Kevin Drum

Democrats Are In For a World of Hurt If They Keep Running From Obamacare

| Tue Mar. 18, 2014 7:59 AM PDT

Last month, when the latest Obamacare horror story turned out to be largely invented out of whole cloth, I speculated about what this means. "I'm a diehard defender of Obamacare," I said, "and even I concede that there ought to be at least hundreds of thousands of people who are truly worse off than they were with their old plans. But if that's the case, why is it that every single hard luck story like this falls apart under the barest scrutiny?" Maybe it means that Obamacare isn't actually hurting very many people at all.

But this question can be turned around. There ought to be lots of people who have been helped by Obamacare too. So why haven't the airwaves been blanketed with their stories? Dave Weigel says the answer here is simpler: yes, there are plenty of feel-good Obamacare stories. But Democratic campaigns have neither the money nor, apparently, the desire to use them:

Take Families USA, the decades-old health care awareness organization, which regularly connects journalists to sources. Last October, Families USA received $1 million from the Robert Wood Johnson Foundation to finance more reporting, more vetting, more sharing of stories. That money helped Families USA expand its team of full-time vetters from one to three. It has not, so far, helped any Democrats running terrified from Obamacare.

“We do not pass along stories to political campaigns,” says Ron Pollack, the executive director of Families USA. “When reporters are doing stories, we pass on leads—that’s what we call them—if the individuals consent. But we do not ever send stories to political campaigns.”

....“There simply is no liberal Koch operation,” complains Paul Begala, a former Clintonite and a strategist for Priorities USA in 2012. “Rather than a national ad campaign, which is not realistic, Dems should look to smart 2014 candidates to engage this issue along [these] lines. Once someone does it, and it works, others will replicate in their states/districts. Do I think Dems should respond to the Koch ads? Absolutely. But it is going to be a piecemeal response.”

So Families USA can't or won't help candidates, and the candidates themselves don't have the money to compete. And even if they did, their fear of Obamacare is so palpable that they're probably afraid to campaign positively on it anyway. This is, needless to say, a self-fulfilling prophecy: Republicans make Obamacare toxic with misleading ads; Democrats are afraid to fight back because they don't want to be tainted by Obamacare; and this leaves the field wide open to making Obamacare even more toxic.

Democrats are going to be in a world of hurt this year if they keep this up. There's no running from Obamacare. There just isn't. If they want to win, they'd better emerge from their fetal crouch and start fighting back. Nobody likes candidates who won't stand up and defend their own party's achievements.

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Are Corporations Hoarding Cash? It's Complicated.

| Mon Mar. 17, 2014 7:31 PM PDT

Over at the newly launched—or relaunched—, Ben Casselman updates us on the enormous mountains of cash that have been piling up in company treasuries ever since the recession ended:

One of the early narratives of the economic recovery was that companies were “hoarding” cash....The data backed up the story: The Federal Reserve in 2011 reported that American companies had more than $2 trillion stashed away in overflowing vaults.

Then the Fed revised its data. New figures released in early 2012, based on more complete tax filings, showed that American companies actually had close to half a trillion dollars less cash than previously thought....The revision didn’t just change the numbers—it undermined the whole narrative.

....It’s understandable that so many experts bought into the “cash on the sidelines” narrative. What’s less understandable is that they’re still buying into it. Despite the big revision, the corporate-cash narrative remains very much alive.

Hmmm. I think there's a little more to it. It's true that two years ago the Fed revised down its corporate cash estimate for the first quarter of 2012 from $2.2 trillion to $1.7 trillion.1 But even taking that into account, corporations have been increasing their cash holdings about 15 percent per year since 2008. In 2013 corporate cash increased another 12 percent. That's a pretty steep increase.

Beyond that, David Cay Johnston estimates that when you count cash worldwide, not just domestically, American corporations are holding something like $7.9 trillion in liquid assets. He calculates that this number has grown six times faster than corporate revenues since 1994. "When liquid assets grow six times faster than revenues, it tells you that companies are hoarding cash, not investing or spending."

Now, it's true that the huge spike initially reported in 2011-12 was mostly illusory. But it's not clear to me that this undermines the entire "cash hoarding" narrative. Even without that spike, corporate cash holdings have been growing strongly over the past decade. What's more, corporate profits have been booming ever since the recession ended—without a correspondingly dramatic increase in capital expenditures.

There are plenty of other arguments floating around. If you remove the tech sector, the whole phenomenon looks less dramatic. Corporate debt has been increasing too thanks to ultra-low interest rates, which suggests that companies are simply making a rational decision to borrow rather than spend their own cash. Cash overseas is piling up because companies don't want to repatriate it and pay the taxes that would be due. Etc.

