Kevin Drum

Ebola Panic Mysteriously Disappeared Last Tuesday

| Thu Nov. 13, 2014 10:49 AM EST

This is from the LA Times yesterday, but I forgot to mention it. It's worth a quick read:

A few short weeks ago, Ebola was public enemy No. 1.

About 1,000 people were being monitored by health officials. Several schools in Texas and Ohio shut down because of a single patient who boarded a plane. A cruise ship was refused permission to dock in Cozumel, off Mexico's Yucatan Peninsula. President Obama appointed an Ebola "czar." Polls showed a majority of Americans were concerned that Ebola would spread out of control in the U.S.

On Tuesday, a fully recovered Dr. Craig Spencer was released from Bellevue Hospital Center in Manhattan. The U.S. was now Ebola-free for the first time since Sept. 5 — a milestone that barely seemed to register with a once-frenzied public.

How did we get here from there?

How indeed?

"October was a rough month for stigma and fear," said Doug Henry, a medical anthropologist at the University of North Texas in Denton. "The cruise ship that was denied entry into a port, kids who weren't welcome at school, parents who kept their own kids home — things got really bad here in Dallas." To further complicate matters, the crisis occurred in the home stretch of the midterm election campaign. Some Democrats accused Republicans of stoking Ebola fears for political advantage.

Yep, it's quite the mystery.

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Pew: Republicans Don't Really Care About "Getting Things Done" in Washington

| Wed Nov. 12, 2014 10:19 PM EST

Here's the latest from Pew. It's offered as a wee course correction for every pundit who somehow thinks the GOP leadership will be more motivated to work with President Obama this year than they were after the 2010 election. Survey says: screw that stuff. Let the eye poking begin.

Jonathan Gruber Says Nothing New, Gets Hammered For It

| Wed Nov. 12, 2014 6:54 PM EST

Jonathan Gruber is one of the intellectual godfathers of Obamacare. Here's what he said last year about it:

"This bill was written in a tortured way to make sure CBO did not score the mandate as taxes," he said during a panel discussion at the University of Pennsylvania in October, 2013. "Lack of transparency is a huge political advantage. And basically, call it the 'stupidity of the American voter' or whatever, but basically that was really, really critical to getting the thing to pass.”

...."In terms of risk-rated subsidies, if you had a law which explicitly said that healthy people pay in and sick people get money, it would not have passed," he said. "You can't do it politically, you just literally cannot do it. It's not only transparent financing but also transparent spending."

I gather this has created a mini-firestorm, and obviously I understand why. If you imply that a bill was structured to take advantage of the "stupidity" of the American voter, that's just bound to come back to haunt you. So the radio yammerheads are having a field day, and I guess I don't blame them.

But if we can take just a half step up from radio yammerhead land, did Gruber say anything that isn't common knowledge? I'm not playing faux naive here. I'm serious. Basically, Gruber said two things.

First, he noted that it was important to make sure the mandate wasn't scored as a tax by the CBO. Indeed it was, and this was a topic of frequent discussion while the bill was being debated. We can all argue about whether this was an example of the CBO scoring process being gamed, but it has nothing to do with the American voter. Rather, it has everything to do with the American congressman, who's afraid to vote for anything unless it comes packaged with a nice, neat bow bearing an arbitrary, predetermined price tag.

As for risk-rated subsidies, I don't even know what Gruber is talking about here. Of course healthy people pay in and sick people get money. It's health insurance. That's how it works. Once again, this was a common topic of discussion while the bill was being debated—in fact, one that opponents of the bill talked about constantly. They complained endlessly that healthy young people would pay relatively higher rates than they deserved, while older, sicker people would get a relative break on their premiums. This was no big secret, but the bill passed anyway.

It's true that the average Joe didn't know anything about this, but not because the average Joe is stupid. It's because most people simply don't pay attention to this stuff even slightly. The fraction of the electorate that cares about the minutiae of policymaking could be stored in a pickle jar. That's just life.

So basically, Gruber foolishly made a comment about the stupidity of the American voter—a comment that wasn't even right, I think. But that's it. Everything else he said was common knowledge during 2009 and 2010 among the pickle jar set. If you cared about policy, you knew this stuff. If you didn't, you didn't. But that's true of everything, isn't it?

Obama Takes a Good Half Step Toward an Unequivocal Ban on Torture

| Wed Nov. 12, 2014 4:42 PM EST

It's worth mentioning that the Obama administration has finally decided to take a more expansive view of where torture and "cruel, inhuman or degrading treatment" are banned:

The Obama administration, after an internal debate that has drawn global scrutiny, is taking the view that the cruelty ban applies wherever the United States exercises governmental authority, according to officials familiar with the deliberations. That definition, they said, includes the military prison at Guantánamo Bay, Cuba, and American-flagged ships and aircraft in international waters and airspace.

But the administration’s definition still appears to exclude places like the former “black site” prisons where the C.I.A. tortured terrorism suspects during the Bush years, as well as American military detention camps in Afghanistan and Iraq during the wars there. Those prisons were on the sovereign territory of other governments; the government of Cuba exercises no control over Guantánamo.

