Kevin Drum

Chart of the Day #2: Wage Growth Is Still Lousy

| Fri Nov. 7, 2014 11:52 AM EST

In my post earlier this morning about jobs growth, I mentioned that wage growth continues to be stuck at about zero after accounting for inflation. This probably deserves a chart of its own to make it clear what things look like, so here it is: wage growth after inflation since the recovery began in 2010. As you can see, real wages have been bouncing along slightly above and slightly below zero for four years now. If you use alternate measures of inflation, the trend is even worse.

This is the basic lay of the land. Yes, the economy is improving and jobs are becoming more plentiful. But most of us have seen our pay stagnate for four years and counting. That's one of the reasons the public mood remains so sour.

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Chart of the Day: Net New Jobs in October

| Fri Nov. 7, 2014 10:50 AM EST

The American economy added 214,000 new jobs in October, but about 90,000 of those jobs were needed just to keep up with population growth, so net job growth clocked in at 124,000. That's about the same as last month—in fact, about the same as the past nine months—and it's a fairly solid number. In addition, the headline unemployment rate ticked down to 5.8 percent, and this was a real gain, not a chimera due to more people giving up and leaving the workforce. In fact, both the labor force participation rate and the employment-population ratio were up.

This is all good news. It's not evidence of a roaring economy, but it's solid good news. As usual, the main blemish comes in wage growth, which continues to be stuck at about zero after accounting for inflation. In other words, the economy is growing, but it's still not growing fast enough to truly tighten up the labor market. When we start seeing healthy wage gains, that will be the first sign that we've truly put the Great Recession behind us. We're not there yet.

President Obama Can Safely Keep His Veto Pen in Mothballs

| Fri Nov. 7, 2014 12:22 AM EST

Ramesh Ponnuru is completely correct about this:

A strange amnesia has settled over much of the political world. I can't count the number of articles I've read saying that the new Republican Congress is going to pass all sorts of legislation that President Barack Obama will veto. The latest example: George Will's syndicated column urging the Republicans to pass several bills even if it results in "a blizzard of presidential vetoes."

There's no blizzard in the forecast. Senate Democrats will have the power to subject almost all legislation to filibuster (a word that does not appear in Will's column). Overcoming a filibuster takes 60 votes. So Republicans, who will probably end up with 54 seats, would have to win over Democrats to get legislation through the Senate to the president's desk. If they can do that, the legislation is unlikely to draw a veto.

I've noticed the same thing Ponnuru did, and it's weird. Is there some kind of unspoken assumption among pundits that Democrats aren't going to routinely insist on a 60-vote threshold for Republican legislation? If so, I don't know why. It seems pretty obvious to me that they will. At the very least, it allows them to keep most legislative negotiating leverage safely within the Senate, which is just where they want it.

Basically, the next two years are going to be just like the last two. The only thing that will change is the order of the signatures on the consent agreements.

Mitch McConnell Puts His Finger on the Pulse of the American People

| Thu Nov. 6, 2014 7:01 PM EST

Mitch McConnell says that repealing Obamacare outright is probably unrealistic, but Republicans will nonetheless try to chip away at it:

But with Mr. Obama sure to block any repeal bill passed in the Senate and Republican-controlled House, Mr. McConnell indicated that Senate Republicans will turn their attention to peeling back “pieces of it that are deeply, deeply unpopular with the American people.” He cited the law’s tax on medical devices, its requirement that big employers provide insurance to all workers clocking 30 hours a week or more or pay a fee, and its mandate that most Americans carry insurance or pay a fee.

Let me get this straight. McConnell thinks a 2.3 percent tax on manufacturers and importers of medical devices is deeply, deeply unpopular? He thinks a requirement that employers provide insurance for anyone who works more than 30 hours a week is deeply, deeply unpopular? He thinks the individual mandate is deeply, deeply unpopular?

OK, I'll give him the last one. The individual mandate is moderately unpopular. Of course, it's also crucial to the functioning of the law, and McConnell knows perfectly well that Obama won't allow it to be repealed. So that leaves the device tax and the 30-hour rule. The former is mostly opposed by medical device lobbyists, while the latter is mostly opposed by medium-sized businesses who want the ability to cancel health coverage for workers merely by reducing their workweek to 39 hours. My wild guess is that neither of these things is deeply, deeply unpopular with the American people.

