Kevin Drum

It's Finally Time For a New Phone

| Sat Apr. 12, 2014 8:52 PM PDT

So I went out today to my local T-Mobile store to check out the new HTC One, and as far as I'm concerned they ruined it. It's now a gigantic slab, thanks to the 5-inch screen mania that's mowed down everything in its path over the past year. They should have kept the old size, even if it meant the screen might be a mere 4.8 or 4.9 inches.

So it's now off my radar, and I'm pretty much thinking I'll go ahead and get a Google Nexus 5 instead. Ironically, it also has a 5-inch screen, but it's nonetheless about the same size as the old HTC One. It's nowhere near as good looking, but it seems to be pretty functional and pretty reasonably priced. Anyone have any reason to warn me away from it?

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Heartbleed is a Sucking Chest Wound in the NSA's Reputation

| Sat Apr. 12, 2014 8:01 AM PDT

On Friday, Bloomberg's Michael Riley reported that the NSA was aware of the Heartbleed bug from nearly the day it was introduced:

The U.S. National Security Agency knew for at least two years about a flaw in the way that many websites send sensitive information, now dubbed the Heartbleed bug, and regularly used it to gather critical intelligence, two people familiar with the matter said....Putting the Heartbleed bug in its arsenal, the NSA was able to obtain passwords and other basic data that are the building blocks of the sophisticated hacking operations at the core of its mission, but at a cost. Millions of ordinary users were left vulnerable to attack from other nations’ intelligence arms and criminal hackers.

Henry Farrell explains just how bad this is here. But later in the day, the NSA denied everything:

“NSA was not aware of the recently identified vulnerability in OpenSSL, the so-called Heartbleed vulnerability, until it was made public in a private-sector cybersecurity report," NSA spokesperson Vanee Vines told The Post. "Reports that say otherwise are wrong.”

The White House and the Office of the Director of National Intelligence echoed that statement Friday, saying neither the NSA nor any other part of the U.S. government knew about Heartbleed before April 2014....The denials are unusually forceful for an agency that has historically deployed evasive language when referring to its intelligence programs.

You know, I'm honestly not sure which would be worse. That the NSA knew about this massive bug that threatened havoc for millions of Americans and did nothing about it for two years. Or that the NSA's vaunted—and lavishly funded—cybersecurity team was completely in the dark about a gaping and highly-exploitable hole in the operational security of the internet for two years. It's frankly hard to see any way the NSA comes out of this episode looking good.

Friday Cat Blogging - 11 April 2014

| Fri Apr. 11, 2014 11:50 AM PDT

Here she is, the Queen of Sheba, keeping a watchful eye on her domain and her loyal subjects. Soon she will take a well-deserved nap.

But before you take a nap, how about donating a few bucks to our investigative reporting fundraiser? Our goal is to raise $100,000 over the next three weeks. As you all know, we're a reader-supported nonprofit, so those dollars aren't going to come from big corporations or super-rich political donors. They'll be small contributions from regular people who read Mother Jones. If you value our reporting—or hell, even if you only value our catblogging—please donate $5 to the Mother Jones Investigative Fund. If you can afford it, make it $10. We'll put it to good use. Here's how to make a contribution:

Thanks!

Who Started the Culture Wars, Anyway?

| Fri Apr. 11, 2014 11:16 AM PDT

A couple of days ago Paul Waldman wrote about Persecuted, a new movie that features a Christian evangelist who gets framed for murder by an evil senator and then spends the rest of the film running from government agents. It all sounds pretty silly, and it's come in for plenty of mockery on the left. But after watching the trailer, I have to say that it didn't sound much sillier than plenty of other movies and TV shows I've seen. In Hollywood, evil businessmen have done a lot worse than this to environmental activists and the CIA has done a lot worse to national security whistleblowers.

