Kevin Drum Feed | Mother Jones http://www.motherjones.com/Blogs/2013/08 http://www.motherjones.com/files/motherjonesLogo_google_206X40.png Mother Jones logo http://www.motherjones.com en One Little Survey Question Explains All of Politics http://www.motherjones.com/kevin-drum/2014/12/one-little-survey-question-explains-all-politics <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>Jonathan Bernstein points to a new Kaiser survey that examines opposition to the individual mandate in Obamacare. <a href="http://kaiserhealthnews.org/news/public-easily-swayed-on-attitudes-about-health-law-poll-finds/" target="_blank">Here's what they found:</a></p> <blockquote> <p>It remains among the least popular aspects of the law&nbsp;&mdash; with just a 35 percent approval rating. But when people are told that the mandate doesn&rsquo;t affect most Americans because they already have coverage through an employer, support jumps to 62 percent.</p> </blockquote> <p>It only takes a modest bit of reading between the lines to figure out what's really going on here: when people find out that the mandate doesn't apply to them personally, lots of them are suddenly OK with it. In case politics has always mystified you, that's it in a nutshell. Now you know.</p></body></html> Kevin Drum Health Care Fri, 19 Dec 2014 03:59:57 +0000 Kevin Drum 267001 at http://www.motherjones.com Mystery Chart of the Day: What's Up With All the Skinny Economists? http://www.motherjones.com/kevin-drum/2014/12/mystery-chart-day-whats-all-skinny-economists <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>The chart on the right is <a href="http://www.wsj.com/articles/memo-to-staff-time-to-lose-a-few-pounds-1418775776" target="_blank">excerpted from the <em>Wall Street Journal</em>.</a> It shows which occupations have the lowest obesity rates, and most of it makes sense. There are folks who do a lot of physical labor (janitors, <img align="right" alt="" class="image image-_original" src="/files/blog_obesity_occupation.jpg" style="border: 1px solid black; margin: 20px 0px 15px 30px;">maids, cooks, etc.). There are health professionals who are probably hyper-aware of the risks of obesity. There are athletes and actors who have to stay in shape as part of their jobs.</p> <p>And then, at the very bottom, there are economists, scientists, and psychologists. What's up with that? Why would these folks be unusually slender? I can't even come up with a plausible hypothesis, aside from the possibility that these professions attract rabid obsessives who are so devoted to their jobs that they don't care about food. Aside from that, I got nothing. Put your best guess in comments.</p></body></html> Kevin Drum Health Thu, 18 Dec 2014 22:22:49 +0000 Kevin Drum 266976 at http://www.motherjones.com Rick Perry Is One Lucky Dude http://www.motherjones.com/kevin-drum/2014/12/rick-perry-one-lucky-dude <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p><a href="http://www.aei.org/publication/oil-price-collapse-may-end-texas-miracle-least-now/" target="_blank">From James Pethokoukis:</a></p> <blockquote> <p>The energy sector gives, and the energy sector takes. The stunning drop in oil prices looks like bad news for the &ldquo;Texas Miracle.&rdquo; (Texas is responsible for 40% of all US oil production &mdash; vs. 25% five years ago &mdash; and all of the net US job growth since 2007.) This from JPMorgan economist Michael Feroli: &ldquo;As we weigh the evidence, we think Texas will, at the least, have a rough 2015 ahead, and is at risk of slipping into a regional recession.&rdquo;</p> </blockquote> <p>Man, Rick Perry is one lucky guy, isn't he? It's true that the "Texas Miracle" <a href="http://www.washingtonmonthly.com/magazine/march_april_may_2014/features/oops_the_texas_miracle_that_is049289.php?page=all" target="_blank">may not be quite the miracle Perry would like us to believe.</a> As the chart below shows in a nutshell, the Texas unemployment rate has fared only slightly better than the average of all its surrounding states.</p> <p>Still, Texas has certainly had strong absolute job growth. However, this is mostly due to (a) population growth; (b) the shale oil boom; and (c) surprisingly strict mortgage loan regulations combined with loose land use rules, which allowed Texas to escape the worst of the housing bubble. Perry had nothing to do with any of this. And now that oil is collapsing and might bring the miracle to a sudden end, Perry is leaving office and can avoid all blame for what happens next.</p> <p>One lucky guy indeed.</p> <p><img align="middle" alt="" class="image image-_original" src="/files/blog_texas_area_unemployment.jpg" style="border: 1px solid black; margin: 15px 0px 5px 17px;"></p></body></html> Kevin Drum 2016 Elections Economy Thu, 18 Dec 2014 19:00:42 +0000 Kevin Drum 266946 at http://www.motherjones.com Yeah, Democrats Are Pretty Pro-Corporate Too http://www.motherjones.com/kevin-drum/2014/12/yeah-democrats-are-pretty-pro-corporate-too <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p><a href="http://www.motherjones.com/kevin-drum/2014/12/no-tea-party-never-going-join-anti-corporate-liberals" target="_blank">A couple of days ago</a> I poured cold water on the idea that tea partiers might join up with the Elizabeth Warren wing of the Democratic Party to form some kind of populist anti-corporate coalition. "Every once in a while they'll get themselves exercised over some trivial issue of 'crony capitalism' like reauthorizing the Export-Import bank," I said, but the truth is that the tea partiers have no real devotion to anti-corporatism. They just want to cut taxes and slash welfare.</p> <p>Over at <em>National Review</em>, Veronique de Rugy tries to make the case that ExIm is more important than I'm giving it credit for, but I'm not buying it. Sorry. It's just a shiny object of the moment that's both small and costs virtually nothing. On the other hand, I'm entirely willing to buy de Rugy's suggestion that <a href="http://www.nationalreview.com/corner/394881/myth-anti-corporate-liberals-veronique-de-rugy" target="_blank">Democrats aren't especially anti-corporate either:</a></p> <blockquote> <p>Please. They talk the talk, but when it&rsquo;s time to vote, they rarely walk the walk. In the end, not unlike a number of Republicans, Democrats rarely miss an opportunity to support big businesses. They support the Department of Energy&rsquo;s 1705 loans, which mostly go to wealthy energy companies, and they never fail to join Republicans in saving other corporate energy subsidies; they support the reauthorization of OPIC, which mostly benefits large corporations; they support farm subsidies, which mostly benefit large agro-businesses at the expenses of small farms; they support Obamacare, which among other things amounts to a huge giveaway to the insurance industry; they support auto and bank bailouts; and for all their complaints about Wall Street, they managed to write a law, Dodd-Frank, that in some ways protects the big financial institutions that they claim to despise.</p> </blockquote> <p>I'd quibble with some of this. Obamacare is indeed good for the insurance industry, but it's not <em>that</em> good. And anyway, this is mostly due to the fact that the structure of American health care is historically dependent on private insurance, and it's just not possible to completely overhaul that overnight. In this case, Democrats caved in to special interests as much because they had to as because they wanted to.</p> <p>Still, it's true that most Democrats are pretty cozy with corporate America. There's a smallish anti-corporate wing of the party, but it rarely has much influence because (a) it's usually outnumbered in the Democratic caucus and (b) there's essentially no anti-corporate wing of the Republican Party to team up with. Being pro-corporate is one of the few bipartisan issues left in Congress. There are lots of fights over small stuff, but it's mostly just window dressing that hides widespread agreement over the big stuff.</p></body></html> Kevin Drum Congress Corporations Thu, 18 Dec 2014 17:39:15 +0000 Kevin Drum 266931 at http://www.motherjones.com Is Vladimir Putin Ready to Make a Deal? http://www.motherjones.com/kevin-drum/2014/12/vladimir-putin-ready-make-deal <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p><img align="right" alt="" class="image image-_original" src="/files/blog_putin_press_conference_2014.jpg" style="border: 1px solid black; margin: 8px 0px 15px 30px;">In his yearly press conference, Vladimir Putin appeared to be trying to <a href="http://www.nytimes.com/2014/12/19/world/europe/vladimir-putin-annual-press-conference.html?hp&amp;action=click&amp;pgtype=Homepage&amp;module=second-column-region&amp;region=top-news&amp;WT.nav=top-news" target="_blank">cool down the rhetoric over Ukraine:</a></p> <blockquote> <p>Mr. Putin recognized the efforts of President Petro O. Poroshenko of Ukraine in ending the conflict in the southeast of that country, but he suggested that others in Kiev, the Ukrainian capital, may be trying to prolong the conflict....