The TPP trade deal, which has been effectively dead for over a year, got a final stake through its heart on Tuesday when President Trump signed an order pulling the US out. But that doesn't mean the rest of the world is standing still:

The Australian government will push ahead for a Trans-Pacific Partnership trade deal without the United States and is open to Indonesia, China and others seeking to join the agreement....On Monday evening, the prime minister, Malcolm Turnbull, reportedly confirmed Australia’s commitment to the TPP in a phone conversation with Japan’s prime minister, Shinzo Abe.

So that's that. We've given up trade leadership in the Pacific, which means that either trade negotiations will continue without any regard for US interests, or else they'll continue under the explicit leadership of China. Neither one is especially good news for us, and there's no special reason to think that Donald Trump's beloved bilateral trade agreements will be any better than TPP would have been.

So what was the beef with TPP, anyway? There were three things. The first two are what I call the egghead complaints:

ISDS. This is a method for resolving complaints from investors who claim that national laws are interfering with their rights under a treaty. ISDS is very commonly used in international treaties, including in NAFTA, and in practice it's never caused much heartburn for the US. But as investors have used it more often, it's made people increasingly nervous about what it might evolve into. Lefties in particular are afraid that secretive international tribunals will allow multinational corporations to evade labor laws and environmental regulations simply by claiming that they undermine rights guaranteed by TPP. And I suppose that's possible. You never know what the future holds. That said, ISDS was never a serious complaint. A modified version of ISDS could have been negotiated if it was a real deal-killer, or, like Australia, the US could have demanded an exemption from the whole system.

Intellectual property. Generally speaking, countries like Vietnam benefit from TPP because it provides them with greater access for their most valuable exports: manufactured goods. In return, countries like the US benefit because it provides greater protection for their most valuable exports: movies, drugs, music, and other patentable and copyrightable goods. This is pretty standard horsetrading, but plenty of American liberals dislike the idea of forcing our patent laws on poor countries. The problem is that without this, there's really nothing much in TPP for the United States. Poor countries manufacture stuff. Rich countries design and research stuff. Any modern treaty that has something for both sides will end up dealing with both goods and intellectual property.

Neither of these, however, is what really drove opposition to TPP during the past year. If you listen to Bernie Sanders and Donald Trump, the problem with TPP is simple:

American workers will lose jobs. It's hard to know what to say about this. Most analysis suggests that TPP will have a positive impact on GDP and jobs, but that the impact is so small that it's barely noticeable.

Small or not, though, the responsibility of trade deals for the decline of manufacturing in the US has become practically holy writ over the past year. Is this legit? Over at Vox, Brad DeLong says no. Period. However, his post is 8,000 words long, and ominously, over at his own site he says that it does "only a third of what I wanted to do." Clearly, then, we need a shorter Brad DeLong. Here it is:

Very roughly speaking, DeLong's argument is this: everyone agrees that Germany is the poster child for an advanced economy with a great manufacturing policy. And yet, their manufacturing employment has steadily declined for the past half century too, just like ours. So if this has happened to Germany, there's not much of a case for suggesting that the US has done anything especially wrong over the past 50 years. We've simply evolved from a (relatively) poor manufacturing nation into a (relatively) rich services and technology nation. This has nothing much to do with trade policy, either. It's just what rich countries do. What's more, it's a decidedly good thing overall, even if it does affect a smallish number of people badly.

Now, you should click the link and read all 8,000 words if you want to understand the details. For example, DeLong says that, actually, Germany has done a little better than us. Good policy might have saved about 12 percent of our manufacturing jobs. On the flip side, he also tells us that the people badly affected by manufacturing losses aren't generally affected that badly. "Your income over the next 20 years turns out to be about 10 percent lower than the income of similarly situated people who are not caught in a mass layoff. You don’t, as a rule, permanently go from a $35-an-hour manufacturing job to a $9-an-hour McDonald’s job."

Still, some people do suffer from manufacturing losses, and 10 percent isn't peanuts. The usual neoliberal response is that we should use the overall benefits from trade deals to compensate the small number of losers. The problem, as DeLong acknowledges, is that no matter how much we chant that mantra, we never seem to actually do it. So it's hardly surprising that working-class folks are decidedly cynical whenever they hear grand promises about retraining and relocation benefits and so forth. That's what made opposition to trade deals such a powerful source of demagoguery for Donald Trump and Bernie Sanders over the past year.

