Earlier this week I noted that one-tenth of the Republican health care bill is taken up with a provision that denies Medicaid coverage to lottery winners. I figured it was just Republicans being Republicans, ever watchful for some poor person who's gaming the system and getting something they don't deserve. But no. The Rude Pundit point out—very rudely!—that the real reason is more prosaic. Here's a snippet from a CBO report released a couple of years ago:

It turns out that Republicans aren't just being dicks. They're also playing the CBO scoring game. Half a billion dollars may not be much over ten years, but it's better than nothing. And if you can help your CBO score and stick it to some poor schmoe who won the lottery—well, that's just a win-win, isn't it?

OK, BUT SERIOUSLY FOLKS: This isn't quite the real story, though it's true that Republicans really are sort of obsessed with making sure no poor person ever gets a penny more than they deserve. Michigan was the trendsetter here. After the great midterm landslide of 2010 gave Republicans total control of the state, they passed a law requiring state agencies to automatically cross-check lottery winners with people receiving welfare benefits. The result was a lovely report about the "truly needy":

Now, you may be thinking that this is pointless since Medicaid has an income test, and lottery winnings count as income. So if you win the lottery, you don't qualify for Medicaid anyway.

But no! Not anymore, anyway. For complicated reasons—explained here in unbelievable detail if you really want to torture yourself—Democrats were forced to change the Medicaid rules in Obamacare so that lottery winnings counted as income only in the month they were received. That means you'd be ineligible for Medicaid that month, but then you'd go right back on Medicaid the next month even though you had this huge pile of lottery cash available to you.

Fixing this rank injustice became a hobbyhorse of Rep. Joe Pitts (R–Penn.), who introduced multiple bills designed to change Obamacare's rule. Pitts retired last year, but no matter: other Republicans are now selflessly carrying on his work. And the complexity of this rule explains why lotteries take up six pages in their bill. It's not just a matter of kicking lottery winners off the Medicaid rolls. Republicans have to define in detail how lottery income is handled. Lots of detail:

A State shall...include such winnings or income...as income received in the month in which such winnings or income (as applicable) is received if the amount of such winnings or income is less than $80,000....over a period of 2 months if the amount of such winnings or income (as applicable) is greater than or equal to $80,000 but less than $90,000....over a period of 3 months if the amount of such winnings or income (as applicable) is greater than or equal to $90,000 but less than $100,000....over a period of 3 months plus 1 additional month for each increment of $10,000 of such winnings or income (as applicable) received, not to exceed a period of 120 months (for winnings or income of $1,260,000 or more), if the amount of such winnings
or income is greater than or equal to $100,000.

So now you know. Republicans are fixated on lotteries and Medicaid because (a) poor people are getting away with something, and (b) the income reporting rule for lotteries was changed by the hated Obamacare. The CBO score is useful not because of the amount of money involved—which really is peanuts—but because it demonstrates that the rule affects the federal budget. That means it can be changed in a reconciliation bill. Which is what Republicans are trying to pass.

All clear now?

It's true: I got a new camera on Wednesday. It's a Lumix FZ2500, which is absurdly expensive for a guy who spends 90 percent of his time taking pictures of cats. But then I thought: Don't my readers deserve the best? Of course they do. Check out Hilbert with the new optics:

Majestic, isn't he? And notice the nicely blurred background. That's called bokeh, and it's what every photographer aspires to in portraits of either humans or cats. Here's Hopper:

Most small digital cameras have small sensors and, therefore, small lenses. This is handy if you want a huge zoom length, but it comes at the expense of both quality and bokeh. Small sensors produce mediocre quality images, while small lenses produce very little bokeh. Just about everything is sharp from a few feet out to infinity. Feline Cannonball can explain the optical principle if you ask nicely. This is why, for example, the new iPhone 7 has a mode that produces a blurred background in software. It's basically a hack to reproduce the bokeh you'd get from a bigger camera. Here's Hilbert again:

In my youth, I had a 35mm camera, a darkroom, and a big bag full of lenses. They produced glorious bokeh. Today I'm just not willing to do that. So that gives me a choice: a small camera that's inexpensive, has awesome zoom capability, but produces so-so images and no bokeh. Alternatively, I could buy a DSLR, which would cost a fortune and produce great images, but would have very little zoom capability. In the end, I chose a middle ground: a fixed-lens camera with a 1" sensor. It's bigger and more expensive than my old camera, but still fairly small and has a pretty good zoom (24-480mm equivalent), which is plenty adequate for my needs. The bokeh it produces isn't as good as a full-size DSLR, but it's way better than my old Canon. Here's Hopper again:

The Lumix also has a bunch of other features I wanted. Its autofocus is way faster than my old camera. It has an articulating LCD screen, a must for cat blogging. It has a very convenient set of controls—much better than the Canon—including a manual focus ring. (Finally! Sometimes autofocus just doesn't work, and the Canon was all but impossible to focus manually.) The Lumix has a good burst mode, which helps to catch just the right moment. You can also shoot 4K video and extract pretty good images from it, which makes it possible to really catch the right moment. I'm a little unsure of how good the metering is, but that may be only because I haven't played around with it enough. I wonder if face-recognition mode works on a cat?

