Kevin Drum

Friday Cat Blogging - 22 May 2015

| Fri May 22, 2015 12:00 PM EDT

One of the reasons we got a pair of sibling cats last year is because I've always wanted a couple of cats who would sleep together in an adorable little kitty pile. And that's worked out pretty well. Is there anything cuter than Hilbert and Hopper snoozing together in the picture below? I don't think so. I really don't.

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Don't Panic: Health Insurance Rates Aren't About to Rise by 50 Percent

| Fri May 22, 2015 10:53 AM EDT

Here's the latest Fox News bait from the Wall Street Journal:

Major insurers in some states are proposing hefty rate boosts for plans sold under the federal health law, setting the stage for an intense debate this summer over the law’s impact.

In New Mexico, market leader Health Care Service Corp. is asking for an average jump of 51.6% in premiums for 2016. The biggest insurer in Tennessee, BlueCross BlueShield of Tennessee, has requested an average 36.3% increase. In Maryland, market leader CareFirst BlueCross BlueShield wants to raise rates 30.4% across its products. Moda Health, the largest insurer on the Oregon health exchange, seeks an average boost of around 25%.

All of them cite high medical costs incurred by people newly enrolled under the Affordable Care Act.

Well, of course they do. It's a handy excuse, so why not use it?

In any case, we've all seen this movie before. Republicans will latch onto it as evidence of how Obamacare is destroying American health care and it will enjoy a nice little run for them. Then, a few months from now, the real rate increases—the ones approved by state and federal authorities—will begin to trickle out. They'll mostly be in single digits, with a few in the low teens. The average for the entire country will end up being something like 4-8 percent.

So don't panic. Sure, it's possible that the Obamacare shit has finally hit the fan, but probably not. Check back in October before you worry too much about stories like this.

Republicans Hate Obamacare Even If They Like Their Own Obamacare Plans

| Thu May 21, 2015 1:17 PM EDT

A new Kaiser poll gives us an in-depth look at what people think about health insurance plans purchased through an Obamacare exchange. Some of the results are unsurprising: people like plans with low deductibles; most say it was easy to shop for a plan; and most were pretty satisfied with the plans they purchased. But unless I'm badly misreading something, there's one result that's pretty gobsmacking. First off, here's a chart showing basic satisfaction levels with Obamacare plans:

That's pretty good. Positive responses increased a bit from 72 percent to 74 percent. That compares very favorably with satisfaction levels toward employer plans. But now take a look at this chart that breaks down Obamacare favorability attitudes by party:

This is crazy. This isn't a general survey of all Americans. It's a survey specifically of people who don't have group coverage. Most of them (probably more than two-thirds) have actually purchased Obamacare plans and therefore have personal experience with them, but favorability is nonetheless still driven mostly by party ID. You can buy an ACA plan on the marketplace, get a subsidy, and be happy with your plan—but if you're a Republican you still overwhelmingly hate Obamacare by 74-25 percent.

Folks, that is hardcore.

CNN Plans to Feature Peanut Gallery Debate as Warmup for Main Event

| Thu May 21, 2015 11:29 AM EDT

CNN will be hosting the second Republican debate, and they've come up with a....unique way of dealing with the fact that there are just too damn many candidates. To handle the crowd, they're going to have two separate debates:

"The first 10 candidates — ranked from highest to lowest in polling order from an average of all qualifying polls released between July 16 and September 10 who satisfy the criteria requirements ... will be invited to participate in 'Segment B' of the September 16, 2015 Republican Presidential Primary Debate," the network states in its candidate criteria. "Candidates who satisfy the criteria and achieve an average of at least 1 percent in three national polls, but are not ranked in the top 10 of polling order will be invited to participate in 'Segment A' of the September 16, 2015 Republican Presidential Primary Debate."