Here on the left, in fact, neoliberal—to the extent that it still has any meaning—is usually used as a synonym for corporate Wall Street shill. And that's when critics are being nice. But I persist anyway. Despite its flaws—and there are many—the neoliberal project, which includes broad trade agreements like TPP, has produced big benefits for both rich and poor countries alike. I'll continue to fight for better redistribution of the benefits of these deals, but I won't let the perfect be the enemy of the good. Neither ISDS nor intellectual property are great reasons to oppose TPP, nor is it likely to cost us any jobs.

In fairness, I'll concede that TPP won't do a huge amount of good either. It's a decent treaty, but not a bombshell. Still, the good outweighs the bad, and abandoning it cedes trade leadership in the Pacific to the very-much-worse-than-neoliberal leaders of China.

I'm not blind or deaf, and I understand that this is obviously not the right time for more trade deals, but I nonetheless wish that cooler heads had prevailed and we'd let this one pass. It would have sent a strong signal to other countries that the US wants to do business with them; that we support the continued expansion of liberal capitalism; and that we intend to maintain ourselves as a leader and counterweight to illiberal China in the Pacific. It's a small opportunity missed, but still an opportunity missed.

NOTE: And one more thing. Hillary Clinton didn't lose because she was soft on trade and lost the votes of disgruntled working-class whites. She lost because of James Comey's letter. Don't let anyone sucker you into believing otherwise.

On Tuesday, Flint's water system was officially declared in compliance with federal standards:

Flint's water system no longer has levels of lead exceeding the federal limit, a key finding that Michigan state environmental officials said Tuesday is good news for a city whose 100,000 residents have been grappling with the man-made water crisis. The 90th percentile of lead concentrations in Flint was 12 parts per billion from July through December — below the "action level" of 15 ppb, according to a letter from the Michigan Department of Environmental Quality to Flint's mayor. It was 20 ppb in the prior six-month period.

That should be good news. Unfortunately, nobody believes it:

Is Flint water now safe? U.S. District Judge David M. Lawson wanted to know.

"I can unequivocally state the drinking water in Flint is safe, as defined by the (Environmental Protection Agency's) Copper and Lead Rule," said Attorney Richard S. Kuhl, an assistant attorney general who is representing the state.

Lawson called Kuhl's addendum, "as defined by the Copper and Lead rule," an "interesting dodge."

....If the water is now safe, why then, haven't officials told residents they can stop using filters? asked plaintiff attorney Dimple Chaudhary of the Natural Resources Defense Council.

"We are still concerned about the lead service line removals and how that will impact the system," the attorney said when asked the question by Lawson. "We are still recommending residents don't drink unfiltered water."

Kuhl said it's a "political decision" and not a "water compliance decision."

....The judge asked Kuhl if he had personally consumed Flint water since it's become "safe." The attorney said he hadn't visited Flint in months. "The force of your argument might be enhanced if you actually did take a trip," Lawson responded.

Color me unimpressed with Judge Lawson. Using federal guidelines is not an "interesting dodge," it's the only appropriate way to judge the water. And telling an attorney to go drink a big glass of Flint water if he wants anyone to believe him is just a juvenile cheap shot. Lawson should be concerned with getting the best facts available, not with playing dumb games in his courtroom.

Unfortunately, as Kuhl said, in one of history's great understatements, "we realize there has been a loss of trust in the city." That's pretty understandable, but it's also yet another tragedy on top of the original one. There's no hint of malfeasance or foul play in the current  monitoring of Flint's water. It's safe to use, and safe to drink. If you want to use bottled water for infants, I wouldn't blame you, but that's as far as I'd go. As much as it's appalling to tell people the water is safe when it isn't, it's just as appalling to keep them in terror of the water when it is safe. Residents of Flint can go back to their lives. It's time to stop keeping them in a constant state of panic.

No More Busts! Please?

Can we please have a moratorium on Republican grousing about busts? For eight years they whinged about Obama removing a Churchill bust from the Oval Office, even though there was already another Churchill bust up in the residence. Eight years! Now the White House is in high dudgeon about a Time correspondent who mistakenly told a pool reporter that Trump had removed a bust of Martin Luther King Jr. from the Oval Office. The Time correspondent corrected himself within half an hour, reached out to everyone who had passed along the bad information, and apologized repeatedly. But Trump bellyached about it the next day, Sean Spicer followed up with further griping, and today Kellyanne Conway claimed that she was getting death threats because of the false report.