Why exclude black sites? Administration officials apparently say this is just a "technical matter of interpretation, underlined by concerns that changing the jurisdictional scope could have unintended consequences, like increasing the risk of lawsuits by overseas detainees or making it harder to say that unrelated treaties with similar jurisdictional language did not apply in the same places."

I can....almost buy that. Lawyers and diplomats get pretty hung up on stuff like this. Nonetheless, I'd be a lot happier if Obama could be a little more Bush-like here, and simply overrule the legal eagles and insist on a clear and unequivocal policy. It's hard to believe there isn't a way to do that which wouldn't somehow wreck a bunch of other treaties at the same time.

So two cheers for doing the right thing. But not three.

The Case Against Postal Banking

| Wed Nov. 12, 2014 3:23 PM EST

Dean Baker thinks the Washington Post is wrong to imply that the postal service hasn't been aggressive about improving its productivity. Agreed. Then this:

The other point is that the Postal Service could improve its finances by expanding rather than contracting. Specifically, it can return to providing basic banking services, as it did in the past and many other postal systems still do. This course has been suggested by the Postal Service's Inspector General.

This route takes advantage of the fact that the Postal Service has buildings in nearly every neighborhood in the country. These offices can be used to provide basic services to a large unbanked population that often can't afford fees associated with low balance accounts. As a result they often end up paying exorbitant fees to check cashing services, pay day lenders and other non-bank providers of financial services.

Color me skeptical. I know this sounds like a terrific, populist idea, but I can think of several reasons to be very cautious about expansive claims that the USPS is uniquely situated to provide basic banking services. Here are a few:

  • What's the core competency that would allow USPS to excel at banking? The Inspector General says that "the first and possibly most important factor is the sheer ubiquity of the Postal Service." In other words, they have lots of locations: 35,000 to be exact. But who cares? Physical real estate is the least compelling reason imaginable to think an organization would be great at basic banking. After all, you know who else has lots of branches? Banks. Even after years of downsizing, there are nearly 100,000 branch banks in the United States.
  • What else? The Inspector General suggests "trust and familiarity with the postal 'brand.'" Meh. Americans trust McDonald's too. That doesn't mean they'd flock to do their banking there. This kind of thing reminds me of hundreds of really bad marketing presentations I've attended in my lifetime.
  • When you say "postal banking," most people think about small mom-and-pop savings accounts. But that's not really what the postal service has in mind. The IG report focuses more on (1) payment mechanisms (i.e., electronic money orders), (2) products to encourage savings, and (3) reloadable prepaid cards. The first is fine, but not really "postal banking." The second is problematic since even the IG concedes that the reason poor people tend not to save is "largely due to a lack of disposable income among the underserved." That's quite an understatement, and it's not clear what unique incentives the postal service can offer to encourage savings among people who have no money to save. That leaves prepaid cards—and maybe a good, basic prepaid card sponsored by the federal government is a worthwhile idea. But that's really all we have here.
  • Finally, there's the prospect of providing very small loans. But as much as we all loathe payday lenders, there's a reason they charge such high rates: they also have high rates of default. The postal service can charge less only by (a) losing money or (b) providing loans only to relatively good customers. If you read the IG report, they basically recommend the latter. It's not clear to me that this is truly an underserved niche.
  • Yes, other countries have postal banking services. But these were mostly established long ago, before commercial banking became ubiquitous. It may have been a good idea half a century ago, but that doesn't mean it's a good idea now.

If the government wants to provide basic banking services for the poor, it's not clear to me why USPS should do it. They have literally no special competence at this, and the motivation behind it is to provide a revenue stream that offsets losses from mail services. That's just dumb. Why on earth should public banking services subsidize public mail services? They have nothing to do with each other.

If we really want some kind of government-sponsored basic banking service, we should simply create one and partner with commercial banks to offer it. If this is truly profitable, banks will bid to host these accounts. If it's not, the subsidies will show up directly in the annual budget accounts. That's the way it should be.

I'm not yet convinced that this is a good idea to begin with, but I could be persuaded. However, if it is a good idea, there's honestly no reason to get the postal service involved in this. We already have a Treasury Department, and we already have a commercial banking industry. They truly do have core competencies in offering financial services. Why not use them instead?

UPDATE: Republicans May Oppose China Climate Deal, But Change Is Coming Anyway

| Wed Nov. 12, 2014 10:45 AM EST

Speaking of climate change, Politico reminds us today that although Republicans may blindly oppose any and all plans to reduce greenhouse gas emissions, there's a whole lot already baked into the cake that they can't do much about:

The coming rollout includes a Dec. 1 proposal by EPA to tighten limits on smog-causing ozone, which business groups say could be the costliest federal regulation of all time; a final rule Dec. 19 for clamping down on disposal of power plants’ toxic coal ash; the Jan. 1 start date for a long-debated rule prohibiting states from polluting the air of their downwind neighbors; and a Jan. 8 deadline for issuing a final rule restricting greenhouse gas emissions from future power plants. That last rule is a centerpiece of Obama’s most ambitious environmental effort, the big plan for combating climate change that he announced at Georgetown University in June 2013.

