I'm beginning to think there's not actually a single person in America who's been harmed by Obamacare. I know that seems unlikely, but take a look at the latest AFP ad pounding Obamacare. It features Julie Boonstra, whose insurance was canceled and replaced with a new policy after Obamacare took effect. Boonstra was diagnosed with leukemia several years ago and has been getting treatment ever since. But now, she says, her treatment is unaffordable. "This is serious," she says. "It's not a game."

But when Glenn Kessler checked into Boonstra's story, here's what he found. First, Boonstra had some initial problems with the Obamacare site. No surprise there. But then she found a plan. It allowed her to keep her doctor. She's still being treated. Her old plan cost $13,200 per year plus "low" out-of-pocket expenses. Her new plan costs a maximum of $13,202 per year. Here's what she told the Detroit News about her old plan:

It was extremely expensive and there are things as far as oral chemotherapies that need to be done to reduce the cost. ... But I was covered and I made having a great health plan a priority for me and that was taken away from me.

Let's recap: Boonstra kept her doctor. Her new plan is, on net, less expensive than her old plan. And presumably she's no longer required to compromise on the type of chemotherapy she receives. In other words, it appears to be superior on virtually every metric.

Boonstra herself is naturally unavailable for comment, and the best an unctuous AFP spokesperson could do to defend this ad is to point out that Boonstra's costs are a little more variable than in the past. Instead of paying a flat $1,100 per month plus low out-of-pocket costs, she sometimes pays more in a single month until she hits her annual out-of-pocket max. That's it.

This ad implies that Boonstra flatly can't afford coverage anymore. It implies that she could no longer see her old doctor. It implies that Obamacare is killing her. None of this is true. Boonstra's care is better and cheaper than it was before. The only downside is that her payments are slightly more erratic than in the past.

So here's my question: if this is the best AFP can do, does that mean that no one is truly being harmed by Obamacare? Hell, I'm a diehard defender of Obamacare, and even I concede that there ought to be at least hundreds of thousands of people who are truly worse off than they were with their old plans. But if that's the case, why is it that every single hard luck story like this falls apart under the barest scrutiny? Why can't AFP find someone whose premiums really have doubled and who really did lose her doctor and who really is having a hard time getting the care she used to get?

If this is happening to a lot of people, finding a dozen or so of them shouldn't be hard. But apparently it is. So maybe it's not actually happening to very many people at all?

You've seen all those Election Day maps that show gigantic swaths of red, suggesting that the vast majority of real America votes conservative. Well, for your entertainment, here's the flip side. David Atkins passes along the map below, which shows economic activity in the United States. The 25 or so largest urban centers in America account for half of all economic activity. Not bad for a bunch of pinko elitists, is it?

Walmart's Core Customer Base Is Doing Poorly

We may not officially be in a recession any more, but the poor are still hurting pretty badly. And that's Walmart's core customer base:

Wal-Mart Stores Inc forecast a lower full-year profit than analysts expect, as fewer food stamps, higher taxes and tighter credit erode its sales, news that sent its shares down 1 percent in premarket trading on Thursday.

....A major factor in Wal-Mart's U.S. performance was a "low-single-digit decline" in sales of groceries at stores open at least a year, which generate about half of its sales....Wal-Mart's grocery sales have suffered from fewer food-stamp benefits resulting from U.S. federal budget cuts in November. One in five of its shoppers relies on food stamps, according to Cowen analyst Tal Lev.

I imagine that Walmart is now suffering from the failure to extend unemployment benefits too. And from the slowdown in economic activity and job losses caused by the sequester. And from our failure to increase the minimum wage.

But then again, lots of people are suffering from all that. Walmart is just a very large canary in the coal mine.

First there was Bridgegate. Now we have another gate. But what to call it? Routergate? Emailgate?

Let's go with Routergate for now. After all, when was the last time a secretly installed router got a scandal named after it? In this case, the secret router belonged to Scott Walker's office staff back when he was Milwaukee County executive. This secret router was used to host a secret email system that his staff used to run his 2010 campaign for governor, which is something of a no-no since public employees aren't supposed to be running the boss's campaign during business hours.