Death threats! Because of the MLK bust.

Enough. No more busts. Just give it a rest, folks, OK?

Over at Vox, health care superguru Sarah Kliff writes about a new CBO report that projects no imminent "death spiral" for Obamacare. CBO reckons that 10 million people will buy insurance from the Obamacare exchanges this year, rising to 13 million by 2027. That's definitely not a collapse, no matter how often Mitch McConnell and Paul Ryan say so. But Kliff adds this:

To be clear: The insurance marketplaces are way smaller than CBO had initially expected. Back when the law passed, the agency estimated that there would be 26 million people in the marketplace in 2017. We’re on pace to have a market less than half that size. A market with more people would likely have lower premiums, as it would mean more healthy people had decided to join.

This is true, but it's important to understand why it's true. CBO originally projected that Obamacare would lead to a big drop in the number of people on private health plans, who would then buy insurance on the exchanges. That didn't happen. Instead, the number of people on private plans stayed nearly stable. Here's how things turned out:

  • 2013 projection for 2016: +22 million on exchanges, -10 million in private coverage, +12 million in Medicaid = net +24 million (Table 1)
  • 2016 projection for 2016: +12 million on exchanges, -4 million in private coverage, +13 million in Medicaid = net +21 million (Table 4)

So the difference between the original projection and the actual numbers for 2016 is about 3 million. That's a fairly small difference, and it's basically good news: we'd rather have people on employer health plans than Obamacare. The coverage is generally better and it costs taxpayers less. The downside is that the low Obamacare numbers make the exchanges a bit less stable, but they aren't showing any signs of collapse, and it's a worthwhile price to pay anyway.

But really, you don't even need to go through this exercise. The easiest way to see how Obamacare is doing is to look at the number of uninsured. Here are the projections:

There are 4 million fewer uninsured than CBO originally projected, and it's cost the taxpayers less than CBO originally thought. In other words, Obamacare has performed better than projected and cost less than projected. That's a big win.

The conservo-sphere is in a tizzy today over yet another undercover video. This one, from the group Live Action, purports to show that Planned Parenthood is lying about what they do: if you want an abortion, they're happy to help. But prenatal services? They'll turn you down every time. They have dozens of recorded phone calls to prove it.

I'm sure you're wondering what the catch is. The answer is: there isn't one. Planned Parenthood is very clear about their mission. Here it is:

Planned Parenthood health centers focus on prevention: 80 percent of our patients receive services to prevent unintended pregnancy.

Page 29 of their 2014-15 annual report breaks this down into the following colorful chart, available to anyone with an internet connection:

Page 30 provides more detailed data: Prenatal visits accounted for 17,149 "clinical interactions" out of a total of 9,455,582. That's 0.18 percent of the total. I've added the blue sliver at the top to illustrate this.

In other words, Planned Parenthood doesn't pretend that prenatal care represents a big share of what they do. For the most part, they provide contraception, abortions, STD testing, and various screening services. The folks who ran this sting operation knew this perfectly well, and deliberately chose to call and ask about a service that very few clinics provide—all so they could get lots of "undercover" phone calls of Planned Parenthood receptionists turning them away when they asked for help. They could have saved themselves a lot of time by just sticking a camera in front of a couple of pages of Planned Parenthood's annual report.

Who Is Medicaid For?

There's a lot of Beltway chatter these days about block-granting Medicaid, a longtime Republican dream. In theory, block granting is simple: instead of covering a certain percentage of each state's Medicaid spending, states are all given a simple grant of money for Medicaid, which they can spend as they choose. They can add to it, they can redistribute it, they can create innovative programs, or do anything else they want. There are usually a few restrictions on where the money can go, but not too many.

Why are Republicans so gung-ho on block grants? The official answer is that they don't think Washington should be telling states how to spend their money. Instead, they want to let a thousand flowers bloom as our laboratories of democracy experiment with new and innovative ways of delivering health care more efficiently.

You will, of course, be unsurprised to learn that this isn't the real reason. The real reason is that, in practice, block grants will steadily reduce spending on Medicaid. There are two reasons for this, and both are simple. Currently, Medicaid reimburses doctors and hospitals for care at set rates. As health care costs rise, Medicaid spending automatically keeps up. Block grants, however, are usually set to increase at a specific rate, which is usually the overall inflation rate. This means that the block grants grow far more slowly than actual health care costs:

This chart shows what's happened over the past 16 years. If the same thing happens over the next 16, Medicaid spending would need to increase about 80 percent in order to provide the same level of services. Under a block grant keyed to overall inflation, however, it would increase only about 40 percent. In real terms, this means that projected Medicaid spending would be slashed by nearly a quarter. That's a nice, big chunk of money that can be put toward tax cuts for the rich.