In other words, it's complicated. I think Casselman has a point that the Fed's revision wasn't very widely reported or acknowledged, but I'm not sure that's quite as damning as he suggests. The corporate cash pile-up, though less startling than we thought in 2012, is still real. Probably.

1Actually, this is an estimate of "liquid assets." We're just using cash here as shorthand.

The Strange, Suicidal Odyssey of Dave Camp's Tax Reform Plan

| Mon Mar. 17, 2014 2:38 PM PDT

A couple of weeks ago I wrote about Dave Camp's tax reform proposal, and I was predictably dismissive. It was a decent effort, I said, but it was DOA before Camp even officially announced it. Still, "I'll be interested in following the reaction as everyone figures out just whose ox would be gored by his various bullet points. Should be fun."

In reality, I just forgot about it entirely. But it turns out that the biggest ox being gored by Camp's plan was Wall Street, which was very much not amused by his proposal to levy a small tax on large banks. They threatened to cancel all GOP fundraisers as long as the bank tax was on the table, and this was enough to bury Camp's proposal once and for all.

So far, so boring. Camp's proposal never stood a chance, and the fact that Wall Street happened to put the final nail in the coffin is basically just a footnote. Jon Chait, however, gets at something more interesting:

The whole point of the push-back from Wall Street, which has reinforced a wildly unenthusiastic reception within the GOP, is not only to prevent Republicans from striking a deal with Democrats.... It’s to murder his plan in a public way so as to prevent it from becoming the baseline for any future Republican agenda. That effort seems to be meeting with predictable, depressing success.

It leaves unanswered the basic mystery of why Camp thought he could write a plan like this in the first place. Sources I’ve asked believe Camp was playing a kind of double game, an interpretation that closely fits all the public reporting. He promised Republicans he could produce a tax reform that would lower the top rate to 25 percent, a holy grail of GOP policymaking, and which would produce a massive windfall for the rich. He had also given lip service to make sure his reform did not decrease tax revenue or increase the tax burden on the poor and middle class.

Meeting all these goals was arithmetically impossible. But Republican fiscal proposals usually come face-to-face with arithmetic impossibility. It is their oldest and most bitter foe. Usually they step around with some kind of evasion or chicanery. Camp actually gave in and acceded to his other, un-emphasized goals of revenue and distributional neutrality (that is, ensuring his plan raised the same amount of tax dollars and didn’t shift the burden downward). Nobody outside of Camp and a handful of allies seems to have realized this until the plan was already out in the open.

Unfortunately, this still leaves the basic mystery unanswered. It's true, as Chait says, that the usual Republican promise—we can lower top rates to 25 percent and make up for it by closing tax breaks—is plainly impossible and everyone knows it. It's a nice applause line, but it only works as long as the tax breaks are never spelled out, something that requires even more than the usual amount of smoke and mirrors we expect from politicians.

But here's the thing: obviously Camp knew this. Just as obviously, he knew that making the math work out would produce a plan that Republicans and their interest groups would hate. In the end, he could reduce the top rate only to 35 percent, and only at the cost of killing or reducing some very specific tax breaks that rich people didn't want killed or reduced.

Camp has been in Congress for more than two decades. He's hardly an ivory tower naif, and he must have known perfectly well that his plan would do little except to expose Republican hypocrisy on taxes. So why did he do it?

GOP Offers Up a New Health Care Propo....z z z z

| Mon Mar. 17, 2014 10:25 AM PDT

I hear that House Republicans have a shiny new health care plan they plan to introduce sometime soon. Before I read past the headlines, let me take a guess at what's in it:

  • Tort reform
  • Health savings accounts
  • Interstate purchase of health plans
  • High-risk pools

OK, now let's take a look. Here is Robert Costa in the Washington Post:

The plan includes an expansion of high-risk insurance pools, promotion of health savings accounts and inducements for small businesses to purchase coverage together. The tenets of the plan — which could expand to include the ability to buy insurance across state lines, guaranteed renewability of policies and changes to medical-malpractice regulations — are ideas that various conservatives have for a long time backed as part of broader bills.

Hmmm. It looks like I missed a couple of things: "inducements" for small businesses and "guaranteed renewability" of policies. Still, I nailed the main points. That's a pretty amazing feat of crystal ball gazing, isn't it?

No, of course not. It's like predicting that a Republican tax plan will include lower rates on the rich. They might package it in different wrapping paper, but it's always the same old stuff. And it's worth keeping in mind that guaranteed renewability of policies has been the law for a long time, so it's unlikely the GOP plan actually offers anything substantive on that point. Ditto for the small business "inducements," which will probably just turn out to be tax cuts of some kind.