&ldquo;We hear a lot of militant statements; I believe President Poroshenko is seeking a settlement, but there is a need for practical action,&rdquo; Mr. Putin added. &ldquo;There is a need to observe the Minsk agreements&rdquo; calling for a cease-fire and a withdrawal of forces.</p> <p>Russia has toned down its talk on the Ukraine crisis in the past month, and some of its most incendiary language, like &ldquo;junta&rdquo; and &ldquo;Novorossiya,&rdquo; a blanket term used for the separatist territories, is no longer used on state-run television news. Mr. Putin also notably omitted those terms, which he had used in other public appearances, on Thursday.</p> </blockquote> <p>So does this mean Putin is adopting a more conciliatory attitude toward the West? <a href="http://www.washingtonpost.com/world/putin-predicts-economy-recover-in-two-years/2014/12/18/6b81bb70-8689-11e4-9534-f79a23c40e6c_story.html?hpid=z4" target="_blank">You be the judge:</a></p> <blockquote> <p>In general, he blamed &ldquo;external factors, first and foremost&rdquo; for creating Russia&rsquo;s situation &mdash; accusing the West of intentionally trying to weaken Russia. &ldquo;No matter what we do they are always against us,&rdquo; Putin said, one of a series of observations directed at how he said the West has been treating Russia.</p> <p>Putin attributed Western sanctions that have targeted Russia&rsquo;s defense, oil and gas and banking sectors for about &ldquo;25 percent&rdquo; of Russia&rsquo;s current difficulties.</p> <p>But Putin stood firm over the actions that brought on the Western backlash, including Russia&rsquo;s annexation of the Crimea peninsula after pro-Moscow rebels in eastern Ukraine began an uprising earlier this year....&ldquo;Taking Texas from Mexico is fair, but whatever we are doing is not fair?&rdquo; he said, in comments seemingly directed at the United States.</p> <p>Putin also suggested that the West was demanding too many concessions from Russia, including further nuclear disarmament. Likening Russia to a bear &mdash; a longtime symbol of the country &mdash; he chided the West for insisting the Russian bear &ldquo;just eat honey instead of hunting animals.&rdquo;</p> <p>&ldquo;They are trying to chain the bear. And when they manage to chain the bear, they will take out his fangs and claws,&rdquo; Putin said. &ldquo;This is how nuclear deterrence is working at the moment.&rdquo;</p> </blockquote> <p>For what it's worth, I'd say Putin is probably right about sanctions being responsible for around 25 percent of Russia's economic problems. As for his guess that those problems will last two years before Russia returns to growth? That might not be far off either, though I suspect growth will be pretty slow for longer than that.</p> <p>It's hard to render a real judgment about Putin's intentions without being fluent in Russian and watching the press conference in real time, but based on press reports I'd say Putin's anti-Western comments were milder than they could have been. My guess is that events in Ukraine really haven't worked out the way he hoped, and he'd be willing to go ahead and disengage if he could do so without admitting that he's conceding anything. The anti-Western bluster is just part of that. (Though it's also partly genuine: Putin really does believe, with some justification, that the West wants to hem in Russia.)</p> <p>Oddly, then, I'd take all this as a mildly positive sign. The rhetoric seemed fairly pro forma; Putin obviously knows that sanctions are hurting him; and there were no serious provocations over Ukraine. I'll bet there's a deal to be made with Putin as long as it's done quietly.</p></body></html> Kevin Drum International Thu, 18 Dec 2014 16:53:59 +0000 Kevin Drum 266926 at http://www.motherjones.com Rape Is Way Down Over the Past Two Decades — But So Is All Violent Crime http://www.motherjones.com/kevin-drum/2014/12/rape-way-down-over-past-two-decades-%E2%80%94-so-all-violent-crime <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>Keith Humphreys passes along some <a href="http://www.samefacts.com/2014/12/crime-incarceration/sexual-assault-has-declined-dramatically-in-a-generation/?utm_source=feedburner&amp;utm_medium=feed&amp;utm_campaign=Feed%3A+RealityBasedCommunity+%28The+RBC%29" target="_blank">positive news about rape:</a></p> <blockquote> <p>Twenty years ago, the National Crime Victimization Survey was redesigned to do a better job detecting sexual assault....In the space of one generation, the raw number of rapes has dropped by 45% and the population-adjusted rate of rape has dropped 55%.</p> <p>I started my career working with and advocating for rape victims, and no one needs to convince me that the only acceptable goal for society is to have no rapes at all. But that doesn&rsquo;t change the fact that we have experienced an astonishingly positive change that should lead us to (1) <img align="right" alt="" class="image image-_original" src="/files/blog_ncvs_crime_1993_2013.jpg" style="margin: 20px 0px 15px 30px;">Figure out how it was achieved so that we can build on it <strong>(personally, I credit the feminist movement, but there may be other variables)</strong> and (2) Never give up hope that we can push back dramatically against even the most horrific social problems.</p> </blockquote> <p>I have to call foul on this. The starting point for this statistic is 1992, the absolute peak of the violent crime wave in America that started during the 60s and continued rising for a generation. Since that peak, <em>all</em> violent crime <a href="http://www.bjs.gov/content/pub/pdf/cv13.pdf" target="_blank">as measured by the NCVS</a> has declined by well over half. The decline in rape is simply part of this overall trend, not a bright spot in an otherwise grim crime picture.</p> <p>In fact, it's just the opposite: the decline in the reported rape rate has <em>lagged</em> the overall drop in reported violent crime. It's plausible that the feminist movement has something to do with this, since it's encouraged more women to report rapes and pushed the criminal justice system into taking rape more seriously. But the raw decline in rape itself? That's almost certainly due not to feminism, but to the same factors that have been responsible for the stunning decline in all violent crime over the past two decades. My hypothesis about this is <a href="http://www.motherjones.com/environment/2013/01/lead-crime-link-gasoline" target="_blank">pretty well known,</a> so I won't repeat it here. But whatever it is, it's something pretty broad based.</p></body></html> Kevin Drum Crime and Justice Thu, 18 Dec 2014 15:51:58 +0000 Kevin Drum 266916 at http://www.motherjones.com Russia Has Already Blown Up the Global Economy Once. Will It Do It Again? http://www.motherjones.com/kevin-drum/2014/12/russia-has-already-blown-global-economy-once-will-it-do-it-again <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>Just in case you're thinking that Russia's economic problems are little more than a fitting karmic payback for Vladimir Putin, you might want to think twice. When the global economy is fragile, sometimes even small events can send the whole system into cardiac arrest, <img align="right" alt="" class="image image-_original" src="/files/blog_committee_save_world.jpg" style="margin: 20px 0px 15px 30px;">and that affects everyone, not just Putin and his cronies. So in case you've forgotten, here's a brief refresher on the events of August 1998:</p> <ol><li>Russia devalues its currency and defaults on its sovereign debt.</li> <li>Markets that are already jittery thanks to the East Asian financial crisis go into full-blown frenzy mode.</li> <li>Money pours out of low-quality emerging market investments and into high-quality US, Japanese, and European bonds.</li> <li>As a result, yield spreads between low-quality and high-quality bonds widen sharply.</li> <li>Long Term Capital Management, which had made large bets on spreads <em>narrowing</em> as the East Asian crisis receded, is blindsided, suffering huge losses.</li> <li>As LTCM gets close to insolvency, Bear Stearns stops clearing their trades. Death is imminent.</li> <li>Because LTCM is so highly leveraged, its debts exceed $100 billion and its collapse thus threatens every bank on Wall Street. Amid growing panic over a systemic meltdown, the Fed finally steps in and arranges a bailout package. Crisis over&mdash;for now.