Kevin Drum Feed | Mother Jones http://www.motherjones.com/Blogs/2009/06/power-coal%3Bwww.aollatinoblog.com/tag/Espaa/%3Bwww.aollatinoblog.com/category/sexo%3Bwww.aollatinoblog.com/2008/03/14/salsa-para-enchilada http://www.motherjones.com/files/motherjonesLogo_google_206X40.png Mother Jones logo http://www.motherjones.com en Happy Independence Day! http://www.motherjones.com/kevin-drum/2015/07/happy-independence-day <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>Jeez, what am I doing, blogging about serious stuff today? Well, that's it. I'm going to go clean the grill or watch a parade or do something else that's date appropriate. Have a happy 4th, everyone!</p> <p><img align="middle" alt="" class="image image-_original" src="/files/blog_flags.jpg" style="border: 1px solid black; margin: 15px 0px 5px 5px;"></p></body></html> Kevin Drum Sat, 04 Jul 2015 17:15:39 +0000 Kevin Drum 279031 at http://www.motherjones.com Obamacare Rates May Be Going Up Significantly in 2016 -- Or Maybe Not http://www.motherjones.com/kevin-drum/2015/07/obamacare-rates-may-be-going-significantly-2016-or-maybe-not <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>The <em>New York Times</em> reports that insurers are asking for <a href="http://www.nytimes.com/2015/07/04/us/health-insurance-companies-seek-big-rate-increases-for-2016.html?hp&amp;action=click&amp;pgtype=Homepage&amp;module=first-column-region&amp;region=top-news&amp;WT.nav=top-news" target="_blank">significant rate increases for 2016:</a></p> <blockquote> <p>Blue Cross and Blue Shield plans &mdash; market leaders in many states &mdash; are seeking rate increases that average 23 percent in Illinois, 25 percent in North Carolina, 31 percent in Oklahoma, 36 percent in Tennessee and 54 percent in Minnesota....The rate requests, from some of the more popular health plans, <img align="right" alt="" class="image image-_original" src="/files/blog_obamacare_laptop.jpg" style="border: 1px solid black; margin: 20px 0px 15px 30px;">suggest that insurance markets are still adjusting to shock waves set off by the Affordable Care Act.</p> <p><strong>It is far from certain how many of the rate increases will hold up on review, or how much they might change.</strong> But already the proposals, buttressed with reams of actuarial data, are fueling fierce debate about the effectiveness of the health law.</p> <p>....Insurers with decades of experience and brand-new plans underestimated claims costs. <strong>&ldquo;Our enrollees generated 24 percent more claims than we thought they would when we set our 2014 rates,&rdquo;</strong> said Nathan T. Johns, the chief financial officer of Arches Health Plan, which covers about one-fourth of the people who bought insurance through the federal exchange in Utah. As a result, the company said, it collected premiums of $39.7 million and had claims of $56.3 million in 2014. It has requested rate increases averaging 45 percent for 2016.</p> <p><strong>The rate requests are the first to reflect a full year of experience with the new insurance exchanges and federal standards that require insurers to accept all applicants.</strong></p> </blockquote> <p>I'd continue to counsel caution until we get further into the process. Big rate increase requests have been the opening bids from insurance companies for years, and they usually get knocked down to something much more reasonable by the time the regulatory process is finished. It's also the case that if lots of young people have been paying the tax penalty instead of getting insured, that might change as the penalty goes up. It was $95 in 2014, went up to $325 this year, and goes up to $695 in 2016. At some point, more and more of these folks are going to decide that they really ought to get something for their money instead of just paying a penalty to the IRS, and that will help broaden the insurance pool.</p> <p>Still, the bottom line here is that credible evidence is growing that we might see biggish rate increases in 2016. They won't be the monster increases that Fox News will be hyping endlessly, but they might be bigger than us liberal types expected. We'll know in a few months.</p></body></html> Kevin Drum Sat, 04 Jul 2015 17:10:38 +0000 Kevin Drum 279026 at http://www.motherjones.com On Independence Day, Pentagon Shows Off Some Real Fireworks http://www.motherjones.com/kevin-drum/2015/07/independence-day-pentagon-shows-some-real-fireworks <!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_bunker_buster_0.jpg" style="border: 1px solid black; margin: 8px 0px 15px 30px;">From W.J. Hennigan on the <a href="http://www.latimes.com/world/middleeast/la-fg-pentagon-iran-20150704-story.html#page=1" target="_blank">front page of this morning's <em>LA Times</em>:</a></p> <blockquote> <p>As diplomats rush to reach an agreement to curb Iran's nuclear program, the U.S. military is stockpiling conventional bombs so powerful that strategists say they could cripple Tehran's most heavily fortified nuclear complexes, including one deep underground....U.S. officials say the huge bombs, which have never been used in combat, are a crucial element in the White House deterrent strategy and contingency planning should diplomacy go awry and Iran seek to develop a nuclear bomb.</p> <p>....U.S. officials have publicized the new bomb partly to rattle the Iranians. Some Pentagon officials warned not to underestimate U.S. military capabilities even if the bunker-busters can't eliminate Iran's nuclear program. Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, suggested at the same Pentagon news conference Thursday that airstrikes might be ordered multiple times if Iran tries to build a bomb.</p> </blockquote> <p>The usual questions present themselves. (1) This is obviously a piece spoon fed to the press. Why now? (2) Who is it targeted at? Iran, or our allies? Or Israel? (3) Is it credible? Does anyone truly believe that Obama will bomb Iran if talks fail? (4) Credible or not, does this kind of saber rattling do more harm than good? Discuss.</p></body></html> Kevin Drum Sat, 04 Jul 2015 16:20:00 +0000 Kevin Drum 279021 at http://www.motherjones.com China Halts IPOs in Peculiar Attempt to Prop Up Stock Market http://www.motherjones.com/kevin-drum/2015/07/china-halts-ipos-peculiar-attempt-prop-stock-market <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>The latest from China, where the <a href="http://www.wsj.com/articles/china-setting-up-fund-to-stabilize-stock-market-1435991611" target="_blank">stock market continues to plummet:</a></p> <blockquote> <p>China has decided to suspend new stock sales and establish a market-stabilization fund aimed at fighting off the worst equities selloff in years, as concerns grow among China&rsquo;s leadership that the stock-market malaise could be spreading to the other parts of the world&rsquo;s second-largest economy.</p> <p>...Previous steps including an interest-rate cut by the central bank have failed to impress investors, many of whom have been forced to unwind their leveraged bets as stocks continue to drop.</p> <p><strong>Chief among the decisions made is to halt new initial public offerings</strong> in a bid to preserve liquidity in an increasingly volatile market, the people said. Officials also discussed the setup of a market-stabilization fund.</p> </blockquote> <p>Another odd move that I don't entirely understand. Do IPOs reduce market liquidity in any significant way? Put another way: Am I missing something here, or is this just another panicky move by the Chinese authorities that's unlikely to make things better?