Did you get that? All the yokels—Carly Fiorina, Bobby Jindal, Rick Santorum, etc.—will go on first. They'll be sort of the warm-up act. Then they'll get shuffled off the stage and the big guns will have prime time all to themselves. This is pretty humiliating for the also-rans, but presumably if they play by the rules they'll have a chance to move up, just like in English Premier League soccer. Perhaps Rick Perry will stumble and get relegated to the minor leagues for the next debate, while Jindal will knock everyone's socks off and get promoted to the show. I don't know if I'd quite call this "fun," but it would certainly make for some interesting office pools.

The first debate, which is hosted by Fox, will feature none of this nonsense. The top ten candidates will be invited to the debate, and that's that. If you're outside the top ten, you can watch the debate on your big-screen TV at home. Or, if Fox is feeling generous, perhaps the sad sacks polling at the 1% level will be allowed to while away their time in the spin room, where they can try to buttonhole reporters and explain why they really should have been up on the stage. Maybe the saddest story will win a prize.

By About 2020, We'll Probably Finally Know Whether a $15 Minimum Wage Is a Good Idea

| Thu May 21, 2015 10:23 AM EDT

So my near neighbor of Los Angeles is poised to raise the minimum wage to $15. How should we think of that?

Personally, I'm thrilled. Not because I think it's a slam-dunk good idea, but because along with Seattle and San Francisco it will give us a great set of natural experiments to figure out what happens when you raise the minimum wage a lot. We can argue all we want; we can extrapolate from other countries; and we can create complex Greek-letter models to predict the effects—but we can't know until someone actually does it.

So what do I think will happen? Several things:

In the tradeable sector, such as clothing piece work and agriculture, the results are very likely to be devastating. Luckily, LA doesn't have much agriculture left, but it does have a lot of apparel manufacture. That could evaporate completely (worst case) or perhaps migrate just across the borders into Ventura, San Bernardino, and other nearby counties. Heavier manufacturing will likely be unaffected since most workers already make more than $15.

In the food sector, people still need to eat, and they need to eat in Los Angeles. So there will probably be little damage there from outside competition. However, the higher minimum wage will almost certainly increase the incentive for fast food places to try to automate further and cut back on jobs. How many jobs this will affect is entirely speculative at this point.

Other service industries, including everything from nail salons to education to health care will probably not be affected much. They pretty much have to stay in place in order to serve their local clientele, so they'll just raise wages and pass the higher prices on to customers.

Likewise, retail, real estate, the arts, and professional services probably won't be affected too much. Retail has no place to go (though they might be able to automate some jobs away) while the others mostly pay more than $15 already. The hotel industry, by contrast, could easily become less competitive for convention business and end up shedding jobs.

On the bright side, of course, a large number of low-income workers will see their wages rise. On the less bright side, the experience of Puerto Rico suggests that (a) employment losses could be as high as 9 percent, and (b) lots of low-wage workers will flee to other places.

So if I had to guess, I'd say that Los Angeles will see (a) less poverty for low-wage workers who keep their jobs, and (b) higher prices for middle-class consumers, who will end up paying for the minimum wage hike. Since the poor spend more than the middle-class, this could be a net stimulus for the LA economy. On the downside, we're also pretty likely to see significant job losses. In other words, I agree with Adam Ozimek that we should not treat this as terra incognita just because it's never been done before:

It’s true that the farther we go out of the historical sample, the more uncertain we are about the magnitude of the impact. But I think minimum wage advocates are taking the wrong message from this. After all, a $100 minimum wage would also be out of sample and subject to the same “we have no clue” and “can’t be on solid ground” statements from Dube and Neumark. But this uncertainty is all in the direction of more job losses. When you enter unprecedented minimum wage hike territory your uncertainty goes up, but so undeniably does your risk of job losses. The idea that a minimum wage hike being of an unprecedented magnitude creates neutral uncertainty is like someone drinking more beer than they ever have just being uncertain about what it will do to their driving ability.

So we'll see. My own guess is that $15 is too high. I would have supported something in the $10-12 range for a city as large and basically prosperous as Los Angeles. But $15? There's just too much uncertainty in a number that big, and the uncertainty almost all points in the direction of significant job losses.

