worked there. Damien Lewis, co-author of the book, said in a telephone interview that Davies was “not well” and is hospitalized. Lewis said he was unaware that the Blue Mountain incident report existed but suggested that Davies might have dissembled in it because his superiors, whom he contacted by telephone once he was informed that the attack was underway, told him to stay away from the compound.

So here's what we know: (a) There was really no need for the dramatic pseudonym. Everyone knew who Davies was. (b) His official report differs wildly from his 60 Minutes account. (c) Davies is now conveniently sick and unable to explain himself. (d) Davies never told his co-author about his after-action report. (e) Presumably he never told 60 Minutes about it either. (f) Congressional investigators have had copies of Davies' report for months.

Needless to say, neither 60 Minutes nor congressional Republicans care about any of this. They have their story and they're sticking to it. The rest of us can make up our own minds.

Despite Problems, Obamacare Remains Fairly Well Liked

| Fri Nov. 1, 2013 10:41 AM EDT

The Kaiser Family Foundation has released yet another Obamacare tracking poll, and they find that huge majorities think the rollout has gone badly. No surprise there. But they also find that this hasn't really changed opinions much. As usual, people who want to keep or expand Obamacare outnumbered those who want to repeal it, 47 percent to 37 percent:

Always keep these results in mind when you hear that Obamacare isn't a popular law. Obviously Obamacare is an extremely polarizing law, but polls that ask simple approve/disapprove questions fail to capture the number of people who disapprove of Obamacare only because it doesn't go far enough. When you break down the answers further, it turns out that, although Obamacare isn't going to win any awards for most popular law ever, it's still reasonably well regarded. Despite the rocky rollout, only about a third of the country wants it repealed.

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"Global Wine Shortage" Turns Out to be Just Another Wall Street Hustle

| Fri Nov. 1, 2013 10:02 AM EDT

There is no global wine shortage. In fact, 2013 is the first year in a long time in which there wasn't a shortage. We're awash in wine this year! Details here.

Bill Gross on Getting Rich at the Expense of Labor

| Fri Nov. 1, 2013 12:07 AM EDT

Here is bond zillionaire Bill Gross:

Having gotten rich at the expense of labor, the guilt sets in and I begin to feel sorry for the less well-off, writing very public Investment Outlooks that “dis” the success that provided me the soapbox in the first place. If your immediate reaction is to nod up and down, then give yourself some points in this intellectual tête-à-tête. Still, I would ask the Scrooge McDucks of the world who so vehemently criticize what they consider to be counterproductive, even crippling taxation of the wealthy in the midst of historically high corporate profits and personal income, to consider this: Instead of approaching the tax reform argument from the standpoint of what an enormous percentage of the overall income taxes the top 1% pay, consider how much of the national income you’ve been privileged to make.

In the United States, the share of total pre-tax income accruing to the top 1% has more than doubled from 10% in the 1970s to 20% today....Congratulations. Smoke that cigar, enjoy that Chateau Lafite 1989. But (mostly you guys) acknowledge your good fortune at having been born in the ‘40s, ‘50s or ‘60s, entering the male-dominated workforce 25 years later, and having had the privilege of riding a credit wave and a credit boom for the past three decades. You did not, as President Obama averred, “build that,” you did not create that wave. You rode it.

And now it’s time to kick out and share some of your good fortune by paying higher taxes or reforming them to favor economic growth and labor, as opposed to corporate profits and individual gazillions....If you’re in the privileged 1%, you should be paddling right alongside and willing to support higher taxes on carried interest, and certainly capital gains readjusted to existing marginal income tax rates. Stanley Druckenmiller and Warren Buffett have recently advocated similar proposals. The era of taxing “capital” at lower rates than “labor” should now end.

I may not think Gross has it right on why investment returns are so low right now, but he certainly has it right about the big picture of what's happened to capital and labor over the past few decades. His fellow zillionaires ought to listen.