</p></body></html> Kevin Drum Sat, 04 Jul 2015 16:05:20 +0000 Kevin Drum 279016 at http://www.motherjones.com Friday Cat Blogging - 3 July 2015 http://www.motherjones.com/kevin-drum/2015/07/friday-cat-blogging-3-july-2015 <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>Today you get a very special episode of Friday Catblogging. It's a movie! I made it with my shiny new Surface 3, and although it's not the <em>greatest</em> catblogging movie ever made, it does prove the old adage: any camera you have is better than any camera you don't. So sit back and enjoy Hopper using her passive-aggressive defensive skills to keep Hilbert at bay. Our show takes place atop the fireplace mantel, everyone's favorite new place these days.</p> <p>Have a great 4th, everyone. See you next week.</p> <p><iframe align="middle" allowfullscreen="" frameborder="0" height="354" src="http://www.youtube.com/embed/ClQbE87PyAo" style="margin: 20px 20px 15px 40px;" width="550"></iframe></p></body></html> Kevin Drum Fri, 03 Jul 2015 17:36:11 +0000 Kevin Drum 279011 at http://www.motherjones.com Greek Media Really, Really Wants Yes Vote On Euro-Bailout http://www.motherjones.com/kevin-drum/2015/07/greek-media-really-really-wants-yes-vote-euro-bailout <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>Henry Chu of the <em>LA Times</em> reports on how the Greek media is presenting <a href="http://www.latimes.com/world/europe/la-fg-greece-media-20150703-story.html#page=1" target="_blank">Sunday's upcoming vote on the bailout:</a></p> <blockquote> <p>Strong emotions are in abundant supply. But impartial reporting is not.</p> <p>Along with Skai TV, nearly all the mainstream press and television stations in Greece have skewed their coverage or are openly in favor of the "yes" campaign, throwing in doubt just how fair Sunday's election will <img align="right" alt="" class="image image-_original" src="/files/blog_tsipras_oxi.jpg" style="margin: 20px 0px 15px 30px;">be. The snap referendum has already come under criticism for being called with too little notice by the left-wing Greek government &mdash; which is urging a "no" vote &mdash; to allow for proper campaigning and educating of voters.</p> <p>....In a widely circulated examination of how the six biggest TV networks treated the rival referendum rallies Monday and Tuesday, freelance journalist Markos Petropoulos found that <strong>the pro-government "no" demonstration got about 81/2 minutes of coverage, whereas the "yes" protest received more than five times that much.</strong></p> <p>In another newscast, one network devoted 18 minutes to warnings and statements from European leaders about the breakdown of bailout negotiations with Athens and the surprise referendum announcement that had precipitated it. The Greek government's position got two minutes.</p> <p><strong>The bias toward the "yes" side reflects the fact that many of Greece's biggest news outlets are owned by corporate titans and other "oligarchs" whose business interests would be directly threatened by a "no" victory and the potential abandonment of the euro in favor of the drachma,</strong> [Nikolas] Leontopoulos said.</p> </blockquote> <p>I suppose it's no surprise that Greece's corporate class is deeply unthrilled by Prime Minister Alexis Tsipras's leftist government, and would be happy to see him humiliated and tossed out of office. I assume that they also prefer the devil they know&mdash;grinding European-imposed austerity for years&mdash;to the devil they don't&mdash;exiting the euro amid chaos and eventually rebuilding their economy with a devalued drachma. After all, they'll stay rich either way, and sticking with their fellow European moguls probably seems the better bet by far.</p> <p>Less than 48 hours to go now.</p></body></html> Kevin Drum Fri, 03 Jul 2015 15:58:29 +0000 Kevin Drum 279006 at http://www.motherjones.com Bobby Jindal Really, Really, Really Hates Gay Marriage http://www.motherjones.com/kevin-drum/2015/07/bobby-jindal-really-really-really-hates-gay-marriage <!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_jindal_flag.jpg" style="border: 1px solid black; margin: 8px 0px 15px 30px;"><a href="http://www.advocate.com/politics/marriage-equality/2015/07/02/bobby-jindal-trying-delay-marriage-louisiana-yet-again" target="_blank">From <em>The Advocate</em>:</a></p> <blockquote> <p>After three courts told him he had to, Louisiana governor Bobby Jindal will finally allow his administration to issue marriage licenses to same-sex couples today.</p> <p>....Jindal's administration argued it's possible the Supreme Court's ruling didn't apply to the Fifth Circuit Court of Appeals, where Louisiana had been defending its statewide ban....On Wednesday, the circuit court actually went through the motion of confirming the Supreme Court has jurisdiction over it.</p> <p>....But Jindal's administration jumped on that as reason to delay even further. The Fifth Circuit technically sent the case back to the lower, district court where its earlier ruling in favor of the state had to be corrected. The <em>New Orleans Times-Picayune</em> reported that Jindal's spokesman said no same-sex couple would be recognized until the district court formally reversed itself. And so it did that today."</p> </blockquote> <p>I've seen several people wondering why Jindal wasted time with this, since he knew perfectly well what the outcome would be. The answer is obvious: He's trying to position himself as the most tea-partyish, most anti-Obama, most combative conservative in the Republican field. So this is basically brand marketing. Republican voters now know that <em>no one</em> will stand up for traditional values as strongly as Bobby Jindal. Message sent and received.</p></body></html> Kevin Drum Fri, 03 Jul 2015 15:05:16 +0000 Kevin Drum 279001 at http://www.motherjones.com China Adopts an Unusual Approach to Fighting a Stock Market Crash http://www.motherjones.com/kevin-drum/2015/07/china-adopts-unusual-approach-fighting-stock-market-crash <!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_shanghai_stock_market.jpg" style="border: 1px solid black; margin: 8px 0px 15px 30px;">Hum de hum hum. Greece is in trouble. Puerto Rico too. <a href="http://www.wsj.com/articles/asian-shares-rise-on-hopes-for-greece-1435800229" target="_blank">And don't forget China:</a></p> <blockquote> <p>Chinese shares plunged Thursday, even as Beijing grasps for solutions to stem the selling, including relaxing rules on the use of borrowed funds to invest in stocks....The Shanghai Composite closed down 3.5% while the smaller Shenzhen market was down 5.6%. The ChiNext board, composed of small-cap stocks, sank 4%. <strong>Even after losing nearly a quarter of its value from a mid-June high, China&rsquo;s main stock market has almost doubled in value over the past year.</strong></p> <p>....In a rare move late Wednesday, <strong>Chinese regulators set in motion draft proposals to ease restrictions on margin lending earlier than scheduled</strong>....Regulators&rsquo; sudden shift in attitude about margin trading comes after vocal warnings about its risks in recent months. In April, regulators took various steps to rein in the practice, which had allowed investors to borrow several times their investment money.</p> </blockquote> <p>Inscrutable, those Chinese. Their stock market is crashing so they're promoting an <em>increase</em> in margin trading. That's sort of like lighting a tree on fire when it gets dark outside and all your flashlights are dead. It'll work. For a while. But it's really not considered best practice.</p> <p>Then again, maybe there's something I don't understand here. All I know is that panicky measures to halt a panic don't usually work. And the Chinese stock market still has a long way to fall. I sure hope they figure something out.</p></body></html> Kevin Drum Thu, 02 Jul 2015 18:38:58 +0000 Kevin Drum 278966 at http://www.motherjones.com My $500 Pill Revealed http://www.motherjones.com/kevin-drum/2015/07/my-500-pill-revealed <!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_revlimid.jpg" style="border: 1px solid black; margin: 8px 0px 15px 30px;">Have you ever wondered what a $500 pill looks like? Well, here's your answer: it looks like pretty much any other pill.