But they are unpopular with interest groups that Republicans care about. So they're on the chopping block.

My Fearless Predictions for the Next 18 Months

| Thu Nov. 6, 2014 2:53 PM EST

We are, tediously, hearing lots of jabber this week about how maybe this election finally sent a message to Washington that the public wants government to work, dammit. Compromise is the order of the day. Republicans need to show that they can govern. Obama needs to show he can be flexible.

Meh. I don't see why anyone thinks this. Mitch McConnell has spent six years obstructing everything in sight, and there's no special reason to think that's going to change. John Boehner has spent the past four years in a wholly futile attempt to make his tea party crazies see reason, and there's no reason to think he's suddenly figured out how to do it. President Obama has spent the past two years convinced that executive action is his only hope of getting anything done, and there's not much reason to think he's changed his mind about that. As for the public, they don't want compromise. They want the other side to give in. Nothing has changed there.

In other words, control of the Senate may have changed hands, but the underlying fundamentals of Washington politics have barely budged. With that in mind, here are my predictions about what does and doesn't have a chance of happening over the next 18 months:

Tax reform: Forget it. All the usual fault lines are still around. In fact, with the Republican caucus now more conservative and the Democratic caucus more liberal, the usual fault lines are even bigger than ever. This is a nonstarter.

Immigration reform: Forget it. See above.

Keystone XL: This depends on whether Obama actually cares about it. I've never been sure about that. But my guess is that he doesn't care very much, so some kind of budget deal that includes authority to build the pipeline seems fairly likely.

Trade agreements: This actually seems doable. It's mostly been Democrats who are opposed.

Obamacare repeal: Forget it.

Tweaks to Obamacare: A bit of tinkering around the margins might be possible. The employer mandate, for example, was never a pillar of the law, and it wouldn't hurt much to get rid of it. Ditto for the medical device tax. But that's about it.

Repeal of Obama's environmental regulations. Forget it.

Executive/judicial appointments: This is going to slow to a crawl. It's a good thing Democrats killed the filibuster when they did.

Iran nuclear treaty: This is actually a tough one to predict, partly because I'm not clear on (a) just how far Obama can go without congressional approval, and (b) whether Iran is serious about a deal in the first place. At a guess, though, Congress might very well decide to throw a spanner in the works that kills any chance of a treaty. A bunch of new Republican senators, combined with the existing strength of the Israel lobby, could be enough to make a real difference here.

So there you go. Those are my predictions. Have I missed anything big?

POSTSCRIPT: Oh, and the 2016 candidates for president will be Hillary Clinton for the Democrats and Scott Walker for the Republicans.

Let the Ass Covering Begin!

| Thu Nov. 6, 2014 12:16 PM EST

I'm late to this story, but last night I finally got around to reading the big campaign tick-tock in the Washington Post by Philip Rucker and Robert Costa. The part everyone is talking about is the description of bad blood between President Obama and Senate Democrats, and Exhibit A comes via a series of stunningly bitter comments from David Krone, Harry Reid's chief of staff. Here's how the reporters managed to put the screws to Krone to get him to talk:

This past Sunday, two days before Election Day, Krone sat at a mahogany conference table in the majority leader’s stately suite just off the Senate floor and shared with Washington Post reporters his notes of White House meetings. Reid’s top aide wanted to show just how difficult he thought it had been to work with the White House.

Look: I get that Obama doesn't socialize much with congressional Democrats. Even as someone who's long thought that senators need to get over themselves, there's no question that this is a real failing of Obama's. Schmoozing and scheming are part of the president's job, and if you don't do it you're going to end up with a lot of offended allies.

That said, take a look at that highlighted sentence. Apparently David Krone is such an unbelievable asshole that he actively decided to vent all his bitterness and bile to a couple of reporters solely to demonstrate just how hard poor David Krone's job had been during this election season. He even made sure to bring along his notes to make sure he didn't forget any of his grievances. As an example of preemptive CYA, this is unequaled in recent memory. To hear him tell the story, Dems would have swept to victory if only Obama had been less of a skinflint and given David Krone more money.

