Kevin Drum

Five years after the Great Recession began, the US economy appears to be rebounding a bit. But two recent bits of evidence suggest that the impact of the recession on ordinary workers may have been even worse than we thought—and that the impact of future recessions might be worse too.

First off, a new paper by a trio of researchers confirms some old news: Adjusted for inflation, wages began stagnating for both men and women 10 years ago. Men's wages have actually decreased slightly since 2000, while women's wages, which had been rising steadily for decades, flattened out nearly to zero. But it could have been worse. Economists have long known that there's a floor to wages because employers don't like to reduce nominal wages. If you make $10 per hour, they won't cut your wage to $9 per hour. They'll just hold it at $10 and let inflation eat it away. This phenomenon is called wage stickiness.

But in "Wage Adjustment in the Great Recession," these researchers have found that wage stickiness, which is driven mostly by social convention, not economic law, might be dying out. During the Great Recession, employers were increasingly willing to cut nominal wages. Among hourly workers, the usual number who experience wage cuts is around 15 percent. That had risen to 25 percent by 2011. Among nonhourly workers, the number rose from about 25 percent to nearly 35 percent. Increasingly, it seems, wage stickiness isn't acting as a barrier against wage losses.

So what does this mean in the real world? Economist Jared Bernstein points us to the chart below. It shows growth in nominal wages, growth in benefits, and growth in total compensation (wages plus benefits). The news is grim. Total compensation (the gray line) grew at about 3 to 4 percent per year during most of the aughts. Since the Great Recession hit, that's dropped to 1 to 2 percent. This is less than the inflation rate, which means that even when you account for benefits, real compensation has been declining since 2008.

Bottom line: Wage stickiness is disappearing, and with it a social convention that prevented wages from dropping too harshly even during recessions. As a result, wages are getting cut in bad times and never catching back up in good times. This is the world we live in today.

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Ah crap. A couple of months ago, President Obama caved in to the hawks and announced $127 million in "nonlethal" aid to the Syrian rebels. Today he caved in again and trotted out Ben Rhodes to announce a further escalation. We'll now be sending some decidedly lethal aid to the rebels:

The United States has concluded that the Syrian government used chemical weapons in its fight against opposition forces, and President Obama has authorized direct U.S. military support to the rebels, the White House said Thursday…Rhodes did not detail what he called the expanded military support, but it is expected initially to consist of light arms and ammunition. He said the shipments would be "responsive to the needs" expressed by the rebel command.

The next step, of course, is to cave in to the hawks and send the rebels the antitank and antiaircraft weaponry they want. I figure, what? Another couple of months before Obama decides to do that? Then the no-fly zone. Then…something else.

The official justification for the new arms shipments is verification of some "small scale" use of sarin gas by the Assad regime. However, the real justification seems to be this:

After weeks of efforts to organize a conference at which the Assad government and the opposition were to negotiate a political transition, the administration is now slowing down that effort, fearful that if it were held now, Mr. Assad would be in too strong a position to make any concessions…Now, an administration official said, the focus will switch from setting a date to fortifying the rebels before they sit across the table from the government.

Great. So now we're committed to continuing escalation until Assad cries uncle and agrees to come to the table. That strategy doesn't have a sterling track record.

This seems like a good time to embed this video of Fareed Zakaria explaining why it's such a bad idea to intervene in Syria. This isn't just the usual anti-intervention shtick, either. It's a broad overview of who's who and why Syria's civil war is likely to last a very long time indeed. It's well worth five minutes of your time.

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Via Andrew Sullivan, I see that a number of people are pushing back against Glenn Greenwald's insistence that the PRISM program allows "direct access" to servers from Google, Microsoft and other tech companies. I'm glad to hear that, because it raises some questions that deserve answers.

As regular readers know, the "direct access" claim puzzled me from the start. Even with my modest technical background, I understood immediately that it didn't make sense. Sure enough, the Washington Post walked back the claim a bit the next day, the New York Times walked it back further the day after that, and even the Guardian has now finally agreed that it's wrong—though they buried the admission in the 18th paragraph of a story published a week after the original report.

There are various reasons this is important. The number one reason, obviously, is that we need to understand what's really happening. There's a huge difference between (a) Google giving NSA unfettered access to all of its user data whenever NSA feels like looking at something, and (b) Google agreeing to set up a secure method of transferring data that NSA has obtained a court order for. It's night and day.