</p> <p>Anyway, I'm supposed to take this for 21 days, then a week off, then another 21 days, etc. This will last a few months before we know if it's working. If it does work, then I'll be taking it forever (I think). So that's $126,000 per year to keep Kevin alive. Of course, I pay only a fraction of that thanks to having excellent health insurance, and I'm sure that even Kaiser pays nowhere near that list price. Maybe half that, or a third. Still, pretty expensive!</p> <p>Luckily I'm not on Obamacare. From what I hear, my case would have gone straight to a death panel, which almost certainly would have decided that my societal worth didn't measure up to the cost of the treatment. And who could argue? I mean, blogging? Seriously?</p> <p><strong>POSTSCRIPT:</strong> I forgot to mention something in my previous health update: I feel great. Not 100 percent, mind you, but pretty good. My stomach is in fine fettle (in fact, I'm overeating these days), I'm sleeping well, and my energy level has recovered almost to normal. The long-term prognosis for the multiple myeloma is obviously still uncertain, and that's an unhappy thing, but in the meantime at least I feel good for the first time in eight months!</p></body></html> Kevin Drum Thu, 02 Jul 2015 17:03:40 +0000 Kevin Drum 278951 at http://www.motherjones.com Greece vs. Germany: Behind a Veil of Morality vs. Technocracy, the Germans are Winning the War of the Narrative http://www.motherjones.com/kevin-drum/2015/07/greece-vs-germany-behind-veil-technocracy-germans-are-winning-war-narrative <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>Just a quick note on Greece. Although I've periodically written at considerable length on the Greek crisis, in shorter posts I often sound as if I blame the whole thing on Germany. That's shorthand, though, and fairly sloppy shorthand.</p> <p>Here's the thing: Greece bears plenty of blame in this whole debacle. They borrowed way too much when their economy was booming; they refused to modernize their infamously porous tax collection, especially toward the rich; they lied through their teeth about their finances for years; and governments of both right and left <img align="right" alt="" class="image image-_original" src="/files/images/blog_greece_germany.jpg" style="margin: 20px 0px 15px 30px;">have doggedly supported an insanely bloated public sector that would make even a Russian blush.</p> <p>On the German (i.e., Northern European) side of things, the story of blame is a little more....technocratic. Banks made bets on interest rate convergences between north and south when the euro was introduced. This paid off, and for years they happily shoveled money into Greece at great profit. Greece's economy overheated, but the ECB kept monetary policy loose because that benefited Germany twice over: first by providing Germans with a good place to invest their money and second by providing Greeks with enough money to import German goods. Eventually, this hot money flow produced inflation, but monetary policy stayed loose anyway because the German economy was kind of sluggish at the time and needed the boost. Inevitably, this produced a capital account surplus in Greece and therefore a current account deficit. When the Great Recession hit, everything went to hell. Due to the hot money flows, Greek banks had become dependent on wholesale funding, and when that suddenly dried up a banking crisis got added to the rest of the mix. It's been downhill ever since.</p> <p>Now: read those two paragraphs carefully. It's plain there's fault on both sides. But the fault of the Greek side is easy to understand and easy to put in moralistic terms. They lived high, they lied about their finances, and they coddled their government workers. It's easy to paint the Greeks as irresponsible wastrels who are just getting what they deserve.</p> <p>The German side is quite different. Be honest: did you even understand it? It's all very technocratic, almost hydraulic in nature. Investors made bets on some derivatives; centralized monetary policy was not ideal for Greece; hot money flows inevitably produced current account deficits; and when the Great Recession cratered the economy it all turned into a full-blown banking and debt crisis. This is all very recondite. Sure, maybe it was Germany's fault, but in an abstract, bureaucratic way. It's a lot harder to see bad personal behavior here.</p> <p>I'm not alone in thinking that once you dig into things, German behavior has been quite a bit worse than Greek behavior. But it's hard to make this case in a way that makes much sense emotionally. What most people see is a highly intricate and technocratic system on one side and a bunch of reckless, happy-go-lucky Greeks on the other side. So who are you going to blame?</p> <p>We humans are attracted to human stories, so the answer is the Greeks, of course. They hired the money, didn't they? The fact that they were stuck in a monetary web designed by Germans that was almost guaranteed to produce disaster&mdash;well, maybe that's true and maybe it's not, but it all sounds like a bunch of blah blah blah. What did you say an ECB refi rate was again?</p> <p>So: reckless people vs. a complex financial system that a few eggheads say was rigged. Which story do you think is going to win?</p></body></html> Kevin Drum Thu, 02 Jul 2015 15:31:26 +0000 Kevin Drum 278946 at http://www.motherjones.com Chart of the Day: Net New Jobs in June (Sucks, Sucks, Sucks) http://www.motherjones.com/kevin-drum/2015/07/chart-day-net-new-jobs-june-sucks-sucks-sucks <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>The American economy <a href="http://www.bls.gov/news.release/empsit.nr0.htm" target="_blank">added 223,000 new jobs last month,</a> 90,000 of which were needed to keep up with population growth. This means that net job growth clocked in at 133,000 jobs and the unemployment rate fell to 5.3 percent.</p> <p>Unfortunately, this isn't the mediocre news it looks like. It was all bad news. Essentially the entire decrease in the unemployment rate was due to 432,000 people leaving the labor force, reversing an increase of 397,000 last month. Because of this, the labor force participation ratio declined by 0.3 percentage points to 62.6 percent, the lowest number in recent history.</p> <p>Oh, and we had downward revisions of 60,000 jobs in April and May. And hourly wage growth of production and nonsupervisory workers was up by a measly 2 cents, a nominal increase of 0.1 percent. Adjusted for inflation, that's a decrease of about 0.3 percent.</p> <p>I don't know how to dress this up. The net number of new jobs was OK, if not spectacular, but the rest of the report is just dismal. The number of people actually employed dropped by 56,000, labor force participation has tanked, and real wage growth was negative. If anyone else can put lipstick on this pig, they're welcome to try. It looks pretty gruesome to me. The only good news I can take out of it is that this is only a single month's data, which jumps around quite a bit. Maybe next month will be better.</p> <p><img align="middle" alt="" class="image image-_original" src="/files/blog_net_new_jobs_june_2015.jpg" style="border: 1px solid black; margin: 15px 0px 5px 20px;"></p></body></html> Kevin Drum Thu, 02 Jul 2015 14:12:09 +0000 Kevin Drum 278931 at http://www.motherjones.com There's More to Kumbaya Than Just Getting Liberals and Conservatives to Agree http://www.motherjones.com/kevin-drum/2015/07/theres-more-kumbaya-just-getting-liberals-and-conservatives-agree <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>Tim Lee lists four pro-growth policy reforms that he thinks <a href="http://www.vox.com/2015/7/1/8858745/boost-economic-growth-cato" target="_blank">liberals and conservatives can agree on:</a></p> <ol><li>Let developers in coastal cities build more</li> <li>Boost high-skilled immigration</li> <li>Reform copyright and patent laws</li> <li>Liberalize occupational licensing rules</li> </ol><p>In theory, I suppose these could be areas of bipartisan agreement. But without throwing too much sand in the gears just to make a nuisance of myself, we should take a look at why all four of these things are so firmly going nowhere even though liberals and conservatives allegedly hold common cause on them. Here we go:</p> <ol><li><strong>Coastal cities.