So fine. Why not make a silly movie about a persecuted evangelist instead of a persecuted journalist trying to expose the CIA? It's not my cup of paranoid thriller tea, but all of us enjoy being paranoid about different things. And I was happy to see that, unlike many lefties, Waldman concedes that right-wing Christian paranoia isn't completely ridiculous:

But liberals should acknowledge that for more fundamentalist Christians, there's a genuine feeling that underlies their fears. In many ways, the contemporary world really has turned against them. Society has decided that their beliefs about family—in which sex before marriage is shameful and wicked, and women are subordinate to their husbands—are antiquated and worthy of ridicule. Their contempt for gay people went from universal to acceptable to controversial to deplorable in a relatively short amount of time. If you are actually convinced that, in the words of possible future senator and current congressman Paul Broun, "I don't believe that the Earth's but about 9,000 years old," then modern geology is an outright assault on your most fundamental beliefs. And so is biology and physics and many other branches of science.

And it's not just changing culture. Over the last half century, various branches of government have also taken plenty of proactive steps to marginalize religion. Prayer in public school has been banned. Creches can no longer be set up in front of city hall. Parochial schools are forbidden from receiving public funds. The Ten Commandments can't be displayed in courtrooms. Catholic hospitals are required to cover contraceptives for their employees. Gay marriage is legal in more than a dozen states and the number is growing rapidly.

Needless to say, I consider these and plenty of other actions to be proper public policy. I support them all. But they're real things. Conservative Christians who feel under attack may be partly the victims of cynical politicians and media moguls, and a lot of their pity-party attempts at victimization really are ridiculous. But their fears do have a basis in reality. To a large extent, it's the left that started the culture wars, and we should hardly be surprised that it provoked a strong response. In fact, it's a sign that we're doing something right.

As far as I'm concerned, the culture wars are one of the left's greatest achievements. Our culture needed changing, and we should take the credit for it. Too often, though, we pretend that it's entirely a manufactured outrage of the right, kept alive solely by wild fantasies and fever swamp paranoia. That doesn't just sell the right short, it sells the left short too. It's our fight. We started it, and we should be proud of it.

Obamacare and the Hack Gap: A Case Study

| Fri Apr. 11, 2014 8:45 AM PDT

"Watch the right search desperately for bad news on Obamacare," says the headline to Michael Hiltzik's piece a couple of days ago about the right, um, desperately searching for bad news on Obamacare. And it's true. Obamacare is a great example of the famous hack gap.

Don't get me wrong. We lefties generally try to portray Obamacare as a success. You won't find Diogenes on either side. But I read lots of lefties who write about health care, and they've generally been willing to acknowledge Obamacare's problems. The federal website rollout was a disaster. The insurance pools so far seem to have fewer of the young and healthy than we'd hoped. Narrow networks are a significant problem, especially in some states. We don't know yet how many Obamacare enrollees were previously uninsured—and in any case, the number appears to be less than CBO projected earlier this year. Etc.

But unless I'm reading the wrong conservatives, you simply see nothing of this sort on the right. Their coverage of Obamacare is simply an endless search for increasingly strained ways to deny that anything even slightly positive has happened. The Obama administration is lying about its numbers. If they're not lying, the figures are meaningless anyway until they've been unskewed. Premiums are skyrocketing. People are being tossed off their plans and thrown in the street. The budget projections are a joke. Cancer patients are dying for lack of doctors to see them. Hours are being cut back and part-time workers are being fired. Fewer people have coverage now than before Obamacare started up.

I could go on. And on. And on. This is the hack gap in all its glory. There's simply no willingness on the right to acknowledge any success at all. And even when they're forced to concede that maybe there are a few people benefiting from Obamacare, it's just an opportunity to rail about Democrats handing out bennies to inner-city moochers like a modern-day Boss Tweed. Welcome to America, ladies and gentlemen.

