Kevin Drum

Factlet of the Day: Mutual Funds Suck

| Sun Mar. 15, 2015 2:50 PM EDT

Jeff Sommer summarizes the results of actively managed mutual funds over the past five years:

If all of the managers of the 2,862 funds hadn’t bothered to try to pick stocks at all — if they had merely flipped coins — they would, as a group, probably have produced better numbers.

I am not an investment advisor, so do whatever you want to do. But if you're smart, you'll invest in a few low-fee index funds and then just leave them alone. That is the path of wisdom.

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Ides of March Catblogging - 15 March 2015

| Sun Mar. 15, 2015 1:25 PM EDT

Et tu, Hopper? A few days ago I featured Hilbert draped over my sister, so I figured that turnabout is fair play: here's Hopper draped over me to make up for the lack of normal Friday catblogging. Hopper is a Daddy's girl, and will sit on no one's lap but mine. Nor will she even do that very often. But once or twice a day she suddenly gets in the mood and plonks herself into the crook of my arm for an hour or so, purring loudly the whole time. Unlike the tubby Hilbert, Hopper weighs a svelte 11 pounds (up from nine when we first got her), so she's no trouble at all to handle. A relaxing time is had by all.

Chart of the Day: Even the Rich Think the Middle Class Is Getting Screwed

| Sun Mar. 15, 2015 11:56 AM EDT

A couple of weeks ago Pew did a poll about government policies during the recession, but I've been too sick to blog about it. However, it's stayed safely in my Saved Stuff folder awaiting my recovery, so here it is today. It's really two charts. Here's the first one:

Nothing too surprising about this. Generally speaking, people think the government did a lot to help out banks (bingo!), large corporations, and the wealthy. The poor and the middle class pretty much got nada. Since any poll like this is going to be dominated by the sheer number of poor and middle class respondents compared to wealthy respondents, this is about what you'd expect.

But now take a look at this table:

That's amazing. Even those with high incomes agree that wealthy people benefited the most from government policies and that the poor and middle class got bupkis. Even Republicans largely agree that this has been the case.

This is Stockholm Syndrome writ large. Everyone—rich, poor, Republican, Democrat—agrees that in the wake of the greatest financial disaster since the Great Depression, the government mostly turned its largesse on banks, big corporations and the wealthy. Nonetheless, Republicans—the longtime party of banks, big corporations and the wealthy—have done increasingly well over the past six years. For an explanation, take your pick:

  • Most voters don't understand Republican economic priorities.
  • Most voters don't think Democrats would do any better.
  • Most voters think this is just the way the world works and there's no point voting based on economic promises in the first place.

Whatever the reason, only about 20 percent of middle-class voters think government policies benefit the middle class. The first party to figure this out and embrace it wholeheartedly has a huge electoral opportunity ahead of it. But first, they're going to have to ditch the rich. Can either of them ever do that?

Pi Day Health News

| Sat Mar. 14, 2015 11:38 AM EDT

Well, a miracle happened. Last Monday, the 2nd, I fell off a deep cliff. For no apparent reason, I was sleeping very poorly and I spent entire days in a miasma of lethargy so great I was nearly debilitated. Twice things got so bad that I went to the ER.

Then, yesterday, suddenly I climbed back on the cliff. I woke up feeling perfectly normal. A little tired, perhaps, but that's normal for post-chemo recovery. In all other respects, I'm human again.

So what happened? Theory 1: We'll never know. Stuff happens for mysterious reasons. Theory 2: It was depression, and it eventually worked its way out of my system. Theory 3: My physician prescribed a different set of sleep meds on Thursday, and I slept better that night.

It's all very weird, and hopefully it will last. In another week or two the Effexor should kick in, and hopefully that will boost my mood (and improve my sleep) as well. The timing is welcome, since I have a busy few weeks of tests and procedures ahead of me.

So that's that. I'm still not in tip-top condition or anything, but I'm basically OK for the first time in two weeks. It's amazing.

POSTSCRIPT/BLEG: My new sleep meds work better than the old ones, but they still aren't ideal. My doctor mentioned the possibility of trying a med like Lunesta, which I gather is a time-release formulation. Does anyone with moderate-to-severe insomnia have any experience with this? Does it really keep you asleep for a full night? Any personal experiences welcome.

Friday Hummingbird Blogging - 13 March 2015

| Fri Mar. 13, 2015 12:00 PM EDT

My physical collapse this week prevented me from taking any new cat pictures, and today I have a full day of workups in preparation for stage 2 of chemo. However, I did snap a new picture of our hummingbird babies yesterday. They seem to be growing nicely.

In the meantime, if you need a cat fix, my sister recommends this Daily Mail article about a human-cat translation device. Spoiler alert: it didn't go well.