But I could be wrong! We now have three cities that are jumping into the deep end of the minimum wage debate, and that will eventually tell us more than all the speculation in the world combined. Fasten your seat belts.

Rand Paul's Latest Fundraiser Now Underway

| Wed May 20, 2015 3:17 PM EDT

I see from the intertubes that Sen. Rand Paul has begun another talking filibuster. This time it's to protest any legislation that extends the NSA's ability to access metadata from phone calls, even if the data is held by the phone companies and available only by court order. Paul's filibuster will annoy a lot of people, but in the end I think I agree, for once, with John McCain: "He'll get his headline and then we'll move on."

That's pretty much the lay of the land. Paul will chew up some floor time, which might end up eating into Memorial Day weekend for the Senate, but since virtually no one agrees with his position, it's simply not going to accomplish anything. I'm even a little skeptical about the headlines. Frankly, once you've done the Jimmy Stewart bit once, its entertainment value starts to plummet.

On the other hand, Paul seems to be mostly treating this as another great fundraising opportunity, and it might very well be. But that's probably all it will be.

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Eight Good Lessons About Health Care — Plus a Ninth

| Wed May 20, 2015 1:20 PM EDT

Over at Vox today, Sarah Kliff and Julia Belluz have a list of eight things they now do differently after reporting on health care for a combined decade between them. It's a great list, and unless I missed something I think I agree with every word on it. Even item #3, which has been, um, a bit of a challenge for me over the past six months.

Of course, as with all collections of advice, even good ones, this one has an underlying ninth item: don't be an idiot. Sometimes guidelines need to be broken. But they're still good to keep in mind.

Big Banks Plead Guilty to Collusion, But Fines are Pocket Change

| Wed May 20, 2015 11:43 AM EDT

Five of the planet's biggest banks have finally been forced to plead guilty to collusion charges in the foreign exchange market:

The Justice Department forced four of the banks — Citigroup, JPMorgan Chase, Barclays and the Royal Bank of Scotland — to plead guilty to antitrust violations in the foreign exchange market as part of a scheme that padded the banks’ profits and enriched the traders who carried out the plot....Underscoring the collusive nature of their contact, which often occurred in online chat rooms, one group of traders called themselves “the cartel,” an invitation-only club where stakes were so high that a newcomer was warned, “Mess this up and sleep with one eye open.” To carry out the scheme, one trader would typically build a huge position in a currency and then unload it at a crucial moment, hoping to move prices. Traders at the other banks agreed to, as New York State’s financial regulator put it, “stay out of each other’s way.”

....The guilty pleas, which the banks are expected to enter in federal court later on Wednesday, represent a first in a financial industry that has been dogged by numerous scandals and investigations since the 2008 financial crisis. Until now, banks have either had their biggest banking units or small subsidiaries plead guilty.

....As part of the criminal deal with the Justice Department, a fifth bank, UBS, will plead guilty to manipulating the London Interbank Offered Rate, or Libor, a benchmark rate that underpins the cost of trillions of dollars in credit cards and other loans.

The total fine is about $5 billion, and it's about damn time this happened. Unfortunately, I assume that a billion dollars each is basically pocket change that's already been fully reserved on their balance sheets. Needless to say, not a single dime of this will hit the actual people running the banks, who couldn't possibly be expected to know that any of this stuff was going on. They were too busy drinking their lunches and remodeling their corner offices to know what a few rogue traders on the 23rd floor were doing. The Times confirms that life will go on as usual:

For the banks, though, life as a felon is likely to carry more symbolic shame than practical problems. Although they could be technically barred by American regulators from managing mutual funds or corporate pension plans or perform certain other securities activities, the banks have obtained waivers from the Securities and Exchange Commission that will allow them to conduct business as usual. In fact, the cases were not announced until after the S.E.C. had time to act.

It's good to be king.

