Kevin Drum

Update: What Do Critics Mean Who Say Obamacare "Isn't Liberal Enough"?

| Wed Apr. 9, 2014 11:38 AM PDT

I periodically drone on about the laziness of polls that ask a simple approve/disapprove question about Obamacare. The problem is that a lot of people say they disapprove because Obamacare isn't liberal enough. These are folks don't necessarily disapprove of the concept of national healthcare in general or Obamacare in particular, and shouldn't really be counted among right-wing opponents of the law.

A couple of weeks ago, a Kaiser poll gave us a slightly deeper glimpse into all this. They asked the disapprovers why they disapproved, and it was clear that some of them had lefty criticisms of the law, not conservative criticisms. But the evidence was still a bit fuzzy.

Today, Mark Blumenthal goes further. In a recent HuffPo poll, about 9 percent of the respondents said they opposed Obamacare because it wasn't liberal enough. Then, in a follow-up question, they were asked, "In your own words, what do you mean when you say the health care law is not liberal enough?"

The results are on the right. There's still some ambiguity here, but I'd classify several of the responses as likely left-wing criticisms. Adding up the percentages, I get 6 + 4 + 15 + 4 + 4 + 3 = 36 percent. That's a little less than half of those who had a response.

So, very roughly speaking, in future polls I'd guess that about half of the "not liberal enough" folks are basically supporters of Obamacare but want the law to go further. It might even be more than that, but it remains hard to parse the motivations behind all of these responses with precision. Is "too complex" a liberal or conservative criticism? How about "lack of choice"? Hard to say.

In any case, this adds some context to the whole debate about Obamacare critics who say it's "not liberal enough." It's also an object lesson against assuming too much ideological coherence from survey respondents. A larger survey with a bigger sample size and a little more structure to the questions would be welcome.

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Can Anyone Win the 2016 Republican Nomination?

| Wed Apr. 9, 2014 9:41 AM PDT

Ben Smith pours cold water on the idea of Jeb Bush running for president:

The notion that Jeb Bush is going to be the Republican presidential nominee is a fantasy nourished by the people who used to run the Republican Party. Bush has been out of a game that changed radically during the 12 years(!) since he last ran for office. He missed the transformation of his brother from Republican savior to squish; the rise of the tea party; the molding of his peer Mitt Romney into a movement conservative; and the ascendancy of a new generation of politicians — Marco Rubio, Paul Ryan, Scott Walker, Ted Cruz, among them — who have been fully shaped by and trained in that new dynamic. Those men occasionally, carefully, respectfully break with the movement. Scorning today’s Republican Party is, by contrast, the core of Jeb’s political identity.

There's more, and Smith makes a good case without even bothering to mention Bush fatigue.

But I have to say that I'm mystified right now. In 2012, from the very start, I thought Mitt Romney would win the nomination. Basically, the whole contest boiled down to Mitt and the Seven Dwarves, and eventually I figured Mitt would stomp each dwarf and then, battered and bruised, win the nomination.

But this time around, it's just dwarves. Like Smith, I have a hard time seeing Jeb Bush making a serious run. Chris Christie still seems terminally damaged by Bridgegate, though I suppose that's still up in the air depending on what future investigations reveal. Beyond that, I guess Scott Walker is still a possibility—though, in the immortal words of Ann Widdecombe, it's always seemed as if there's a bit of the night about him. And Paul Ryan, of course, though it sure doesn't seem like he's seriously interested in running.

Beyond that, it's just the usual clown show of nutballs and C-list wannabes. You can make a great case for why none of them can possibly win. And yet, someone has to win. It's a mystery.

Guess What? Greece Is Finally Starting to Recover

| Wed Apr. 9, 2014 9:00 AM PDT

Apropos of nothing in particular, I want to highlight this column from Hugo Dixon that I found at Counterparties yesterday:

Greece is undergoing an astonishing financial rebound. Two years ago, the country looked like it was set for a messy default and exit from the euro. Now it is on the verge of returning to the bond market with the issue of 2 billion euros of five-year paper.

