Kevin Drum

One Little Survey Question Explains All of Politics

| Thu Dec. 18, 2014 10:59 PM EST

Jonathan Bernstein points to a new Kaiser survey that examines opposition to the individual mandate in Obamacare. Here's what they found:

It remains among the least popular aspects of the law — with just a 35 percent approval rating. But when people are told that the mandate doesn’t affect most Americans because they already have coverage through an employer, support jumps to 62 percent.

It only takes a modest bit of reading between the lines to figure out what's really going on here: when people find out that the mandate doesn't apply to them personally, lots of them are suddenly OK with it. In case politics has always mystified you, that's it in a nutshell. Now you know.

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Mystery Chart of the Day: What's Up With All the Skinny Economists?

| Thu Dec. 18, 2014 5:22 PM EST

The chart on the right is excerpted from the Wall Street Journal. It shows which occupations have the lowest obesity rates, and most of it makes sense. There are folks who do a lot of physical labor (janitors, maids, cooks, etc.). There are health professionals who are probably hyper-aware of the risks of obesity. There are athletes and actors who have to stay in shape as part of their jobs.

And then, at the very bottom, there are economists, scientists, and psychologists. What's up with that? Why would these folks be unusually slender? I can't even come up with a plausible hypothesis, aside from the possibility that these professions attract rabid obsessives who are so devoted to their jobs that they don't care about food. Aside from that, I got nothing. Put your best guess in comments.

Rick Perry Is One Lucky Dude

| Thu Dec. 18, 2014 2:00 PM EST

From James Pethokoukis:

The energy sector gives, and the energy sector takes. The stunning drop in oil prices looks like bad news for the “Texas Miracle.” (Texas is responsible for 40% of all US oil production — vs. 25% five years ago — and all of the net US job growth since 2007.) This from JPMorgan economist Michael Feroli: “As we weigh the evidence, we think Texas will, at the least, have a rough 2015 ahead, and is at risk of slipping into a regional recession.”

Man, Rick Perry is one lucky guy, isn't he? It's true that the "Texas Miracle" may not be quite the miracle Perry would like us to believe. As the chart below shows in a nutshell, the Texas unemployment rate has fared only slightly better than the average of all its surrounding states.

Still, Texas has certainly had strong absolute job growth. However, this is mostly due to (a) population growth; (b) the shale oil boom; and (c) surprisingly strict mortgage loan regulations combined with loose land use rules, which allowed Texas to escape the worst of the housing bubble. Perry didn't actually have much to do with any of this, but he gets to brag about it anyway. And now that oil is collapsing and might bring the miracle to a sudden end, Perry is leaving office and can avoid all blame for what happens next.

One lucky guy indeed.

Yeah, Democrats Are Pretty Pro-Corporate Too

| Thu Dec. 18, 2014 12:39 PM EST

A couple of days ago I poured cold water on the idea that tea partiers might join up with the Elizabeth Warren wing of the Democratic Party to form some kind of populist anti-corporate coalition. "Every once in a while they'll get themselves exercised over some trivial issue of 'crony capitalism' like reauthorizing the Export-Import bank," I said, but the truth is that the tea partiers have no real devotion to anti-corporatism. They just want to cut taxes and slash welfare.

Over at National Review, Veronique de Rugy tries to make the case that ExIm is more important than I'm giving it credit for, but I'm not buying it. Sorry. It's just a shiny object of the moment that's both small and costs virtually nothing. On the other hand, I'm entirely willing to buy de Rugy's suggestion that Democrats aren't especially anti-corporate either:

Please. They talk the talk, but when it’s time to vote, they rarely walk the walk. In the end, not unlike a number of Republicans, Democrats rarely miss an opportunity to support big businesses. They support the Department of Energy’s 1705 loans, which mostly go to wealthy energy companies, and they never fail to join Republicans in saving other corporate energy subsidies; they support the reauthorization of OPIC, which mostly benefits large corporations; they support farm subsidies, which mostly benefit large agro-businesses at the expenses of small farms; they support Obamacare, which among other things amounts to a huge giveaway to the insurance industry; they support auto and bank bailouts; and for all their complaints about Wall Street, they managed to write a law, Dodd-Frank, that in some ways protects the big financial institutions that they claim to despise.