Senate Torture Report Starts to Leak

| Fri Apr. 11, 2014 8:01 AM PDT

In an entirely unsurprising development, it appears that the Senate report on CIA torture is starting to get leaked. Today, McClatchy reports the complete list of findings from the report, including these:

  • The CIA’s use of enhanced interrogation techniques did not effectively assist the agency in acquiring intelligence or in gaining cooperation from detainees.
  • The CIA inaccurately characterized the effectiveness of the enhanced interrogation techniques to justify their use.
  • The CIA’s use of enhanced interrogation techniques was brutal and far worse than the agency communicated to policymakers.
  • The CIA impeded effective White House oversight and decision-making. The CIA has actively avoided or impeded congressional oversight of the program. The CIA impeded oversight by the CIA’s Office of Inspector General.
  • The CIA manipulated the media by coordinating the release of classified information, which inaccurately portrayed the effectiveness of the agency’s enhanced interrogation techniques.

The whole story is here, along with the complete list of findings. I expect more like this in the future unless the CIA stops slow rolling its declassification process and allows the report to be substantially released.

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File This One Under Big Government Run Amok

| Thu Apr. 10, 2014 8:23 PM PDT

What a weird story this is. A few years ago, someone tacked an amendment onto a farm bill that lifted the 10-year statute of limitations on collection of old debts to the government. So now the Social Security Administration is intercepting tax refunds in order to collect on ancient overpayments.

But that's not the weird part. The weird part is that in some cases, they're seizing money from the children of dead beneficiaries who were overpaid as long ago as the 60s and 70s. According to the Washington Post, "Social Security officials say that if children indirectly received assistance from public dollars paid to a parent, the children’s money can be taken, no matter how long ago any overpayment occurred."

But wait. Even that's not the weirdest part of the story. This is:

A few weeks ago, with no notice, the U.S. government intercepted Mary Grice’s tax refunds from both the IRS and the state of Maryland. Grice had no idea that Uncle Sam had seized her money until some days later, when she got a letter saying that her refund had gone to satisfy an old debt to the government — a very old debt.

When Grice was 4, back in 1960, her father died, leaving her mother with five children to raise. Until the kids turned 18, Sadie Grice got survivor benefits from Social Security to help feed and clothe them.

....Social Security officials told Grice that six people — Grice, her four siblings and her father’s first wife, whom she never knew — had received benefits under her father’s account. The government doesn’t look into exactly who got the overpayment; the policy is to seek compensation from the oldest sibling and work down through the family until the debt is paid.

WTF? They just go after the eldest child first and work their way down? All because their mother was (allegedly) overpaid, which means a bunch of teenage kids benefited three decades ago? That's got to be the most cockamamie thing I've ever heard of.

Two French Unions Ban Work Email After 6 pm

| Thu Apr. 10, 2014 1:41 PM PDT

Huh. A couple of white-collar unions in France have signed a new labor agreement:

The legally binding deal, signed by employers' federations and unions representing almost one million workers in the digital and consultancy sectors, stipulates that employees should be left alone when they are out of the office.

Staff will be ordered to switch off their professional phones and avoid looking at work-related emails or documents on their tablets and computers. Businesses will be required to ensure that workers are under no pressure to check their messages.

The ban takes effect at 6 pm each night. Remarkable.

Some Follow-Up Notes on Thomas Piketty's "Capital in the 21st Century"

| Thu Apr. 10, 2014 10:47 AM PDT

I'm a little reluctant to dive ever deeper into the weeds of Thomas Piketty's Capital in the 21st Century since I'm woefully unqualified for the task. But I have a couple of follow-up comments that might be worthwhile. These are things I alluded to in my post on Tuesday but didn't elaborate on.

First: As you know by now, Piketty's primary argument is that, historically, r > g. That is, the return on capital is higher than economic growth, which means that owners of capital see their incomes grow faster than ordinary laborers. Since the rich own most of the capital, this means that the incomes of the rich naturally increase faster than the non-rich unless proactive steps are taken to stop it.

That's fine. But take a look at the highlighted region in the chart on the right. The first set of points is for 1950-2012, a period in which r was about 0.5 percentage points less than g. The next set of points is a projection for 2012-2050, a period in which r is roughly 0.5 percentage points greater than g. This is not a big difference, especially considering the inherent noise in the data. Even if it's correct, it means the next 40 years will see only small changes in the relative returns to capital and labor.