There are still political risks, and the real economy is only now starting to turn. But the financial recovery is impressive. The 10-year bond yield, which hit 30 percent after the debt restructuring of two years ago, is now 6.2 percent....The changed mood in the markets is mainly down to external factors: the European Central Bank’s promise to “do whatever it takes” to save the euro two years ago; and the more recent end of investors’ love affair with emerging markets, meaning the liquidity sloshing around the global economy has been hunting for bargains in other places such as Greece.

That said, the centre-right government of Antonis Samaras has surprised observers at home and abroad by its ability to continue with the fiscal and structural reforms started by his predecessors. The most important successes have been reform of the labour market, which has restored Greece’s competiveness, and the achievement last year of a “primary” budgetary surplus before interest payments.

I don't have anything to say about this, but once a narrative takes hold we sometimes don't realize it when things change. If you had asked me last week how Greece was doing, I would have answered, "Oh, they're still screwed." But apparently they're doing better. Not out of the woods yet, but doing better. Update your priors.

POSTSCRIPT: If this keeps up—and that's still a big if—it also might be a lesson in the virtue of kicking the can down the road. Back in 2012, lots of commenters, including me, believed that the eurozone had deep structural problems that couldn't be solved by running fire drills every six months or so and then hoping against hope that things would get better. But maybe they will! This probably still wasn't the best way of forging a recovery of the eurozone, but so far, it seems to have worked at least a little better than the pessimists imagined. Maybe sometimes kicking the can is a good idea after all.

Here's Some Stunning and Unexpected Good News About Obamacare

| Wed Apr. 9, 2014 8:27 AM PDT

Today brings yet another take on Obamacare from Rand's latest survey of the health insurance market. Rand's sample size is fairly small, so there are large error bars associated with their numbers, but they also break them down in interesting ways. The number we've been tracking most closely in the other surveys on insurance is the number of uninsured who got coverage via Medicaid or the exchanges, which Rand displays in the top row of this table:

About 5 million previously uninsured people got coverage via Medicaid and the exchanges. This is slightly lower than other estimates, but only slightly. When you account for the March surge and the sub-26ers on their parents policies, you're probably back up to about 8 million. We'll have a better idea about this next month, but so far this is roughly consistent with other surveys we've seen.

But there's one stunning number in the Rand survey that we haven't seen before: the dramatic surge in people who have employer insurance (ESI). According to Rand, 8.2 million new people—7.2 million of them previously uninsured—have gotten employer insurance since mid-2013. Adrianna McIntyre is agog:

I can’t overstate how stunning this finding is if it’s true; CBO expected that ESI gains and losses would pretty much break even in 2014 and that employer coverage would decline modestly in future years.

If it’s correct, it was probably motivated multiple factors—I hate the word “synergy” on principle, but it comes to mind. The economy has been improving, so some of the previously unemployed have secured jobs with benefits. But CBO built in expectations about economic recovery, so I don’t think it’s quite right to try pinning all (or even most?) of the 8.2 million on that. The individual mandate, while weak in its first year, might be a stronger stick than we expected, nudging people to take their health benefits where they’d previously been opting out. Employers could be helping this move this trend along; the University of Michigan, for example, eliminated “opt out dollars” in 2014 (cash compensation for employees who declined coverage).

If this finding is confirmed, it's a genuine shocker. Although CBO projected that ESI would stay steady, there's been a lot of chatter about the likelihood of employers dropping coverage thanks to Obamacare. But that sure doesn't seem to have happened. So in addition to the usual sources of coverage—Medicaid, exchanges, sub-26ers—it looks like Obamacare has yet another big success story to tell, one that was almost completely unexpected.

For now, this should all be considered tentative. We'll have firmer numbers in April and May, once the March surge is fully accounted for and we know how many people have paid for coverage. But for now, it looks as if Obamacare is not merely hitting its target, but in a broadly unforeseen way, it's wildly exceeding it. This is terrific news.

