Kevin Drum

Quote of the Day: Vulture Fund Suing Argentina Is Just a Lonely Defender of the Free Market

| Thu Jul. 31, 2014 10:24 AM EDT

Here is fellow hedge fund manager Daniel Loeb defending Paul Singer, the billionaire owner of the vulture fund that successfully forced Argentina into default because it was insisting on full payment for old Argentine bonds:

He doesn’t get into fights for the sake of fighting. He believes deeply in the rule of law and that free markets and free societies depend on enforcing it.

You betcha. Anytime a Wall Street tycoon is supposedly fighting for deep principles, hold onto your wallet. They don't become billionaires because of their deep commitment to fair play and the unfettered operation of capital markets. However, there's also this:

The big question, however, is whether Argentina will ever pay Elliott what it wants. If the firm fails to collect, that would underscore the limits of its legal strategy. There is no international bankruptcy court for sovereign debt that can help resolve the matter. Argentina may use the next few months to try to devise ways to evade the New York court. Debt market experts, however, do not see how any such schemes could avoid using global firms that would not want to fall afoul of Judge Griesa’s ruling.

This is an interesting point. Normally, Argentina would just continue to pay the holders of its "exchange" bonds and refuse to pay the vulture funds that refused to go along with the terms of its bankruptcy and restructuring a decade ago. Elliot and the other vultures would be out of luck. The problem is that Argentina's payments are funneled through a US bank, and the judge in the case has forced US banks to halt payments.

But in all the articles I've read about this, I've never really seen an adequate explanation of why it's so impossible to avoid funneling payments through the US. I get that Argentina can no longer use an American US bank. Also, I assume, they can't use a big global bank that does business in the US. But surely there are mid-size banks that do no business in the US that could act as payment agents? If dollars were the issue, they could pay off in euros instead. I don't know what it would take legally for Argentina to switch either payment agents or the denominations of its bonds, but it doesn't sound impossible. And yet apparently it is. Why?

Advertise on MotherJones.com

Republicans About to Blow Up Emergency Border Crisis Funding

| Thu Jul. 31, 2014 1:07 AM EDT

The Obama administration is—once again—being forced to go into crisis mode to keep the government functioning because Republicans refuse to do their most basic job: appropriating money to deal with emergencies. This time it's for the refugee disaster on the border:

Border agencies say their existing budgets — sapped by added costs from overtime, detention and transportation for the children, more than 57,000 of whom have arrived since October — will start running dry before lawmakers get back in September.

Administration officials warn that the price of congressional inaction will be steep, estimating the cost of caring for each immigrant youth runs between $250 and $1,000 a day.

"Scary," Sen. Richard J. Durbin of Illinois, the No. 2 Democrat, said about the agencies' budget outlook.

On Wednesday, officials at the Office of Management and Budget were putting together plans to scrounge up funds. But without congressional approval, President Obama is limited to moving around money only in small amounts. That probably means the redistribution will touch many different programs — a distressing prospect for officials in vulnerable agencies.

So why is it that Republicans can't agree on even a minimal stopgap funding bill? Because Ted Cruz is grandstanding again:

“The Obama White House should put Ted Cruz on the payroll,” said Rep. Peter T. King (R-N.Y.), a vocal Cruz opponent. “We have a chance to pass a good bill, not a perfect bill. Boehner is working hard to get to 218 votes and yet there is Ted Cruz, telling us to do nothing. If he wants to come over and run for speaker, that’s fine, but otherwise he should stay over there in the Senate.”

....At a conference meeting Tuesday, Boehner announced that he would pare down his initial framework after hearing numerous complaints about its size and scope....But Steve King, Gohmert and Salmon — along with Cruz and others — want House Republicans to defund Obama’s Deferred Action for Child Arrivals program, which has granted temporary relief for some children of illegal immigrants and is set for renewal this fall. Boehner has resisted the idea. But late Wednesday, GOP aides said that leaders were likely to allow a vote on a standalone bill that would defund DACA before voting to approve the border spending measure. If the bill to defund DACA were to pass, it wasn’t clear exactly how House leaders would merge the two proposals and send them to the Senate.

Basically, Cruz is trying to rally House conservatives to vote against Boehner's stopgap bill unless it also kills DACA, the so-called mini-DREAM executive action that halts deportations of children who have been in the country for many years. If he succeeds, then no funding bill will pass before Congress goes on vacation. That's why the Obama folks are in crisis mode. We can't just starve the kids who have come across the border, after all, and that means Obama is once again forced to be the grown-up in the room.

Your Republican Party at work, folks. George Washington would be proud.