And of course, it's not just for cat blogging. This morning the furballs were next door looking unusually excited about a bush. I have a feeling our lizard might have been over there. However, our squirrel showed up a couple of minutes later and he was in a tizzy. Do you think there happened to be a pine cone buried under that bush too?

Over at EPI, Elise Gould has a roundup of how wages are doing, and for the most part the news is unsurprising. The good news is that wages for ordinary folks were fairly robust last year. The bad news is that the bottom 50 percent has seen no gains since 2000 and income inequality continues to increase. There's a ton of good data in her report, which you should take a look at if you want to take a deep dive into working wages.

However, I want to highlight two of her charts that are just plain peculiar. Here's the first one:

It's no surprise that the 95th percentile is rising faster than everyone else, but the last two years have been breathtaking. According to Gould's data, men at the top have seen their wages go up 17 percent. Women at the top have done well too, but nothing like this. What's going on?

Here's the second oddball chart:

Look at that yellow line at the bottom. The very worst performance has been among men with some college. They've done worse than high school grads and worse even than high school dropouts. Their absolute wages are still higher than the high school crowd, but they're losing ground. Once again, there's a similar dynamic among women, though nowhere near as stark.

I have no insights to offer about either of these. They just seemed peculiar enough to share.

Daniel Mügge and Lukas Linsi had a pretty interesting chart in the Washington Post yesterday. Here it is:

According to the United States, our trade deficit with Mexico is $63 billion and steady. According to Mexico, it's $122 billion and climbing. That's quite a discrepancy.

The weirdest part of this is that apparently no one quite knows what's going on. The discrepancy in the official figures was fairly modest until 2007, but since then it's widened considerably. The US and Mexico disagree about the correct figure by a factor of two these days.

The authors go through a few possible explanations, but none of them really do the job. They also note that this kind of discrepancy is common, though the US-Mexico disagreement is larger than most. Our trade deficit with China, for example, is either $388 billion (US figures) or $260 billion (Chinese figures). Other country pairs show the same discrepancies.

There's no real lesson to take from this since we don't know the cause. The authors suggest only that you take official trade figures with a grain of salt. They're not quite as precise as you might hope.

A reader emailed this morning asking for a really basic primer on Obamacare and the repeal effort. Judging from some of the stuff I've read, this sounds like a good idea. What follows is really basic, so skip it if you already know this stuff.

1. The insurance market

Most of us get our health insurance either from our employer or from Medicare. Neither Obamacare nor the Republican health care bill affect either one except in a few minor ways. They deal solely with two other parts of the health insurance market: Medicaid and individual insurance. Everything you hear about exchanges, premium increases, death spirals, and so forth applies to individual insurance only, which is a tiny piece of the entire market. It's the little yellow box on the far right:

Yesterday the New York Times ran a piece saying that recent premium increases had affected "only" 3 percent of Americans. Technically that's true, but it's pretty misleading. That's half the individual market.

2. How is Obamacare working out?

The main goal of Obamacare was to reduce the number of people who are uninsured. It did this two ways. First, it expanded Medicaid, which now covers about 10 million more people than before. Second, it set up the exchanges, where private insurers could sell individual coverage. This also covered about 10 million additional people. Altogether, Obamacare has substantially reduced the number of Americans who lack health insurance:

This isn't to say that Obamacare has been perfect. Insurers misjudged pricing early on, which led to large premium increases last year as they finally caught up. The individual mandate wasn't strong enough, so lots of young, healthy people have avoided insurance altogether, which makes the total pool covered by the exchanges older and sicker than originally predicted. As a result, several insurers have left the market, and there are lots of counties where only one insurance company is still selling in the exchanges.

3. How does Obamacare work?

Medicaid is simple: Obamacare simply allocates more money to cover more people. However, states can decline the expansion, and many red states have.

The exchanges are a little more complex and rest on three pillars. First, no one can be turned down for insurance because of pre-existing conditions. However, this means the number of sick people in the insurance pool will increase, and that needs to be balanced with healthy people. So the second part of Obamacare is the individual mandate, which requires everyone to buy insurance. If they don't, they have to pay a tax penalty. But you can't very well require poor people to buy something they can't afford, so the third part of Obamacare is subsidies, which help reduce the cost of insurance for the poor and working poor.

4. How is Obamacare paid for?

Basically, by some modest taxes on the rich along with some taxes on corporations. Here's the CBO's latest estimate:

Overall, Obamacare helps the deficit because its taxes are a bit higher than its outlays, which have been less than projected. The Republican bill has no revenue sources yet. We don't know how much it would cost, but whatever it is, the number will go straight onto the deficit.