The Truth About How Obama Has Handled the Pacific Trade Deal

| Wed May 20, 2015 9:00 AM EDT
Japanese Prime Minister Shinzo Abe and President Barack Obama at the White House on April 28, 2015

While Kevin Drum is focused on getting better, we've invited some of the remarkable writers and thinkers who have traded links and ideas with him from Blogosphere 1.0 to this day to contribute posts and keep the conversation going. Today we're honored to present a post from Daniel Drezner.

One of the enduring memes of the Obama administration has been the notion that the president is a lousy politician. One of the things that Bill Clinton and George W. Bush had in common is that they knew how to schmooze. Obama, on the other hand, does not have any close friendships on the international stage, nor is he particularly tight with Republican or Democrat members of Congress. Indeed, this has been a sufficiently common lament for someone to write "A Brief History of President Obama Not Having Any Friends" last year.

So let's stipulate that the president is a cold fish. What remains contested is whether this matters in terms of getting things done. There are DC insiders who argue that personal relationships and one-on-one politicking really do matter. These are the pundits who tend to bemoan presidential passivity and write "Why won't Obama lead?" ledes and ask why Barack Obama doesn't drink more whiskey with Mitch McConnell or play more golf with John Boehner. And then there are structuralists who argue that what really matters are the separation of powers written into the Constitution and the incentive of opposition parties to, you know, oppose the president's policies.

When it comes to managing his own party, there may be something to the "Why can't Obama lead?" meme.

Last week's machinations over trade promotion authority (TPA) regarding the Trans Pacific Partnership (TPP) will not definitively settle this debate, but they did offer a few data points that suggest the relative merits of each side of this debate.

First, Senate Majority Leader Mitch McConnell gave a delightfully blunt interview to the New York Times' John Harwood. On TPA/TPP, McConnell and most of the Senate Republicans are working with Obama, which puts him in strange territory. To explain this to Harwood, McConnell flatly debunked the notion that Obama would have accomplished more in the GOP-controlled Congress if only he'd been more sociable with Republican members of Congress:

In the caricature of how Washington works, Mr. McConnell and other congressional Republicans were supposed to bond with Mr. Obama at a so-called bourbon summit meeting, as though a soothing, generous pour would bring them together.

It has never happened—which, as far as Mr. McConnell is concerned, counts for exactly zero.

"It's all good stuff for you all to write, but it has no effect on policy," Mr. McConnell said. He dismissed "press talk" that social outreach could bridge the deep ideological and partisan divisions of 21st-century American politics.

"It wouldn't make any difference," he concluded. "Look, it's a business." (emphasis added)

And that sound you just heard was the combined egos of the "why can't Obama lead" crowd visibly deflating.

McConnell's Hyman Roth-like answer would seem to validate the structuralist position of the president's ability to get legislation passed—at least when it comes to dealing with the opposition party.

When it comes to dealing with his own party, however, I'm not sure that the structuralists can claim victory. One could argue that Democrats are just as constrained on trade as Republicans because of their base's public opinion, but I don't think it's really that simple.

There were a lot of things going on in last Tuesday's initial failure of TPA to pass the Senate, including genuine policy differences between Obama and elements of the progressive movement. But as Reuters noted, at least part of it was Obama's alienation of Senate Democrats:

As for Obama, he may have hurt his chances with Democrats by minimizing concerns about trade's impact on labor, the environment and regulations, and his explicit criticism of the anti-trade stance of leading liberal Democratic Senator Elizabeth Warren.

"The president was disrespectful to her," Democratic Senator Sherrod Brown told reporters. "When he said that a number of us, not just Senator Warren, don't know what we're talking about...he shouldn't have." Brown opposes the fast-track bill.

Indeed, there has been a lot of Democrat grumbling about Obama's rhetorical jabs at Warren and other anti-TPP Democrats, to the point where Sherrod Brown accused Obama of sexism.

Of course, twenty-four hours later, a deal had been struck for a vote on TPA in the Senate. If Edward Isaac-Dovere and Burgess Everett's Politico recap is accurate, then Presidential Leadership (TM) played a pivotal role in the process:

The White House named names. And not 24 hours later, President Barack Obama and his aides had a deal to get fast-track back on track...

