Kevin Drum

Greece Gives Europe What It Wants, Europe Says No Anyway

| Thu Jun. 25, 2015 12:11 PM EDT

European leaders were in final, last-ditch, eleventh-hour, crisis talks with their Greek counterparts today, which by my count is at least the third time we've held final, last-ditch, eleventh-hour, crisis talks in the past two weeks. This leaves me a little unsure of when the real "world will explode" deadline is anymore. But soon, I'm sure.

In any case, as Paul Krugman notes, the Europeans are no longer merely demanding concessions of a certain size from the Greeks, they now want final say over the exact makeup of the concessions:

The creditors keep rejecting Greek proposals on the grounds that they rely too much on taxes and not enough on spending cuts. So we’re still in the business of dictating domestic policy.

The supposed reason for the rejection of a tax-based response is that it will hurt growth. The obvious response is, are you kidding us? The people who utterly failed to see the damage austerity would do — see the chart, which compares the projections in the 2010 standby agreement with reality — are now lecturing others on growth? Furthermore, the growth concerns are all supply-side, in an economy surely operating at least 20 percent below capacity.

Basically, the Europeans just can't seem to say yes even when they get what they want. Besides, although tax increases probably will hurt Greek growth, so will spending cuts. There's just no way around it. The Greek economy is completely moribund, and any kind of austerity is going to make it worse. But the Europeans want austerity anyway, and they have the whip hand, so now they've decided they also want to dictate the exact nature of the concrete life preservers they're throwing to Greece.

The Greeks have little choice left, unless they're willing to leave the euro, which would cause massive short-term pain at home. Maybe they will, but it would take a backbone of steel to do it. Voters would probably cheer raucously the first night, but be in a mood to vote the entire team out of office after about the second day, when their savings and pensions were converted into New Drachmas and suddenly slashed in half. There is no happy ending to this.

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Obamacare Survives Supreme Court to Fight Another Day

| Thu Jun. 25, 2015 11:30 AM EDT

Hey, I finally got one right! The Supreme Court decided to keep Obamacare subsidies intact, with both Roberts and Kennedy voting with the liberal judges in a 6-3 decision. And apparently they upheld the subsidies on the plainest possible grounds:

Chief Justice Roberts wrote that the words must be understood as part of a larger statutory plan. “In this instance,” he wrote, “the context and structure of the act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase.”

Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” he added. “If at all possible, we must interpret the act in a way that is consistent with the former, and avoids the latter.”

So this had nothing to do with the possibility that if Congress required states to build their own exchanges in order to get subsidies, that would be unconstitutional coercion on the states. That had been something a few of us speculated on in recent days. Instead it was a white bread ruling: laws have to be interpreted in their entirety, and the entirety of Obamacare very clearly demonstrated that Congress intended subsidies to go to all states, not just those who had set up their own exchanges.

So that's that. As far as I know, there are no further serious legal challenges to Obamacare. The only challenge left is legislative, if Republicans capture both the House and the Senate and manage to get a Republican elected president. So let's all hope that doesn't happen, m'kay?

Health Insurance for All Is About a Lot More Than Just Health

| Wed Jun. 24, 2015 6:28 PM EDT

Megan McArdle writes today that there's little consistent evidence showing that giving people health insurance actually does much to save lives. This is based largely on a couple of recent papers (plus a few other older ones), and she's basically right. She's also right when she says that health insurance does save people lots of money. I don't want to address this literature in detail right now, but if you want to know more about it you should read Ezra Klein's post about this and then McArdle's response.

However, I do have some quick comments I want to add to this conversation. Some of it echoes what the other posts say, while some of it is new. Here it is:

  • The single biggest piece of evidence about the effect of health insurance is a study of Medicaid in Oregon a few years ago. It showed that people who randomly got Medicaid coverage didn't show much improvement in their health, nor did they live any longer than those without Medicaid.
  • However, as important as it was, the Oregon study was small; the time frame was short; the population was drawn entirely from the poor; and the results were ambiguous. Nobody should ignore this study, which was unique in being a true controlled trial, but no one should think it's the final word either.
  • The results of the Oregon study would probably not scale up. One way or another, Oregon's health care system can absorb a few thousand uninsured people. Some of the cost gets absorbed by hospitals that don't get paid. Some gets absorbed by local programs. Some gets absorbed by free clinics. It's a strain, but the system can handle it without breaking completely.
  • But this isn't an argument against health insurance generally. If half the state were uninsured, the system would almost certainly break down. There would simply be too many people who either couldn't or wouldn't pay for their care, and not enough people left over to absorb that cost.
  • Also, as I like to point out ad nauseam, there's more to health care than mortality. A dental filling won't extend your life, but it will sure make you feel better. Ditto for a hip replacement or an antidepressant.
  • Health insurance is a financial lifeline, and in many cases prevents bankruptcy. But there's more. It's also a huge reliever of stress. Trying to cobble together care from a complicated, ad hoc network of clinics, ERs, doctors who don't want to see you, and friends who can loan you a few bucks is soul destroying—especially for people whose lives probably kind of suck to begin with.

