Kevin Drum - 2013

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

| Fri Nov. 1, 2013 12:48 PM 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!

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Yet Another Benghazi Story Falls Apart

| Fri Nov. 1, 2013 12:11 PM 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 11:41 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.

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

| Fri Nov. 1, 2013 11:02 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 1:07 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.

Germany Continues to Fiddle as Europe Stagnates

| Thu Oct. 31, 2013 7:04 PM EDT

Unemployment in the euro area hit 12.2 percent in September, up from 11.5 percent a year ago. The inflation rate hit 0.7 percent, down from 2.5 percent a year ago. This suggests that Europe could tolerate a wee bit more stimulus in its economic policy, especially from its biggest and most powerful country.

So what was the response of Europe's biggest and most powerful country? Dismissing as "incomprehensible" U.S. criticism of Germany's continuing dedication to running trade surpluses, and then taking a shot at high U.S. debt levels.

I think that perhaps "incomprehensible" does not mean what they think it means.

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Taking a Second Look at Rate Shock

| Thu Oct. 31, 2013 5:41 PM EDT

Rate shock is the subject of the day, and I have to confess to a growing unease about it. Here's why. I think a lot of us expected that young people in good health might see higher premiums under Obamacare. This is largely because Obamacare mandates a maximum 3:1 ratio between premiums for the young and premiums for the old. Roughly speaking, this means that insurers are being forced to charge older buyers artificially low prices, and that in turn forces them to charge younger buyers more. Instead of, say, charging $100 and $500, the 3:1 ratio means they have to charge $150 and $450. In essence, the young are subsidizing the old. Add in the fact that Obamacare forces insurers to provide better coverage, and prices are going to go up even more.

But this means that older buyers shouldn't see all that much rate shock. After all, they're getting the benefit of that 3:1 ratio. And yet, they are. A couple of days ago I wrote about the case of Deborah Cavallaro, a 60-year-old woman in Los Angeles who had been profiled on the NBC Nightly News. She currently pays $293 for her coverage, but got a letter saying her plan had been canceled and a replacement would cost $478. I wondered whether her insurance company was simply trying to steer her into a high-cost plan, even though they knew she could do better on the exchange.

In a word, no. I headed over to the California exchange, entered the appropriate numbers, and found a bronze plan from Anthem Blue Cross for $479. Her insurance company wasn't playing any games.

But maybe this new insurance is better than her existing policy? Michael Hiltzik talked to Cavallaro, who told him that her current policy has a deductible of $5,000 a year, an out-of-pocket max of $8,500 a year, and two doctor visits per year with a copay of $40. (She pays full price for subsequent visits.)

And the Obamacare bronze policy? It has a deductible of $5,000 a year, an out-of-pocket max of $6,350 a year, and three doctor visits per year with a copay of $60. (Subsequent visits are full cost until the deductible is met.)

Now, when you dig into the details, this is indeed slightly better coverage. Lifetime caps are no longer allowed, for example. And Anthem probably would have increased the price of Cavallaro's policy for 2014 even if Obamacare didn't exist. On the other hand, the new plan might have a more limited choice of doctors than Cavallaro is getting now. This stuff is probably a bit of a wash, which means that, roughly speaking, the bronze policy costs $2,200 more per year in return for an out-of-pocket max that's $2,200 lower. Any year in which Cavallaro goes over this max, the Obamacare bronze policy will pay off. Any year in which she stays under it, she's on the losing end of the deal.

So....I'm not sure what to think about this. The lower out-of-pocket max is a good thing, but basically Cavallaro is now paying for it every year instead of only in the years where she goes over $6,350. It's hard to spin that as a good deal.

Generally speaking, I'm trying to steer a path between denial and panic on this stuff. As Justin Wolfers illustrates on the right, there are still way more winners than losers under Obamacare. Right now, most of what we're hearing is anecdotal, and we simply don't know how everything is going to work out in the end or how many people are going to end up with higher rates. In Cavallaro's case, as in many others, that will depend a lot on the subsidies she gets. But there's not much question that any year in which her income is high enough to put her over the subsidy cap, she'll end up paying quite a bit more for coverage that's only marginally better. It's no surprise that she's unhappy about it.

And the fact that this is happening to 60-year-olds, not just 20-somethings, is a bit of a surprise to me. I'm not going to panic over these stories yet, but the more of them I hear, the less that denial seems like a reasonable response either.

Conservatives Punish Fox News for 2012 Election Failure

| Thu Oct. 31, 2013 3:19 PM EDT

Via Andrew Sullivan, Connor Simpson passes along the latest results of the YouGov BrandIndex survey, which tells us which brands are the most trusted. Results for Republicans are on the right, and as you can see, Fox News has fallen so far it's not even in the top ten anymore. Nor is this just an election year aberration. Fox News ranked #1 in both 2011 and 2012 before it cratered this year. Simpson takes a crack at figuring out what happened:

So where did it all go wrong? Some trace the recent Republican-Fox divorce all the way back to last November, when poor Megyn Kelly roamed through the Fox hallways looking for an answer to Karl Rove's ridiculous question: why isn't Mitt Romney president?