You betcha. Please raise your hand if you think lack of money was even on the top ten list of reasons that Democrats lost this year. Anyone? No?

Then there's this bit of whinging, which I've heard over and over:

Exacerbating matters was Obama’s Oct. 2 speech in Chicago, in which he handed every Republican admaker fresh material that fit perfectly with their message: “I am not on the ballot this fall. . . . But make no mistake — these policies are on the ballot, every single one of them.”

“It took about 12 seconds for every reporter, every race, half of the Obama world to say that was probably not the right thing to say,” said a senior Democratic official. It was so problematic that many Democrats wondered whether Obama meant to say it. He did. “It is amazing that it was in the speech,” the official said. “It wasn’t ad-libbed.”

Good God. Are Democrats really delusional enough to convince themselves that this made even the slightest difference? Aside from the fact that virtually no one outside the political junkie community heard this speech, who cares anyway? Republicans had long since made the election all about Obama and his policies, and it didn't matter a whit whether Obama acknowledged this or not. The GOP attack ads were going to be the same either way. If anything, the truth is that Dems might have been better off if they'd been more willing to face the reality Obama tried to warn them about: that this election was about Obama's policies whether anyone liked it or not. Instead of cowering in their corners, they needed to figure out a way to deal with this.

Obama has made plenty of mistakes over the past year. The healthcare.gov rollout was obviously a debacle that hurt Democrats. Foreign policy has been occasionally tone deaf, even if it's been substantively fairly solid. The flip-flop on immigration was inept. But Obama has raised plenty of money. He's been willing to either campaign or keep his distance as circumstances dictate. His relatively low approval ratings obviously hurt Democrats, but he was far from their biggest problem. They better face up to that sometime soon.

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Nope, the Tax Revolt Isn't Dead Yet

| Thu Nov. 6, 2014 11:02 AM EST

Alec MacGillis writes that there was a very specific reason for the surprising Republican win on Tuesday in the Maryland governor's race:

I knew Democrat Anthony Brown was in trouble in the race for Maryland governor when every single voter I spoke with Tuesday—including several who voted for Barack Obama—at a polling station in a swing district in Baltimore County, just outside the Baltimore city line in the Overlea neighborhood, brought up the rain tax.

The rain tax is a “stormwater management fee” signed into law by Governor Martin O’Malley in 2012 that requires the state’s nine largest counties, plus Baltimore city, to help fund the reduction of pollution in Chesapeake Bay caused by stormwater runoff. The tax is hardly draconian—in Baltimore County, homeowners pay a flat fee that can range from $21 to $39, while commercial property owners are assessed based on the proportion of impervious surfaces (parking lots, roofs, etc.) on their land.

As a native Californian, this naturally brings back memories of the infamous "car tax," which Arnold Schwarzenegger cynically rode to victory in a special election in 2003. And this wasn't even a new tax. A few years earlier the vehicle license fee had been lowered under Governor Gray Davis, but with a proviso that it would go back up if state finances deteriorated. Sure enough, when the dotcom boom turned into the dotcom bust, the state budget tanked and eventually Davis signed an order restoring the old VLF rates. But the VLF never actually increased; it merely returned to the same level it was at before it had been cut.

It didn't matter. Schwarzenegger ran endless TV commercials starring ordinary citizens who simply couldn't believe that anyone expected them to survive if they had to pay the outrageous Democrat car tax. It was just more than a body could bear. (Yes, that really was the tone of the ads. I'm not making it up.) All this caterwauling was over an average of about $70 in taxes that everyone had been paying with no noticeable distress just four years earlier.

And Arnold won. Cutting the VLF made California's finances even worse, of course, as did Arnold's cynical-beyond-all-imagining bond measure a couple of years later to make up for the revenue shortfall. As usual, Californians were somehow suckered into thinking that this was free money of some kind, not something that would cost more in the long run than just paying the VLF in the first place.