Up to now, Walker has managed to keep his fingerprints away from all this, refusing to even say whether he knew the secret email system existed. Today, however, a huge cache of emails from the system was released, and this was one of them:

"Consider yourself now in the 'inner circle,'" Walker's administration director, Cynthia Archer, wrote to Walker aide Kelly Rindfleisch just after the two exchanged a test message. "I use this private account quite a bit to communicate with SKW and Nardelli."

SKW would be Scott Kevin Walker, who apparently received "quite a bit" of campaign email from these secret accounts. Does this mean he knew about the secret router? Does it mean he knew it was being used to conduct campaign business during working hours? No it doesn't. But it sure points in that direction. From the Washington Post:

Walker has characterized the activities as wayward behavior of low-level aides. But the e-mails show that he knew county officials were working closely with campaign officials. Walker, for instance, directed his county staff members and campaign aides to hold a daily conference call to coordinate strategy, the documents show.

He routinely used a campaign e-mail account to communicate with county staff members, who also used private accounts, the documents show. Prosecutors have said the approach was used to shield political business from public scrutiny.

That sounds familiar, doesn't it? In any case, a bunch of those low-level aides have already been convicted of campaign misconduct, but not Walker. He's managed to maintain plausible deniability, and that's unlikely to change. But for what it's worth, Charles Pierce thinks that Walker's shenanigans are eventually going to catch up to him:

If you like the grandiose and unfolding corruption in New Jersey under Chris Christie, you're going to love the penny-ante thievery in Wisconsin under Scott Walker.

His entire political career has been marked by one laughably cheap scam or another. His first campaign has an impressive body count; former aides went to jail for using his office as Milwaukee County Executive to campaign for him for governor. He also has a absolute gift for surrounding himself with people who have interesting notions of public service. My favorite is still Ken Kavanaugh, who was convicted for literally robbing money from widows and orphans, and for pillaging a fund dedicated to taking the children of American soldiers killed in action to the zoo....And now there's a special prosecutor looking into possible illegalities in the campaign through which Walker fought off a recall effort.

Walker is running for reelection this year, and you can be sure that Democrats will be doing their best to make hay with the latest investigation, which involves allegations that Walker illegally coordinated his 2012 anti-recall campaign with "independent" conservative groups.

None of this is likely to damage Walker very badly. Campaign misconduct just doesn't bother people much. Still, you have to figure that where there's smoke, there's fire. If Walker is the kind of guy to do all this stuff, he might also be the kind of guy to go a step or two further someday and forget to cover his tracks. Stay tuned.

From Andrea Peterson, summarizing some avuncular corporate advice to users of Google Glass:

With a few of these dos and don’ts, it seems like Google is trying to explain to users how to act like a normal human being in public settings.

In some industries, I guess that's a legitimate topic for a FAQ.

After losing a court battle over its effort to impose net neutrality requirements on broadband carriers, the FCC is taking another crack at it:

The Federal Communications Commission said Wednesday that it will craft new rules to prevent Internet service providers from charging companies like Netflix Inc. or Google Inc. a toll to reach consumers at the highest speeds.

The guidelines are expected to ban broadband providers from blocking or slowing down access to any websites. Supporters say the concept, known as "net neutrality," is crucial to keeping the Internet open and allowing smaller companies to compete with the biggest content providers. But the courts have ruled against the FCC's last two attempts to enforce net neutrality on companies like Comcast Corp. and Verizon Communications Inc. that provide Internet connections to households and businesses.

The Journal has an accompanying article about the feud between Netflix and the large backbone carriers that's causing slowdowns in Netflix service:

Verizon has a policy of requiring payments from networks that dump more data into its pipes than they carry in return. "When one party's getting all the benefit and the other's carrying all the cost, issues will arise," said Craig Silliman, Verizon's head of public policy and government affairs.

The Internet has historically been built on arrangements in which big networks agree to swap each other's traffic without charge, based on the assumption that it will all even out over time. But, America's heavy use of video services like Netflix and Amazon.com Inc., as well as expanded online offerings from TV channels like ESPN, is making these old arrangements less tenable.

....The pendulum has been swinging toward the carriers in such disputes. In recent years several big Web companies, including Google Inc., Microsoft Corp., and Facebook Inc., have begun paying major U.S. broadband providers for direct connections that bring faster and smoother access into their networks. Netflix, so far, has held out.

