David French:

Remember when the Democrats passed ObamaCare through reconciliation, using procedural gimmickry to pass major social legislation over the unanimous objection of the majority party? So do congressional Republicans, and it looks like payback might be imminent.

I know this is an easy mistake to make, but I'm pretty sure Obamacare was passed over the unanimous objection of the minority party, the Democrats having won a massive, landslide victory in 2008. They figured this gave them a mandate to carry out the promises made during the campaign—silly, I know, since only Republicans have mandates—and they proceeded to do just that.

Less excusable is French's contention that Obamacare was passed via reconciliation. It wasn't. It was passed in the Senate under regular order, by a vote of 60-39 on December 24, 2009. Later, after Democrats lost their supermajority in the Senate, the House passed the Senate bill and then passed a second bill that implemented a few modest increases to subsidy levels and taxes. None of them were critical to the overall bill, but the Senate agreed to support these changes. These small, nonessential adjustments are the only part of Obamacare that was passed via reconciliation.

Everything else—the individual mandate, the pre-existing conditions ban, the subsidies, the Medicaid expansion, the medical loss ratios, the donut hole, the cost improvements, the taxes to pay for it all—in other words, everything that mattered, was passed via regular order.

As for the unanimous opposition of Republicans, that's perfectly true. Democrats in the Senate tried mightily to put together a plan that might attract some GOP votes, but Republicans were adamantine. They pretended to negotiate, but by October it was clear they were just playing delaying games and had no intention of ever supporting anything that would expand access to health care. This strategy of blind obstruction, which applied to every part of Obama's agenda, not just Obamacare, is a huge blot not on Democrats, but on the congressional Republicans who decided on it before Obama ever set foot in the Oval Office. It was only in the face of this unconditional obstruction that Democrats went ahead and passed something on their own.

From House Speaker Paul Ryan, on Republican plans to repeal and replace Obamacare:

There will be a transition and a bridge so that no one is left out in the cold, so that no one is worse off.

This quote is a month old, but I only noticed it today when Nancy LeTourneau brought it to my attention. Democrats need to hold Ryan to this.

That means no change in Medicaid expansion. It means no change in access to health coverage. It means no reduction in federal subsidies. It means making sure that insurers stay in the exchanges. It means no lifetime limits on covered medical care. It means kids can stay on their parents' plan through age 26.

This is also a good yardstick for Ryan's eventual replacement for Obamacare. Technically, he didn't say that the eventual Republican replacement would leave no one worse off, only the transition. But someone should pin him down on that too.

According to the Washington Post, House Republicans have backed off their plan to gut their ethics committee:

House Republicans scrapped plans to weaken an independent ethics watchdog on Tuesday after a backlash from President-elect Donald Trump, as a new period of Republican-led governance started taking shape on a tumultuous note.

The House GOP moved to withdraw changes made the day before to official rules that would rein in the Office of congressional Ethics. Instead, the House will study changes to the office with an August deadline.

Trump took to Twitter to slam House Republicans for voting behind closed doors Monday night to weaken the independent ethics office. The vote defied House GOP leaders and complicated Trump’s “drain the swamp” campaign mantra.

Oh please. The backlash was in full swing last night, long before Trump's tweet. And anyway, Trump didn't object to Republicans gutting the ethics office. He just thought they should do it later, when fewer people might notice. And that's what they're doing. They'll "study changes" and then gut the office in August, when everyone is on vacation.

Can we please stop pretending that everything in the country is happening as a direct result of Trump's tweets? For God's sake.

Here's the news from Ford:

The automaker also said it is canceling plans for a new $1.6 billion plant in San Luis Potosi, Mexico, but confirmed that the next-generation of its Focus compact will be produced at its Hermosillo, Mexico factory.

Ford CEO Mark Fields said the decision to cancel the plant in Mexico was based in part on changing market conditions with sales of small cars declining as well as the pro-business climate the automaker expects under incoming President Donald Trump. "This is a vote of confidence for president elect Trump and some of the policies he may be pursuing," Fields at the plant today.

