Kevin Drum - January 2014

Is Ezra Klein the Next Roger Ailes?

| Wed Jan. 22, 2014 12:07 PM PST

Andrew Sullivan today:

I have to say it’s been amazing to see Washington get almost giddy about the Ezra Klein story. Well, maybe only Washington journalists ... but, still....All the stories about these ventures rightly take a wait-and-see approach as to whether we are witnessing a realignment in which those old big media companies accelerate their decline by being unable to accommodate their new media stars ... or whether these new ventures will eventually founder in a grim business climate for journalism. These new models may be evanescent or central to the future. We just don’t know yet.

This is true: we don't know yet. At the same time, no one should feel like this is something new and unprecedented. It's the same thing that's been happening to popular media for over a century. When radio was invented, it attracted young entrepreneurs like William Paley (using family money) and Richard Sarnoff (working his way up the ranks at RCA). The burgeoning market for middle-class reading material attracted young entrepreneurs like Henry Luce (magazines), William Randolph Hearst (newspapers), and Simon & Schuster (books). The film industry attracted young entrepreneurs like Walt Disney and Howard Hughes. Cheap four-color printing prompted Malcolm Wheeler-Nicholson to start up the company that would later become DC Comics. Car culture produced car magazines. Computers produced computer magazines. Gaming produced gaming magazines. The rise of cable TV brought us CNN, Fox News, and MSNBC. When politics collided with the rise of the internet, we got websites like Drudge Report, Talking Points Memo, the Huffington Post, and Politico.

Will Ezra Klein's new venture succeed? Who knows. But I think it's safe to say that some of these ventures will succeed, and they will indeed produce a realignment in the political media universe. They already have, after all: Fox News and Politico are probably more influential already than the entire old-guard newspaper industry combined.

Young (and some not-so-young) entrepreneurs have been reshaping popular media forever. It's no surprise that this is continuing. What else would you expect, after all?

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Global Investors See Bubbles As Far As the Eye Can See

| Wed Jan. 22, 2014 11:06 AM PST

Generally speaking, global investors are pretty optimistic. According to a new Bloomberg poll, they think China is a trouble spot, but they're bullish on prospects in Europe and the US, and a large majority are more confident than they were at this time last year. But take a look at this:

After the great crash of 2008, investors sure are sensitive about bubbles. They think equity markets are close to being a bubble; fixed-income markets are close to being a bubble; and even US treasuries are inching toward bubblicious territory. That accounts for just about everything except real property, which investors are still sanguine about—in the US, anyway.

This is just raw data, and it might not mean anything. On the other hand, no matter what investors say about the economy, if they're bearish on real-world ventures (factory expansions, etc.) and they're getting cold feet about financial ventures, does this mean that more and more money is going to be sitting on the sidelines? Or does it mean that all this money is going to suddenly start pouring into the safe haven of US housing until everyone gets scared of that too? Or something else?

Did Congress Just Kill Regulation of Spending By Political Groups?

| Wed Jan. 22, 2014 10:21 AM PST

Last week's budget bill was hurried through before anyone really had a chance to read the hundreds of riders and amendments that got tacked onto it. This was a very deliberate decision. John Boehner may have said that he wished Congress had more time to review the bill, but he knew perfectly well that the main reason for the rush was the fact that the House passed a 3-day continuing resolution after the final text was first posted. There were only three days to look at the bill because that's what the Republican leadership wanted.

This means that we'll be discovering cute little buried acorns in this bill for a while, and today Patrick Caldwell digs one up:

One small section could upend the Internal Revenue Service’s ability to regulate political organizations hoping to become nonprofits. Tacked on as a symbolic effort to mollify conservatives’ anti-IRS mania, the text is so overly vague that it could mean the dissolution of longstanding rules. Or nothing at all. No one's really sure.

....The relevant section is buried on page 439 of the gigantic bill. Just nine lines long and 68 words, the two clauses say money designated for the IRS cannot be used to "target citizens of the United States for exercising any right guaranteed under the first Amendment" or to target "groups for regulatory scrutiny based on their ideological beliefs."