</strong> The problem here is that this is a pretty low priority for both liberals and conservatives. They just don't care that much, and they certainly don't care enough to fight the nonpartisan power bloc that unfailingly&mdash;and rabidly&mdash;opposes this: current residents of coastal cities. This is mainly a local issue, not a state or federal issue, and the fastest way for any local pol in LA or San Francisco to get tossed out of office is to propose lots of new high-rise residential buildings that will (allegedly) bring tons of traffic and crime into the community, and probably drive down current property values. So the game just isn't worth the candle. Plus, <img align="right" alt="" class="image image-_original" src="/files/blog_agenda_21_conspiracy.png" style="margin: 20px 0px 15px 30px;">conservatives have to watch out for the tea-party crazies who think high-rises are part of an Agenda 21 plot from the UN to make us all live like rabbits in government-controlled urban warrens. Or something.</li> <li><strong>High-skill immigration.</strong> There <em>are</em> people who oppose this&mdash;primarily high-skill citizens who don't really want lots of new competition&mdash;but that's not the big problem. Mainly this is a political football. Sure, liberals and conservatives agree on this particular part of immigration reform. But liberals don't want to <em>unilaterally</em> agree to it. They want it to be one of the bargaining chips for broader immigration reform. After all, if they preemptively agree to all the stuff conservatives already support, they have no leverage for eventually negotiating a comprehensive bill that includes some stuff conservatives don't support. So for the time being, it's being held hostage and that shows no signs of changing soon.</li> <li><strong>Copyright and patent.</strong> I dunno. For a policy that liberals and conservatives allegedly agree about, we sure haven't seen much action on it. Quite the contrary, in fact. Most Republicans and about a third of Democrats just approved fast-track status for the TPP treaty, which, among other things, enshrines American-style copyright and patent law on everyone who's part of the treaty. Once that's in place, we couldn't change our laws in any meaningful way even if we wanted to. And frankly, I've seen very little evidence that either Republicans or business-oriented Democrats really want to. They're too interested in currying favor with IP owners to bother with an issue that will win them virtually no votes from anyone on Election Day.</li> <li><strong>Occupational licensing rules.</strong> This one, finally, is a bit of a mystery to me. I agree that it's not an inherently partisan issue, but in a way, that's the problem. It's also not a hot-button issue, which means neither party is really willing to fight back against it. On the other hand, taxidermists, animal trainers, bartenders, funeral attendants, and so forth <em>are</em> willing to fight for it since it restricts entry and raises wages in their profession.</li> </ol><p>There's a common theme to all four of these issues: there are special interests who care a lot about them, but no real benefit for working politicians to reach across the aisle and fight back. In theory, they might have similar attitudes on these four items, but why bother doing anything about it? No one is jamming their phone lines about this stuff and no one is voting for or against them based on their positions. If activists want action on this kind of googoo stuff, they have to figure out a way to make the public care. Once they do that, they'll have at least a fighting chance of getting politicians to care too. Until then, don't get your hopes up.</p></body></html> Kevin Drum Wed, 01 Jul 2015 18:44:04 +0000 Kevin Drum 278881 at http://www.motherjones.com Greece Is Just a Few Days Away From Unconditional Surrender to Germany http://www.motherjones.com/kevin-drum/2015/07/greece-just-few-days-away-unconditional-surrender-germany <!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/images/Blog_Greece_0.jpg" style="border: 1px solid black; margin: 8px 0px 15px 30px;">Apparently the <a href="http://www.nytimes.com/2015/07/02/business/international/greece-bailout-tsipras.html" target="_blank">Greek prime minister is blinking:</a></p> <blockquote> <p>In a letter sent on Tuesday to the creditors &mdash; the European Central Bank, the International Monetary Fund and other eurozone countries &mdash; Mr. Tsipras said Greece was &ldquo;prepared to accept&rdquo; a deal set out publicly over the weekend by the creditors, with small modifications to some of the central points of contention: pension cuts and tax increases. In the letter, released publicly on Wednesday, Mr. Tsipras linked Greece&rsquo;s acceptance of the terms to a new package of bailout aid that would need to be negotiated.</p> <p>The development initially raised the prospect of progress in resolving a financial crisis that has sent shudders through global markets and deeply strained European unity. President Fran&ccedil;ois Hollande of France called for talks in the hopes of getting a deal by the weekend, saying, according to Agence-France Presse: &ldquo;We need to be clear. The time for a deal is now.&rdquo;</p> <p>But other European leaders, fed up with Mr. Tsipras and in no mood for quick compromise, dashed any hopes of an immediate breakthrough.</p> <p><strong>Chancellor Angela Merkel of Germany responded by repeating her position that there should be no further negotiations until Greece holds the referendum on Sunday.</strong></p> </blockquote> <p>In other words, Merkel is not even willing to grant Tsipras a few meaningless face-saving concessions. Why? I think Merkel believes she now holds all the cards and has no reason to make any concessions at all, no matter how small. And I suspect she's right. In the end, the Greek public will be unwilling to back Tsipras in Sunday's referendum and will vote to accept the European deal as is. The potential catastrophe of default and leaving the euro is just too scary for most of them to contemplate.</p> <p>So Tsipras will be out and Europe will effectively have total control of Greek finances. After six months of cage rattling, the Greek revolt will be over and future governments will simply have to accept whatever pain Merkel wants to deal out. At that point, with Tsipras gone, it's actually possible she'll agree to a few concessions here and there. Policy issues aside, there's little doubt that Merkel's personal contempt for Tsipras has done a lot to cement her hard line toward Greece.</p> <p>So that's my prediction. Unless Tsipras caves completely beforehand, the referendum will be held on Sunday and Greeks will vote to stay in the euro and accept Germany's terms. It will basically be an unconditional surrender.</p></body></html> Kevin Drum Wed, 01 Jul 2015 17:24:02 +0000 Kevin Drum 278866 at http://www.motherjones.com Santorum Holding Onto Debate Stage By His Fingernails in Latest CNN Poll http://www.motherjones.com/kevin-drum/2015/07/santorum-holding-debate-stage-his-fingernails-latest-cnn-poll <!