....The administration was committed to its upcoming deadlines many months ago, in some cases under court order, after postponing a number of the actions until after the 2012 or 2014 elections. Now that Obama is almost out of time, they’re coming all at once.

On deck are even more climate actions that will stretch well into 2015. In June, EPA is due to put out a final version of its rule for cutting greenhouse gases from the nation’s existing power plants — the linchpin of Obama’s entire climate effort.

Now, this is probably not enough to meet even the modest goals that Obama agreed to with China, but it's unquestionably the most ambitious effort of any president ever. And there's not much that Republicans can do to stop it. They can delay some of this stuff a bit, but that's just window dressing. Once the final rules are in place, there's nothing they can do to roll them back without Democratic support. And that's not likely to come.

Unlike Obama's threatened immigration rules, these are all things that have been in the pipeline for years. Obama doesn't have to take any active steps to make them happen, and Republicans can't pretend that any of them are a "poke in the eye," or whatever the latest bit of post-election kvetching is. This stuff is as good as done, and second only to Obamacare, it's right up there as one of the biggest legacies of Obama's presidency.

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BREAKING: Climate Deal May Face Republican Opposition

| Wed Nov. 12, 2014 10:23 AM EST

As the capstone of an "unexpectedly productive two days of meetings" between President Obama and Chinese President Xi Jinping, a deal was announced yesterday that called on both the US and China to begin reducing emissions of greenhouse gases. Mark Landler of the New York Times tosses in this deadpan paragraph about halfway through his dispatch:

Administration officials acknowledged that Mr. Obama could face opposition to his plans from a Republican-controlled Congress. While the agreement with China needs no congressional ratification, lawmakers could try to roll back Mr. Obama’s initiatives, undermining the United States’ ability to meet the new reduction targets.

Um, yeah. I guess that's a possibility.

I don't quite remember, but maybe someone can remind me. Are there any Republicans left in Congress who will publicly admit that climate change is both real and manmade? There must be one or two, right? I just can't remember who they might be.

The Great Wage Slowdown Finally Takes Center Stage

| Tue Nov. 11, 2014 2:01 PM EST

I'm feeling better today, but still not really in good blogging condition. So just a quick note: it appears that the great wage slowdown is finally getting lots of mainstream attention. Why? Because apparently the midterm results have persuaded a lot of people that this isn't just an economic problem, but a political problem as well. In fact, here's the headline on David Leonhardt's piece today:

The Great Wage Slowdown, Looming Over Politics

Josh Marshall makes much the same point with this headline:

Forget the Chatter, This is the Democrats' Real Problem

Both are saying similar things. First, growing income inequality per se isn't our big problem. Stagnant wages for the middle class are. Obviously these things are tightly related in an economic sense, but in a political sense they aren't. Voters care far less about rich people buying gold-plated fixtures for their yachts than they do about not getting a raise for the past five years. The latter is the problem they want solved.

Needless to say, I agree, but here are the two key takeaways from Marshall and Leonhardt and pretty much everyone else who tackles this subject: (1) nobody has any real answers, and (2) this hurts Democrats more than Republicans since Democrats are supposed to be the party of the middle class.

I'd say #1 is obviously true, and it's a huge problem. But #2 is a little shakier. Sure, Republicans are the party of business interests and the rich, but voters blame their problems on whoever's in power. Right now, Democrats have gotten the lion's share of the blame for the slow economy, but Republicans rather plainly have no serious ideas about how to grow middle-class wages either. They won't escape voter wrath on this front forever.

I'm not going to try to say more about this right now. I just wanted to point out that this is finally starting to get some real attention. And that's good: it's one of the great economic trends of our time, and therefore one of the great political trends as well. For a short rundown of the other great trends of our time, I recommend this piece. I wrote it a couple of years ago, and I continue to think these are the basic battlegrounds our politics are going to be fought on over the next decade or two.

Housekeeping Note

| Mon Nov. 10, 2014 3:10 PM EST

Sorry folks. Not a good day today. Hopefully I'll be back tomorrow.

Republican Agenda Starts to Take Shape

| Mon Nov. 10, 2014 12:48 AM EST

Reading between the lines, I gather that Republicans are starting to coalesce around a legislative agenda to celebrate their recent midterm victory:

  • Ban abortions after 20 weeks.
  • Wipe out all of Obama's new and pending EPA regulations.
  • Repeal Obamacare bit by bit.
  • Figure out a way to obstruct Loretta Lynch's nomination as Attorney General.

Oh, there's still some desultory happy talk about tax reform and fast-track trade authority and other "areas of agreement," but that seems to be fading out. Poking a stick in President Obama's eye is very quickly becoming the order of the day.

And no reason not to, I suppose. Republicans won, after all. But they shouldn't be surprised if Obama continues to plan to poke back.