I'd quibble with some of this. Obamacare is indeed good for the insurance industry, but it's not that good. And anyway, this is mostly due to the fact that the structure of American health care is historically dependent on private insurance, and it's just not possible to completely overhaul that overnight. In this case, Democrats caved in to special interests as much because they had to as because they wanted to.

Still, it's true that most Democrats are pretty cozy with corporate America. There's a smallish anti-corporate wing of the party, but it rarely has much influence because (a) it's usually outnumbered in the Democratic caucus and (b) there's essentially no anti-corporate wing of the Republican Party to team up with. Being pro-corporate is one of the few bipartisan issues left in Congress. There are lots of fights over small stuff, but it's mostly just window dressing that hides widespread agreement over the big stuff.

Is Vladimir Putin Ready to Make a Deal?

| Thu Dec. 18, 2014 11:53 AM EST

In his yearly press conference, Vladimir Putin appeared to be trying to cool down the rhetoric over Ukraine:

Mr. Putin recognized the efforts of President Petro O. Poroshenko of Ukraine in ending the conflict in the southeast of that country, but he suggested that others in Kiev, the Ukrainian capital, may be trying to prolong the conflict....“We hear a lot of militant statements; I believe President Poroshenko is seeking a settlement, but there is a need for practical action,” Mr. Putin added. “There is a need to observe the Minsk agreements” calling for a cease-fire and a withdrawal of forces.

Russia has toned down its talk on the Ukraine crisis in the past month, and some of its most incendiary language, like “junta” and “Novorossiya,” a blanket term used for the separatist territories, is no longer used on state-run television news. Mr. Putin also notably omitted those terms, which he had used in other public appearances, on Thursday.

So does this mean Putin is adopting a more conciliatory attitude toward the West? You be the judge:

In general, he blamed “external factors, first and foremost” for creating Russia’s situation — accusing the West of intentionally trying to weaken Russia. “No matter what we do they are always against us,” Putin said, one of a series of observations directed at how he said the West has been treating Russia.

Putin attributed Western sanctions that have targeted Russia’s defense, oil and gas and banking sectors for about “25 percent” of Russia’s current difficulties.

But Putin stood firm over the actions that brought on the Western backlash, including Russia’s annexation of the Crimea peninsula after pro-Moscow rebels in eastern Ukraine began an uprising earlier this year....“Taking Texas from Mexico is fair, but whatever we are doing is not fair?” he said, in comments seemingly directed at the United States.

Putin also suggested that the West was demanding too many concessions from Russia, including further nuclear disarmament. Likening Russia to a bear — a longtime symbol of the country — he chided the West for insisting the Russian bear “just eat honey instead of hunting animals.”

“They are trying to chain the bear. And when they manage to chain the bear, they will take out his fangs and claws,” Putin said. “This is how nuclear deterrence is working at the moment.”

For what it's worth, I'd say Putin is probably right about sanctions being responsible for around 25 percent of Russia's economic problems. As for his guess that those problems will last two years before Russia returns to growth? That might not be far off either, though I suspect growth will be pretty slow for longer than that.

It's hard to render a real judgment about Putin's intentions without being fluent in Russian and watching the press conference in real time, but based on press reports I'd say Putin's anti-Western comments were milder than they could have been. My guess is that events in Ukraine really haven't worked out the way he hoped, and he'd be willing to go ahead and disengage if he could do so without admitting that he's conceding anything. The anti-Western bluster is just part of that. (Though it's also partly genuine: Putin really does believe, with some justification, that the West wants to hem in Russia.)