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_poll_republican_candidates_june_2015.jpg" style="border: 1px solid black; margin: 8px 0px 15px 30px;">Fox News will be sponsoring the first Republican debate on August 6, and they have decided to limit the stage to the top ten candidates. The lucky winners will be the ones who "place in the top 10 in an average of the five most recent, recognized national polls leading up to Aug. 4."</p> <p>So how is everyone doing so far? CNN is certainly a recognized national poll, so they'll be part of the eventual winnowing. And their <a href="http://i2.cdn.turner.com/cnn/2015/images/06/30/trumpbushclinton.pdf" target="_blank">most recent poll </a>shows Jeb! at the top followed by Trump, Huckabee, Carson, and Rand Paul. The bottom three candidates&mdash;Christie, Cruz, and Santorum&mdash;could easily lose a point or two just due to statistical churn, to be replaced by Jindal, Kasich, and Fiorina.</p> <p>I'm looking forward to the Trump-Christie showdown for the Annoying Loudmouth Award, and to the Carson-Cruz showdown for the Looneybin Award&mdash;though both men have been disappointingly circumspect lately, hedging their beliefs as if they really wanted to win this thing.</p> <p>But there's still a chance of Rick Perry melting down in amusing fashion. That should make the whole thing worth watching.</p></body></html> Kevin Drum Wed, 01 Jul 2015 16:03:02 +0000 Kevin Drum 278861 at http://www.motherjones.com Atlanta Fed Says Workers Finally Benefiting From Recovery http://www.motherjones.com/kevin-drum/2015/07/atlanta-fed-says-workers-finally-benefiting-recovery <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>Here's some potentially good news. There are various way of tracking wage growth (with or without benefits, employer survey vs. worker survey, nonsupervisory vs. everyone, etc.), and the Atlanta Fed has introduced a new wage index constructed from the Current Population Survey. In theory, <img align="right" alt="" class="image image-_original" src="/files/blog_atlanta_fed_wages.jpg" style="border: 1px solid black; margin: 20px 0px 15px 30px;">this should provide reliable data with a large sample size and will be available monthly. The good news is that their index shows nominal wage growth increasing at a <a href="http://macroblog.typepad.com/macroblog/2015/06/new-atlanta-fed-series-shows-wage-growth-held-steady-in-may.html" target="_blank">fairly healthy 3.3 percent per year:</a></p> <blockquote> <p>Wage growth by this measure was essentially unchanged from April and 1 percentage point higher than the year-ago reading. <strong>The current pace of nominal hourly wage growth is similar to that seen during the labor market recovery of 2003&ndash;04</strong> and about a percentage point below the pace experienced during 2006&ndash;07, which was the peak of the last business cycle.</p> </blockquote> <p>Other wage measures will be released later this week. With inflation still well under control, this is good news for workers, and potentially bad news for Fed watchers, who hope they won't use it as an excuse to raise rates. We'll see.</p></body></html> Kevin Drum Wed, 01 Jul 2015 15:17:51 +0000 Kevin Drum 278856 at http://www.motherjones.com Jeb Bush's Finances Could Spell Trouble For Him in the GOP Primaries http://www.motherjones.com/kevin-drum/2015/06/jeb-bushs-finances-could-spell-trouble-him-gop-primaries <!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.washingtonpost.com/politics/jeb-bushs-33-years-of-tax-returns-expected-to-show-increased-wealth/2015/06/30/af8ad598-1f3d-11e5-84d5-eb37ee8eaa61_story.html?hpid=z1" target="_blank">Jeb Bush is in big trouble:</a></p> <blockquote> <p>Since leaving the Florida governor&rsquo;s office in 2007, Jeb Bush has made about $29 million, a considerable increase in his personal wealth since reentering the private sector....The documents show he paid an effective tax rate of more than 36 percent each year since leaving the governor&rsquo;s office, according to his campaign.</p> </blockquote> <p>That's it? $5 million per year? And he was lame enough with his finances to hand over 36 percent to Uncle Sugar? What the hell kind of business-oriented Republican does he think he is? You could make that much working for a bunch of do-gooder charity operations like some starry-eyed Democrat.</p> <p>Jeb better have a good explanation for this. Otherwise he might not make it out of the primaries.</p></body></html> Kevin Drum Tue, 30 Jun 2015 21:55:14 +0000 Kevin Drum 278801 at http://www.motherjones.com Did Republicans Ever Think They Really Had a Chance of Winning King v. Burwell? http://www.motherjones.com/kevin-drum/2015/06/did-republicans-ever-think-they-really-had-chance-winning-king-v-burwell <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>Today, Harold Pollack wins the award for....um, something. Best geek-obsessive amateur polling and chartmaking of 2015? Whatever, it's really impressive. Man, I wish I had done this.</p> <p>So here's what he did: Last week, before the Supreme Court's Obamacare decision was announced, Pollack asked an "elite group of health policy and legal experts" to give their predictions. Who would win? The plaintiffs or the government? He got replies from <img align="right" alt="" class="image image-_original" src="/files/blog_obamacare_laptop.jpg" style="border: 1px solid black; margin: 20px 0px 15px 30px;">over 40 people, about three-quarters of them Democrats. With the obvious caveat that this is a nonrandom, nonscientific sample etc. etc., <a href="http://www.samefacts.com/2015/06/domestic-politics/expert-predictions-of-the-outcome-in-king-vs-burwell/" target="_blank">here's what he found:</a></p> <blockquote> <p>Although Democrats and Republicans had wildly different views of who should win, <strong>the distribution of predicted probabilities of a plaintiff victory was surprisingly similar between the two groups.</strong> Amazingly, Cato&rsquo;s Michael Cannon and I offered identical prior predictions&mdash;20% probability of plaintiff victory.</p> <p>Among Democrats, the median predicted probability of plaintiff victory was 40%. Among Republicans, the median was 37.5%.</p> </blockquote> <p>Pollack has a different takeaway from some of this than I do, and you should read his post for more. But I have a different point to make. Before the decision was handed down, I noticed that <em>in public</em> an awful lot of experts seemed to be assuming a plaintiff victory. Conservatives were adamant that they had a slam-dunk winning case. Liberals, for their part, increasingly seemed to be in tacit agreement thanks to their pessimism about the cynicism of the Roberts court. At a guess, if you were a visitor from Mars perusing blogs and op-ed columns, you'd assume that most people thought the plaintiffs were going to win.</p> <p>And yet, behind the scenes that wasn't the case. In private, even Republicans thought victory for the plaintiffs was unlikely.</p> <p>So here's what we have in this case. In public, Republicans were sticking with confident assertions that the case was a winner on plain textual grounds. Democrats, in public, were becoming more and more resigned to a conservative victory.</p> <p>And what does the public take away from all this? All we can do is guess, but I'd say most of them figured the plaintiffs had the better case. After all, both sides seemed to think so. This makes it pretty easy to generate a serious sense of outrage when, in the end, the plaintiffs lost after all.</p> <p>The lesson conservatives taught us here is simple: Never let them see you sweat. Insist to the bitter end that you obviously have the better case. That's good politics. For one thing, it might actually give you a better chance of winning. And even if it doesn't, it makes it easier to maintain public outrage when you lose. In this case, conservatives did a pretty good job of wringing every possible advantage they could out of <em>King v. Burwell</em>.