Lucy and the Great 10% Myth

| Wed Jul. 30, 2014 11:44 AM EDT

Andrew Sullivan reminds me of something I was curious about the other day. He quotes Jeffrey Kluger, who writes in Time that he's annoyed with the movie Lucy because it perpetuates the ridiculous myth that we only use 10 percent of our brains. I sympathize. I was sort of annoyed just by seeing that in the trailer. But it did make me wonder: where did this urban legend come from, anyway? Wikipedia to the rescue:

One possible origin is the reserve energy theories by Harvard psychologists William James and Boris Sidis...William James told audiences that people only meet a fraction of their full mental potential....In 1936, American writer Lowell Thomas summarized this idea...."Professor William James of Harvard used to say that the average man develops only ten percent of his latent mental ability."

In the 1970s, psychologist and educator Georgi Lozanov, proposed the teaching method of suggestopedia believing "that we might be using only five to ten percent of our mental capacity."....According to a related origin story, the 10% myth most likely arose from a misunderstanding (or misrepresentation) of neurological research in the late 19th century or early 20th century. For example, the functions of many brain regions (especially in the cerebral cortex) are complex enough that the effects of damage are subtle, leading early neurologists to wonder what these regions did.

Huh. So we don't really know for sure. That's disappointing but not surprising. It's remarkable how often we don't know where stuff like this comes from.

As for its continuing popular resonance, I have a theory of my own. There are an awful lot of people out there with remarkable—and apparently innate—mental abilities. They can multiply enormous numbers in their heads. They can remember every day of their lives. That kind of thing. And yet, they operate normally in other regards. The fact that they've stored, say, distinct memories of the past 15,000 days of their lives doesn't seem to take up any cerebral space or energy that they needed for anything else. So surely all that storage and retrieval capacity is just sitting around unused in the rest of us?

No, it's not. But the idea resonates because freakish mental skills seem to be so much further out on the bell curve than freakish physical skills. It makes the whole 10 percent thing seem pretty plausible. And that's why it sticks around.

POSTSCRIPT: Or does it? I mean, has anyone tried to find out how many people still believe this myth? For all I know, everyone has long been aware that it's not true. We need a poll!

An Awful Lot of People Think Obama Is Bored With Being President

| Wed Jul. 30, 2014 11:05 AM EDT

You have to give the Fox News polling operation credit for mixing things up in an interesting way sometimes. At first glance, their latest poll is just a collection of all the usual leading questions about Obama busting up the Constitution, Obama being a loser compared to Vladimir Putin, Obama being incompetent, etc. etc. This is mostly yawn-worthy stuff intended as fodder for their anchors. All that's missing is a question about whether Obama plays too much golf. But then there's this:

Who else would think to ask a question like that? But it's kind of fascinating, really. And what's most fascinating is that it's barely partisan at all. In virtually every group, something like 40 percent of the respondents think Obama is bored with the whole presidenting thing. That goes for Democrats as well as Republicans; for blacks as well as whites; for the rich as well as the poor; and for liberals as well as conservatives. It's not quite a majority in any group—though it's pretty close among Hispanics and senior citizens—but an awful lot of people sure are convinced that Obama has already checked out of the Oval Office. He might want to do something about that.

GDP Increases At a Smart 4.0% Rate in Second Quarter

| Wed Jul. 30, 2014 10:15 AM EDT

Here's something that counts as good news: GDP increased in the second quarter at an annual rate of 4.0 percent. At the same time, the first quarter numbers were revised to a slightly less horrible -2.1 percent growth rate. This means, roughly speaking, that the economy has grown about 1.9 percent over the first half of the year.

Now, this is obviously nothing to write home about. A growth rate of 1 percent per quarter is pretty anemic. Still, it's better than expectations after the terrible Q1 numbers, and the rebound in Q2 suggests there really was some make-up growth. A fair amount of this growth came from inventory build-up, which is normally a reason for caution, but after two previous quarters of inventory decline it's probably not the warning sign it might otherwise be.

All in all, this is decent news. It's still not possible to say that the economy is roaring along or anything, but the Q1 number now looks like it really was an anomaly. Slowly and sluggishly, the economy is continuing to recover for the ~95 percent of us who haven't been unemployed for months or who haven't given up and exited the labor force entirely. For those people, economic growth is still slow enough to leave them behind. One good quarter is nice, but we still have a lot of work to do.

Republicans Still Holding Up Virtually All Obama Appointments

| Wed Jul. 30, 2014 1:52 AM EDT

Jonathan Bernstein notes today that although filibuster reform has technically given Democrats the ability to confirm any executive branch appointment, in practice Republicans can still tie up the Senate by insisting on lengthy parliamentary delays for every nominee. And that's what they're doing:

Senate Republicans continue to impose an across-the-board virtual hold on every executive branch nomination....Republican foot-dragging has created a backlog of more than 100 nominees, almost none of whom are controversial, and some of whom have been waiting since January for Senate floor action.