The real action is in the period 2050-2100, and it's almost entirely dependent on Piketty's projection that g will plummet by two full percentage points. Now, this might be correct. But keep in mind what's going on here. Piketty's main conclusion is (a) based on a projection more than 50 years in the future, which is inherently unreliable, and (b) primarily a guess that economic growth will plummet. So everything boils down to this: will global economic growth plummet during the period 2050-2100? I'd like to suggest that this is a very different question from the one most people are addressing in their reviews of Piketty.

Second: Another thing I mentioned on Tuesday is that if economic growth slows and capital stocks increase, then the return on capital should go down. Piketty acknowledges this—though not in the chart above—but contends that r will fall less than g. In technical terms, this all depends on the elasticity of substitution between capital and labor. However, over at Tyler Cowen's blog, Matt Rognlie argues that Piketty is confusing gross and net production functions. If you account for depreciation, then the elasticity is such that r is likely to fall much faster than Piketty thinks as capital stocks increase and economic growth slows down.

I want to be clear that I can't assess this independently. But it sounds plausible, and Cowen thinks it sounds plausible too. I'd very much like to hear Piketty or someone else address this.

Behind the Scenes on Those Enormous Medicare Billing Numbers

| Thu Apr. 10, 2014 8:53 AM PDT

Yesterday's data dump of how much Medicare pays doctors has generated predictable outrage about the vast amounts some of the top doctors bill. Obviously there are a lot of reasons for high billing rates, but Paul Waldman points to an interesting one: the way Medicare reimburses doctors for pharmaceuticals is partly to blame. The #1 Medicare biller on the list, for example, was a Florida ophthalmologist who prescribes Lucentis for macular degeneration instead of the cheaper Avastin. Since Medicare pays doctors a percentage of the cost of the drugs they use, he got $120 for each dose he administered instead of one or two dollars. That adds up fast. (More on Avastin vs. Lucentis here.)

In the LA Times today, a Newport Beach oncologist who's also near the top of the Medicare billing list offers this defense:

For his part, Nguyen, 39, said his Medicare payout is misleading because all five physicians at his oncology practice bill under his name, and much of that money overall is reimbursement for expensive chemotherapy drugs on which he says doctors make little or no money. Other high-volume doctors voiced similar complaints about the data.

Anyway, Waldman wonders why we do this:

If nothing else, this story should point us to one policy change we could make pretty easily: get rid of that six percent fee and just give doctors a flat fee for writing prescriptions. Make it $5, or $10, or any number that makes sense. There's no reason in the world that the fee should be tied to the price of the drug; all that does is give doctors an incentive to prescribe the most expensive medication they can. That wouldn't solve all of Medicare's problems, but it would be a start. Of course, the pharmaceutical lobby would pull out all the stops trying to keep that six percent fee in place. But that's no reason not to try.

The backstory here is that Medicare used to set the reimbursement rate for "physician-administered drugs" based on an average wholesale price set by manufacturers. This price was routinely gamed, so Congress switched to reimbursing doctors based on an average sales price formula that's supposed to reflect the actual price physicians pay for the drugs. Then they tacked on an extra 6 percent in order to compensate for storage, handling and other administrative costs.

I don't know if 6 percent is the right number, but the theory here is reasonable. If you have to carry an inventory of expensive drugs, you have to finance that inventory, and the financing cost depends on the value of the inventory. More expensive drugs cost more to finance.

However, this does motivate doctors to prescribe more expensive drugs, a practice that pharmaceutical companies are happy to encourage. I don't know how broadly this is an actual problem, but it certainly is in the case of Avastin vs. Lucentis, where the cost differential is upwards of 100x for two drugs that are equally effective. And the problem here is that Medicare is flatly forbidden from approving certain drugs but not others. As long as Lucentis works, Medicare has to pay for it. That's great news for Genentech, but not so great for the taxpayers footing the bill.