</p></body></html> Kevin Drum Tue, 30 Jun 2015 18:08:27 +0000 Kevin Drum 278766 at http://www.motherjones.com Managers of America, Unite! You Have Nothing to Lose Except Straight Time for 60 Hours of Work a Week http://www.motherjones.com/kevin-drum/2015/06/managers-usa-unite-you-have-nothing-lose-except-straight-time-60-hours-work-week <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>If you're paid 12 bucks an hour, you're not making much. But hey&mdash;at least you're eligible for overtime. Hooray! Federal law dictates that you be paid time-and-a-half for working more than 40 hours in a week.</p> <p>But wait. You work at McDonald's and you're a "supervisor." Under the current opaque and complicated rules adopted a decade ago by the Bush administration, that <img align="right" alt="" class="image image-_original" src="/files/blog_manager.jpg" style="border: 1px solid black; margin: 20px 0px 15px 30px;">means you're management. No overtime for you. Sorry.</p> <p>That wage amounts to about $23,000 per year, and if that seems a little stingy for a manager, you're right. Way back in 1975, the Ford administration set the wage level to qualify as management at $6.25/hour, and if you adjust for inflation that amounts to about $28/hour today, or $56,000 per year. For most of us, that's intuitively a little closer to the wage we think a real manager makes.</p> <p>Well, good news. Today, after years of arguing and rulemaking, the Obama administration raised the wage level at which the "management exemption" comes into play. It's a little less than the inflation-adjusted figure from the Ford administration, but it's close. The new level is $970 per week, or about $50,000 per year. Anyone paid less than that, even if they have supervisory duties, qualifies for overtime pay. What's more, future increases are pegged to the level of inflation, so the rules will keep up with reality even when Republicans are in office.</p> <p>Naturally, the folks who benefit from the old rules are threatening havoc. <a href="http://www.washingtonpost.com/business/labor-proposal-would-make-millions-more-eligible-for-ot/2015/06/29/917a768a-1ec0-11e5-a135-935065bc30d0_story.html?wpisrc=nl_daily202&amp;wpmm=1" target="_blank">Check this out:</a></p> <blockquote> <p>The National Retail Federation, a business group, says <strong>its members would probably respond by converting many salaried workers to hourly status, which could cost them benefits such as paid vacation.</strong> Other salaried workers would have their hours cut and wouldn&rsquo;t receive higher pay. Businesses might hire additional workers to avoid paying overtime or extend the hours they give part-timers. Yet supporters of extending overtime coverage say they would welcome those changes.</p> </blockquote> <p>Charming. Of course, we've heard this before in other contexts&mdash;remember all those millions of workers who were supposedly going to be cut from 30 hours a week to 29 to avoid giving them health insurance under Obamacare?&mdash;and most companies aren't likely to follow through on this threat. But it's the thought that counts. And surely there will be a few who decide that screwing their managers is good business, and I expect we'll hear about every last one of them.</p> <p>Don't listen. In this case, anecdotes are just propaganda tools. In a year or so the Department of Labor will provide us all with comprehensive statistics on what happened, and then we'll know. Until then, just enjoy the good news.</p> <p><strong>UPDATE:</strong> This post originally said federal law required overtime pay for working more than 8 hours in a day. That's true in some states, including California, where I live, but it's not federal law. The post has been corrected.</p></body></html> Kevin Drum Tue, 30 Jun 2015 16:21:52 +0000 Kevin Drum 278746 at http://www.motherjones.com Health Update Update http://www.motherjones.com/kevin-drum/2015/06/health-update-update <!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/2015/06/health-update" target="_blank">As you may recall,</a> the key thing my doctor&mdash;and I&mdash;would like to see on the multiple myeloma front is a big drop in my M protein level, a marker for cancerous plasma cells. Today we got the latest results, and it's up to 0.9. Since the first round of chemotherapy had already gotten it down to 1.0, what this means is that the entire second round of chemotherapy at City of Hope was basically useless. I didn't respond to it at all.</p> <p>We went ahead with the biopsy today anyway, for reasons that are a little vague to me. Apparently it will give us some indication of <em>where</em> the cancerous cells are, but the results won't have any impact on my treatment plan. In a couple of days I'll start on a low daily dose of Revlimid, in hopes that it will get my M protein level down to zero. If it doesn't, then we'll try a higher dose.</p> <p>Revlimid is a highly controlled substance because it's in the same family as thalidomide and can cause serious birth defects. You cannot just pick it up at your local pharmacy. First, you have to fill out a lengthy form, and the medication is then mailed from a central location, presumably in a plain brown wrapper or something. As near as I could tell, pretty much every question on the form was some variation of me promising not to even think about getting anyone pregnant while I'm taking it. As you can imagine, this is not really an issue, so the form turned out not to be too much of a chore after all. It was just OK, OK, OK, OK, etc. I promise.</p> <p>So that's it for now. Not exactly cheery news, but the buildup of cancerous cells in my bone marrow is not actually that heavy (about 5 percent or so), which means there's a decent chance the Revlimid will be enough to keep it under control. We'll know in a couple of months or so.</p></body></html> Kevin Drum Tue, 30 Jun 2015 03:49:12 +0000 Kevin Drum 278726 at http://www.motherjones.com Health Update http://www.motherjones.com/kevin-drum/2015/06/health-update-0 <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>This is probably it for blogging today. It's biopsy day for me, and unfortunately this is up in LA, so it's going to wipe out most of the day. The good news is that this is the last of the tests for now, and in a week or two we'll know for sure how well I responded to the second-round chemo up at City of Hope. Whether <em>that</em> turns out to be good news or bad is the million-dollar question.</p> <p>In the meantime, I'm feeling pretty good. I bought myself a Surface 3 yesterday as part of my tablet collection hobby. It's my fourth in four years. I now have an iPad, an Android tab, and two Windows tabs. Since I don't spend a lot of money on anything else, I figure it's actually a fairly harmless and cheap hobby.</p> <p>Seems to be OK so far with a few odd quirks. But I've not yet been able to answer my key question: how well does Firefox work? Their servers appear to have been down for maintenance since last night, so I'm unable to sync the new tablet. Until then, it's basically a brick since Firefox is about half of what I do with it. Maybe the Mozilla folks will have their servers back up and running by the time I get home.</p></body></html> Kevin Drum Mon, 29 Jun 2015 17:30:04 +0000 Kevin Drum 278641 at http://www.motherjones.com Court Rules EPA Must Consider Cost in Regulation of Power Plants http://www.motherjones.com/kevin-drum/2015/06/court-rules-epa-must-consider-cost-regulation-power-plants <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>In today's EPA case, the question at hand was whether EPA has to consider both costs and benefits when it makes the decision to regulate power plants. EPA says it has to consider only benefits during the initial decision, and can consider costs later when it writes the actual regulations themselves.