</li> </ol><p>This is not going to happen again. The world is not the same now as it was in 1998. It's just meant as an example of how an otherwise limited financial crisis can have a global impact. The fact that it begins with a Russian currency crisis is merely a felicitous coincidence.</p> <p>But also a bit of an unnerving coincidence. More than likely, Russia's problems will be contained to Russia. But they might not be, so we should all be careful what we wish for.</p></body></html> Kevin Drum Economy International Thu, 18 Dec 2014 05:47:31 +0000 Kevin Drum 266906 at http://www.motherjones.com Obama's Had a Helluva Good Month Since the Midterms http://www.motherjones.com/kevin-drum/2014/12/obamas-had-helluva-good-month-midterms <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>So how have things been going for our bored, exhausted, and disengaged president? He's been acting pretty enthusiastic, energized, and absorbed with his job, I'd say. Let us <img align="right" alt="" class="image image-_original" src="/files/blog_obama_happy.jpg" style="border: 1px solid black; margin: 20px 0px 15px 30px;">count the things he's done since the November 4th midterm elections:</p> <ul><li><strong>November 10:</strong> Surprised everyone by announcing his support for strong net neutrality.</li> <li><strong>November 11:</strong> Concluded a climate deal with China that was not only important in its own right, but has since been widely credited with jumpstarting&nbsp;progress at the Lima talks last week.</li> <li><strong>November 20:</strong> Issued an executive order protecting millions of undocumented workers from the threat of deportation.</li> <li><strong>November 26:</strong> Signed off on an important new EPA rule significantly limiting ozone emissions.</li> <li><strong>December 15:</strong> Took a quiet victory lap as Western financial sanctions considerably sharpened the pain of Vladimir Putin's imploding economy.</li> <li><strong>December 16:</strong> Got nearly everything he wanted during the lame duck congressional session, and more. Democrats confirmed all important pending nominees, and then got Republican consent to several dozen lesser ones as well.</li> <li><strong>December 17:</strong> Announced a historic renormalization of relations with Cuba.</li> </ul><p>I guess you can add to that a non-event: In its second year, Obamacare signups are going smoothly and ahead of target. Am I missing anything beyond that? Maybe. It's been quite the whirlwind month for our bored, exhausted, disengaged president, hasn't it?</p> <p>All of these things are worthwhile in their own right, of course, but there's a political angle to all of them as well: they seriously mess with Republican heads. GOP leaders had plans for January, but now they may or may not be able to do much about them. Instead, they're going to have to deal with enraged tea partiers insisting that they spend time trying to repeal Obama's actions. They can't, of course, but they have to show that they're trying. So there's a good chance that they'll spend their first few months in semi-chaos, responding to Obama's provocations instead of working on their own agenda.</p> <p>Was that part of the plan? Beats me. But it seems to be working pretty well so far.</p></body></html> Kevin Drum Obama Wed, 17 Dec 2014 20:37:59 +0000 Kevin Drum 266871 at http://www.motherjones.com The Person Who Cares Most About Barack Obama's Approval Rating is Hillary Clinton http://www.motherjones.com/kevin-drum/2014/12/person-who-care-most-about-barack-obamas-approval-rating-hillary-clinton <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>Peter Beinart thinks President Obama is due for a comeback. <a href="http://prospect.org/article/barack-obamas-revival-way" target="_blank">Paul Waldman agrees:</a></p> <blockquote> <p>I think Beinart is probably right, and the economy is the main reason; it swamps every other consideration in evaluating the president. We could have some major shock that upends the momentum it has been gaining, but if things proceed for the next two years on the trajectory they're on, the Obama presidency will be one of the best for job creation in recent history. <strong>But it's also important to understand that an Obama revival, should it happen, is going to look different than that of other presidents.</strong></p> </blockquote> <p>In this case, "look different" means that even in the best case Obama will end his presidency with approval ratings in the mid-50s, but no higher. The country is just too polarized to produce anything better. Conservatives of nearly all stripes are going to disapprove of Obama come hell or high water, and that puts a ceiling on how high his approval rating can go. Ditto for any other president these days.</p> <p>But it's true that the economy seems to be doing pretty well these days, and it's usually the economy that drives approval ratings. That's good news for Obama, but it's far better news for Hillary Clinton. For Obama, leaving office with a strong economy is nice for his legacy, but that's about it. For Hillary, it almost certainly means the difference between winning and losing the presidency. If the economy is sluggish or worse in 2016, there's simply no way she overcomes voter fatigue toward Democratic rule. But if the economy is ticking along strongly, she just might.</p> <p>So that's that. The person who cares most about Obama's approval rating isn't Barack Obama. It's Hillary Clinton. It's the tailwind she needs if she wants to become the first woman to occupy the Oval Office.</p></body></html> Kevin Drum 2016 Elections Hillary Clinton Obama Wed, 17 Dec 2014 18:41:10 +0000 Kevin Drum 266841 at http://www.motherjones.com Battered Ruble Stabilizes -- For Now http://www.motherjones.com/kevin-drum/2014/12/battered-ruble-stabilizes-now <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>I promise not to post this chart every day, but since I've put it up for the past two days when the ruble was crashing, I figure I should let everyone <img align="right" alt="" class="image image-_original" src="/files/blog_ruble_dollar_2014_12_17.jpg" style="border: 1px solid black; margin: 20px 0px 15px 30px;">know when the crash has halted. For a few hours, anyway, <a href="http://www.wsj.com/articles/ruble-volatile-in-early-trading-1418802891?mod=WSJ_hp_LEFTWhatsNewsCollection" target="_blank">thanks to some dubious measures from Russian banking authorities:</a></p> <blockquote> <p>The currency was trading 8% stronger against the dollar at 62.1 on the Moscow exchange, while Russia&rsquo;s RTS Index was up 17%, after the central bank eased regulations on the banking system in a bid to provide some relief on capital adequacy for banks and convince Russians to keep their money in rubles.</p> <p>Measures including allowing banks not to take provisions against souring loans and weakening assets they hold, and allowing lenders to use last quarter&rsquo;s exchange rate when settling some foreign-exchange transactions.</p> </blockquote> <p>I'm not sure that loosening banking regulations is a great response to a currency crisis, but I guess you never know. In any case, it seems to have stabilized things for the time being. In the longer term, storm clouds are still brewing. Stay tuned.</p></body></html> Kevin Drum Economy International Wed, 17 Dec 2014 16:49:49 +0000 Kevin Drum 266821 at http://www.motherjones.com Surprise! Obama Plans to Normalize Relations With Cuba. http://www.motherjones.com/kevin-drum/2014/12/surprise-obama-plans-normalize-relations-cuba <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p><a href="http://www.motherjones.com/kevin-drum/2014/12/sure-why-shouldnt-obama-normalize-relations-cuba" target="_blank">A couple of weeks ago,</a> <em>National Review's</em> Jay Nordlinger suggested that maybe President Obama's next executive action would be normalization of relations with Cuba. That struck me as something out of left field, since I'd heard not even a hint of a <img align="right" alt="" class="image image-_original" src="/files/images/Blog_Visit_Cuba.jpg" style="border: 1px solid black; margin: 20px 0px 15px 30px;">peep of a rumor that anything along these lines was in the works. But congratulations Jay! <a href="http://www.wsj.com/articles/american-alan-gross-released-from-cuba-after-5-years-in-prison-1418825981?mod=WSJ_hpp_LEFTTopStories" target="_blank">You were right:</a></p> <blockquote> <p>The United States will restore full diplomatic relations with Cuba and open an embassy in Havana for the first time in more than a half century after the release of an American contractor held in prison for five years, American officials said Wednesday.