Basically, Republican health care proposals are always, always, always a repackaging of the four tired old points above. Nobody seriously thinks that any of them will expand access to health care in any serious way, but that doesn't matter. These are the only things Republicans can all agree on, so that's what they always propose. Whether it works or not isn't really the point.

If you want more detail about all this, rather than just my exasperated Cliff Notes version, check out Jonathan Cohn here. He has it all covered.

Obamacare is Probably Safe, But It's Not a Slam Dunk

| Mon Mar. 17, 2014 9:52 AM PDT

I was chatting with a friend this weekend about what Republicans will do if they manage to win total control of the government in 2016. Will they abolish the filibuster and repeal Obamacare? I think the odds are low. At a guess, I'd put the chances of winning total control at p=20%, the conditional odds of abolishing the filibuster at p=50%, and the conditional odds of then repealing Obamacare at p=50%. (Why so low for repeal? Because by 2017 there are going to be a lot of people benefiting from parts of Obamacare; at least a few Republicans will recognize that you really can't repeal just the unpopular bits; and the health care industry will have spent billions of dollars committing itself to operating within the framework of the law.) So that's about a 5% chance that Obamacare dies in 2017. Not zero, but not very significant either.

But what about 2015? What if Republicans win the Senate later this year? Paul Waldman surveys the landscape and notes that House and Senate Republicans are offering very different campaign visions of what to do about Obamacare:

See the difference? The senators accept that the ACA is law and are thinking about how they’d like to change it. The House members are coming up with another way to make a futile, symbolic shaking of their fists in the general direction of the White House. And this may offer a clue to how legislating would proceed in a Republican Congress. The House, still dominated by extremely conservative Republicans for whom any hint of compromise is considered the highest treason, could continue to pass one doomed bill after another, while the Senate tries to write bills that have at least some chance of ever becoming law.

And that would be just fine with Barack Obama. If he’s faced with both houses controlled by the opposition, there’s nothing he’d rather see than them fighting with each other and passing only unrealistic bills that he can veto without worrying about any backlash from the public.

Allow me to be a bit more pessimistic. Even if they lose the Senate, Democrats will still have the filibuster available to them, and they'll use it. And as Waldman says, Obama can veto anything he doesn't like.

But there are two wild cards here. First, the usual way that you get difficult provisions passed is by tacking them onto must-pass legislation. Pentagon appropriations bills are the traditional favorites. Depending on the provision, this might require monkeying around with the reconciliation rules, but Republicans have few scruples about that. So the odds are that we'll end up with yet another series of showdowns. Maybe not huge debt-ceiling style showdowns, but big fund-the-military type showdowns. And the question is who wins.

And that brings up the second wild card: will Democrats stay united in defense of Obamacare? After watching Dems scatter like frightened children over the nomination of Debo Adegbile to lead the Justice Department's civil rights division, and then scatter again when the NRA started mau-mauing them over Vivek Murthy's nomination as Surgeon General—well, you have to wonder, don't you? Add in the fact that Democrats have been running away from Obamacare for months, and it's hardly unrealistic to think that they might be less than adamantine when it comes to a showdown over protecting Obamacare while Fox News is pillorying them nightly as playing politics with our brave troops in order to save a failed health care policy.

As it happens, I'd say the odds of caving in are fairly low. Even if Republicans win the Senate, they'd need eight or nine Democrats to defect in order to break a filibuster. And Obama isn't running for anything. He can afford to hold out.

Still, it's not a slam dunk. Republicans won't be able to repeal Obamacare if they win the Senate later this year, but there's a chance they could do it some damage. It all depends on how willing Democrats are to defend their principles. Unfortunately, that's always a thin reed.

Dorian Nakamoto Hires Lawyer, Denies Any Bitcoin Connection

| Mon Mar. 17, 2014 8:06 AM PDT

Just a quick update on Dorian Satoshi Nakamoto of Temple City, the man Newsweek says is the inventor of Bitcoin. He has hired a lawyer and released a statement:

In the statement, Nakamoto says: "I did not create, invent or otherwise work on Bitcoin. I unconditionally deny the Newsweek report....My background is in engineering. I also have the ability to program. My most recent job was as an electrical engineer troubleshooting air traffic control equipment for the FAA. I have no knowledge of nor have I ever worked on cryptography, peer to peer systems, or alternative currencies."

The Newsweek story also notes what appears to be a strange gap in his resume over the last decade, the time during which the bitcoin code was written and released. Nakamoto explains:

"I have not been able to find steady work as an engineer or programmer for ten years. I have worked as a laborer, polltaker, and substitute teacher. I discontinued my internet service in 2013 due to severe financial distress. I am trying to recover from prostate surgery in October 2012 and a stroke I suffered in October of 2013. My prospects for gainful employment has been harmed because of Newsweek's article."