</p> <p>The conservative majority on the Supreme Court disagreed. Although the Clean Air Act generally requires EPA to regulate sources that&nbsp; &ldquo;presen[t] a <img align="right" alt="" class="image image-_original" src="/files/blog_power_plant_smokestack.jpg" style="border: 1px solid black; margin: 20px 0px 15px 30px;">threat of adverse effects to human health or the environment," the requirements for regulating power plants are different. EPA can only regulate power plants if it finds regulation "appropriate and necessary."</p> <p>So what does that mean? "There are undoubtedly settings in which the phrase 'appropriate and necessary' does not encompass cost," the majority opinion says, "But this is not one of them." <a href="http://www.supremecourt.gov/opinions/14pdf/14-46_10n2.pdf" target="_blank">Then this:</a></p> <blockquote> <p>EPA points out that other parts of the Clean Air Act expressly mention cost, while [the power plant clause] does not. But this observation shows only that&nbsp;[the power plant clause's] broad reference to appropriateness encompasses <em>multiple </em>relevant factors (which include but are not limited to cost); other provisions&rsquo; specific references to cost encompass just cost. <strong>It is unreasonable to infer that, by expressly making cost relevant to other decisions, the Act implicitly makes cost irrelevant to the appropriateness of regulating power plants</strong>....Other parts of the Clean Air Act also expressly mention environmental effects, while [the power plant clause] does not. Yet that did not stop EPA from deeming environmental effects relevant to the appropriateness of regulating power plants.</p> </blockquote> <p>As it happens, this is not entirely clear. The origin of the phrase "the exception proves the rule" applies to this. If I say that parking is not allowed on 4th Avenue on weekdays, this implicitly means that parking <em>is</em> allowed on weekends. The fact that I made a specific rule and deliberately failed to include certain cases in that rule, means that the rule doesn't apply to the excepted cases.</p> <p>In this case, cost is specifically mentioned elsewhere in the Clean Air Act, but not here. So power plants appear to be an exception to the general rule that cost has to be considered from the very start. This means that the question is whether "appropriate and necessary" encompasses cost, or whether Congress would have specifically mentioned cost if it wanted it considered.</p> <p>The conservative majority decided cost was inherently part of that phrase. The liberal dissenters disagreed. The conservatives won.</p></body></html> Kevin Drum Mon, 29 Jun 2015 15:51:59 +0000 Kevin Drum 278676 at http://www.motherjones.com This Will Probably Not Be a Very Fun Week http://www.motherjones.com/kevin-drum/2015/06/will-probably-not-be-very-fun-week <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>This week's news to watch for:</p> <ul><li>Greek talks have broken down and they might be about to leave the euro, causing chaos.</li> <li>Negotiations with the Iranians have hit a pretty rough patch. <img align="right" alt="" class="image image-_original" src="/files/blog_china_stock_market_plunge_june_2015.jpg" style="border: 1px solid black; margin: 20px 0px 15px 30px;">There may be no nuclear deal after all.</li> <li>Puerto Rico has effectively declared bankruptcy.</li> <li>China's stock markets, which have been falling already, are off a cliff today. "China&rsquo;s main stock index entered bear-market territory Monday," says the <em>Wall Street Journal,</em> "as a surprise interest-rate cut over the weekend failed to lift the market amid concerns over investors&rsquo; debt levels, while uncertainty about Greece shook sentiment elsewhere in the region."</li> <li>And in non-financial bad news, the Supreme Court has a couple of important cases coming up this week. The smart money suggests that the liberal run of good luck in the high court may be over. Fasten your seat belts.</li> </ul><p><strong>POSTSCRIPT:</strong> It's already happening. The Court has just upheld lethal injection procedures for executing death-row inmates and has struck down EPA rules on toxic emissions. On the brighter side, they ruled that independent commissions can draw district lines. So liberals are 1-2 so far this week.</p></body></html> Kevin Drum Mon, 29 Jun 2015 14:41:45 +0000 Kevin Drum 278661 at http://www.motherjones.com Greece Now Has to Decide Whether to Leave the Euro http://www.motherjones.com/kevin-drum/2015/06/greece-now-has-decide-whether-leave-euro-its-noit-no-brainer <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>Today's news is all about Greece. To make a long story short, the Greeks last week presented the Europeans with an austerity proposal that was pretty much what they had been asking for. But it turned out that "pretty much" wasn't good enough. The Europeans wanted <em>exactly</em> what they had been asking for and sent the Greeks packing. Talks broke down completely, and the Greek prime minister has called for a referendum later this week. The question: whether to accept the humiliating European terms and stay in the euro, or to reject the terms and exit the euro. <a href="http://krugman.blogs.nytimes.com/2015/06/28/grisis/" target="_blank">Paul Krugman offers his opinion:</a></p> <blockquote> <p>I would vote no, for two reasons. First, much as the prospect of euro exit frightens everyone&mdash;me included&mdash;the troika is now effectively demanding that the policy regime of the past five years be continued indefinitely. Where is the hope in that? Maybe, just maybe, the willingness to leave will inspire a rethink, although probably not. <strong>But even so, devaluation couldn&rsquo;t create that much more chaos than already exists, and would pave the way for eventual recovery, just as it has in many other times and places. </strong>Greece is not that different.</p> <p>Second, the political implications of a yes vote would be deeply troubling. The troika clearly did a reverse Corleone&mdash;they made Tsipras an offer he can&rsquo;t accept, and presumably did this knowingly. So the ultimatum was, in effect, a move to replace the Greek government. And even if you don&rsquo;t like Syriza, that has to be disturbing for anyone who believes in European ideals.</p> </blockquote> <p>It's worth unpacking this a bit, and doing it in the simplest possible way. If Greeks vote no on the European proposal, it's basically a vote to abandon the euro and recreate a new version of their old currency. Call it the New Drachma. They would then devalue the ND, making Greek exports more competitive in the international market. That would mean more tourists, more olive exports, and more fish exports. At least, that's what it would mean in the long term.</p> <p>In the short term it would mean chaos. Banks would close, and capital controls would be put in place until the new currency could be put in circulation. Imports would skyrocket in price, and this would effectively mean pay cuts for everyone. Savings would be lost, and pensions would be effectively slashed.</p> <p>In other words, Greece would almost certainly suffer <em>more</em> short-term austerity by leaving the euro than by staying within in it. The payoff, hopefully, would be control of their own currency, which would allow them to rebalance their economy in the long run and begin a true economic recovery. In the meantime, however, I'd be skeptical of Krugman's belief that leaving the euro would cause a bit of chaos, but not much more than Greece is already suffering. <a href="http://equitablegrowth.org/2015/06/28/must-read-barry-eichengreen-path-grexit-tragedy-paved-political-incompetence/" target="_blank">Here's Barry Eichengreen:</a></p> <blockquote> <p>Nearly a decade ago, I analyzed scenarios for a country leaving the eurozone.&hellip;The costs, I concluded, would be severe and heavily front-loaded.&hellip;a bank run&hellip;shutter[ing] the financial system.