In the end, I think this is what health insurance is mostly about: financial security and common decency. Yes, the uninsured can usually patch together health care in an emergency, and sometimes even when it's not. This is why access to health insurance probably has only a modest effect on health. (Though I don't believe it's zero. If we could do a bigger, better, longer-term study we'd almost certainly see a difference.) Still, is a constant, desperate search for health care really a decent thing to tolerate in the richest country in the world? Is relentless, gnawing worry about whether to buy food this week or take your child in for a checkup a decent thing for us to tolerate? Is an endless, threatening barrage of harassment from hospital bill collectors a decent thing for us to tolerate?

It kills me that some people think it's just fine to tolerate this—among the poor, anyway. It's true that there are lots of things that are inevitably going to afflict the lives of the poor. Compared to the better off, they'll have worse food, worse housing, worse cars, and worse clothes. But should they have worse health care? That's a moral question, not a scientific one. And my moral compass says that health care is one of the things all of us should have decent, regular access to. In fact, it makes me a little sick to my stomach every time I have to face up to the fact that a lot of moral compasses here in America apparently don't agree.

It's Time for Another Obama Apology Tour

| Wed Jun. 24, 2015 1:49 PM EDT

Here's our latest "crisis":

French President Francois Hollande held a crisis meeting of the country's Defense Council on Wednesday after newspapers published WikiLeaks documents showing that the United States eavesdropped on him and two predecessors.

After the meeting, the council issued a statement lambasting U.S. spying as "unacceptable" and declaring that France had demanded two years ago that the National Security Agency stop snooping on its leaders. The latest WikiLeaks revelations, published by the daily newspaper Liberation and the investigative news website Mediapart, claim the NSA eavesdropped on telephone conversations of former Presidents Jacques Chirac and Nicolas Sarkozy as well as Hollande.

Look, can't we just assume the NSA has been spying on every world leader around the globe? Clearly, the answer is for President Obama to put this finally to rest by embarking on an apology tour of the entire planet—except for leaders we don't like and plan to keep spying on. This will accomplish two things: (a) it will take care of the whole spying thing all at once, instead of having it dribble out every month or two, and (b) Obama really would go on an apology tour, which would make Republicans deliriously happy. Finally they'd be able to accuse him of going on an apology tour and they wouldn't even have to lie about it. How cool is that?

Then, when it's all over, we can go back to spying on everyone, except more carefully. I mean, you didn't really think we were going to stop spying on these guys, did you?

The Rest of the World Is Pretty Happy With President Obama's Handling of World Affairs

| Wed Jun. 24, 2015 12:36 PM EDT

President Obama has had his ups and downs on the world stage. Libya didn't turn out so well. There's been no progress between Israel and the Palestinians. Vladimir Putin continues to be annoying. Still, all things considered, he hasn't done badly. He's started some new wars, but none as horrifically bad for US interests as George Bush's. He appears to have managed passage of the Trans-Pacific Partnership. He negotiated the NEW START treaty with Russia. He's mostly stayed out of Syria, despite endless braying from Republicans. The pivot to Asia has been moderately successful. And he might yet sign a treaty that will halt Iran's nuclear bomb program, though it still looks like no more than a 50-50 proposition to me.

But enough about me. What does the rest of the world think of Obama? According to a new Pew poll, they think surprisingly well of him. Obama's foreign policy is astonishingly well regarded in France, Italy, and Germany—and surprisingly, although his numbers are down from last year, he still does reasonably well in Israel too. And here I thought Obama was universally hated in Israel because he had betrayed them to their enemies thanks to his preoccupation with sucking up to Muslims. I guess that'll teach me to listen to Republicans.

Obama bombs in a few countries too, notably Russia, Jordan, and Pakistan. Russia and Pakistan are easy to understand, but what's the deal with Jordan? I don't quite remember what we've done to piss them off.

China is surprisingly positive: 44-41 percent approval. The rest of Asia is strongly positive, probably because they trust Obama to stand up to China.

Anyway, Obama's median approval throughout the world is a surprisingly healthy 65-27 percent. He could only wish for such strong approval at home.