The second reason that block grants reduce spending is even simpler. Under the current system, you qualify for Medicaid if you meet certain conditions. Income is part of it, and during recessions this means that Medicaid spending automatically goes up as more people qualify. With a block grant, this doesn't happen. It is what it is, regardless of how many people are in need. And since states are usually strapped during recessions and barred from deficit spending, this means that Medicaid spending stays constant or even goes down at the worst possible time.

Now, this doesn't have to happen. Block grants for Medicaid could be keyed to medical inflation, and the size of the grants could be keyed to a formula that accounts for the number of people who qualify for it. If Republicans did that, it would demonstrate good faith. It would show that instead of merely trying to free up money for tax cuts, they're truly interested in letting states experiment to see if they can provide better care with the same funding.

I guess we'll have to wait and see, but I wouldn't bet the ranch on seeing anything like that from Donald Trump and Paul Ryan. They just want to slash spending on the poor.

And that leads us to one final thing: who gets all this Medicaid money, anyway? The undeserving poor? Here's a breakdown from a very useful short Medicaid primer by CBPP:

Only about a third of Medicaid spending goes to poor adults. The vast majority goes to nursing care for the elderly; medical care for the blind and disabled; and medical care for children. Do you really want to see steadily reduced spending on grandma's nursing home—which will inevitably make long-term care even crappier than it is now? Do you really want to cut off the blind and disabled? Poor children? Even if you don't think that poor adults deserve decent medical care, are you really hellbent on taking it out on the elderly, the disabled, and poor kids?

We're going to find out.

The Oscar nominations are out today, and naturally the only question on everyone's mind is how many black nominees there are. Here's the answer, in an update of a chart from last year:

The acting categories took a sharp turn upward, largely thanks to three black actors who were nominated in the Best Supporting Actress category (Viola Davis, Naomie Harris, and Octavia Spencer). The songwriting category, by contrast, was unusually white this year.

But the best news comes from outside of the acting categories. The truth is that the Oscars for acting haven't been especially white in recent years. It's the Oscars for everything else that have been white. But this year, a record 9 percent of the nominees in the other categories were black. Some of this was due to the documentary category, which produced four films directed by African-Americans, but the rest of the list was blacker than usual too.

Any individual year is a crapshoot, of course, but this is a promising development. If you're truly interested in seeing more diversity in Hollywood, forget about acting. It's the "everything else" category to watch. That's the one that's been a white stronghold for 88 years and counting.

The Congressional Budget Office has published its latest forecast of deficits and debt over the next decade. Here it is:

As the CBO notes, this steady rise in the debt is pretty much inevitable given an aging population and a Republican Congress unwilling to properly fund our spending commitments. Still, I'm not a huge debt alarmist, and this projection doesn't bother me a lot. It would be nice to see the national debt decline during economic expansions like our current one, though. After all, economic expansions don't last forever, even with the galaxy's best businessman in charge of the country.

Still, it's worth putting this up as a baseline. This is the debt projection at the end of the Obama era. In 2020, after four years1 of total Republican rule, we can compare and see just what the projected debt looks like in the hands of folks who claim to be devoted to balanced budgets and low deficits. My guess is that it will be somewhere north of 120 percent of GDP.

Of course, I might be wrong. Maybe the economy will grow at 4 or 5 percent per year under GOP stewardship and the resulting boom will cause tax revenue to skyrocket and the debt to come down. Anything is possible, I suppose. But I wouldn't bet on it.

1Probably.

The New York Times has called one of President Trump's lies a lie. The word isn't used in the text of the story, but it is used in the headline:

In this case, Trump said that between three million and five million illegal immigrants voted for Hillary Clinton, and he would have won the popular vote if not for that. Why was that judged a lie? Presumably because Trump has said it before, and it's been widely exposed as flatly untrue. Trump surely knows this, which means he's telling a knowing falsehood, aka a lie.