</p> <p>In a deal negotiated during 18 months of secret talks hosted largely by Canada and encouraged by Pope Francis who hosted a final culminating meeting at the Vatican, President Obama and President Raul Castro of Cuba agreed in a telephone call to put aside decades of hostility to find a new relationship between the island nation just 90 minutes off the American coast.</p> <p>....The United States will ease restrictions on remittances, travel and banking relations and Cuba will release 53 Cuban prisoners identified as political prisoners by the United States government. Although the decades-old American embargo on Cuba will remain in place for now, the administration signaled that it would welcome a move by Congress to ease or lift it should lawmakers choose to.</p> </blockquote> <p>Oddly enough, I don't see any reaction yet from Nordlinger, or indeed, from anyone over at <em>National Review</em>. Perhaps the intercession of Pope Francis is giving them pause?</p> <p>In any case, this is good news. I don't personally care an awful lot about Cuba or our relations with them, but half a century of pointless enmity really ought to be enough. Fidel Castro may not have been an admirable guy, but&nbsp;Fulgencio Batista was no great shakes either, and it's long past time to stop pining away for the days when he was in power. So let it go, folks. We don't have to approve of everything Cuba does in order to act like adults and conduct normal relations on both sides. We manage to do it with Russia and Venezuela and Pakistan, after all.</p> <p>In any case, that's that. The next step is lifting the trade embargo, but I suppose it's unlikely that a Republican Congress is going to act on that any time soon. Too bad. There's no longer any reason for it, and I'll bet the majority of cigar smokers are Republicans. They want their Havanas, so lifting the embargo would, in a sense, be nothing more than a routine bit of base maintenance. Perhaps if Republicans think of it as just another political payoff for their strongest supporters, they can be talked into it.</p></body></html> Kevin Drum International Wed, 17 Dec 2014 16:31:38 +0000 Kevin Drum 266811 at http://www.motherjones.com Wall Street Salivating Over Further Destruction of Financial Reform http://www.motherjones.com/kevin-drum/2014/12/wall-street-salivating-over-further-destruction-financial-reform <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>Conventional pundit wisdom suggests that Wall Street may have overreached last week. Yes, they successfully managed to repeal the swaps pushout provision in Dodd-Frank, but in so doing they unleashed Elizabeth Warren and brought far more attention to their shenanigans than they bargained for. They may have won a battle, but with the public now suitably outraged and alert for further mischief, they're unlikely to keep future efforts to weaken financial reform behind the scenes, where they might have a chance to pass with nobody the wiser.</p> <p>Then again, maybe not. Maybe it was all just political theater and Wall Street lobbyists know better than to take it seriously. Ed Kilgore points to <a href="http://thehill.com/policy/finance/227363-emboldened-wall-street-ready-to-dismantle-dodd-frank-financial-law" target="_blank">this article in <em>The Hill</em> today:</a></p> <blockquote> <p><strong>Banks and financial institutions are planning an aggressive push to dismantle parts of the Wall Street reform law when Republicans take control of Congress in January.</strong></p> <p>Fresh off a victory in the government funding debate that liberals decried as a giveaway to Wall Street, advocates for the financial sector aim to pursue additional changes to Dodd-Frank that they say would lighten burdens created by the 2010 law. <strong>Among the top items on the wish list: easing new requirements on mortgages, loosening restrictions on financial derivatives and overhauling the Consumer Financial Protection Bureau....</strong><strong>Another fight on the horizon is the push for &ldquo;regulatory relief,&rdquo;</strong> as financial institutions and Republicans seek to require agencies to pursue more cost-benefit analysis when writing rules.</p> <p>....In the face of loud opposition, financial lobbyists say they have a compelling case for revisiting the law. While the economy is improving, they argue the new rules have made it exceedingly difficult to obtain loans, including mortgages.</p> </blockquote> <p>Will Democrats in the Senate manage to stick together and filibuster these efforts to weaken Dodd-Frank? Or will enough centrists peel off to allow a few of them to pass? I'd like to think that Elizabeth Warren has made unity more likely, but then again, I have an uneasy feeling that Wall Street lobbyists might have a better read on things than she does. Dodd-Frank has already been weakened substantially in the rulemaking process, and this could easily represent a further death by a thousand cuts. After all, as the Wall Street flacks say, the economy is improving. And who needs a bunch of fussy rules when the economy is good?</p></body></html> Kevin Drum Congress Economy Regulatory Affairs Wed, 17 Dec 2014 15:37:46 +0000 Kevin Drum 266796 at http://www.motherjones.com Republicans Cave In, Begin Traditional Holiday Backbiting, and Head For Home http://www.motherjones.com/kevin-drum/2014/12/republicans-cave-backbite-head-home <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>Earlier today, Harry Reid pushed through Senate confirmations of Tony Blinken to be deputy secretary of State and Sarah Salda&ntilde;a to head up Immigration and Customs Enforcement. At that point, Republicans, finally tired of staying in <img align="right" alt="" class="image image-_original" src="/files/images/Blog_US_Capitol_0.jpg" style="border: 1px solid black; margin: 20px 0px 15px 30px;">session and convinced that Reid wasn't bluffing about continuing to hold confirmation votes, <a href="http://www.politico.com/story/2014/12/sarah-saldana-confirmed-immigration-and-customs-enforcement-113612.html?hp=t4_r" target="_blank">caved in:</a></p> <blockquote> <p><strong>Dozens of nominees were confirmed unanimously or by voice vote</strong> as the clock ticked on, building on Democrats&rsquo; progress pushing through several bitterly contested nominations during the last days of their majority. After fighting Democrats tooth and nail for more than a year on lifetime judicial appointments, <strong>Republicans waved the white flag on fighting Reid&rsquo;s attempts to confirm a dozen judicial nominations and allowed eleven of them to go through without dissent.</strong></p> </blockquote> <p>Wait. <em>Dozens</em> of nominees? <a href="http://www.washingtonpost.com/politics/another-republican-upends-the-senates-year-end-plans/2014/12/16/127292d8-8559-11e4-9534-f79a23c40e6c_story.html?hpid=z3" target="_blank">How many dozen?</a></p> <blockquote> <p>Democrats controlling the Senate also <strong>secured agreements from Republicans to confirm at least six dozen of President Obama&rsquo;s nominees</strong> to serve as federal judges, agency bosses and on myriad government boards, a last-minute coup for the White House since most of the picks faced tougher odds next year once Republicans take full control of Capitol Hill.</p> </blockquote> <p>And of course everyone knows <a href="http://www.nytimes.com/2014/12/17/us/politics/with-the-way-eased-two-more-obama-nominees-win-approval-from-senate.html?hp&amp;action=click&amp;pgtype=Homepage&amp;module=second-column-region&amp;region=top-news&amp;WT.nav=top-news&amp;_r=0" target="_blank">who to thank for all this:</a></p> <blockquote> <p>Most of the day was consumed with nominations, none more irritating to many Republicans than the ones who received a vote because of an impulsive move by one of their colleagues. <strong>And with the book now closed on the 113th Congress, they could go down as the Cruz Confirmations</strong> &mdash; the batch of the president&rsquo;s nominees who were confirmed by the Senate only after Senator Ted Cruz, Republican of Texas, forced his colleagues to stay in session for 10 hours on a bleak December Saturday.</p> <p>&ldquo;No, we would not have had all of these 24 confirmations, and I think most people know that,&rdquo; said Senator Orrin G. Hatch, Republican of Utah, referring to the two dozen nominees that Senator Harry Reid of Nevada, the majority leader, forced votes once Mr. Cruz made his move.</p> </blockquote> <p>Merry Christmas!</p></body></html> Kevin Drum Congress Wed, 17 Dec 2014 06:09:11 +0000 Kevin Drum 266776 at http://www.motherjones.com On Torture, Dick Cheney Isn't the Problem. We Are. http://www.motherjones.com/kevin-drum/2014/12/torture-dick-cheney-isnt-problem-we-are <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p><img align="right" alt="" class="image image-_original" src="/files/blog_pew_poll_torture.jpg" style="border: 1px solid black; margin: 8px 0px 15px 30px;"><a href="http://www.nationalreview.com/corner/394773/interrogation-verdict-rich-lowry" target="_blank">Rich Lowry is a satisfied man:</a></p> <blockquote> <p>After a week of condemnations of the CIA interrogation program, and talk everywhere of how it violated our values and weakened our standing in the world, the verdict of public opinion is in: People support it....In the case of <em>Cheney v. Feinstein</em>, Cheney wins&mdash;at least with the public.