Home Weatherization Not As Good a Deal As We Thought

| Wed Jun. 24, 2015 11:48 AM EDT

Brad Plumer passes along some bad news on the effectiveness of residential energy efficiency upgrades. A massive controlled test in Michigan showed that it doesn't pay for itself:

The researchers found that the upfront cost of efficiency upgrades came to about $5,000 per house, on average. But their central estimate of the benefits only amounted to about $2,400 per household, on average, over the lifetime of the upgrades. Yes, the households were using 10 to 20 percent less energy for electricity and heating than before — but that was only half the savings that had been expected ahead of time. And households weren't saving nearly enough on their utility bills to justify the upfront investment.

The culprit appears to be the real world. Engineering studies suggest that residential upgrades should pay for themselves in lower energy costs within a few years, but in real life the quality of the upgrades is never as good as the engineering studies assume:

These engineering studies may not always capture the messiness of the real world. It's easy to generate ideal conditions in a lab. But outside the lab, homes are irregularly shaped, insulation isn't always installed by highly skilled workers, and there are all sorts of human behaviors that might reduce the efficacy of efficiency investments.

....In this particular study, the economists found that the federal home weatherization program was not a particularly cheap way to reduce CO2 emissions. Although energy use (and hence carbon pollution) from the homes studied did go down, it came at a cost of about $329 per ton of carbon. That's much higher than the $38-per-ton value of the social cost of carbon that the US federal government uses to evaluate cost-effective climate policies.

Back to the drawing board.

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Even Wisconsin's Republicans Are Getting Tired of Scott Walker

| Tue Jun. 23, 2015 5:04 PM EDT

Our story so far in America's laboratories of democracy: Over the past few years, Republican governors have been eagerly implementing big tax cuts, insisting that they will supercharge their states' economies and increase revenue instead of reducing it. Kansas was the poster child for this experiment, and it failed miserably. Louisiana has been a disaster too. Now comes Wisconsin, where fellow Republicans are getting a little tired of Governor Scott Walker's denial of reality:

Leaders of Mr. Walker’s party, which controls the Legislature, are balking at his demands for the state’s budget. Critics say the governor’s spending blueprint is aimed more at appealing to conservatives in early-voting states like Iowa than doing what is best for Wisconsin.

Lawmakers are stymied over how to pay for road and bridge repairs without raising taxes or fees, which Mr. Walker has ruled out. The governor’s fellow Republicans rejected his proposal to borrow $1.3 billion for the roadwork, arguing that adding to the state’s debt is irresponsible.

Oh man. Been there, done that. This was also Arnold Schwarzenegger's solution to a budget hole created by his own tax cuts, and it didn't work out so well. It turns out that spending is spending, whether you pay for it now or later.

As in so many other states, even Republican legislators are starting to glom onto the fact that if you cut taxes, you're pretty likely to create a big budget hole. Unfortunately for them, they're learning that there's only so far you can go in crapping on the poor to close the hole.1 At some point, you have to start cutting back on stuff you approve of too, like roads and bridges. But Walker doesn't care. He's got a presidential run coming up, and he wants to be able to say he didn't raise taxes. If that means playing "let's pretend" and borrowing the money instead, he's OK with that.

On the bright side, at least it's better than the childishness that Bobby Jindal came up with. And borrowing costs are low right now. So I guess things could be worse.

1Though in Wisconsin's case, Walker's signature move for crapping on the poor has been to refuse Obamacare's Medicaid expansion. This will cost Wisconsin $345 million over the next two years, making their budget hole even worse. That's how much Walker wants to crap on the poor.

Waiters Now Have Yet Another Gripe to Contend With

| Tue Jun. 23, 2015 2:03 PM EDT

Roberto Ferdman writes today about the "most annoying restaurant trend happening today." But when I got around to reading it, I was a little surprised by how it ended:

Without my permission, restaurants have abandoned, or simply overlooked, a classic tenet of service etiquette....Rather than clear plates once everyone at the table has finished the meal, which has long been the custom, servers instead hover over diners, fingers twitching, until the very instant someone puts down a fork. Like vultures, they then promptly snatch up the silverware — along with everything else in front of the customer. If you're lucky, they might ask permission before stealing your plate.

....It's possible that there's an economic impetus behind it. "The price of land is going up, which pushes up the value of each table," said [Tyler] Cowen. "That makes moving people along more important."

....But maybe waiters are clearing individual plates because they believe that's what customers want. I have heard as much from servers and restaurateurs.

No excuse, however, should suffice. Publicly, restaurants might argue that they are trying to avoid clutter; privately, they might encourage waiters to speed tables along; but what it amounts to is an uncomfortable dining experience.