....All of the tax experts reached by Mother Jones were mystified by the use of the word "target," an unusual term to be applied to the IRS. "I'm not even sure what targeting means,” says Owens.

This is obviously a sop to tea partiers, who continue to be obsessed by the idea that the IRS "targeted" them unfairly in 2010. The real scandal, of course, wasn't the fact that tea party groups got some scrutiny, but the fact that more groups don't get scrutiny. The law pretty clearly limits the tax exemption of groups that are directly engaged in political activity, and it ought to be applied to far more groups than it is now. That includes tea party groups, virtually all of which were created specifically to engage in political activity.

But now that law is in conflict with a hastily written provision that forbids "targeting" any groups for engaging in free speech. If courts interpret that as forbidding the IRS from going after groups engaged in political advocacy, it could upend campaign finance law in the United States.

Or maybe not. But you can rest assured that this will be coming to a court near you sometime soon.

Note to GOP: Don't Reveal Your Fiendish Plan to Destroy Obamacare Until the Last Reel

| Wed Jan. 22, 2014 9:01 AM PST

One of the reasons that insurers aren't too worried about the low signup rate for Obamacare is that it's early days. They figure things will work out eventually, and in the meantime they're protected from serious losses during the first three years by a provision of the bill called "risk corridors." The details aren't too important here. In a nutshell, if it turns out that an insurer has seriously miscalculated the cost of its coverage on the exchanges—perhaps because too few people have signed up—the federal government will reimburse them for part of their losses.

This is all very wonky stuff designed to smooth the transition to Obamacare. You're only reading about it now because a little while back some bright spark decided that if you called this an "Obamacare bailout" it might turn into a big campaign issue. Maybe Republicans could even get it repealed, which in turn would make life so hard for insurers that they'd drop out of Obamacare entirely! Bwa-ha-ha!

But their plan isn't going anywhere, and Dave Weigel thinks it's partly because conservatives have acted too much like a stock villain from a James Bond movie:

I mention Bond villainy for a reason. What's the mistake that Goldfinger and Blofeld and 006 et al constantly make? They explain the plot while there's still time for 007 to stop it. Conservative groups from FreedomWorks to Heritage Action have rallied behind Rubio's bill and a companion House bill, and obviously the hope is that a "no bailout" bill would gather momentum in the Senate and make life difficult for red state Democrats. But Congress just passed an omnibus funding bill that takes care of things for the rest of the year. A good chance to pressure the Senate on Obamacare — slotting the "no bailout" language in the House bill — has been lost. Even a scheme backed by Krauthammer, Ponnuru, and Cannon, all well-respected on the right, failed to gain traction in a Congress that's been chastened by the shutdown, and is more fearful of causing a crisis to gut Obamacare.

Neither Democrats nor the insurance industry were ever going to be fooled by any of this, but by making it clear that the real goal of repealing risk corridors is to cripple Obamacare completely, proponents lost even the slim chance they had to get a hearing from the press and from independents. They might take another crack at making this a big issue when the debt ceiling comes up, but it probably won't get them anywhere. Their tea party allies will be thrilled, but everyone else will see it as yet another in a long, tired string of contrived outrages designed to kill Obamacare. Time to move on, folks.

4 Years After Citizens United, Outside Campaign Spending Has Skyrocketed

| Tue Jan. 21, 2014 10:25 PM PST

On the 4-year anniversary of the Supreme Court's Citizens United ruling, which opened up elections to a flood of outside money, Chris Cillizza posts six charts showing how it's affected campaign spending since 2010. The chart below, based on data from Open Secrets, shows spending on midterm elections through January 21 in order to get a clean comparison of 2014 with previous election years.

Up through 2006, outside spending at this point in the election cycle had been flat for years at a very low level. In 2010, we were on an upward trajectory even before the Citizens United decision was handed down. And 2014? With Citizens United now in full operation, the sluice gates have opened wide. Outside spending is 25 times higher than it was at this point in 2006. Welcome to the future of American elections.