The real reason this is happening is that Ford has suffered sales declines in its Fusion sedan, which is made at its Mexico plant, as well as sales declines in the Mustang, which is made in Flat Rock, Michigan. There's not much point in building a new small-car plant anywhere if Fusion sales are down, and not much point in underutilizing its Flat Rock plant.

And it's not as if Ford is moving any production from Mexico to the United States. All it's doing in Flat Rock is some expansion to build self-driving and electric vehicles. This involves a grand total of 700 jobs, which were never going to be in Mexico in the first place.

In other words, this was a pure business decision. So why is Mark Fields giving Trump a big shout out? Because he figures there's no harm in spinning this into flattery of the incoming president. It might help and it can't hurt.

But it ain't so. Ford sales of sedans and small cars are tanking. If they were doing better, they'd still be building that new plant in Mexico.

The Wall Street Journal ran a piece yesterday about the folks who (accidentally) created the 401(k) retirement plan. They aren't happy with their creation:

Many early backers of the 401(k) now say they have regrets about how their creation turned out despite its emergence as the dominant way most Americans save. Some say it wasn’t designed to be a primary retirement tool and acknowledge they used forecasts that were too optimistic to sell the plan in its early days.

Others say the proliferation of 401(k) plans has exposed workers to big drops in the stock market and high fees from Wall Street money managers while making it easier for companies to shed guaranteed retiree payouts.

The Journal piece is accompanied by the chart on the right, showing the decline of the personal saving rate over the past few decades. It looks pretty bad. Just as old-style pensions were going away, Americans were saving less and less, including their savings in 401(k) accounts. Retirement is now a hellhole, just a grim march from retirement to death subsisting on cat food.

But let me show you another chart. There's more than one way to save, it turns out. For example, you can build up equity in your home. And as housing prices have risen over the past several decades, so has total personal wealth:

Even this number is down since the 80s, but a drop from 103 percent to 98 percent doesn't seem all that scary, does it? And it's worth remembering that housing wealth has long played a role in retirement, as retired homeowners either sell their houses, downsize their houses, or take out a reverse mortgage on their houses.

Now, this hardly tells the whole story. The truth is that there are good and bad aspects to both old-style pensions and 401(k) plans. Here are a few:

  • Most people vastly overestimate how generous those old-style pensions were. Half of Americans never got them at all, and most of the rest got modest pensions. The exceptions were public-sector workers and some unionized workers.
  • That said, old-style pensions were most likely distributed a bit more evenly than 401(k) wealth, which is skewed toward the wealthy. But the difference probably isn't huge. Unfortunately, there's no reliable data that tells us for sure.
  • Overall pension wealth hasn't changed much. It was about 13 percent of total wages in 1984 and it's about 13 percent today.
  • Early 401(k) plans largely bypassed the poor and working class. However, changes made in 2006 have increased the retirement saving rate among the young and the low-income. It's probably the case that more low-income workers are saving for retirement today than ever in history.
  • 401(k) plans are more vulnerable to stock market shocks. However, the 2006 changes included a provision that encourages employers to offer "lifecycle" funds, which become less volatile as workers get older. Hopefully this will become close to universal in the future.
  • The bottom third of the income spectrum is screwed now and always has been. Neither old-style pensions nor 401(k) plans have ever helped them much, and they rely almost entirely on Social Security. We should increase Social Security payouts for these folks.

I've written about this in more detail before, most recently here. Advantages of 401(k) plans over traditional pensions are here. The bottom line is that 401(k) plans aren't perfect, and we could stand to make more changes to them. I'd like to see hard caps on management fees, for example. Nonetheless, on average, old-style pensions weren't all that great either, and 401(k)s are getting better. I'm all for further reforms, and I'm all for expanding Social Security for the bottom third. But taken as a whole, 401(k) plans aren't bad, and as the 2006 reforms continue to make a difference, they're going to get better.

Corporate America is about to go on a spending spree! They're so excited about Donald Trump that they can't hold themselves back!