Wait. What? "No excuse should suffice"? If Ferdman dislikes this trend, that's fine. But if, in fact, most diners prefer having their places cleared when they've finished eating, that sure seems like a more than sufficient reason for this classic tenet of service etiquette to hit the bricks. It's not as if it came down on a tablet from Mount Sinai, after all. Surely the most basic tenet of service etiquette is to make customers as comfortable and satisfied as possible. If, in the 21st century, it turns out that this requires waiters to remove place settings quickly, then that's what they should do, even if a small minority dislikes it.

Now personally, I think the most annoying restaurant trend happening today is that all the restaurants I like have gone out of business. It's eerie as hell. Almost literally, every restaurant that Marian and I used to eat at regularly has closed, to be replaced by some horrible trendy chain outlet. Our favorite Chinese place is gone. And our favorite Mexican place. Our favorite pizza place. Our favorite Italian place. Our second-favorite pizza place. And probably a few others I've forgotten about. There are basically only two of our favorites left, and they don't seem like they're about to go out of business, but who knows?

It's my own fault, of course, for living in Irvine, where the Irvine Company owns all the land and basically prices out of business anything except profitable chain stores. It's surely no coincidence that of the two restaurants still standing, one is outside Irvine and the other is about a hundred yards from the city limit. I made my bed, now I have to lie in it.

POSTSCRIPT: Back on the original topic, Ferdman's piece has gotten me curious about something. I don't go to a lot of high-end restaurants, but I do go to a few now and again. And unless my memory is playing tricks on me (always a possibility), it's always been the custom to remove plates when diners are finished, not all at once when everyone is finished. Is this a Southern California thing? Is it a matter of how high-end the restaurant is? I eat at expensive places on occasion, but virtually never at the kind of truly pricey places where you have to wait a month for a reservation. Help me out here. Why is it that removing place settings individually strikes me as normal, not a crime against proper etiquette?

Fast Track Passes. TPP Now Nearly Certain to Pass Too.

| Tue Jun. 23, 2015 12:27 PM EDT

Well, it looks like the Trans-Pacific Partnership treaty is in business. The standalone fast-track bill just passed the Senate by a hair, 60-37. Several Republicans defected and voted no even though they had voted yes the first time around, but only one Democrat defected. So now it goes to President Obama's desk, where he'll sign it.

Next up is a standalone Trade Adjustment bill, which Democrats killed the first time around because it was linked to fast track, which meant that voting no killed fast track. This time around, however, Democrats will presumably go ahead and vote for it since voting no will no longer stop fast track. Mitch McConnell and John Boehner have both promised to bring it up for a vote and to do their best to whip enough Republican votes for it to pass. If it doesn't, Democrats will be furious at having been conned, and might take this out by voting no on TPP itself when it comes to the floor. This gives Boehner and McConnell plenty of motivation to get it passed, and I think they will.

This still doesn't guarantee that TPP itself will have smooth sailing. However, it takes only a simple majority to pass, so there would have to be quite a few defections to kill it. Still, there's time. Once the full text finally becomes public, I expect a full-court press from anti-TPP forces in both parties. I'd give it a 90 percent chance of passage at this point, but there's still a glimmer of hope for opponents.

Three Things I Don't Care About

| Tue Jun. 23, 2015 12:09 PM EDT

There are lots of topics I don't write about (or write very little about), and normally nobody notices. Or, if they do, they don't know why I haven't written about any particular one of them. Maybe it's just uninteresting to me. Maybe I've gotten temporarily bored by it. Maybe I don't know enough about it. Maybe I can't think of anything interesting to say that hasn't already been said. Could be lots of reasons.

That said, here are three things I haven't written about, and probably won't:

Should we call Dylann Roof a terrorist? In the dim past, back when we used to blog earnestly about such things, I always argued that this was a silly distraction. You can call members of Al-Qaeda terrorists or extremists or militants or whatever. For Republicans, this eventually became some kind of weird litmus test designed to show that Democrats were appeasers, and it was ridiculous. Ditto today, coming from the Democratic side. Call Roof a terrorist if you want, or call him a madman or a racist psychopath. I don't care.

The pope on climate change. I'm not Catholic. I'm not even Christian. Pope Francis seems like a relatively good guy as popes go, but I don't care what he thinks about much of anything. I'm certainly not going to opportunistically start now just because he happens to be saying something I agree with.

Donald Trump. Oh please.

That's it. We'll soon be back to our regularly scheduled program of stuff I do write about.

IMPORTANT NOTE! I almost forget to add a caveat that's critical in the blogosphere: this is just me. Everyone else should feel free to write about all these things. This post should not be taken as a personal condemnation of anyone who chooses to do so. First Amendment. De gustibus. Etc.