Nobody Cares What You Think Unless You're Rich

| Tue Apr. 8, 2014 5:36 PM PDT

In a simple model of democratic politics, there are three basic drivers of political decisionmaking:

  • The collective opinion of average citizens
  • The collective opinion of the affluent
  • The lobbying of interest groups

But which of these really matter? Martin Gilens and Benjamin Page studied 1,779 policy outcomes over two decades and came to a pretty simple conclusion: the collective opinion of average citizens doesn't matter a whit:

When the preferences of interest groups and the affluent are held constant, it just doesn't matter what average folks think about a policy proposal. When average citizens are opposed, there's a 30 percent chance of passage. When average citizens are wildly in favor, there's still only a 30 percent chance of passage. Conversely, the odds of passage go from zero when most of the affluent are opposed to more than 50 percent when most of the affluent are in favor.

Interest group lobbying, it turns out, also has an effect on policymaking—but business interest groups matter a lot more than mass interest groups. This comes via John Sides, who has much more detail about the study here. But none of it should come as a surprise. We've seen plenty of results like this before.

Quote of the Day: How Do You Solve a Problem Like Obamacare?

| Tue Apr. 8, 2014 2:22 PM PDT

From a Republican congressional health aide who was "granted anonymity to speak candidly," on the difficulties of creating a Republican plan to replace Obamacare:

The problem with replace is that if you really want people to have these new benefits, it looks a hell of a lot like the Affordable Care Act. ... To make something like that work, you have to move in the direction of the ACA. You have to have a participating mechanism, you have to have a mechanism to fund it, you have to have a mechanism to fix parts of the market.

That's a problem, all right. If you actually want to cover people, you have to pay for it. End of story. Republicans are steadfastly not willing to pay for it, so they aren't going to cover anyone with whatever plan they dream up. No matter what kind of smoke and mirrors they throw up to disguise this, that's the bottom line. No money, no coverage.

Really, though, all this GOP aide is saying is that Obamacare is fundamentally a pretty conservative plan. Liberals nearly all prefer a simpler, cheaper, more comprehensive riff on single-payer of some kind. But that couldn't pass in 2009—even moderate Democrats wouldn't have supported it—so instead we had to cobble together a bunch of conservative ideas into a kind of Rube Goldberg edifice that was at least better than nothing. It only works moderately well, but that's because the conservative take on healthcare is fundamentally incoherent. The more conservative your health care plan, the worse it works.

So Republicans have a choice. They can:

  1. Introduce a more liberal plan that's cheaper and works better.
  2. Introduce an even more conservative plan that's more expensive and works even worse than Obamacare
  3. Toss out a few of the usual pet rocks and just pretend it's a plan.

My money is on Option 3.

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My Kinda Sorta Non-Review of Thomas Piketty's "Capital in the 21st Century"

| Tue Apr. 8, 2014 10:51 AM PDT

I'm having a hard time finishing Thomas Piketty's Capital in the 21st Century. Is this because it's a long, dense tome? Not really, though that doesn't help. Is it because he has nothing interesting to say? Not at all. Capital presents a very provocative thesis. Nevertheless, I started it once, put it down, finally picked it up again, and still haven't finished it.

So what's the problem? It's pretty simple: Piketty's provocative thesis is extremely elementary and he makes it right in the introduction. Here it is in a nutshell:

Over the long run, ordinary labor income grows at about the same rate as the broader economy. That's about 2-3 percent per year these days. Capital, however, tends to produce real returns of 4-5 percent. This means that over the course of, say, 50 years, labor income will increase about 3x while capital stocks will increase about 9x. That in turn means that income from capital will also increase 9x. And since rich people have by far the bulk of all capital income, income inequality inevitably grows forever unless something stops it.