</p> </blockquote> <p>This is the most discouraging part of the whole torture debate. It's one thing to learn that Dick Cheney is every bit the vicious wretch we all thought he was. But time after time since 9/11, polls have shown that the American public is basically on his side. As a nation, we simply don't believe that a comprehensive program of state-sanctioned torture is wrong. On the contrary: we think it's just fine as long as it's done to other people. If we're a Christian nation, as we're so often reminded, we're still an Old Testament one.</p></body></html> Kevin Drum Human Rights Tue, 16 Dec 2014 23:50:50 +0000 Kevin Drum 266766 at http://www.motherjones.com The Great Paradox of Bitcoin: If It Ever Succeeds, It's Doomed http://www.motherjones.com/kevin-drum/2014/12/great-paradox-bitcoin-if-it-ever-succeeds-its-doomed <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>Will Bitcoin ever become a major competitor to the world's more conventional currencies? It certainly has some advantages over existing payment networks, thanks partly to its technical structure and partly to the fact that it's largely free of regulation. But Henry Farrell argues that <a href="http://www.washingtonpost.com/blogs/monkey-cage/wp/2014/12/16/bitcoins-financial-network-is-doomed/" target="_blank">its freedom from regulation is a chimera:</a></p> <blockquote> <p>Up to this point, regulators have largely tolerated Bitcoin as a curiosity and experiment....But if Bitcoin were ever to threaten to become a truly decentralized payments network, owned by no one, and with no one e.g. capable of implementing Know Your Customer rules, regulators <em>would</em> know very well what to do with it. <strong>They&rsquo;d introduce regulatory guidances and pass laws to freeze it off from the regular financial system.</strong> Very possibly, Bitcoin could still survive at the margins (as the Hawala system has survived). However, it would be isolated, and in no position to <img align="right" alt="" class="image image-_original" src="/files/blog_bitcoin.jpg" style="margin: 20px 0px 15px 30px;">threaten Visa or Mastercard, let alone the underlying payment and messaging services that really underpin the world financial system.</p> <p>If Tim Lee and other Bitcoin fans want to make the case that Bitcoin can become a major payment network, they need to do one of two things. First, they could show that the U.S. and other major states would not feel threatened by a well-established payment system that they couldn&rsquo;t control. Second, they could show that a Bitcoin financial network would survive the opposition of hostile states that have enormous control over the actually-existing financial systems that Bitcoin needs to connect to, as well as regulators, police, etc. I don&rsquo;t see any very plausible arguments that would support either claim. It&rsquo;s perfectly possible that the underlying technologies of Bitcoin (which help solve some interesting problems of trust and exchange) can be deployed to other valuable uses. <strong>But Bitcoin is doomed as a payments network &mdash; the very point at which it looks as though it is likely to be widely deployed is the point at which governments, like that of the United States, will crack down on it.</strong></p> </blockquote> <p>This is almost certainly correct, and the interesting question, I think, is whether Bitcoin and its ilk can figure out ways to operate on a large scale without being effectively shut down by real-world governments. At the moment, I don't see any way they can do that, but it's not impossible that this will change in the future.</p> <p>The evolution of the internet itself provides conflicting guidance as an analogy. Generally speaking, national governments have had considerable difficulty regulating internet content. It's just too distributed and fast moving. So perhaps digital payment networks similar to Bitcoin will eventually thrive because they pose similar problems to would-be regulators. Like kudzu, they'll simply be impossible to contain.</p> <p>On the other hand, countries like China have shown that internet content <em>can</em> be regulated. It merely requires sufficient motivation. And even less authoritarian governments have managed to throw a lot of sand in the gears when they rouse themselves to action. Given that regulating commerce and money is easier than regulating content, this bodes ill for the future of Bitcoin. There's not much question that it can harried into uselessness if national governments decide to do it.</p> <p>Still, there are lots of currencies in the world, and it's possible that a medium-scale version of Bitcoin could stay alive by remaining fairly modest in its connection to any one currency, but fairly large when all of its connections to all the world's currencies are added up. This might cause problems of coordinated action that would end up defeating national regulators, especially if there were dozens or hundreds of different digital currencies to deal with. Maybe. Possibly. I'm not sure if the arithmetic here would ever add up to anything significant, but I'm also not sure it's impossible.</p> <p>But if I had to put money on it? I'd say Bitcoin is doomed in the medium-term future. Farrell is right: it can be a bit of a curiosity, but if it ever enjoys wider success, that very success will kill it.</p></body></html> Kevin Drum Economy International Tue, 16 Dec 2014 19:55:47 +0000 Kevin Drum 266746 at http://www.motherjones.com This Little History Lesson Should Terrify Vladimir Putin http://www.motherjones.com/kevin-drum/2014/12/it-may-not-be-1989-russia-it-sure-looks-close-cousin <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>Why did the Soviet Union lose control of its satellite states behind the Iron Curtain in 1989? Lots of reasons, but the proximate cause was a disastrous war in Afghanistan; plummeting oil prices; and a resulting economic crisis. <a href="http://www.aei.org/feature/the-soviet-collapse/" target="_blank">Here is Yegor Gaidar:</a></p> <blockquote> <p>The timeline of the collapse of the Soviet Union can be traced to September 13, 1985. On this date, Sheikh Ahmed Zaki Yamani, the minister of oil of Saudi Arabia, declared that the monarchy had decided to alter its oil policy radically. The Saudis stopped protecting oil prices, and Saudi Arabia quickly regained its <img align="right" alt="" class="image image-_original" src="/files/blog_kremlin_night.jpg" style="border: 1px solid black; margin: 20px 0px 15px 30px;">share in the world market. During the next six months, oil production in Saudi Arabia increased fourfold, <strong>while oil prices collapsed by approximately the same amount in real terms.</strong> As a result, the Soviet Union lost approximately $20 billion per year, money without which the country simply could not survive.</p> <p>The Soviet leadership was confronted with a difficult decision on how to adjust....Instead of implementing actual reforms, the Soviet Union started to borrow money from abroad while its international credit rating was still strong. <strong>It borrowed heavily from 1985 to 1988, but in 1989 the Soviet economy stalled completely. The money was suddenly gone.</strong> The Soviet Union tried to create a consortium of 300 banks to provide a large loan for the Soviet Union in 1989, but was informed that only five of them would participate and, as a result, the loan would be twenty times smaller than needed.</p> <p>The Soviet Union then received a final warning from the Deutsche Bank and from its international partners that the funds would never come from commercial sources. Instead, if the Soviet Union urgently needed the money, it would have to start negotiations directly with Western governments about so-called politically motivated credits. <strong>In 1985 the idea that the Soviet Union would begin bargaining for money in exchange for political concessions would have sounded absolutely preposterous to the Soviet leadership. In 1989 it became a reality, and Gorbachev understood the need for at least $100 billion from the West to prop up the oil-dependent Soviet economy.