But this is all a bit bloodless. For a more dramatic illustration of what this means in real life, check out Andy Kroll's profile of the DeVos clan and how they use their Amway-driven fortune to support right-wing causes and defund the left.

Medicaid Enrollment Has Soared Under Obamacare

| Tue Jan. 21, 2014 3:07 PM PST

The New York Times reports that Medicaid expansion has been a huge success in West Virginia:

Enrollment in private insurance plans has been sluggish, but sign-ups for Medicaid, the federal insurance program for the poor, have surged in many states. Here in West Virginia, which has some of the shortest life spans and highest poverty rates in the country, the strength of the demand has surprised officials, with more than 75,000 people enrolling in Medicaid....In West Virginia, where the Democratic governor agreed to expand Medicaid eligibility, the number of uninsured people in the state has been reduced by about a third.

It's not just West Virginia, either. Probably not, anyway. Charles Gaba, who is basically the Nate Silver of Obamacare numbers, writes today that he's now pretty sure the total number of enrollments in Medicaid since October 1st isn't the 4 million or so that we previously thought, but more likely 6.2 million. We still don't know for sure how many of these represent new enrollments vs. re-enrollments, but the higher number makes it pretty likely that a very large chunk of this 6.2 million are new enrollees. Anecdotal evidence backs this up, and preliminary figures from the states that break out new enrollees separately suggest that roughly two-thirds of total signups are new enrollees.

If that's true, it means that about 4 million new people have signed up for Medicaid since October 1st. That's 4 million people who feel like this:

Waitresses, fast food workers, security guards and cleaners described feeling intense relief that they are now protected from the punishing medical bills that have punched holes in their family budgets. They spoke in interviews of reclaiming the dignity they had lost over years of being turned away from doctors’ offices because they did not have insurance.

“You see it in their faces,” said Janie Hovatter, a patient advocate at Cabin Creek Health Systems, a health clinic in southern West Virginia. “They just kind of relax.”

We're the richest country in the world. We can afford this.

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Earmarks are Back, Baby!

| Tue Jan. 21, 2014 12:32 PM PST

Why did so many Republicans vote for last week's budget bill? One reason is that they wanted to avoid getting blamed for another government shutdown. As you'll recall, the last one didn't turn out so well. But Stan Collender says there's another reason:

This is real inside-baseball: An omnibus appropriation provided an opportunity for the leadership to buy support from reluctant members by providing more dollars for their pet programs and projects. The demise of earmarks several years ago plus the use of continuing resolutions (which generally don't provide dollars on a program-by-program basis) to fund the government took that ability away. This was the first appropriations bill in five years where that wasn't the case.

[More....] Virtually every Republican who voted for the bill got some dollars devoted to something, if not many things, that her or his constituents will be very happy to have. In other words, this was the first real return of earmarks since they were banned several years ago and even anti-spending members couldn't resist.

Earmarks are back, baby! But really, I shouldn't be so flippant about it. Nobody likes to see the sausage being made, but the truth is that earmarks are a useful part of the legislative process. Sure, they're a little inefficient, and sure, they can get out of hand. But they don't increase overall spending, and they do provide congressional leaders with a way to whip their troops into line. Human nature being what it is, leaders need at least a few carrots and sticks in order to get anything done, and this is something they've largely lost over the past few decades. It would be a good thing if they got some of them back.

Chris Christie is Losing the Invisible Primary

| Tue Jan. 21, 2014 11:53 AM PST

How is Chris Christie doing in the latest presidential polling for 2016? It's hard to care much. It's way too early for these polls to mean anything.

