It turns out that timing is everything with the blood moon. We had a thin little haze of clouds passing across the sky here in Irvine, so I couldn't get a very sharp image, but at 11:24 pm, the moon was still disappointingly moon-colored. By 12:03 am, however, it was satisfyingly florid. Enjoy.
The Social Security Administration announced Monday that it will immediately cease efforts to collect on taxpayers’ debts to the government that are more than 10 years old.
....“I have directed an immediate halt to further referrals under the Treasury Offset Program to recover debts owed to the agency that are 10 years old and older pending a thorough review of our responsibility and discretion under the current law,” Social Security’s acting commissioner, Carolyn Colvin, said in a statement.
So there you have it. If your mother—maybe, possibly—got overpaid 40 years ago when you were a five-year-old child, the Social Security Administration will no longer seize your tax refund check in order to recover her alleged debt. Progress!
The CBO released a small bit of good news/bad news about Obamacare today. The good news: they now estimate that the 10-year cost of the program will be $104 billion less than they previously thought—which, in turn, was less than they had projected in 2010. This is primarily because exchange premiums have come in lower than CBO originally estimated, which means that federal subsidies will be lower.
The bad news: the lower cost of premiums is primarily because the quality of the plans coming from insurers is lower than CBO originally estimated: "The plans being offered through exchanges in 2014 appear to have, in general, lower payment rates for providers, narrower networks of providers, and tighter management of their subscribers’ use of health care than employment-based plans do. Those features allow insurers that offer plans through the exchanges to charge lower premiums (although they also make plans somewhat less attractive to potential enrollees)."
CBO didn't update its projection of Obamacare revenues, but if those don't change, it means that Obamacare will reduce the deficit even more than we thought.
But here's an interesting thing: CBO continues to project that Obamacare will lead to no short-term change in employer-based insurance. But the latest Rand poll suggests that employer insurance has increased by about 7 million since Obamacare enrollment started up last year. If that number turns out to be real, I wonder how that will affect CBO's budget estimates? It all depends on how this feeds into their models, but it seems like it would be a positive thing one way or the other.
TIAA-CREF is buying Nuveen Investments for $6.25 billion from Madison Dearborn, a private equity shop that bought Nuveen in 2007. Nuveen has performed poorly since then, but insiders say that the TIAA-CREF deal ensures that the Madison Dearborn will at least break even on its investment. Felix Salmon is gobsmacked after running through the numbers:
So here’s my back-of-the-envelope math: you buy a company for $2.7 billion in cash, plus debt which you refinance a few times. While you’re running the company, it loses a total of $2.4 billion. And then you sell the company for $1.75 billion in cash. Total going out the door: $5.1 billion. Total coming in, at exit: $1.75 billion. Net loss: some $3.35 billion, give or take.
All of which raises some big questions about the WSJ’s claim that Madison Dearborn “will have at least broken even on its Nuveen investment”. If that claim is even close to being true, then at the very least we can’t take Nuveen’s public filings at face value at all....This is worth remembering, when private-equity types (think Mitt Romney) claim that their interests are aligned with the interests of the companies they buy. That certainly doesn’t seem to have been the case here. Nuveen is being sold with about $1.5 billion more debt than it started with, and with cumulative losses under Madison Dearborn’s ownership of some $2.4 billion. That’s not a great legacy for TIAA-CREF to inherit. If Madison Dearborn really is breaking even on this deal, that only goes to show the enormous disconnect between the economics of private equity companies — the wealthy rentiers of society — versus the economics of the real-world companies they buy and sell.
Of course, one possibility is that Madison Dearborn is just putting a brave face on things and reporters are taking it at face value. More likely, though, there are tax games of some kind that allowed Madison Dearborn to strip a ton of value out of Nuveen over the past seven years. I suppose they're also benefiting from low interest rates, which means that Nuveen's refinanced debt is less onerous now than it was in 2007.
In any case Salmon's point is well taken. If you can break even after running a company as disastrously as Madison Dearborn has, there's something pretty badly rotten about the entire world of high finance. But then, you knew that already, didn't you?
On Thursday I posted a couple of very rudimentary comments regarding Thomas Piketty's blockbuster new book, Capital in the 21st Century. I had questions about Piketty's estimates of r (return on capital) and g (economic growth) in the past and—much more importantly—how they were likely to play out in the future. But all I had were amateur musings because I am, after all, only an amateur.
However, yesterday Brad DeLong tackled some of the questions I asked in a far more rigorous and disciplined way, teasing out a lot of unstated implications along the way—including the importance of various measures of r and how they relate to the probability of increasing future wealth concentration in the real world. It's a long post, and complex in places, but highly recommended. If you're willing to work your way through it, DeLong provides a framework for thinking about Piketty's model that helps you start to make sense of both the book and its conclusions.
POSTSCRIPT: I've gotten a couple of questions about why I seem unduly skeptical, or even harsh, about Piketty's book. It's obviously a landmark work, I don't really mean to be unfair. But it's a book with innovative and untested ideas that has obvious appeal to anyone left of center, and I think this is precisely the time to avoid unquestioning hosannas. Affinity bias makes us all sympathetic to Piketty's arguments, and that's why we should instead question it carefully and thoroughly.
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?
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.
“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.
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.
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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.
"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.
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