....Right after the election, Slate's Allison Benedikt argued Republicans should stop trusting the network because of its impossibly close ties with the Republican Party if they want honest news. "After Karl Rove’s on-air freakout and the aforementioned MegynCam challenge, Fox was forced to acknowledge that Obama had won the damn election. And now what are they left with?" Benedikt asked. "A whole lot of viewers who are quite surprised to find that they are once again outnumbered by Americans who actually like better access to health care and don’t all keep Carrie Mathison-style timelines of the Benghazi cables on their living room walls." A Public Policy Poll released in January showed a serious decline in trust during the months after the election. Only 52 percent of those who identify as "somewhat conservative," said they trust Fox News, down from 65 percent last year.

Well, it would be nice to believe this, but I have to admit I'm having a hard time with it. You see, I haven't noticed any particular increase in conservative dedication to the values of truth and compromise and caring about the less fortunate. Quite the contrary. Perhaps you've noticed the same thing?

So I'm a little flummoxed. If conservatives are even more radicalized than ever—and all the evidence suggests they are—why don't they like Fox News as much as they used to? Maybe it's not really trust at all. Or at least, not trust in the usual sense. Maybe after Obama's election victory, they decided that Fox News had failed them. After all, the implicit promise of Fox News was an assurance that they were going to get rid of that Kenyan socialist in the White House, and they didn't deliver the goods. Maybe conservatives still trust Fox News in the usual sense of believing their version of events, but they no longer trust them to be effective.

Or, who knows? Maybe conservatives are just watching less TV. The History Channel suffered a pretty big plunge too. So two TV channels got replaced by Craftsman and Lowe's. Maybe they're all just retreating to their workshops?

Anyway, the whole thing is pretty weird. What's up with Welch's? How did they break into the top ten? Are Republicans drinking more grape juice these days? And why is Chick-Fil-A no longer highly trusted? I suppose that happened after their epic cave last year, when they traded in their anti-gay message for PR mush: "We are a restaurant company focused on food, service and hospitality; our intent is to leave the policy debate over same-sex marriage to the government and political arena." Just another bunch of losers.

Anyway, here are the full results for 2012 and 2013. Basically, liberals like Google and conservatives like Welch's. Feel free to make sense of that as you will.

Republicans Declare Yet Another War

| Thu Oct. 31, 2013 1:39 PM EDT

A couple of months ago, Democrats agreed not to fiddle with the Senate's filibuster rules in return for Republicans agreeing to confirm several of President Obama's executive branch nominees. The last of the nominees was quietly confirmed this week, and you'll be unsurprised to learn that full-court obstruction reappeared instantly:

With votes slated for Thursday, Senate Republicans were poised to reject by filibuster the nomination of Rep. Mel Watt (D-N.C.) to head a major federal housing agency. Patricia Millett’s bid for a seat on the prestigious D.C. Circuit Court of Appeals also looked to be right on the margin of getting the 60 votes needed defeat a filibuster.

The two standoffs come as a group of other Republicans, led by Sens. Lindsey O. Graham (R-S.C.) and John McCain (R-Ariz.), have threatened to filibuster the nominations of Janet L. Yellen for Federal Reserve chairman, Jeh Johnson for homeland security secretary and a host of other presidential picks.

Sure enough, Watt and Millett have been blocked, and Yellen is being blocked two ways. Rand Paul plans to hold her nomination until he gets a vote on his father's "Audit the Fed" hobbyhorse, and Graham and McCain are blocking both Yellen and Johnson until they "get answers" on Benghazi.

So that's that. All of these are perfectly ordinary, well-qualified candidates without any special ideological baggage. Except that they're liberals, of course. Apparently that's enough. Republicans are back to war.

Oddly Enough, Syria Really Is Destroying Its Chemical Weapons

| Thu Oct. 31, 2013 1:04 PM EDT

Here's the latest news on the chemical weapons front:

The international chemical weapons watchdog said on Thursday that Syria had met an important deadline for “the functional destruction” of all the chemical weapons production and mixing facilities declared to inspectors, “rendering them inoperable” under a deal brokered by Russia and the United States.

....The next phase of the timetable set down by the United Nations foresees Syria destroying its stockpiles of chemical weapons by mid-2014. Those weapons are reported to include mustard gas and sarin, a toxic nerve agent which the Obama administration says was used in the Aug. 21 attack.

I don't really have any comment about this, except to express a bit of puzzlement. As near as I can tell, Bashar al-Assad is really and truly sincere about destroying his chemical weapons stocks.1 But why? I very much doubt it's because he fears retaliation from the United States. And given his past behavior, it's hardly likely that it's driven by feelings of moral revulsion.

So what's his motivation? For reasons of his own, he must have decided that he was better off without chemical weapons than with them. Perhaps it has to do with the internal political situation in Syria. Or maybe Russia got fed up for some reason. But it's a bit of a mystery, and not one that I've seen any plausible explanations for.

1So far, anyway. Obviously things might change in the future. At the moment, though, it seems like he's genuinely being cooperative.