However, the invisible primary for the Republican nomination will be starting in earnest within a year, and even now GOP power brokers are starting to make decisions about who to support. So it probably is worth asking how Christie is doing among Republicans. Dave Weigel answers:

Worse and worse. In the last Quinnipiac poll, 64 percent of Republicans said Christie would be a "good president." Only 18 percent disagreed. That's shrunk to 50 and 22 percent, respectively—a mere 4-point increase in the hard-no number, but a 12-point move from "good president" to "ask me something else." Conservatives, more skeptical in general of Christie, had given him a 54–26 advantage on the "good president" question. That's down to 37–24. Again, not huge movement to "no," just a lot of sliding toward undecided.

Since I officially think Christie never had much of a chance in 2016 to begin with, I suppose these numbers shouldn't mean much to me. But Bridgegate really does seem to be moving Christie from the "slim chance" column to the "no chance" column. You need to have a good reason to gamble on someone with Christie's obvious downsides, and that good reason has always been his appeal to blue-collar America as an honest guy who doesn't pull his punches. When that morphs into a reputation as a guy with control issues who revels in petty reprisals against his political foes, the jig is up. He's got nothing left. The folks with money who are looking for a winner are going to start looking elsewhere.

Hate Obamacare, Love the Benefits From Mumble-Mumble-Care

| Tue Jan. 21, 2014 10:42 AM PST

In Time this week, Stephen Brill catches up with a couple who had serious health care issues and desperately needed insurance:

When we spoke in October and Stephanie told me she didn't "think Obamacare will help us," I suggested that she might be mistaken and that if she was unable to get information from the then sputtering website she should consult an insurance broker. (Insurers pay the brokers' fees, not consumers.)

"When they came to my office, Stephanie told me right up front, 'I don't want any part of Obamacare,' " recalls health-insurance agent Barry Cohen. "These were clearly people who don't like the President. So I kind of let that slide and just asked them for basic information and told them we would go on the Ohio exchange"—which is actually the Ohio section of the federal Obamacare exchange—"and show them what's available."

What Stephanie soon discovered, she told me in mid-November, "was a godsend."

This kind of story is quickly becoming a classic, along the lines of "Keep the government out of my Medicare." But I still wonder whether, in the end, this is good or bad for Obamacare. Obviously, getting people signed up is good, regardless of how it happens. But how many people who are benefiting from Obamacare will become supporters of Obamacare? You'd think that virtually all of them would, but if they don't really know they're benefiting from Obamacare, maybe they won't.

Then again, maybe it's all for the best. If Republicans try to cripple Obamacare in some way, the word will quickly go out in all 50 states that Congress is doing something that will damage Kynect or Covered California or Healthy NY or whatever. Maybe that actually makes Obamacare safer than ever.

Teen Employment Isn't Really Very Well Correlated With the Minimum Wage

| Tue Jan. 21, 2014 10:12 AM PST

Via Tyler Cowen, here is a chart from Kevin Erdmann that shows raw teen employment figures during periods after the minimum wage was increased. What it shows, roughly speaking, is that in nearly every case, the trend rate of teen employment declined when a minimum wage hike went into effect. He asks: "Is there any other issue where the data conforms so strongly to basic economic intuition, and yet is widely written off as a coincidence?"

But but but.....what about the long-term trend? Between 1954 and 1970 the minimum wage went up steadily in real terms, and so did teen employment. Since 1980 the minimum wage has been declining steadily, and so has teen employment. Is it really possible that changes in the minimum wage would have immediate effects in one direction but long-term effects in the exact opposite direction?

Sure, maybe. But it doesn't seem likely. In terms of short-term effects, what I mostly see are employment declines in 1973, 1979, 1990, 2000, and 2007. And guess what? Those are the dates of the last five recessions in the United States. What's more interesting about this is that teen employment recovered from its immediate decline during the Carter and Clinton years, but didn't recover during the Reagan and Bush years. (And probably not during the Obama years either, though the final results aren't in yet.) Why? That's an intriguing question.

Bottom line: Teen employment has dropped substantially since about 1980. But during that time the real minimum wage has declined from $8 to $6 and then gone back up to a little over $7. Maybe there's a correlation there, but it sure isn't easy to see. Whatever's happening, the minimum wage seems to be a pretty small part of it.