</strong></p> <p>....Government-to-government loans were bound to come with a number of rigid conditions. For instance, if the Soviet military crushed Solidarity Party demonstrations in Warsaw, the Soviet Union would not have received the desperately needed $100 billion from the West....The only option left for the Soviet elites was to begin immediate negotiations about the conditions of surrender. Gorbachev did not have to inform President George H. W. Bush at the Malta Summit in 1989 that the threat of force to support the communist regimes in Eastern Europe would not be employed. This was already evident at the time. Six weeks after the talks, no communist regime in Eastern Europe remained.</p> </blockquote> <p>This sounds awfully familiar, doesn't it? War, sanctions, an oil crash, and finally bankruptcy. And while history may not repeat itself, it sure does rhyme sometimes: 25 years later Vladimir Putin has managed to back himself into a situation surprisingly similar to the one that led to the end of the Soviet Union and the final victory of the West&mdash;the very event that's motivated almost everything he's done over the past few years. This is either ironic or chilling, depending on your perspective.</p></body></html> Kevin Drum Economy International Tue, 16 Dec 2014 17:58:43 +0000 Kevin Drum 266716 at http://www.motherjones.com Gouging the Gougeable: Yet Another Triumph of the American Health Care System http://www.motherjones.com/kevin-drum/2014/12/gouging-gougeable-yet-another-triumph-american-health-care-system <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>Len Charlap has had a couple of outpatient echocardiograms recently. <a href="http://www.nytimes.com/2014/12/16/health/the-odd-math-of-medical-tests-one-echocardiogram-two-prices-both-high.html?hp&amp;action=click&amp;pgtype=Homepage&amp;module=second-column-region&amp;region=top-news&amp;WT.nav=top-news" target="_blank">Elisabeth Rosenthal tallies up the damage:</a></p> <blockquote> <p>The five hospitals within a 15-mile radius of Mr. Charlap&rsquo;s home here charge an average of about $5,200 for an echocardiogram, according to an analysis of Medicare&rsquo;s database. The seven teaching hospitals in Boston, affiliated with Harvard, Tufts and Boston University, charge an average of about $1,300 for the same test. There are even wide variations within cities: <strong>In Philadelphia, prices range from $700 to $12,000.</strong></p> <p>....In other countries, regulators set what are deemed fair charges, which include built-in profit. <strong>In Belgium, the allowable charge for an echocardiogram is $80, and in Germany, it is $115.</strong> In <img align="right" alt="" class="image image-_original" src="/files/blog_portable_echo.jpg" style="margin: 20px 0px 15px 30px;">Japan, the price ranges from $50 for an older version to $88 for the newest, Dr. Ikegami said.</p> <p>Because Mr. Charlap, 76, is on Medicare, which is aggressive in setting rates, <strong>he paid only about $80 toward the approximately $500 fee Medicare allows.</strong> But many private insurers continue to reimburse generously for echocardiograms billed at thousands of dollars, said Dr. Seth I. Stein, a New York physician who researches data on radiology. Hospitals pursue patients who are uninsured or underinsured for those payments, he added.</p> </blockquote> <p>This is now such a common story that it's hard to work up the outrage it deserve. Is this practice corrupt? Merely venal? Or just crazy? I don't even know anymore. What I do know is that if an outpatient echo costs $80 in Belgium and $500 via Medicare, there's no conceivable justification for a $5,200 charge. It bears no relationship to the actual cost of the test, and is designed primarily to gouge the occasional uninsured patient who has no choice in the matter along with the (inexplicable) occasional insurance company willing to pony up even for obviously outrageous charges. One of the hospitals that performed an echocardiogram on Charlap didn't even bother denying that this is what they're doing:</p> <blockquote> <p>In a statement, the hospital in Princeton that performed Mr. Charlap&rsquo;s first, more expensive echocardiogram noted that &ldquo;the vast majority of customers&rdquo; paid much less than the listed prices. It added that its pricing reflected the need to offset losses because many programs, including Medicare, reimburse less than the cost of delivering services.</p> </blockquote> <p>I doubt that Medicare is reimbursing less than the cost of performing an echocardiogram, but you can see what's going on here. The "vast majority" of patients do indeed pay far less than list price. So why have such a high list price? In order to gouge the tiny minority who are gougeable.</p> <p>It's lovely the way American medicine works, isn't it?</p></body></html> Kevin Drum Health Care Tue, 16 Dec 2014 17:12:00 +0000 Kevin Drum 266711 at http://www.motherjones.com The Ruble Continues Its Free Fall http://www.motherjones.com/kevin-drum/2014/12/ruble-continues-its-free-fall <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p><img align="right" alt="" class="image image-_original" src="/files/blog_ruble_2014_12_16.jpg" style="border: 1px solid black; margin: 8px 0px 15px 30px;">Well, we have our answer: the Russian central bank's last-ditch effort to stop capital flight didn't work. It was indeed taken by the market as a sign of desperation, not strength. The ruble recovered a bit right after the surprise interest hike in the middle of the night, but by mid-morning panic had settled back in and the ruble was once again in free fall. Even the enticement of 17 percent interest wasn't enough incentive for people to <a href="http://www.wsj.com/articles/russian-ruble-rallies-after-interest-rate-rise-1418715476?mod=WSJ_hpp_LEFTTopStories" target="_blank">keep their rubles in Russian banks:</a></p> <blockquote> <p>By early afternoon in Moscow, the ruble dropped sharply, reaching 80 to the dollar, a record low and a 35% decline from opening levels when it rallied briefly. At 1630 local time, the dollar was trading around 73 rubles....Deputy Chairman Sergei Shvetsov called the situation &ldquo;critical,&rdquo; the Interfax news agency reported. &ldquo;At lot of (market) participants are in serious condition because of these events.&rdquo;</p> <p>&ldquo;The choice the central bank made (to raise rates) was between very bad and very, very bad,&rdquo; he said, noting that the bank could yet take more measures to stabilize the market....Economists warned that the central bank appeared to be losing control of the market and might have no alternative but to restrict trading. &ldquo;Capital controls as a policy measure cannot be off the table now,&rdquo; said Citigroup&rsquo;s Mr. Costa.</p> </blockquote> <p>Stay tuned.</p></body></html> Kevin Drum Economy International Tue, 16 Dec 2014 15:50:56 +0000 Kevin Drum 266701 at http://www.motherjones.com Quote of the Day: Russian Central Bank Decides It Needs to Destroy the Economy In Order to Save It http://www.motherjones.com/kevin-drum/2014/12/russian-central-bank-decides-it-needs-destroy-economy-order-save-it <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p><a href="http://www.nytimes.com/2014/12/16/upshot/vladimir-putin-vs-the-currency-markets-what-to-know-about-the-rubles-collapse.html?partner=rss&amp;emc=rss" target="_blank">From Neil Irwin,</a> commenting on the huge interest rate jump announced by Russia's central bank in the wee hours of the morning:</p> <blockquote> <p>It may go without saying, but a 6.5 percentage point emergency interest rate increase announced in the middle of the night is not a sign of strength.</p> </blockquote> <p>Roger that. Russian central bankers hope that this will be an incentive for people to keep their money in Russia, earning high interest, instead of shipping rubles out of the country at warp speed and squirreling them away in any safe haven that comes to hand. And maybe it will work. Alternatively, as Irwin suggests, it may be viewed as a sign of desperation, causing Russia's oligarchs to pile on the dilithium crystals and ship out their money even faster. You never know what's going to work when a currency crisis goes into panic mode.</p> <p>In any case, even if it works, the price is going to be high. Here in America, we argue about whether the Fed will choke off recovery if it raises interest rates to 2 percent. Russia is now at 17 percent. Even if this puts a halt to currency flight, it's going to kill their economy. In Russia tonight, there are no good options left.