Except, um, maybe that's not it after all. The Wall Street Journal reports that the stock market rally of the past month might be due to something more mundane:

The 6.7% rally since then, much of it since Election Day, has largely been attributed to the potential for tax cuts, looser regulation and fiscal spending under the president-elect. But the rise has also coincided with a fundamental improvement: U.S. companies'return to earnings growth.

"It's earnings growth that drives stocks over the long term," said Tom Cassidy, chief investment officer at Univest Wealth Management Division…Earnings for companies in the S&P 500 grew 3.1% in the third quarter from a year earlier, according to FactSet, entering positive territory for the first time since the first quarter of 2015, when they grew 0.5%. Analysts polled by FactSet expect the rebound to continue, and are estimating a 3.2% growth rate in the fourth quarter of 2016.

The third quarter, needless to say, was back when everyone was expecting Hillary Clinton to be the next president of the United States. Corporations may indeed be excited by the prospect of lower taxes and the end of pesky regulations, but if you want to know why the stock market is rallying, profitable companies are a more likely explanation than anything Trump is promising.

When Republicans control Congress and a Democrat is president, it's all investigation all the time. It doesn't matter if any of the stuff they're investigating is genuinely scandalous or not. They just keep at it, month after endless month.

With a Republican about to take over the White House, we all expected this to come to a halt. But as usual, Republicans aren't satisfied with just letting their investigatory fever quietly fade away. They have to take it a step further:

House Republicans, defying their top leaders, voted Monday to significantly curtail the power of an independent ethics office set up in 2008 in the aftermath of corruption scandals that sent three members of Congress to jail.

The move to weaken the Office of Congressional Ethics was not public until late Monday, when Representative Robert Goodlatte, Republican of Virginia and chairman of the House Judiciary Committee, announced that the House Republican Conference had approved the change with no advance public notice or debate.

This is all happening at the same time that the most corrupt president in modern history—almost by definition—is about to take office. Donald Trump has made it crystal clear that he doesn't care about conflict-of-interest allegations and plans to use the presidency to boost his family's wealth by as much as the traffic will bear. Republicans in Congress have responded by making it clear that this is fine with them, and now the House is making it equally clear that they don't intend to allow any serious investigations of corruption among their own members. It's going to be a free-for-all, and nobody with any subpoena power will ever be allowed to touch any Republican.

I didn't expect them to be quite so obvious about this. But apparently they just don't care anymore.

UPDATE: BuzzFeed does a good job of summarizing what this change means:

Charles Krauthammer comments on the war in Syria:

Look, the most important thing here is that this cease-fire, to the extent that it holds, is not a result of clever diplomacy. It’s what the Romans called “the peace of the grave.” The rebels were dealt such a huge defeat in Aleppo, they are in no position to carry on the fight in the same way as before. This is a Russian victory. The mantra out of this administration always was, “You can’t solve a civil war militarily.” The answer is, you can.

It's worth clearing this up. Obama and his team did indeed say this in various formulations over the past few years. But any honest reading includes the following implicit qualifiers:

  1. Obama said you can't solve this civil war militarily, not civil wars in general.
  2. He said there was no ultimate military solution in Syria.
  3. And in the short term, he said there was no way for us to help the anti-Assad rebels to victory without an enormous commitment of ground troops.

You can argue with #2 and #3. But I'd still put my money on Obama being right. Syria is likely to be unstable for a good long time, and I doubt there was anything we could have done to defeat Assad that didn't include a serious invasion force. This was an asymmetrical conflict from the beginning, and Assad had a real army at his disposal. I've just never bought the idea that we could have won if only we'd armed the "moderate" rebels back in 2012, or put up a no-fly zone, or anything like that.

Putin apparently decided that assisting Assad was worthwhile because (a) Assad could win with a modest additional reinforcement, and (b) in return Russia got better access to its Tartus naval facility, their only port on the Mediterranean. I wouldn't be surprised if sometime soon Assad gives Putin permission to upgrade Tartus so that it can handle larger ships.

Would it have been worth a massive American presence to prevent that? I suppose Krauthammer would say yes, but I'm not sure how many Americans would agree with him.

Happy New Year!