....I understand that Republicans are upset about the Democrats' filibuster reform. It has robbed them of leverage over nominations — even if it's entirely their own fault for having abused that leverage. But Republicans aren’t harming Senate majority leader Harry Reid by blocking nominations. They’re harming the functioning of the U.S. government. (Perhaps it might be nice to have ambassadors appointed in a few important nations?) And they are needlessly, cruelly, messing with people’s lives. On top of all that, they’re eliminating the leverage of individual Senators. As Ted Cruz (maybe) just learned, there’s no point putting an individual hold on a nomination that is already being held up by the entire Republican caucus.

And why? For the sake, as far as I can tell, of a tantrum.

Pretty much. But this is what they've been doing all along. The point of filibustering everything and everyone has never been just to prevent a few objectionable candidates from being confirmed. It's been to tie up Senate floor time and disrupt even the routine functioning of a federal government that's under Democratic control. Even with filibuster reform they can still do that, so why should they stop now? A broken government is nothing but good news for Republicans.

Bernstein says in another post today that he's tired of hearing about political polarization. It's not really anything new, after all. That's true enough, and this is a good example. It's not a case of polarization, it's just a straightforward case of assholery. There's no principle or ideology behind this, they're merely causing dysfunction for the sake of causing dysfunction. Welcome to the modern GOP.

Advertise on MotherJones.com

My Ten-Dollar Offer to the Halbig Truthers

| Tue Jul. 29, 2014 8:31 PM EDT

There's no question that the statutory text of Obamacare contains a mistake. In one of its sections, it authorizes federal subsidies only for taxpayers who enroll through a state-based exchange, not for those who enroll through the federal exchange. But was it really a mistake? Brian Beutler comments:

Right-wing activists have spent the last several months fabricating a rival narrativea ludicrous theory of intent, in which leading Democrats meant to condition the subsidies, but decided to keep the inducement a secret from reporters, back bench members, governors, budget analysts, and health care reform advocates. This kind of deceptive argumentation is perhaps to be expected from activists. What's become incredibly frustrating to me about the Halbig brouhaha in the last few days is watching the conservative health care writers who were in the same trenches watching the same debate unfoldattempting, from a very skeptical vantage point, to explain the bill correctlysuddenly turn around and vouchsafe the Halbig Truthers.

That suggests something to me. As far as I know, not a single reporter who covered the Obamacare battle believes that Congress intended to restrict subsidies to state exchanges. As Beutler says, "To the extent that the question wasn’t probed widely, if at all, it's because that would've been almost like asking whether the subsidies were intended to be denominated in Rubles." Sarah Kliff agrees: "It was never a question, during the five years I've spent writing about Obamacare, whether this would be case." Nobody in Congress questioned the universality of subsidies. Nobody in the executive branch questioned it. No governors questioned it. None of the bureaucrats tasked with building the exchanges questioned it. And nobody in the press questioned it.

And that brings me to my suggestion: Is it really true that no one in the press questioned it? For the moment, let's forget about liberals. Hell, everyone knows we're in the bag for Obamacare, and by now we've probably scrubbed all our old posts of damning evidence. Ditto for the mainstream media. They're just shills for Obama anyway. But how about conservatives? They covered the Obamacare battle pretty obsessively too. Here's my guess: every single article written by conservatives between January 2009 and March 2010 (a) assumed that subsidies were universal and (b) never so much as mentioned the possibility that they weren't. In other words, they all believed in universal subsidies too because there was never any reason in their reporting to believe otherwise. Not one single reason.

But maybe I'm wrong! So here's my offer: I will send a crisp, new ten-dollar bill to anyone who can point out a conservative who so much as suspected that subsidies were limited to state exchanges prior to March 2010. Surely that's incentive enough? Let's start digging up evidence, people.

The Forgotten Murder Trial of the NRA's Top Lawyer

| Tue Jul. 29, 2014 4:48 PM EDT

Robert J. Dowlut is the NRA's top lawyer, a "human encyclopedia" on the subject of state gun laws and the man responsible for much of the gun lobby's success in a series of court cases that have steadily eroded restrictions on gun ownership in the United States. "He is a really reliable and exhaustive source for legal input on the issue," says one admirer.

But 50 years ago, according to a pile of court documents MoJo's Dave Gilson uncovered for "The NRA's Murder Mystery," a teenage Dowlut had a rather different relationship with guns:

Shortly before dark on the evening of April 17, 1963, Robert J. Dowlut went looking for a gun inside the city cemetery in South Bend, Indiana. Making his way through the headstones, he stopped in front of the abandoned Studebaker family mausoleum. He knelt by the front right corner of the blocky gray monument and lifted a stone from the damp ground. Then, as one of the two police detectives accompanying him later testified, the 17-year-old "used his hands and did some digging." He unearthed a revolver and ammunition. As Dowlut would later tell a judge, the detectives then took the gun, "jammed it in my hand," and photographed him. "They were real happy."