Oddly, then, I'd take all this as a mildly positive sign. The rhetoric seemed fairly pro forma; Putin obviously knows that sanctions are hurting him; and there were no serious provocations over Ukraine. I'll bet there's a deal to be made with Putin as long as it's done quietly.

Rape Is Way Down Over the Past Two Decades — But So Is All Violent Crime

| Thu Dec. 18, 2014 10:51 AM EST

Keith Humphreys passes along some positive news about rape:

Twenty years ago, the National Crime Victimization Survey was redesigned to do a better job detecting sexual assault....In the space of one generation, the raw number of rapes has dropped by 45% and the population-adjusted rate of rape has dropped 55%.

I started my career working with and advocating for rape victims, and no one needs to convince me that the only acceptable goal for society is to have no rapes at all. But that doesn’t change the fact that we have experienced an astonishingly positive change that should lead us to (1) Figure out how it was achieved so that we can build on it (personally, I credit the feminist movement, but there may be other variables) and (2) Never give up hope that we can push back dramatically against even the most horrific social problems.

I have to call foul on this. The starting point for this statistic is 1992, the absolute peak of the violent crime wave in America that started during the 60s and continued rising for a generation. Since that peak, all violent crime as measured by the NCVS has declined by well over half. The decline in rape is simply part of this overall trend, not a bright spot in an otherwise grim crime picture.

In fact, it's just the opposite: the decline in the reported rape rate has lagged the overall drop in reported violent crime. It's plausible that the feminist movement has something to do with this, since it's encouraged more women to report rapes and pushed the criminal justice system into taking rape more seriously. But the raw decline in rape itself? That's almost certainly due not to feminism, but to the same factors that have been responsible for the stunning decline in all violent crime over the past two decades. My hypothesis about this is pretty well known, so I won't repeat it here. But whatever it is, it's something pretty broad-based.

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Russia Has Already Blown Up the Global Economy Once. Will It Do It Again?

| Thu Dec. 18, 2014 12:47 AM EST

Just in case you're thinking that Russia's economic problems are little more than a fitting karmic payback for Vladimir Putin, you might want to think twice. When the global economy is fragile, sometimes even small events can send the whole system into cardiac arrest, and that affects everyone, not just Putin and his cronies. So in case you've forgotten, here's a brief refresher on the events of August 1998:

  1. Russia devalues its currency and defaults on its sovereign debt.
  2. Markets that are already jittery thanks to the East Asian financial crisis go into full-blown frenzy mode.
  3. Money pours out of low-quality emerging market investments and into high-quality US, Japanese, and European bonds.
  4. As a result, yield spreads between low-quality and high-quality bonds widen sharply.
  5. Long Term Capital Management, which had made large bets on spreads narrowing as the East Asian crisis receded, is blindsided, suffering huge losses.
  6. As LTCM gets close to insolvency, Bear Stearns stops clearing their trades. Death is imminent.
  7. Because LTCM is so highly leveraged, its debts exceed $100 billion and its collapse thus threatens every bank on Wall Street. Amid growing panic over a systemic meltdown, the Fed finally steps in and arranges a bailout package. Crisis over—for now.

This is not going to happen again. The world is not the same now as it was in 1998. It's just meant as an example of how an otherwise limited financial crisis can have a global impact. The fact that it begins with a Russian currency crisis is merely a felicitous coincidence.

But also a bit of an unnerving coincidence. More than likely, Russia's problems will be contained to Russia. But they might not be, so we should all be careful what we wish for.