The shorthand for this is r > g. That is, r (the return on capital) is historically greater than g (economic growth), which means that rich people with capital will always see their incomes grow faster than ordinary wage slaves. The rest of the book is a lengthy succession of charts and tables demonstrating that, historically, r really is greater than g. Since I was pretty easily persuaded of this, I had a hard time slogging through all the details.

In any case, the historical data isn't really why anyone other than specialists cares about this book. After all, the world has been ticking along for centuries, and somehow the rich have not, in fact, accumulated 99.9 percent of the world's income despite more than a thousand years of r being greater than g. Why? The simple answer, I gather, is war. This is the great leveler. The rich get richer for a while, but then they lose it all during periods of war, and the cycle starts all over. That's what happened in the 20th century: The rich were obscenely wealthy early on, and then came World War I, the Great Depression, and World War II. That wiped out lots of wealth, and the postwar rebuilding era was one of those rare eras when g was actually greater than r. (See chart on right.) So labor did relatively well for a few decades. This ended in the 80s, when the old historical pattern reasserted itself.

This brings us to the question we really care about: Now that we've reverted to a more ordinary r > g world, will this continue? I started skipping through the book to find Piketty's answer, and I was disappointed at what I found. After some preliminary throat clearing to get clear on some details (the nature of private savings, what components should be counted in capital accounts, etc.), we get....nothing.

Basically, Piketty says that historically r has been greater than g, and there's no reason to think this won't be true in the future. That's really about it. Oh, he addresses some technical issues, like the fact that a glut of capital should reduce the return on capital, but basically that's his argument. In the past r has almost always been greater than g, and we'd be foolish to think that's likely to change.

Don't get me wrong: Piketty may be right. Hell, he probably is right. But while the details are of keen interest to specialists and practitioners, the gist of his argument is simply that the future will probably look like the past. That's certainly plausible, but I'm frankly having a hard time plowing through a ton of background material in support of such a simple thesis.

I'm not sure why I'm fessing up to all this. I'm really doing nothing except admitting that I'm not sure what everyone else sees that I don't. As a data-gathering exercise, this book is unquestionably a tour de force, and I'm truly not trying to slight Piketty's seminal achievement here. But as a layman's guide to the future (and it's explicitly written for a lay audience), Capital has little to say except that current trends will probably continue. It might be unreasonable to expect more, since obviously no one can predict the future, but I guess I expected more anyway. Is r > g really a monocausal explanation for the evolution of the entire world economy? Is it possible that r might decline for structural reasons in the future? Or that g might increase thanks to automation? Or that other factors might come into play? That seems at least worth addressing in some depth.

In any case, this is Piketty's story. Capital grows faster than labor income. Rich people have most of the capital. Therefore rich people get richer faster than ordinary wage earners and income inequality inexorably rises. If we don't like that, we'll have to do something about it. Piketty thinks the only answer is a global wealth tax, which he admits is a political nonstarter. Dean Baker has some other ideas here. Or maybe war will once again take care of things. Or maybe the rise of smart robots will make things even worse than Piketty ever imagined. I guess we'll all know in another 50 years or so.

Unless You Can Do It Blindfolded, Please STFU

| Tue Apr. 8, 2014 9:31 AM PDT

I've long suspected this, but now we have Scientific Proof™. Professional violinists who insist that there's nothing like a Strad can't even tell them apart from modern instruments:

In this study, 10 renowned soloists each blind-tested six Old Italian violins (including five by Stradivari) and six new during two 75-min sessions—the first in a rehearsal room, the second in a 300-seat concert hall. When asked to choose a violin to replace their own for a hypothetical concert tour, 6 of the 10 soloists chose a new instrument....On average, soloists rated their favorite new violins more highly than their favorite old for playability, articulation, and projection, and at least equal to old in terms of timbre. Soloists failed to distinguish new from old at better than chance levels.

Wine snobs can barely distinguish red from white when they're blindfolded. Pro violinists can't pick out a Strad from a decent modern violin. Art aficionados are routinely taken in by fakes even when they're allowed to investigate them from inches away. The examples of this kind of thing are endless.