Two days earlier, a woman named Anna Marie Yocum had been murdered in her South Bend home. An autopsy determined she had been shot three times, once through the chest and twice in the back, likely at close range as she'd either fled or fallen down the stairs from her apartment. Two .45-caliber bullets had pierced her heart.

....The following morning, Dowlut was charged with first-degree murder. A year and a half later, a jury found him guilty of second-degree murder. Before the judge handed down a life sentence, he asked the defendant if there was any reason why he shouldn't be put away. Dowlut replied, "I am not guilty." A day later, the Indiana State Prison in Michigan City registered Dowlut, now 19, as prisoner number 33848.

Less than six years later, Robert Dowlut would be a free man—his murder conviction thrown out by the Indiana Supreme Court because of a flawed police investigation. The court ordered a new trial, but one never took place. Dowlut would return to the Army and go on to earn college and law degrees. Then he would embark on a career that put him at the epicenter of the movement to transform America's gun laws.

Click the link to read the whole story.

Guns and Doctors: A Follow-Up

| Tue Jul. 29, 2014 3:05 PM EDT

Aaron Carroll responds to my skeptical take on doctors asking patients about their gun ownership:

I think you ask legitimate questions, but these are consensus things that pediatricians ask about. You’re thinking like an adult, and not as a parent.

I don’t know if internists ask adults about guns. I doubt they do. But pediatricians do ask parents. They also ask if parents have talked about street safety. They ask if they keep chemicals out of reach of their children. They ask if they’ve checked the temperature of the hot water heater. They ask about water safety, bathtubs, and talk about drowning. Fire safety. Bike safety. Car safety (including airbags). I could go on and on and on.

This is what pediatricians do. You may be too far removed from that to remember, but it is! Read Bright Futures. It’s hundreds of pages long.

In my post, I was mostly thinking about adult doctors, not pediatricians, though I suppose both were on my mind. In any case, this is an obvious distinction, and I thought it was worth passing along.

Quote of the Day: "The Press Loves to Cover Her Hard"

| Tue Jul. 29, 2014 2:49 PM EDT

Dave Weigel notes that the media is still obsessed with Hillary Clinton's comment about being "dead broke" when she and Bill left the White House:

They've got to be sick of this by now. Maggie Haberman had it nailed three weeks ago: Hillary Clinton was "still raw over the partisan wars that hindered her husband’s legacy and left the couple with millions of dollars in legal debt." Her answer, as she told Ramos, was accurate, and it's baffling to her that this became a "gaffe." As she continued her tour, HarperCollins was printing up copies of Clinton, Inc., a tell-all by the Weekly Standard's Daniel Halper. On Page 18, Halper recalls that in 2001 "the Clintons were broke, owing a fortune in legal fees from the many investigations into their personal lives," and that they had to be loaned $1.3 by Terry McAuliffe. Until just a month ago, that was how even conservatives remembered the Clintons' departure from the White House.

What's the deal with this? Sure, Hillary could have responded to questions about her wealth a little better. She's not the natural politician Bill is. But really, there's not much else here. So why does it continue to be news a full month later? Uber-insider Mark Halperin explains:

She has a lot of positive attributes that are currently just being overwhelmed by all this negative coverage. And it’s going to keep going. The momentum—there’s, there’s— The press loves to cover her hard.

This comes courtesy of Bob Somerby, who's been following this ever since the initial flood-the-zone coverage of Hillary's "gaffe" in the Washington Post. Somerby tells the rest of the story:

Multimillionaire TV stars asked if voters would support a person as wealthy as Clinton. In response to Clinton’s answers, some of the nation’s most famous pundits launched their famous “gaffe culture.”

The Washington Post even launched a front-page jihad concerning the size of Clinton’s speaking fees. In the New York Times, Maureen Dowd assailed Clinton for her “rapacious” behavior and her “wanton acquisitiveness,” which she was said to be passing along to her daughter.

....Halperin made a starting suggestion—he suggested the press corps’ coverage of a major candidate could determine the outcome of our next White House campaign.

Plainly, that’s what happened in Campaign 2000, when a twenty-month war against Candidate Gore let George Bush reach the White House. In the main, that war was conducted by the mainstream press corps, not by the RNC.

The press corps’ poisonous war against Gore let Bush reach the White House. But it’s a basic law of the guild: Major journalists never suggest that the behavior of their own guild could have such startling effects.

The media's preoccupation with the Clintons' wealth won't last forever. Even for the Washington press corps, it's too transparently silly to pretend that it's somehow surprising that a presidential candidate is wealthy. But Somerby and Halperin are right: it's a sign of things to come. The press has never liked Hillary, and she's never liked them, and that's that. If she decides to run for president, this is going to be one of her biggest problems—or maybe her biggest, period. She's just never going to catch a break.