This is a reasonable metric. The problem with branding something a lie is that you have to be sure the speaker knew it was wrong. Otherwise it's just ignorance or a mistake. But in Trump's case, it's often clear that he knows he's lying. When he says the crowd at his inauguration was over a million, it's clear that he has no basis for this. He's just making up a number. When he says millions of illegal immigrants voted, he knows it's false because a legion of reporters have told him it's false. When he says the unemployment rate is 42 percent, it might be a mistake the first time. But the tenth time? It's a deliberate lie.

Beyond this, I'll repeat a three-part test I offered a few years ago that I find useful for judging how deceptive a statement is:

  1. What was the speaker trying to imply? This is necessarily a judgment call, but it's what gets us away from a single-minded focus on "lying" and instead focuses our attention on how badly a speaker is trying to mislead us.
  2. What would it take to state things accurately? This is the most important part of the exercise. Without getting deep in the weeds (nobody expects politicians to speak in white paper-ese), what would it take to restate things reasonably accurately?
  3. How much would accuracy damage the speaker's point? Obviously, if accuracy dents the speaker's point only a bit, not much harm has been done. If it demolishes the speaker's point completely, it's as bad as an actual lie, even if you can somehow spin it as technically true.

In this case, Trump was (a) stating that millions of illegal immigrants voted, (b) the only way to restate this accurately is to say that only a tiny handful of illegal immigrants voted, and (c) this completely demolishes Trump's point. It's obviously a 10 out of 10, and since Trump is aware of this, that makes it an egregious lie.

Click the link to find out why I think this test is useful. The nickel version is that it's a check on my emotional response. When I go through these three steps, sometimes I find things worse than I thought and other times I find them more benign. Give it a try.

UPDATE: Here's an interesting little nugget about the evolution of the Times headline:

Julia Hahn is a 25-year-old Breitbart News reporter who has written several scorched-earth pieces about House Speaker Paul Ryan whenever he hasn't toed the Breitbart line to their liking. Naturally, that caught the approving eye of Steve Bannon, formerly the executive chair of Breitbart and now the Rasputin of the Trump administration. Robert Costa reports:

Hahn, 25, is expected to join the White House staff, serving as an aide to strategist Stephen K. Bannon....“She’ll be Bannon’s Bannon and make Bannon look moderate,” said William Kristol, the editor at large of the Weekly Standard, a conservative magazine. “Her tendency is to fight and fight, often to the extreme.”

....Her hiring alarmed and angered several allies of Ryan....Privately, a number of House Republicans told The Washington Post that Hahn’s involvement signaled Bannon’s plans to possibly put her to use against them, writing searing commentaries about elected Republican leaders to ram through Trump’s legislative priorities and agitate the party’s base if necessary.

“This is obviously a provocative act and clearly an intentional act,” said Peter Wehner, a longtime Ryan friend and former official in three Republican administrations....Wehner said that too many Republicans on Capitol Hill are “engaging in a fiction, a game, where Bannon and Trump aren’t taken seriously even though Bannon and Trump are operating in a serious way and bringing on people who are going to work for their cause, not for conservatives.”

Back during the primaries, Fox News thought they could take on Trump. Eventually they learned they couldn't, and abjectly caved in to him.

Trump's Republican opponents all underestimated him too. They figured he was bound to implode on his own, and they'd just as soon let someone else spend the money to attack him. By the time they all understood what was going on, it was too late.

The #NeverTrumpers did no better. Their campaign was almost embarrassingly ineffective.

Democrats did a bit better, largely because they had lots of polls to back up their confidence in victory. In the end, though, they underestimated Trump too. They underestimated the willingness of outsiders like James Comey and Vladimir Putin to help him, and they underestimated Trump's appeal to Midwestern working-class whites. Now he's president.

I fear that Paul Ryan is doing the same thing. He's hoping to chivvy Trump along for a while and get his pet bills passed: tax cuts, Obamacare repeal, corporate-friendly deregulation, block grants for Medicaid and other social welfare programs, etc. As Grover Norquist once said, all Ryan needs is a president with a few working fingers to sign the bills he sends him. If the price of this is ditching TPP and pretending to build a wall, no big deal.

Maybe it'll work. Maybe Ryan will get what he wants and then Trump will implode this time. But Ryan better be sure that he isn't the sucker in this relationship. Trump has a long memory for people like Ryan who failed to support him enthusiastically, as well as an army of supporters who will turn on Ryan instantly if Trump tells them to. If Ryan is sitting back and allowing Trump to amass power in the belief that he can cut Trump down to size later, he better think again. Too many people have made this mistake already.