So am I skeptical when you claim your $90,000 turntable is really and truly light years better than some mere $2,000 POS? Yes I am. Am I skeptical when you claim you can distinguish Beluga caviar from Sterlet? Yes I am. Hell, I'm not even sure you can tell the difference between Coke and Pepsi. If you can do it blindfolded, then I'll believe you. Until then, don't even bother me with this nonsense.

The OC: No Longer Sprawling, Thank You Very Much

| Tue Apr. 8, 2014 7:47 AM PDT

Via Andrew Sullivan, the table on the right shows the most compact, least sprawling large metro areas in the United States. New York is number 1, no surprise, and I've read enough about the "myth" of LA sprawl that I wouldn't have been surprised to see Los Angeles on the list. But no. Los Angeles ranks 21st. Oddly enough, though, take a look at what region breaks the top ten: Orange County, aka Santa Ana/Anaheim/Irvine.

How did that happen? Orange Country is practically the dictionary definition of suburb, after all. Well, it turns out that scores are based on four factors, and Orange County does very well on three of them: development density, land use mix, and street connectivity. But I still don't really get this. Sure, Orange County is fully developed, but almost exclusively by low-density housing and low-slung office buildings. Land use mix is probably OK, since Orange County is old enough to have turned into one of Joel Garreau's "edge cities," regions that provide both bedrooms and jobs. As for street accessibility, our high score must be a technicality of some kind. Sure, we have lots of four-way intersections, but outside of a few small downtown centers, no one would really consider any of Orange County walkable in the usual urban sense.

So I still don't get it. But it doesn't matter. The OC is now officially off limits for your mockery of sterile, suburban sprawl. We're more compact and accessible than Chicago, Detroit, or Denver. So there. More details here.

Let's Invade Ukraine! (As Soon As We Can Figure Out Where It Is)

| Mon Apr. 7, 2014 10:38 PM PDT

A couple of weeks ago, a team of researchers asked Americans to locate Ukraine on a map. You'll be unsurprised to learn that most of them couldn't. But check this out:

Accuracy varies across demographic groups. In general, younger Americans tended to provide more accurate responses than their older counterparts: 27 percent of 18-24 year olds correctly identified Ukraine, compared with 14 percent of 65+ year-olds.

Say what? The idiot youngsters, the ones who are forever being mocked for not being able to locate France on a map, did better than their older, obviously better educated peers? How about that. Keep this in mind the next time you see one of those endless surveys bemoaning what geographic numbskulls the kids today are.

But that wasn't really the point of the survey. This was:

The further our respondents thought that Ukraine was from its actual location, the more they wanted the U.S. to intervene militarily. Even controlling for a series of demographic characteristics and participants’ general foreign policy attitudes, we found that the less accurate our participants were, the more they wanted the U.S. to use force, the greater the threat they saw Russia as posing to U.S. interests, and the more they thought that using force would advance U.S. national security interests; all of these effects are statistically significant at a 95 percent confidence level. Our results are clear, but also somewhat disconcerting: The less people know about where Ukraine is located on a map, the more they want the U.S. to intervene militarily.

Yep: folks who thought Ukraine was somewhere near Chad were more convinced that Russia's actions posed a threat to US interests. Chew on that for a while. Let's toss out some possible reasons for this:

  1. Ignorant folks are more likely to be jingoistic supporters of military action.
  2. If you think Ukraine is farther away from Russia than it is, it makes sense to assume that Russia is trying to project military power over a great distance and therefore poses a greater threat than a mere border incursion would.
  3. Low-information respondents are more easily manipulated by rabble-rousers.
  4. Ignorance of geography is a proxy for ignorance of both the capabilities of the US military and the costs and likely success of intervention.
  5. This is just some weird statistical artifact and means nothing.

Or maybe there's something I haven't thought of.