But there's another reason: I want to know how far I can trust Edward Snowden. He's supposed to be a technical guru of some sort, but apparently he didn't understand this. Or, if he did, he didn't bother clearing it up for either Glenn Greenwald or Bart Gellman, who both went with the "direct access" phrase in their initial stories. If it's the former, I wonder just how much he actually knows about NSA's capabilities. If it's the latter, I wonder about his motivations.

I'd also like to know just what PRISM is. Is it really an NSA codeword for a data collection program? Or is it merely the name of the unclassified software they use to provide access and project management capabilities for the data they already collect? Does Snowden know? If not, why not?

Snowden has made several other dubious statements, including the suggestion that he could order a wiretap on anyone he wanted, and that he had access to any CIA station. Put this all together, and I think it's reasonable to ask just how much we can trust what Snowden is saying. He's done a public service by shining the spotlight on NSA's activities, but that doesn't mean he gets a pass on tough questioning. I'd like to hear some answers about this stuff.

UPDATE: Several commenters have pointed out that NSA's own PowerPoint presentation claims that PRISM provides data "directly from the servers" of Microsoft etc. That's true, and it's precisely the problem: Greenwald and Gellman apparently read that and simply passed it along without understanding what it implied. That can lead you badly astray, as it seems to have done here.

This is not a pedantic point. It's absolutely critical. "Direct access" implies that NSA can just root around in Google's servers whenever they want. That's big news. Conversely, a story about how companies transfer information to NSA after they get a court order is a complete nothing. Who cares what technical means are used to transfer data to NSA? What we care about is what kind of information NSA is getting, and nothing in the PRISM story has given us any insight into that.

If Snowden really has the technical chops he claims to have, he should have cleared this up. But Greenwald and Gellman apparently didn't ask about it, and Snowden apparently didn't volunteer anything. (I say "apparently" because I don't know for sure who said what to whom.) This suggests either that Snowden didn't know what this phrase meant or else chose not to explain it properly. Either one raises some red flags.

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Ramesh Ponnuru argues today that Republicans are foolish for hanging their hats on the likelihood that Obamacare will die a fiery death in 2014, sweeping them into control of Congress and then, two years later, into the presidency. That won't happen, he says. Instead, Obamacare will die a slow, painful, lingering death, and Republicans need to get busy now coming up with a replacement healthcare plan for when that happens. But what should it be?

Congressional Republicans have not reached agreement on what should replace Obamacare, let alone a strategy for enacting that replacement. The best option for replacing Obamacare would be a plan that made it possible for almost everyone in the country to purchase catastrophic insurance (and possible for most people to buy insurance that goes beyond catastrophic coverage) by removing the obstacles that government policy puts in the way of that goal.

A plan to do that would involve six key steps....

I'll spare you the six steps. It's all the usual stuff—catastrophic coverage, high-risk pools, tax reform, etc.—and I think Paul Waldman's response pretty much says what needs to be said:

The biggest problem with this kind of appeal is that he will never, ever get anything beyond a tiny number of Republicans to invest any effort in coming up with a health-care plan. That would involve understanding a complex topic, weighing competing values and considerations against one another, and eventually getting behind something that will be something of a compromise. And let me say it again: They. Just. Don't. Care.

I don't blame Ponnuru and others for trying to get conservatives to embrace some kind of healthcare plan. I think they're kind of crazy to think their proposed plan would (a) work, (b) be politically attractive, or (c) be popular, but maybe that's just my liberal bias talking. What's not my liberal bias talking, however, is the plain fact that conservatives don't care about expanding access to healthcare. As Waldman says, the evidence on this score is overwhelming. They opposed Medicare. They opposed CHIP. They've opposed every expansion of Medicaid ever. Only brutal strongarm tactics got them to support their own president's prescription drug plan, despite the sure knowledge that killing it would likely lose them the White House the following year. And of course, they've opposed every Democratic attempt to pass universal healthcare legislation in the last century.

During that same period, Republicans have never shown any interest in a plan of their own. They periodically put on a show whenever Democrats propose something that looks like it might have legs, but it's purely defensive. When the threat goes away, so does the show. This has happened like clockwork for decades.

There is no way—repeat: no way—to broaden access to healthcare without spending more money. That's something Republicans have never been willing to do, and they're less willing now than ever. Nor is there any way to tap dance around this. You can try, but you'll get caught pretty quickly. There's just no way to square this circle.

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