Health Update

| Wed Mar. 11, 2015 1:03 AM EDT

On Tuesday I landed in the emergency room once again, and with the same results: there's nothing wrong with me. Nothing aside from a debilitating fatigue and lassitude, that is. But whatever it is, my oncologist doesn't think it's related to the chemo meds, and the ER doc was unable to find any other likely medical cause. So it's a mystery.

On the good news front, my biopsy results came back and were quite positive. So I'm now firmly scheduled for stage 2 of my treatment, a stem cell transplant at City of Hope. This will happen in April, but there are going to be plenty of preliminaries in the meantime. More details as they become available.

As for blogging, I just don't know. What's happened to me over the past week is unexpected, unexplained, and quite frankly scary. I don't know how I'm going to feel from day to day, but I have a feeling that the next few weeks—or perhaps months—are going to be fairly unpleasant and unproductive. I'll talk to my editors about this shortly and figure out a plan.

Wish me luck.

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Once Again, Obamacare Is Turning Out To Be Cheaper Than Expected

| Mon Mar. 9, 2015 1:57 PM EDT

Here's some good news: the latest report from the CBO has reduced its estimate of the cost of Obamacare. This is due partly to a slight decrease in the number of people CBO expects to be covered, but mostly due a lower estimate of the cost of insurance premiums. Thanks to this, federal subsidies are estimated at $209 billion less over a ten-year period, and the cost of CHIP and Medicaid is estimated at $73 billion less. However, there are also reductions in expected revenues from Obamacare's excise tax, so the net reduction amounts to $142 billion over ten years. The table below tells the story.

Sarah Kliff has more details here. As she notes, this isn't the first time CBO has reduced its estimate of how much Obamacare will cost: "The CBO is projecting the federal government will spend $600 billion less on health care than the agency expected in 2010, when it wasn't counting even a dollar of the spending in Obamacare. That's simply an amazing fact." Yep.

Yes, Education Matters. But It's Not the Answer to Growing Income Inequality.

| Mon Mar. 9, 2015 10:55 AM EDT

David Brooks has a bit of an odd column today:

For many years, Democratic efforts to reduce inequality and lift middle-class wages were based on the theory that the key is to improve the skills of workers. Expand early education. Make college cheaper. Invest in worker training. Above all, increase the productivity of workers so they can compete.

But a growing number of populist progressives have been arguing that inequality is not mainly about education levels. They argue that trying to lift wages by improving skills is an “evasion.” It’s “whistling past the graveyard.”

....Focusing on human capital is not whistling past the graveyard. Worker productivity is the main arena. No redistributionist measure will have the same long-term effect as good early-childhood education and better community colleges, or increasing the share of men capable of joining the labor force.

I don't quite get who Brooks is arguing against here. Larry Summers is the obvious target, but Summers has been clear that he thinks education is important, both individually and for the economy as a whole. He just doesn't think that improved education is likely to have much impact on growing income inequality, which is driven by other factors.

But Brooks never even pretends to address this. I don't think there are any prominent Democrats arguing that education isn't important. Pretty much all of them are on board with good early-childhood education and better community colleges, among other things. That will help individuals and make the American economy stronger.

But will it rein in growing income inequality? As long as inequality is driven primarily by the gains of the top 1 percent—which it is—then it won't. To address that particular problem, we have to look elsewhere.

Sunday Hummingbird Blogging

| Sun Mar. 8, 2015 5:31 PM EDT

I'm feeling just energetic enough today to actually eat lunch (hooray!) and take a picture of the baby hummingbirds in our backyard. They sit there all day with their beaks stuck in the air waiting for mama to come home and deposit something yummy.

Hummingbirds must be pretty stubborn critters. Last year's crop of hummingbird eggs never hatched because the nest was on a thin branch that blew away during the first decent storm of the year. So what happened? This year's nest is in exactly the same spot as it was last year. I guess mama is lucky that we've had pretty mild weather this year.

Friday Cat Blogging - 6 March 2015

| Fri Mar. 6, 2015 3:40 PM EST

Today's catblogging is special. As usual, the lighting in our living room is pretty bad, but nonetheless, this is your first glimpse of the commenter known as Inkblot's Aunt—aka my sister Karen. She's been wonderful about helping us out as Marian and I both recover from our various medical problems, and on Wednesday she came over and stayed with me all evening when I was feeling especially bad. You can see her reward in the photo: Hilbert finally decided she was part of the family and plonked down in her arms for a nice hour-long snooze.

By the way, when I head off to stage 2 of my chemotherapy, Karen will be catsitting for several weeks. This means she'll be responsible for using her iPad to capture catblogging photos each week. Depending on how I feel during stage 2, I'll post them as I get them. In any case, be nice to her in comments. Sometime in the next month or two, catblogging will depend on her.