&hellip;losing access to not just their savings but also imported petrol, medicines and foodstuffs.&hellip;Not only would any subsequent benefits, by comparison, be delayed, but they would be disappointingly small.&hellip;Any improvement in export competitiveness due to depreciation of the newly reintroduced national currency would prove ephemeral.&hellip;Greece&rsquo;s.&hellip;leading export, refined petroleum, <img align="right" alt="" class="image image-_original" src="/files/images/blog_greece_germany.jpg" style="margin: 20px 0px 15px 30px;">is priced in dollars and relies on imported oil.&hellip;Agricultural exports.&hellip;will take several harvests to ramp up. And attracting more tourists won&rsquo;t be easy against a drumbeat of political unrest.</p> </blockquote> <p>A lot of people think it's a no-brainer for Greece to leave the euro at this point. This is why it's not. Make no mistake: it will cause a <em>lot</em> of pain. Greek incomes will effectively be slashed, and it will take years to recover on the backs of improved exports. It's quite possible that this is the only good long-term solution for Greece, which has been treated badly by its European creditors&mdash;for which you should mostly read "German creditors"&mdash; but it is no easy decision. There will be a lot of suffering for a lot of years if Greece goes down this road.</p> <p>This is why the Greek prime minister has called for a referendum on the European proposal. If Greeks vote no, they're accepting his proposal to exit the euro and accepting the inevitable austerity that will follow. That allows him to keep governing. If they vote yes, he will accept the European proposal and presumably step down from government. The people will have spoken, and effectively they will be saying that they were bluffing all along, and now that their bluff has been called they're willing to fold.</p> <p>For Europe, the problem is different. If Greece leaves the euro, it probably won't affect them very much. The Greek economy is simply too small to matter, and most Greek debt is now held in public hands. However, the political implication are potentially huge: It means the currency union is not forever and ever, as promised. If the pain of using a currency whose value is basically dictated by the needs of Germany becomes too severe, countries will leave. Perhaps later they will be let back in. Instead of a currency union, it will become more of a currency board, with countries coming in and out as they need to. This will be especially true if observers like Krugman are right, and the short-term pain of Greece leaving is mild and long-term recovery is strong. That would send a strong lesson to any future country stuck in the web of German monetary policy and finding itself in a deep and long economic depression.</p> <p>Stay tuned.</p></body></html> Kevin Drum Economy Foreign Policy International Top Stories Mon, 29 Jun 2015 14:01:22 +0000 Kevin Drum 278636 at http://www.motherjones.com And Now For Something Completely Different http://www.motherjones.com/kevin-drum/2015/06/now-something-completely-different <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>A new<sup>1</sup> study from Swift, Stone, and Parker has identified the top four components of a successful online fundraising appeal. Here they are:</p> <ul><li>The end of a quarterly fundraising cycle.</li> <li>Clear comparisons to the opposition's fundraising results.</li> <li>Over the top doomsaying.</li> <li>Cats.</li> </ul><p>Lucky for me, I've got all those things, so I figured I'd take a crack at it.</p> <p class="rteindent1">Check out <em>National Review's</em> current fundraising drive. <a href="http://www.nationalreview.com/corner/420201/two-fifty-very-nifty-jack-fowler" target="_blank">One reader</a>&nbsp;just gave $250! <a href="http://www.nationalreview.com/corner/420233/lifeline-sanity-jack-fowler" target="_blank">This guy</a> coughed up $100! They've even got a <a href="http://www.nationalreview.com/corner/385379/join-national-review-wine-club-and-save-100-and-get-two-complimentary-bottles-pinot" target="_blank">wine club</a> to suck in new contributors. And a cruise!</p> <p class="rteindent1"><em>These guys are killing us.</em> Without your help, the heirs of William F. Buckley will dominate the political magazine market for years to come. And you know what that means: More articles about how the only real racism is anti-white <img align="right" alt="" class="image image-_original" src="/files/blog_hilbert_hopper_fundraiser.jpg" style="margin: 20px 0px 15px 30px;">racism. More pseudo-science about how the globe is probably cooling, not warming. More hagiographies of Marco Rubio. More whining about how white people can't use the N-word. More blog posts about Jonah Goldberg's dog.</p> <p class="rteindent1">Maybe you think this doesn't matter to you? Think again. This week features <a href="https://www.nationalreview.com/nrd/articles/419954/reagans-supply-side-genius" target="_blank">"Reagan's Supply-Side Genius,"</a> and it doesn't matter if you try to ignore it. Your crazy uncle is going to be regaling you about it <em>for hours</em> this Thanksgiving unless you figure out how to fight back.</p> <p class="rteindent1">This blog is your ticket. We need contributions to help us fight back against the avalanche of right wing babble. Right. Now.</p> <p class="rteindent1">This is our final push. My cats are down to their last bowl of kibble. The fell hordes of <em>NR</em> are already cackling at their imminent victory. Soon we won't be able to afford the very pixels that make up this blog. I know you don't want that. So please, make a generous contribution today. The first $10 will go to cat food.<sup>2</sup> The rest will go to fighting the dark hordes. And Jonah's dog.</p> <p>OK, I'm joking around here. But we really are closing out our fiscal year next week and <em>Mother Jones</em> can use all the help we can get. If you can afford to <a href="https://secure.motherjones.com/fnp/?action=SUBSCRIPTION&amp;list_source=7Z56KD&amp;extra_don=1&amp;abver=A" target="_blank">pitch in</a>, please do&mdash;so I never have to write a fundraising appeal like this and actually mean it.</p> <p><a href="https://secure.motherjones.com/fnp/?action=SUBSCRIPTION&amp;list_source=7Z56KD&amp;extra_don=1&amp;abver=A" target="_blank">Make a tax-deductible gift by credit card here</a>.</p> <p><a href="https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&amp;hosted_button_id=9JQ8KKMWQUQT4" target="_blank">Or via PayPal here.</a></p> <p><em>1: See the Annals of Improbably Convenient Results, v. 83, p. 101.<br> 2: Just kidding. The cats already have a bottomless supply. Your full donation will go towards MoJo&rsquo;s hard-hitting journalism that gets people talking.</em><em> Like our groundbreaking package, <a href="http://www.motherjones.com/politics/2015/04/true-cost-of-gun-violence-in-america" target="_blank">"The True Costs of Gun Violence in America,"</a> that <a href="https://twitter.com/markfollman/status/612073338240811008" target="_blank">President Obama alluded to</a> in the wake of Charleston.&nbsp;</em></p></body></html> Kevin Drum Fri, 26 Jun 2015 19:00:09 +0000 Kevin Drum 278306 at http://www.motherjones.com Friday Cat Blogging - 26 June 2015 http://www.motherjones.com/kevin-drum/2015/06/friday-cat-blogging-26-june-2015 <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"> <html><body><p>This is a bird's eye view of cat TV. Sort of like breaking the fourth wall, feline style. But how did Kevin get on TV? He was in here just a minute ago. Very fishy, no?</p> <p><img align="middle" alt="" class="image image-_original" src="/files/blog_hilbert_hopper_2015_06_26.jpg" style="border: 1px solid black; margin: 15px 0px 5px 40px;"></p></body></html> Kevin Drum Fri, 26 Jun 2015 18:00:07 +0000 Kevin Drum 278486 at http://www.motherjones.com