</p></body></html> Kevin Drum Economy International Tue, 16 Dec 2014 02:05:42 +0000 Kevin Drum 266676 at http://www.motherjones.com The Lima Climate Talks Actually Produced Something Important: An Idea http://www.motherjones.com/kevin-drum/2014/12/lima-climate-talks-actually-produced-something-important-idea <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>So what should we think about the recently concluded climate talks in Lima? They were, as usual, a dog's breakfast. Rich countries fought their usual battles with poor ones. The talks nearly foundered completely. Over the weekend the wording of the draft agreement went from "weak to weaker to weakest," <a href="http://abcnews.go.com/International/wireStory/climate-talks-deadlocked-27584788" target="_blank">in the words of Sam Smith,</a> chief of climate policy for the environmental <img align="right" alt="" class="image image-_original" src="/files/blog_lima_climate_cop20.jpg" style="border: 1px solid black; margin: 20px 0px 15px 30px;">group WWF. And in the end, no legally binding limits were set on greenhouse gas emission.</p> <p>That sounds pretty bad. And yet, something important happened in Lima. As weak as the final language turned out, it does do one thing: it asks every country on the planet to submit a plan to reduce its greenhouse gas emissions. It doesn't mandate what the plans should be. It doesn't require any independent review of the plans. It doesn't set out any timetables. <em>But it does require a plan from everyone.</em></p> <p>This is something new. It may not be legally binding, but then, no agreement was ever likely to be. For the first time ever, though, Lima enshrines the idea that every country should have a plan to fight climate change. This is similar to Obamacare, which is flawed in dozens of ways but, for the first time in American history, enshrined in law the idea that everyone should have access to affordable health coverage. Once you do that&mdash;once you get that kind of public agreement to an idea&mdash;you can use it as a building block. Eventually Obamacare will become universal health care. In the same way, Lima may eventually be the building block that produces a universal agreement to fight climate change on a global scale.</p> <p>This is a fairly rosy view of the Lima agreement, and I don't want to oversell it. Still, the mere principle that every country on the globe should have a formal plan to reduce greenhouse gas emissions is important. Once the plans are in place, they become a concrete starting point for climate activists everywhere. And then they go from weakest to weaker to weak to something that's actually meaningful. Everywhere.</p> <p>It's not enough. But it's something.</p></body></html> Kevin Drum Climate Change Mon, 15 Dec 2014 20:42:01 +0000 Kevin Drum 266641 at http://www.motherjones.com The Russian Ruble Is Now Entering Free Fall http://www.motherjones.com/kevin-drum/2014/12/russian-ruble-now-entering-free-fall <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p><img align="right" alt="" class="image image-_original" src="/files/blog_dollar_ruble_2014_12_15.jpg" style="border: 1px solid black; margin: 8px 0px 15px 30px;">Speaking of a possible economic crisis in Russia, it looks like the <a href="http://www.wsj.com/articles/russian-rubles-rout-continues-1418652153?mod=WSJ_hp_LEFTTopStories" target="_blank">ruble is now entering free fall:</a></p> <blockquote> <p>For months, Russia&rsquo;s ruble has been falling in line with a decline in oil. But now, the selloff has stepped up a gear amid a broad rout in emerging-market currencies. Monday, the dollar shot above 63 against the battered Russian currency....&ldquo;There&rsquo;s no relief in sight, the mood on the market is pessimistic. Any recovery in the ruble is used to buy into foreign currencies,&rdquo; said Igor Akinshin, a trader at Alfa Bank.</p> <p>....The country&rsquo;s bond markets are also under strain. Russia&rsquo;s dollar bond maturing in Sept. 2023 is yielding 7.102%, up from 6.633% on Friday.</p> </blockquote> <p>It's above my pay grade to speculate on how this ends. But it's worth keeping an eye on.</p></body></html> Kevin Drum Economy International Mon, 15 Dec 2014 17:52:40 +0000 Kevin Drum 266616 at http://www.motherjones.com No, the Tea Party Is Never Going to Join Up With Anti-Corporate Liberals http://www.motherjones.com/kevin-drum/2014/12/no-tea-party-never-going-join-anti-corporate-liberals <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p><a href="http://www.washingtonmonthly.com/political-animal-a/2014_12/elizabeth_warrens_real_and_ima053316.php" target="_blank">This really can't be said often enough:</a></p> <blockquote> <p>I'm afraid we need to call B.S. on this idea of Elizabeth Warren (or any other "populist") becoming a pied piper to the Tea Folk, pulling them across the barricades to support The Good Fight against "crony capitalism." Yes, many "constitutional conservatives" oppose<iframe align="right" allowfullscreen="" frameborder="0" height="258" src="http://www.youtube.com/embed/DJpTxONxvoo" style="margin: 20px 20px 15px 30px;" width="400"></iframe>corporate bailouts. But they also typically support eliminating not just subsidies but regulation of big banks and other corporations.</p> </blockquote> <p>That's from Ed Kilgore, and he's responding to the suggestion that the <em>real</em> divide in American politics isn't between left and right, it's between pro-corporate and anti-corporate. Spare me. Sure, the tea partiers opposed TARP and were hazily in favor of just letting all the banks collapse in 2008, but that was little more than a fleeting morsel of emotional outrage. As Kilgore says, tea partiers may <em>say</em> they oppose corporate power, but when it comes time to vote, they can be counted on to support the folks who oppose any and all regulations that might actually rein in the power of corporations generally and Wall Street in particular.</p> <p>But every once in a while they'll get themselves exercised over some trivial issue of "crony capitalism" like reauthorizing the Export-Import bank, and suddenly pundits will rediscover the supposedly populist right. Give it a rest, folks. The tea partiers will no sooner find common cause with Elizabeth Warren than they will with <em>Mother Jones</em>. In reality, they couldn't care less about ExIm or the swaps pushout or any of the other shiny objects that right-wing fundraisers occasionally find useful for replenishing their coffers. On the economic side of things, what they care about are low taxes and slashing welfare. On the social side of things, they care about abortion, guns, gays, and the moral decay of everyone else. The rest is just fluff.</p></body></html> Kevin Drum Economy The Right Mon, 15 Dec 2014 17:17:55 +0000 Kevin Drum 266606 at http://www.motherjones.com Here's Why Banks Care About Gutting Dodd-Frank http://www.motherjones.com/kevin-drum/2014/12/heres-why-banks-care-about-gutting-dodd-frank <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>Elizabeth Warren got a lot of attention last week for rallying liberals against a provision of the cromnibus spending bill that repealed a portion of the Dodd-Frank financial reform bill. This particular bit of the law had required FDIC-insured banks to get out of the custom swaps business. If they wanted to buy and sell risky derivatives, the parent company needed to do it at a separate entity outside the bank, not with government-insured cash.</p> <p>But why did Wall Street actually care about this? Even if the swaps are "pushed out" to a subsidiary outside the FDIC umbrella, they're still part of the bank holding company. If the swaps are profitable, the holding company makes money either way. Ditto if they lose money. So who cares? Via Matt Yglesias, here is John Carney of the <em>Wall Street Journal</em> to explain <a href="http://www.wsj.com/articles/ratings-game-behind-big-banks-derivatives-play-heard-on-the-street-1418417119" target="_blank">why this was so important:</a></p> <blockquote> <p>The advantage: [The bank depository units], with implicit government backing, are considered less risky than parent holding companies....Citigroup&rsquo;s insured depository unit is rated A2 by Moody&rsquo;s; the parent company is a far lower Baa2. So a bank buying a derivative contract from the parent would receive a higher capital charge than if it bought it from the depository unit. So the price Citi could fetch for it would be lower. The same divergence exists at the other banks, though to a lesser degree.</p> <p>The result: Each would suffer from having to push derivatives out of their depository units. In effect, they would lose the advantage of the higher rating and perception of government support.</p> </blockquote> <p>FDIC-insured depository units have higher credit ratings thanks to their government guarantee. Because of this, swaps sold under the depository umbrella also have a higher rating, and can be sold at a higher price. Outside this umbrella, with its lower parent company rating, the price would have to be discounted. That makes the swaps business less profitable.