It's not clear if net neutrality rules would affect this particular dispute or not. It probably depends on how the rules are written, and no details were provided today. I imagine the rules-writing process will take quite a while, so this isn't going to be resolved anytime soon.

Matt Yglesias makes a point worth sharing about technology and economic growth:

It seems entirely conceivable to me that future technological progress simply won't lead to that much economic growth. If we become much more efficient at building houses, that will increase GDP, because the output of the housing sector is selling housing. But the output of the health care sector is selling health care services, not curing illnesses, and sick people already buy a lot of health care services. People with cancer tend to buy cancer treatments. If those treatments become more effective at curing cancer, that'd be great for patients and their families but it's not obvious that it would raise "productivity" in the economic sense.

Yglesias provides a couple of example of this ambiguity. The printing press didn't do much for GDP growth, because books just aren't a big segment of the economy and never have been. But that doesn't mean the printing press wasn't a revolutionary invention. Likewise, if someone invented a pill that cured cancer, that might actually reduce GDP by eliminating all the money we spend on cancer care. But it would still be a huge contribution to human welfare.

This is a point that plenty of economists have made, but it's worth repeating. Facebook is a big deal, but it hasn't added an awful lot to measured GDP. In terms of the market economy, it employs a few thousand people, owns some buildings, and operates some large server farms. That's not a huge contribution. On the flip side, if 100 million people spend more time on Facebook and less time going to the movies or reading books, it could actually be a net GDP loser. Ditto for video games, which might reduce economic output if the time and energy spent buying games and game consoles is less than what people used to spend all those hours on.

This isn't a bulletproof case. It's just meant to illustrate a point. If, in the future, we spend a lot more time on activities that are relatively cheap to produce—social networking, video games, virtual reality, etc.—we could end up in a world where people are as happy as they are now (or happier) with far less in the way of the traditional production of market goods. I doubt that this dynamic has had much effect on growth yet, but it's quite possible it will in the future. Living in the Matrix is pretty cheap, after all.

Yesterday I wondered aloud why it was taking so long for chip-and-PIN credit cards to come to America, and why, now that they're finally here, we're getting lame chip-and-signature cards instead.

First things first. There's actually not a lot of mystery about why it's taken so long, something I've written about before. Roughly speaking, the answer is that fraud detection in the US improved dramatically in the 90s, and that reduced the motivation to make the switch. Conversely, fraud detection in Europe was more primitive, so it made a lot of financial sense to transition to chip-and-PIN. Most of the transition costs were paid for by reduced fraud.

So that explains that. But now that we're finally making the switch, why are we moving toward chip-and-signature? The whole point of smart cards is that the chip makes them hard to counterfeit and the PIN makes them hard for thieves to use. Chip-and-signature cards are still hard to counterfeit, but they can be used by thieves just as easily as current mag stripe cards. Plus they aren't universally compatible in the rest of the world.

The answer, apparently, is that banks don't want to do it:

The changeover in this country will be costly—as much as $35 billion, by some estimates.... According to the National Retail Federation, merchants are willing to spend that money if the banks issue the right kind of smart cards. Retailers want what are called chip-and-PIN cards, which require that a PIN be entered for each transaction.

....At a news conference Tuesday, Mallory Duncan, the federation's senior vice president and general counsel, called chip-and-signature cards a bad idea. "It's like locking the front door and leaving the back door open," he said. "It would be a shame to spend all that money for a half-baked solution."

The American Bankers Association said the marketplace should be able to accommodate both chip-and-signature and chip-and-PIN smart cards. "It's the only way for this complex payments system to continue to deliver convenience and meet the needs of consumers," said Jeff Sigmund, the association's senior director of public relations.

Well, sure, the marketplace can accommodate both, but banks are apparently planning to issue signature-only cards, not cards that can be used both ways. Why?

"Merchants see the PIN as a more secure option, but it doesn't make a lot of sense to the banks because it really doesn't do anything," said Alphonse Pascual, a senior analyst for security, risk and fraud at Javelin Strategy & Research. "It would be like putting a new deadbolt on your front door and then putting gum in the lock. It's the lock that's protecting you, not the gum."