Obama aides strategically put out word to reporters of the meeting, even before senators had arrived at the White House. Shortly after the meeting ended, they released the list: the seven Democrats who'd voted for fast-track in committee, plus Sens. Heidi Heitkamp (D-N.D.), Patty Murray (D-Wash.) and Tim Kaine (D-Va.). A few hours before, every Senate Democrat except Tom Carper of Delaware had publicly rebuked his trade effort. Now the White House put on the spot the other nine who had either publicly or privately indicated they would support the underlying fast-track and Trade Adjustment Assistance package, but who voted against opening debate.

In other words, the president had more than enough votes just in the room to get the trade bill moving. According to senators who were there, the president took his time, spending 90 minutes to explain why they needed to get their act together.

Now this does sound like some Old Time-y Presidential leadership, and so maybe, when it comes to managing his own party, there is something to the "Why can't Obama lead?" meme.

But not a lot. My colleague Greg Sargent's take suggests that last Tuesday's vote was more about Reid/McConnell dynamics than anything to do with Obama. And even the close of Politico's story:

Then again, some Senate Democrats said this all would have been resolved even without Obama—though maybe not in time for the House to take up the bill in June, keeping it on track to help Obama seal the Trans-Pacific Partnership with 12 Pacific Rim countries.

"This was going to end up there anyway," Nelson said. "But I would say the meeting with the president accelerated the discussion."

So, to sum up: Most of the time, the structuralists are mostly right when it comes to presidents exercising leadership in pushing legislation through Congress. But they're not completely right. On the margins, when dealing with one's own party, maybe presidential leadership matters just a wee bit.

Are You a True Political Junkie? A Wee Test.

| Tue May 19, 2015 2:49 PM EDT

I'm often amazed at the incredible memories that true political junkies have for trivial stuff that happened well over a decade ago. I was just reading a Kevin Williamson item over at The Corner, and he was noting that (a) some police organizations are apparently referring to President Obama's new restrictions on transfer of military equipment as a "ban," and (b) that lefties were attacking this as fear-mongering, since it wasn't a ban, just a restriction on how the federal government plans to spend its own money.

Where's he going with this, I wondered. I didn't have to wait long to find out:

Well....

Am I the only one who remembers the so-called federal ban on stem-cell research enacted by the Bush administration? That was a ban that was not, in fact, a ban at all, or even a ban on federal funding for embryonic stem-cell research, but a restriction on federal funding for research using newly created lines of embryonic stem cells. When the [Fraternal Order of Police] complains that police departments cannot use federal funds the way they did before, the Left insists that the word “ban” is inappropriate, that the complaints amount to “fear-mongering.” But Mother Jones wrote of a “Stem Cell Research Ban” under Bush, CBS News reported “Obama Ends Stem Cell Research Ban,” Wired wrote of a “Bush stem cell ban,” U.S. News and World Report wrote of “Bush’s Stem Cell Research Ban,” etc.

A funding restriction is not a ban; it isn’t now—but it wasn’t then, either. It is too much to expect even a modicum of consistency from our feckless, lollygagging media, which is mainly composed of people who were too thick for law school and too lazy to sell real estate, and certainly not from the intellectually dishonest Democratic operatives within the media (Hello, Mr. Stephanopoulos!). But we should always keep that dishonesty in mind.

I guess I take a much more easygoing attitude toward this stuff, especially when we're talking about headlines. Heds are almost never entirely accurate thanks to space constraints, and using the word ban instead of ban on federal funding of new stem cell lines seems pretty much inevitable. As long as the hed is reasonably close to reality and a more accurate explanation is put in the first paragraph or two, I can't get too excited.

And if it was something that happened back in 2001? I'd be racking my brains to remember what happened and whether I should still give a damn. I guess that's what marks me as not really a true political junkie. I don't hold grudges against the press quite long enough.