</p> <p><a href="http://www.vox.com/2014/12/15/7392301/swaps-pushout-dodd-frank" target="_blank">As Matt points out,</a> this is an indication that Dodd-Frank is actually doing its job: "Investors aren't confident that Citi is 'too big to fail' and likely to get future bailouts. That's why Citi wants to get as much business as possible done under the shield of the FDIC."</p> <p>I guess, in a way, this is a small bit of solace to take from last week's sordid episode of congressional capitulation to Wall Street: it only mattered because financial reform seems to be working. A little bit, anyway. If it were <em>really</em> working, of course, bank parent companies would be so well capitalized that their credit ratings would be nearly as good as their FDIC-insured subsidiaries. Obviously we're not quite there yet.</p></body></html> Kevin Drum Congress Economy Mon, 15 Dec 2014 16:05:34 +0000 Kevin Drum 266591 at http://www.motherjones.com Krugman: "Russia Keeps Looking More Vulnerable to Crisis" http://www.motherjones.com/kevin-drum/2014/12/krugman-russia-keeps-looking-more-vulnerable-crisis <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>Paul Krugman just left a conference in Dubai, and decided to write a bit about oil prices because all the geopolitical stuff he heard was pretty grim. But the oil stuff wasn't that interesting. <a href="http://krugman.blogs.nytimes.com/2014/12/14/petrothoughts/" target="_blank">His one paragraph about geopolitics is:</a></p> <blockquote> <p>My other thought is that Venezuela-with-nukes (Russia) keeps looking more vulnerable to crisis. Long-term interest rates at almost 13 percent, a plunging currency, and a lot of private-sector institutions with large foreign-currency debts. You might imagine that large foreign exchange reserves would allow the government to bail out those in trouble, but the markets evidently don&rsquo;t think so. <strong>This is starting to look very serious.</strong></p> </blockquote> <p>Yes it is, and the reference to Venezuela-with-nukes is telling. A Russian economic crash <em>could</em> just be a crash. That would be bad for Russia, bad for Europe, and bad for the world. But it would hardly be the first <img align="right" alt="" class="image image-_original" src="/files/blog_putin_microphones.jpg" style="border: 1px solid black; margin: 20px 0px 15px 30px;">time a midsize economy crashed. It would be bad but manageable.</p> <p>Except that Russia has Vladimir Putin, Russia has a pretty sizeable and fairly competent military, and Russia has nukes. Putin has spent his entire career building his domestic popularity partly by blaming the West for every setback suffered by the Russian people, and that anti-Western campaign has reached virulent proportions over the past year or two. If the Russian economy does crash, and Putin decides that the best way to ride it out is to demagogue Europe and the West as a way of deflecting popular anger away from his own ruinous policies, it's hard to say what the consequences would be. When Argentina pursues a game plan like that, you end up with a messy court case and lots of diplomatic grandstanding. When Russia does it, things could go a lot further.</p> <p>I have precious little sympathy for Putin, whose success&mdash;such as it is&mdash;is based on a toxic stew of insecurities and quixotic appetites that have expressed themselves in a destructive brand of crude nativism; reactionary bigotry; disdain for the rule of law, both domestic and international; narrow and myopic economic vision; and dependence on an outdated and illiberal oligarchy to retain power. Nonetheless, there are kernels of legitimate grievance buried in many of these impulses, as well as kernels of necessity given both Russia's culture and the post-Cold War collapse of its economy that has left it perilously dependent on extractive industries.</p> <p>I don't know if it's too late to use the kernels as building blocks to improve, if not actually repair, Western relations with Putin's Russia. But it's still worth trying. A Russian crash may or may not come, but it's hardly out of the realm of possibility. And if it happens, even a modest rapprochement between East and West could help avoid a disastrous outcome.</p></body></html> Kevin Drum Economy Foreign Policy International Sun, 14 Dec 2014 16:31:26 +0000 Kevin Drum 266556 at http://www.motherjones.com Ted Cruz Shoots Self in Foot, Declares Victory http://www.motherjones.com/kevin-drum/2014/12/ted-cruz-shoots-self-foot-declares-victory <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>File this under <a href="http://www.latimes.com/nation/politics/politicsnow/la-pn-senate-ted-cruz-saturday-session-government-shutdown-20141213-story.html" target="_blank">"with friends like this, who needs enemies?"</a></p> <blockquote> <p>Republican senators fumed as a strategy developed by Sen. Ted Cruz (R-Texas) intended to undercut President Obama&rsquo;s immigration action seemed to backfire, giving Democrats a chance to move a <img align="right" alt="" class="image image-_original" src="/files/blog_cruz_reporters.jpg" style="border: 1px solid black; margin: 20px 0px 15px 30px;">batch of controversial Obama administration appointments.</p> <p>....Saturday&rsquo;s session was required after conservative Sen. Mike Lee (R-Utah) objected to an effort by Senate Majority Leader Harry Reid (D-Nev.) late Friday to adjourn the Senate for the weekend....He and Cruz had sought to force a vote to strip out funding that would be used to implement Obama&rsquo;s plan to halt deportations for as many as 5 million immigrants.</p> <p><strong>Without the ability to leave for the weekend, Reid instead began the process of bringing 20 long-stalled nominations to a vote, </strong>including Obama&rsquo;s nominee for surgeon general, Vivek Murthy, who was a target of groups like the powerful National Rifle Assn. over his advocacy for stricter gun laws. Shortly after noon the Senate began the first of what could be 40 procedural votes that could lead to confirming all the nominees by the end of the week.</p> </blockquote> <p>The Cruz/Lee proposal was entirely symbolic in not just one, but two separate ways:</p> <ul><li>It was merely a "point of order" to express opposition to funding President Obama's executive order on immigration. It would have accomplished nothing.</li> <li>It had little chance of passing anyway.</li> </ul><p>So now everyone has to spin their wheels on the Senate floor over the weekend instead of seeing their families or watching the Army-Navy game. By itself, that might deserve only the world's tiniest violin. But as long as they're there and have some extra time, Harry Reid decided to start the process of approving a whole bunch of Obama nominations that otherwise might have dropped off the calendar later in the week as senators began pressing to start the holiday recess. That meant Obama's nominees would have had to face a Republican Senate in January, but now, thanks to Cruz and Lee, they'll all be safely in office by then.</p> <p>I'm sure the NRA is thrilled. Ditto for all the Republicans who were apoplectic over the nomination of Tony Blinken as deputy secretary of state. And megadittoes&mdash;with a megadose of irony&mdash;for Cruz, Lee, and all their tea party buddies who objected to confirming Sarah&nbsp;Salda&ntilde;a to head Immigration and Customs Enforcement. Their objection, of course, was meant as a protest against Obama's executive order on immigration. Now, thanks to a dumb little stunt that was pathetic even as an empty protest against Obama's immigration plan, they're going to lose an actual, substantive protest against an Obama immigration nominee. Nice work, guys.</p> <p>But I guess it's a nice big platter of red meat that plays well with the rubes. With Cruz, that's all that counts.</p> <p><strong>UPDATE:</strong> <a href="http://www.nytimes.com/2014/12/14/us/senate-spending-package.html" target="_blank">You gotta love this:</a></p> <blockquote> <p>Only the Democrats seemed able to wrest a modicum of enjoyment from the day&rsquo;s proceedings. Senator Benjamin L. Cardin, Democrat of Maryland, said that it was &ldquo;inconvenient to be here voting around the clock&rdquo; but that he was &ldquo;kind of pleased at how it&rsquo;s working out.&rdquo; Mr. Cardin said, &ldquo;We will get these confirmations done, and we may not have gotten them done otherwise.&rdquo; And as Senator John Cornyn of Texas, the No. 2 Senate Republican, struggled to explain to a group of reporters just what Mr. Cruz was trying to achieve, Senator Cory Booker, Democrat of New Jersey, loped by and clapped him on the shoulder.</p> <p>&ldquo;Let me know if you need backup,&rdquo; Mr. Booker said with a grin.</p> </blockquote></body></html> Kevin Drum Congress Immigration The Right Sun, 14 Dec 2014 01:29:34 +0000 Kevin Drum 266551 at http://www.motherjones.com