5. Can Republicans repeal Obamacare?

This is tricky. Democrats can filibuster any repeal bill, and Republicans don't have 60 votes in the Senate to overcome a filibuster. That means they have to repeal Obamacare via reconciliation, which requires only a simple majority in the Senate.

But there's a big problem with reconciliation: it can be used only on things that directly affect the federal budget. Subsidies affect the budget, so Republicans can repeal the subsidies. Medicaid expansion affects the budget, so they can repeal that. The individual mandate affects the budget, so they can repeal that.

But there's something missing here: the pre-existing conditions provision. That affects only insurance companies. It has no effect on the federal budget, so the pre-existing conditions ban can't be repealed. Besides, the ban is extremely popular, so it would be political suicide to repeal it. This is a big problem: if insurers are required to insure everyone, even people with expensive pre-existing conditions, they'll go bankrupt unless healthy people also sign up. But with skimpy subsidies and no individual mandate, the number of healthy people is going to plummet. This is going to leave insurers with a pool of people whose premiums are far lower than the cost of their medical care, and that in turn means insurers will lose tons of money. It's a disaster waiting to happen.

6. So what will Republicans do?

Your guess is as good as mine. One option is that they just bull ahead without worrying about the consequences, and the individual market will implode. Another is that a few Republican senators see reason, and the repeal effort fails. A third possibility is that the repeal bill passes, and then Republicans count on Democrats helping them out with subsequent bills to fix things, because Democrats don't want to see the entire individual market go up in smoke. Finally, a fourth option—which is very unlikely—is that Republicans increase the subsidies and tighten up the mandate, which will keep the individual market in decent shape.

The American economy added 235,000 new jobs last month, 90,000 of which were needed to keep up with population growth. This means that net job growth clocked in at 145,000 jobs—nearly all of it in the private sector. The headline unemployment rate stayed steady at 4.7 percent. That's not bad, and behind the scenes the news was even more positive. The labor force participation rate ticked up to 63 percent; the number of unemployed dropped by 107,000; 176,000 people joined the labor force; and the ranks of the employed went up by nearly half a million.

But how about wages? Hourly earnings of production and nonsupervisory employees went up at an annual rate of about 2.3 percent. That's about even with the inflation rate last month, which means the real increase was close to zero. That's disappointing given recent signs that wages were starting to make gains.

I got a new camera yesterday. You all know what that means, don't you? Lotsa photos! More on that tomorrow, but in the meantime, enjoy the Great Lizard Hunt of 2017, courtesy of the new camera's burst mode.

Seriously, folks, WTF is going on with the State Department?

The press is not happy:

D.C. bureau chiefs from major news organizations, including The New York Times, The Washington Post, The Wall Street Journal, the wire services, Fox News and CNN sent a letter to the State Department earlier this week protesting Secretary of State Rex Tillerson's decision to ditch reporters on his upcoming trip to Asia.

...."Not only does this situation leave the public narrative of the meetings up to the Chinese foreign ministry as well as Korea’s and Japan’s, but it gives the American people no window whatsoever into the views and actions of the nation’s leaders."

The American public will get the official narrative, and that's it. The odds are also slim that Tillerson himself will have anything to say about his meetings. He literally hasn't spoken with the press in—what? Weeks? Months? Since the day he was confirmed? A few reporters have gotten desperate to find out what's going on. Here's NBC's Andrea Mitchell several days ago trying to get a few words out of Tillerson:

Here she is trying again a few days later:

Tillerson has fired a big chunk of his management staff. He has no deputy. He won't talk to the press and he won't take them along on foreign trips. He failed to show up for the annual release of the human rights report. He's apparently happy to accept a budget that slashes both the State Department and foreign aid by more than a third. He doesn't get invited to President Trump's meetings with foreign leaders. Hell, the State Department doesn't even know they're happening:

The entire State Department is completely adrift. If it were Trump pulling a stunt like this, we'd chalk it up to some kind of bizarre revenge fantasy festering in his brain. But why is Tillerson doing this? Is he under orders from the White House? Is he too scared to talk to reporters? What the hell is going on here?

Senate Majority Leader Mitch McConnell in an interview this morning about the border wall:

Brookings has done an analysis of RepubliCare and estimates that it will reduce coverage by at least 15 million people compared to Obamacare, and probably more. Their estimate is based on previous CBO forecasts of the effects of provisions that are in the Republican bill.

My own guess is closer to 20 million. I figure I might as well put my money where my mouth is, so here's how I think the CBO forecast will turn out:

I'm actually being generous here since this forecast assumes the individual insurance market won't implode completely. Will CBO have the guts to make a forecast like this? We'll see next week.

Oh, and premiums will go up a lot too. But that's an estimate for another day.