Obama's Had a Helluva Good Month Since the Midterms

| Wed Dec. 17, 2014 3:37 PM EST

So how have things been going for our bored, exhausted, and disengaged president? He's been acting pretty enthusiastic, energized, and absorbed with his job, I'd say. Let us count the things he's done since the November 4th midterm elections:

  • November 10: Surprised everyone by announcing his support for strong net neutrality.
  • November 11: Concluded a climate deal with China that was not only important in its own right, but has since been widely credited with jumpstarting progress at the Lima talks last week.
  • November 20: Issued an executive order protecting millions of undocumented workers from the threat of deportation.
  • November 26: Signed off on an important new EPA rule significantly limiting ozone emissions.
  • December 15: Took a quiet victory lap as Western financial sanctions considerably sharpened the pain of Vladimir Putin's imploding economy.
  • December 16: Got nearly everything he wanted during the lame duck congressional session, and more. Democrats confirmed all important pending nominees, and then got Republican consent to several dozen lesser ones as well.
  • December 17: Announced a historic renormalization of relations with Cuba.

I guess you can add to that a non-event: In its second year, Obamacare signups are going smoothly and ahead of target. Am I missing anything beyond that? Maybe. It's been quite the whirlwind month for our bored, exhausted, disengaged president, hasn't it?

All of these things are worthwhile in their own right, of course, but there's a political angle to all of them as well: they seriously mess with Republican heads. GOP leaders had plans for January, but now they may or may not be able to do much about them. Instead, they're going to have to deal with enraged tea partiers insisting that they spend time trying to repeal Obama's actions. They can't, of course, but they have to show that they're trying. So there's a good chance that they'll spend their first few months in semi-chaos, responding to Obama's provocations instead of working on their own agenda.

Was that part of the plan? Beats me. But it seems to be working pretty well so far.

The Person Who Cares Most About Barack Obama's Approval Rating is Hillary Clinton

| Wed Dec. 17, 2014 1:41 PM EST

Peter Beinart thinks President Obama is due for a comeback. Paul Waldman agrees:

I think Beinart is probably right, and the economy is the main reason; it swamps every other consideration in evaluating the president. We could have some major shock that upends the momentum it has been gaining, but if things proceed for the next two years on the trajectory they're on, the Obama presidency will be one of the best for job creation in recent history. But it's also important to understand that an Obama revival, should it happen, is going to look different than that of other presidents.

In this case, "look different" means that even in the best case Obama will end his presidency with approval ratings in the mid-50s, but no higher. The country is just too polarized to produce anything better. Conservatives of nearly all stripes are going to disapprove of Obama come hell or high water, and that puts a ceiling on how high his approval rating can go. Ditto for any other president these days.

But it's true that the economy seems to be doing pretty well these days, and it's usually the economy that drives approval ratings. That's good news for Obama, but it's far better news for Hillary Clinton. For Obama, leaving office with a strong economy is nice for his legacy, but that's about it. For Hillary, it almost certainly means the difference between winning and losing the presidency. If the economy is sluggish or worse in 2016, there's simply no way she overcomes voter fatigue toward Democratic rule. But if the economy is ticking along strongly, she just might.

So that's that. The person who cares most about Obama's approval rating isn't Barack Obama. It's Hillary Clinton. It's the tailwind she needs if she wants to become the first woman to occupy the Oval Office.

Battered Ruble Stabilizes -- For Now

| Wed Dec. 17, 2014 11:49 AM EST

I promise not to post this chart every day, but since I've put it up for the past two days when the ruble was crashing, I figure I should let everyone know when the crash has halted. For a few hours, anyway, thanks to some dubious measures from Russian banking authorities:

The currency was trading 8% stronger against the dollar at 62.1 on the Moscow exchange, while Russia’s RTS Index was up 17%, after the central bank eased regulations on the banking system in a bid to provide some relief on capital adequacy for banks and convince Russians to keep their money in rubles.

Measures including allowing banks not to take provisions against souring loans and weakening assets they hold, and allowing lenders to use last quarter’s exchange rate when settling some foreign-exchange transactions.

I'm not sure that loosening banking regulations is a great response to a currency crisis, but I guess you never know. In any case, it seems to have stabilized things for the time being. In the longer term, storm clouds are still brewing. Stay tuned.