I promise this post is not about Donald Trump, even though it starts with him. Here he is talking further about the whole hacking episode:

“I don’t care what they say, no computer is safe,” he added. “I have a boy who’s 10 years old; he can do anything with a computer. You want something to really go without detection, write it out and have it sent by courier.”

Trump's proposal of a massive new executive branch courier service is intriguing as the foundation of his promise to create more jobs, but that's not what I'm here to talk about. Rather, I want to talk about the myth that young people are all geniuses with computers.

As usual, I won't claim any huge expertise here. However, I do interact with young 'uns periodically, mostly pretty smart ones. However, even they generally have no real expertise with computers. Far from it, in fact. What they do have is (a) a general familiarity with the UI conventions of modern smartphone apps, and (b) a deep and encyclopedic familiarity with the handful of apps they use constantly. This provides a surface sheen of expertise, especially to older folks who don't use smartphones much.

But dig an inch below the surface and most of them don't really know much. Grab your stereotypical person on a street corner and ask them, say, when the French left Vietnam. Or what vegetable has the most Vitamin A. These take about ten seconds each to answer (1954-56,1 sweet potatoes), but most people struggle with stuff like this, and young folks struggle just as much as anyone. Ditto for any app they aren't familiar with, especially on a platform they aren't familiar with.

There's nothing unusual about this. Ask a question about Facebook on an iPhone and you'll get a flurry of activity from your average teenager but only a blank stare from me. Ask more generally about some problem on a Windows machine, and I can probably help you while your average teenager will now be the one with the blank stare.

On average, young people are more comfortable around computers than older people. Show them a new app and they're generally willing to learn it, while us older coots probably don't want to bother unless we really think it's going to be useful. Younger generations also have different preferences thanks to these apps (text vs. phone calls, news aggregators vs. weekly newsmagazines, etc.). But that's about it. In the sense of broad knowledge of computers and networks, or the ability to find information, or the ability to produce useful work with their computers, Xers and millennials aren't any more savvy than the rest of us.

But the flying fingers on their smartphones, along with their deep familiarity with the apps they use, provide an aura of expertise so compelling that it seems almost genetically inborn. Mostly, though, it's an illusion.

Of course, even with that illusion affecting our judgment, most of us don't believe that ten-year-olds "can do anything with a computer." For that level of idiocy, you really need Donald Trump.

1OK, I'll confess that finding the 1956 component of that answer took me more than a few seconds. The French agreed to leave in 1954, and the last troops left in 1956.

Happy New Year!

Here is the president-elect of the United States on the last day of the old year, offering his skepticism that Russia was behind the hacks of the DNC and other political organizations during the election:

“I just want them to be sure because it’s a pretty serious charge,” Mr. Trump said of the intelligence agencies....He added: “And I know a lot about hacking. And hacking is a very hard thing to prove. So it could be somebody else. And I also know things that other people don’t know, and so they cannot be sure of the situation.”

When asked what he knew that others did not, Mr. Trump demurred, saying only, “You’ll find out on Tuesday or Wednesday.”

Here's what I think Donald Trump knows about hacking: nothing. In movies, the stereotypical hacking nerd can blow through any cyber defense in about 30 seconds of whirlwind typing. So this is what Trump believes: There are lots of 19-year-old kids who can type furiously for about 30 seconds and break into any computer in the world.

I don't imagine anyone is going to argue with me about that, so let's move on to Trump's statement that he knows things "that other people don't know." Intriguing! What could that be?

Well, America's intelligence agencies think Russia is behind the hacking, so Trump doesn't have any secret knowledge from them. Where else could he have gotten it? There are two obvious possibilities. The first is that Trump's team did it, and he's going to confess on Tuesday (or Wednesday). Wouldn't that be great? The second possibility is that Putin has provided Trump with some kind of plausible misdirection, which he's going to parrot on Tuesday (or Wednesday).

Actually, of course, there's a third possibility, and it's the most likely of all: Trump is just blathering as usual, and he will provide no new information on either Tuesday or Wednesday. He's just playing the press the way he always does, and we'll all turn out for the show, just like we did for the birther show in September.

We've got at least four years and 20 days of this stuff still ahead of us, folks. Take a deep breath.