I'll confess that I'm surprised by how this story has progressed. The fact that the "Satoshi Nakamoto" who invented Bitcoin managed to stay anonymous for several years isn't too remarkable. Trying to identify a single person out of 7 billion is hard. But once a particular person was identified, I expected that the online community would turn its talents on the guy like a laser beam, fairly quickly establishing without doubt whether he is or isn't the right guy. But that hasn't really happened. We still don't know for sure.

Along with his unconditional statement, though, the fact that Dorian Satoshi Nakamoto hasn't been conclusively identified as the Bitcoin founder is bad news for Newsweek. If he were really the guy, there would probably be a whole lot more evidence today than there was two weeks ago.

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One Man's True Experience With the Naked Web

| Sun Mar. 16, 2014 8:42 AM PDT

One thing led to another this weekend, and yesterday I found myself playing around with Internet Explorer on Windows 8.1. It had probably been 20 years since I'd last used it. It turned out to be surprisingly nice once I got everything set up, so then I got curious and set up the tile version too. (That's the Windows RT version, aka the Metro version, aka the Modern UI version, aka whatever Microsoft is calling it this month.) It was actually fairly nice too. I have a few UI quibbles here and there, but that's true of every app. Generally speaking, it was pretty good.

But. It turns out that the MUI version of IE doesn't support add-ons. Don't ask me why. That means I couldn't install AdBlock. And holy cow: during the hour or so that I spent checking things out I felt like I was under assault. My browser was deluged with gigantic banner ads, flash ads, auto-play video ads, animated GIF ads, ads that danced across my screen, and a relentless series of popup ads that apparently have figured out how to foil the built-in popup blocker.

I've spent the last ten years or so browsing with ad blocking of some kind enabled. This was the first time in a long while that I had been forced to spend time on the naked web, so to speak. Have I just lost my tolerance for this kind of thing? Or has advertising on the web really gotten an order of magnitude worse since the early aughts? This is an academic question, since needless to say I won't be using the MUI version of IE anytime soon, but I'm still curious. What say you, commenters?

US Announces Plan to Give Up Control Over Internet Plumbing

| Fri Mar. 14, 2014 3:01 PM PDT

Well, this is interesting:

U.S. officials announced plans Friday to relinquish federal government control over the administration of the Internet, a move likely to please international critics but alarm many business leaders and others who rely on smooth functioning of the Web.

Pressure to let go of the final vestiges of U.S. authority over the system of Web addresses and domain names that organize the Internet has been building for more than a decade and was supercharged by the backlash to revelations about National Security Agency surveillance last year.

I won't pretend I'm thrilled about this, even if it was probably inevitable at some point. Whatever else you can say about the United States and the leverage its intelligence community gets from control over internet plumbing, it's also true that the US has been a pretty competent and reliable administrator of the most revolutionary and potentially subversive network ever invented. Conversely, global organizations don't have a great track record at technocratic management, and world politics—corrosive at best, illiberal and venal at worst—could kill the goose that laid the golden egg. I certainly understand why the rest of the world chafes at American control, but I nonetheless suspect that it might be the best of a bad bunch of options.

Then again, maybe not. There are also plenty of global standards-setting organizations that do a perfectly good job. Slowly and bureaucratically, maybe, but that's to be expected. Maybe ICANN will go the same way. We'll see.

In any case, I think we can expect Republicans to go ballistic over this.

Friday Cat Blogging - 14 March 2014

| Fri Mar. 14, 2014 11:57 AM PDT

The sun has been back for two weeks now and Domino has decided it's probably safe to come outside. Not very far outside, mind you, but she does adore the stiffly-bristled welcome mat we have outside our front door. It's a great place to scratch an itch, and when you're done, it catches the afternoon sun and provides a lovely napping spot.

In other news, click here and decide if you think I look like a badass. I think perhaps the headline writer was engaging in a wee flight of fancy. However, I commend to my editors the reporter's deadpan note about how I feel about blogging: "For him, it's 'the perfect job,' noting he rarely hears from his bosses at Mother Jones." That, um, didn't quite turn out right, did it?

The United States Is a Data Wonk's Dream

| Fri Mar. 14, 2014 11:24 AM PDT

Via Emily Badger, here's an interesting chart showing which countries are most open with national data. Obviously rich countries do best at this kind of statistical recordkeeping, but some rich countries do better than others, and the US is one of the best. In fact, it would be the best if not for the fact that corporate registration is a state function, and the US therefore scores approximately zero for its lack of a national corporate registry database. Full data for all countries is here. Enjoy.