Anyway, this is just a long-winded way of saying that lots of liberals have spent the past few years predicting the end of the tax revolt. I plead guilty to this once or twice myself. It generally seems to happen whenever some state or another successfully passes a tax for something, but as California showed a decade ago and as Maryland showed yesterday, it ain't so. I think it's fair to say that raising taxes is no longer an automatic kiss of death, but it's still pretty damn dangerous. For the most part, we still live in Grover Norquist's world.

Harry Reid's Hubris? Not So Fast.

| Wed Nov. 5, 2014 5:38 PM EST

This cracks me up. Via Andrew Sullivan, here is Cato's Roger Pilon cackling over the chickens coming home to roost for Harry Reid:

How sweet it is. Less than a year ago—on November 21st, to be exact—Harry Reid went nuclear....He ended the availability of the filibuster for most executive branch nominations, not by the two-thirds vote that Senate rules had long required but by a simple majority.

....And where will those remaining Democratic senators who voted for Harry Reid’s nuclear option be sitting? Why on the minority side, watching Republicans enjoy their newly acquired power to block controversial Democratic nominees by the vote of a mere majority—all because of Harry’s hubris.

Republicans are now able to block Obama's nominees by a mere majority! Imagine that!

Just to state the obvious, the nuclear option merely removed the ability for a minority to block presidential appointments. Under every version of Senate rules in history, a majority could always block them. So nothing has changed and Reid is paying no "price" for his hubris.

(Technically, I suppose the price Reid is paying is the ability to filibuster his own president's nominees. But I'm pretty sure that was never a big part of his playbook.)

There's something about the institutional filibuster that drives men mad. Over time, it somehow makes "mere majorities" seem almost totalitarian. But mere majorities are the very stuff of democracy, and they've always been allowed to block action. That was the case on November 21st of last year, and it's still the case today.

Don't Just Do Something, Stand There!

| Wed Nov. 5, 2014 3:05 PM EST

National Review has an editorial today that's headlined—deep breath, folks:

The Governing Trap

No, that's not the Onion. That's for real. NR is earnestly begging Republicans not to try to actually govern the country:

The desire to prove Republicans can govern also makes them hostage to their opponents in the Democratic party and the media. It empowers Senator Harry Reid, whose dethroning was in large measure the point of the election. If Republicans proclaim that they have to govern now that they run Congress, they maximize the incentive for the Democrats to filibuster everything they can — and for President Obama to veto the remainder. Then the Democrats will explain that the Republicans are too extreme to get anything done.

I wonder if NR's editors have enough of a sense of humor left to be embarrassed by this? After all, this is precisely what Republicans have been doing to Democrats for six years: obstructing everything imaginable and then snickering as Dems helplessly try to explain to voters that Washington gridlock isn't their fault, it's the fault of that mean Mitch McConnell. Clearly NR understands how well this worked and wants to protect Republicans from having their own playbook used against them.

Beyond that, NR is afraid that trying to govern will just upset one faction or another in the GOP's delicately balanced coalition, and that makes no sense. Who needs a bunch of crazy tea partiers stirring up trouble again? There's no reasoning with those folks! Better to just lie low.

As cynical political strategy, it's hard to argue with the logic here. Republicans probably are better off doing nothing for the next two years except mocking President Obama and throwing out occasional symbolic bits of red meat to keep the rubes at bay. Usually, though, this is the kind of thing you talk about quietly behind closed doors. It's a little surprising that we've gotten to the point where apparently this level of cynicism is so routine that no one thinks twice about spelling it out in public in explicit detail. Welcome to modern politics.

It's Power Outage Day!

| Wed Nov. 5, 2014 11:36 AM EST

I almost forgot, but an Edison worker just knocked on my door to remind me that power is scheduled to go out here for a few hours. The last time this happened, I figured I was all set: my tablet was charged and my cell phone hotspot was ready to go. Who needs electricity? Unfortunately, it turned out that the local T-Mobile tower was inside the maintenance area, so it went down along with everything else. No hotspot, no internet connection, no blogging.

This time perhaps I'll be luckier. But if there's nothing new on the blog for the next few hours, now you know why.