This makes no sense. A PIN foils thieves. What's really going on here is that it's merchants who mostly pay the costs of fraud these days, so banks don't care much about it. Apparently, this means they just don't want to deal with the hassle of PIN cards:

There's also the concern that Americans, who tend to have a variety of credit cards, would have a tough time managing multiple PINS.

"If the consumer doesn't want to memorize all those numbers, they might choose the same PIN for each card," said Randy Vanderhoof, executive director of the nonprofit Smart Card Alliance. "Using one PIN to protect 10 different cards in your wallet now exposes you to the potential for increased fraud."

PIN technology could pose a challenge to credit card issuers, which must deal with users who can't remember their PIN or need to change it. That was a problem when Canada switched to chip-and-PIN credit cards, but people eventually got accustomed to it.

This is a combination of insulting and crazy. Americans are already accustomed to using PINs, and would have no more trouble managing multiple PINs than Danes and Italians do. And while using one PIN for ten cards might not exactly be best practice, it's certainly better than no PIN at all. How could it possibly increase fraud? Signature cards can be used with nothing more than a scrawl.

And then we get to the last paragraph. If cards have PINs, banks and card issuers will have to spend a bit of money helping people change their PINs.

And that seems to be what we're left with. Merchants are willing to make the switch. Consumers would get used to the switch pretty quickly. But card issuers don't want to bother because it might increase their customer support costs a bit during the transition.

Once again, the American financial industry is proving that there's nothing they can't screw up. For the last two decades they've been just about the least consumer-enhancing industry in the country, and they're continuing their value-destroying ways in the transition to smart cards. I guess we shouldn't really be surprised.

Bottom line: This really begs for regulation from the Fed or Congress. With all the public outrage over recent data breaches, you'd think this would be a relatively bipartisan kind of issue. I understand that it involves regulation, and Republicans have a knee-jerk opposition to regulation of any kind, but honestly, this is precisely the kind of regulation Congress is made for. Do your jobs, folks.

The CBO released a study today on the effect of raising the minimum wage to $10.10. The chart below shows their main finding: millions of families outside the upper middle class would see a net increase in income (partly from higher wages and partly from higher economic growth) while families in the top 20 percent would see a decline (primarily from having to pay slightly higher prices for goods and services):

The cost of this higher income is fewer jobs: CBO estimates that employment would fall by about 0.3 percent, or 500,000 workers. That strikes me as being on the high side of consensus estimates, but it's probably in the right ballpark.

As economic policies go, that's not bad. In the real world, there's no such thing as a policy that has benefits with zero costs. There are always compromises. In this case, in return for the small job losses, 16 million workers would get a direct wage increase; another 8 million would get an indirect wage increase; and nearly a million workers would be lifted out of poverty. That's about as good as it gets.

All that said, this is a report that I suspect CBO shouldn't have bothered doing. Their value-add lies in assessing the effects of legislation that no one else is studying. But the minimum wage has been studied to death. CBO really has nothing to add here except its own judgment about how to average out the dozens of estimates in published academic papers. In other words, they aren't adding anything important to the conversation at all. This report is going to get a lot of attention, but it really doesn't teach us anything new.

UPDATE: This post originally said that 80 percent of all families would benefit from a minimum wage increase. But the CBO figures don't actually say that. Families throughout the bottom 80 percent of the income spectrum would benefit, and each individual income bucket that CBO studied would see a net increase in income, but that doesn't mean every single family would benefit. I've corrected the text to reflect this.

Out of all the Obamacare signups to date, how many are from people who were previously uninsured? Extrapolating from signups in New York, Charles Gaba provides the following estimates:

  • October, November, December — perhaps 50% of 2.15 million = 1.075 million previously uninsured
  • January — perhaps 75% of 1.15 million = 863,000 previously uninsured
  • February — probably 90% out of, say, 700,000 = 630,000 previously uninsured
  • March — probably at least 95% out of (unknown number, depends on strength of the expected "March surge"...assume 1.0 - 1.5 million?) = perhaps 0.9 - 1.4 million previously uninsured

Unsurprisingly, people who were already insured dominated the early signups. Since the beginning of 2013, however, it's mostly been people who are getting insurance for the first time. If Gaba is right, by March we'll have about 4 million workers who are newly insured via private plans, plus several more millions who have newly qualified for Medicaid. It's a start.